{"id":9458,"date":"2010-01-19T22:35:01","date_gmt":"2010-01-20T02:35:01","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=9458"},"modified":"2010-01-19T22:35:01","modified_gmt":"2010-01-20T02:35:01","slug":"powprc-goes-haywire","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=9458","title":{"rendered":"POW.PR.C Goes Haywire"},"content":{"rendered":"

Assiduous Reader prefhound<\/i> asks<\/a>:<\/p>\n

Any idea what is going on with POW.PR.C? It has gone up about $1 in the past two days. Is there some possibility of a call at $25.50?<\/p>\n

If POW.PR.C, what about PWF.PR.I (currently callable at $25.75; $25.50 in April)? Is there a holding company vs sub difference here?<\/p>\n

Both of these are nicely under the call price (unlike GWO.PR.X recently called while above the call price).<\/p><\/blockquote>\n

This is very strange. If we look at the POW PerpetualDiscount issues outstanding:<\/p>\n

\n\n\n\n\n\n\n\n
POW PerpetualDiscount Issues
Close, 2010-1-19<\/td>\n<\/tr>\n
Ticker<\/td>\nDividend<\/td>\nQuote<\/td>\nBid YTW<\/td>\nCurrent Call Price<\/td>\n<\/tr>\n
POW.PR.A<\/td>\n1.40<\/td>\n23.59-75<\/td>\n5.97%<\/td>\n25.00<\/td>\n<\/tr>\n
POW.PR.B<\/td>\n1.3375<\/td>\n22.62-72<\/td>\n5.94%<\/td>\n25.25<\/td>\n<\/tr>\n
POW.PR.C<\/td>\n1.45<\/td>\n25.16-50<\/td>\n5.54%<\/td>\n25.50<\/td>\n<\/tr>\n
POW.PR.D<\/td>\n1.25<\/td>\n21.92-08<\/td>\n5.73%<\/td>\n26.00
Commencing
2010-10-31<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

The yields don’t show a pattern – there should normally be an increase in yields with proximity to par to counterbalance negative convexity. POW.PR.A is somewhat less liquid than the others, but not by so much as to warrant more than a beep or two in yield.<\/p>\n

Today’s trading is kind of interesting. Between 12:29 and and 13:09 there were ten trades on the TSX with total volume of 7,500 shares, starting with the low price of 25.38 and ending with the high price of 25.45, all with RBC as the buyer.<\/p>\n

Then Nesbitt went nuts. Nesbitt was on the buy side for thirty-eight of the last forty trades of the day, taking the price up to 25.53 before it closed with a quote of 25.16-50. All of these trades were retail size – the biggest single transaction was 400 shares and Nesbitt bought a total of 11,600 shares on the day at an average price of $25.446 (data from PC Quote Canada Inc.).<\/p>\n

Trading on Pure was relatively inoccuous, trading 5,100 shares with an afternoon high of 25.53 (100 shares, bought by Nesbitt) before closing at the aren’t-you-glad-there-are-market-makers-on-the-TSX quote of 25.30-27.99, 5×20.<\/p>\n

To me, it looks like some retail broker has had a brilliant idea and executed it. But you’ll have to ask him what the idea was!<\/p>\n

Update, 2010-1-20<\/b>: New commenter to_be_frank<\/i> reminds me<\/a> that POW.PR.C was recently added to TXPR<\/a> and suggests:<\/p>\n

For the same reason, W.PR.J and ENB.PR.A have recently declined by a substantial amount, because those issues were removed from the index. These positions take time to unwind in a relatively illiquid market.<\/p><\/blockquote>\n

I have examined this hypothesis in the post TXPR Rebalaning Effect on Market<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Assiduous Reader prefhound asks: Any idea what is going on with POW.PR.C? It has gone up about $1 in the past two days. Is there some possibility of a call at $25.50? If POW.PR.C, what …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-9458","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/9458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9458"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/9458\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}