Consol stock is taking time to settle down, say an
Consol stock is taking time to settle down, say analysts
March 2, 2005
By Margie Inggs
Durban - Consol`s share price volatility since its listing on Monday was just a case of it finding its feet, analysts polled yesterday agreed.
The stock, which started trading at R12 on Monday, has bounced between R12.45 and R10.80 over the past two days - a shift of 12.45 percent.
After opening at R11.90 yesterday, the shares slid 9.3 percent to R10.80 before recovering to close at R11. In 258 deals yesterday, 2.57 million Consol shares changed hands for R28.3 million.
Shares in AVI, Consol`s erstwhile parent, were more stable, opening yesterday at R15.25 and sinking to R14.95 before edging back to close at R15.
John Thompson, a JP Morgan analyst, said Consol`s share price still needed to come down a bit, probably to about R10.50, in relation to its peers and its discounted cash flow.
Another analyst pointed out the similarly with Spar`s listing, when it unbundled from Tiger Brands last year. Spar has been trading between R22 and R24 since it listed in October.
The new AVI has also been trying to find its level. The combined share price on Friday was R25.75.
One analyst said Consol had been rated slightly cheaply, while the forward looking rating on AVI had been rich.
Another view was that AVI`s share register was quite diverse and fragmented as the company had a lot of oversees shareholders who had not really managed to `get their heads around` the glass packaging company.
`We will therefore probably see it bouncing around quite a bit more for the next few days as shareholders who do not really care about the fundamentals of the company get rid of their shares, creating more supply than demand in the first week,` the analyst said. The maiden interim results, to be released today, would give the market a better idea of Consol`s value.
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