Upside down

fatcat · 1 Upside down Fri Mar 16, 2012 7:45 am

fatcat

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Last 3-4 moths CDBX is trading
25% more then CDB N price
So I dont understand the logic behind ?

Slstock · 2 Re: Upside down Fri Mar 16, 2012 11:10 am

Slstock

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fatcat wrote:Last 3-4 moths CDBX is trading
25% more then CDB N price
So I dont understand the logic behind ?

Wonder of CSE.
Though there is no rule that says X have to trade below N it is the expected norm. But CDB.N right issue was at Rs 70. With current earnings it i s trading at PE of 4-5.

Expert · 3 Re: Upside down Fri Mar 16, 2012 11:12 am

Expert

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CDB or any other, 'X' cannot be more valuable than the 'N'.
This has happened in MAL too.
It can be the CDB.N is not worth.
Or, it has to be some kind of manipulation.
Some may reason out that the number of 'X' shares being less in number is causing this but who wants to buy the 'X' at a higher price than the 'N'?

Roboticfx · 4 Re: Upside down Fri Mar 16, 2012 1:02 pm

Roboticfx

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Location : 5° 55'N - 9° 55' N and 79° 42'E - 81° 52E'.

Yes, as slstock said there is no rule. But normally X shares trade below N shares because X shares don't have the voting power. Actually this is an upside down. But this will turn back to its normal position in near future.

Slstock · 5 Re: Upside down Fri Mar 16, 2012 1:18 pm

Slstock

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We have 4 probable scenarios.

1) CDB.X will fall
2) CDB. N will go up
3) N & X meet in the middle and pass it other
4) or continues this gap.

1) not so easy to happen as X has few shares i n market and many bought over Rs 50. In the bear market if N going up suddenly , it is not that easy with comparatively more shares. So as long as only medium interest is there it can have range bound values. As I said N is trading at around PE of 4-5 on current earnings now and rights was issued at Rs 70 and all were subscribed. So for some reason CDB,N is trading at low values now in the sector just like PLC. Not sure whether there is an issue we do not know.

In any case when the bear recovers and bull comes CDB can run rather fast. ( provided their financials not deteriorate hat heavily)