Portfolioplus, I have only a small investment in TIMPB ($18k) as part of a range of other notes picked up after the Bear Sterns debacle. The other notes I have are BNBG, GNSPA, BEPPA, TPAPA, AZAPB, MXUPA, IANG, WFLPA. All these hybrids and notes were providing very good returns with TIMPB and WFLPA being the stand outs. But I was worried about TIMPB with a flood of scrip hitting market in Oct 2009. So using CFD's I hedged 75% of the shares by going short TIM. This hedge is by no means perfect. The risk is that the share price of TIM goes down to much lower levels and the scrip I shorted is only a fraction of what I am exchanged into. Ideally, you could sell CFD's each day during the 20 days VAWP pricing period in Sep09 but the risk remains that there may not be CFD's available. As stocks become hard to borrow, stocks become LONG ONLY trades. For example, you cannot short WFL on CMC markets and you cannot short TIM and WFL on Comsec. ING markets has WFL as short trade but I could not be bothered setting up another CFD a/c just in the off chance I need to sell CFD on WFL.
There is a sleeper however. SMH on 17 May reported that discussions are being held between Forestry Industry and Government about increased role of forestry companies in Carbon Sinks. Any changes in this direction will boost the value of forestry companies like TIM. I have always thought Carbon would increase value of forestry assets and this is the first discussion I have seen for a while reported in media. So whilst TIM and others are on the nose a bit with questions relating to MIS and tax office etc, the role of forests in carbon is the wild card that could keep TIM price up.
TIM Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
