Steep, sudden dip in market price ‘curious’—Permell

Peter Permell, chairman of the Clico Policyholders Group, has described as “curious” the steep and sudden dip in the market price of shares in the Clico Investment Fund (CIF) since its opening day of trading on January 7. He said the decline was “based on relatively small trade volumes.”

He said despite the small trade volumes and declines “there has been no adverse market news about the security, the robust fundamentals of the underlying assets, that is the Republic Bank Ltd shares, have not changed since November 1, 2012, the date the CIF was launched.” Though the current market price of units in CIF differed from its net asset value, he is confident the price will trend upward in the future.

During the first week of trading, the price of units in CIF fluctuated closing the week’s trading at $20.31 which can be compared to a net asset value of $25. Permell is not worried about the value of the units. “Once the market price returns to $25 they stand to gain approximately 23 per cent on those units purchased at this price.”

Permell said he has already purchased additional units at the discounted price of $20.31 because he “has every confidence that the price will move back up to $25 sooner rather than later.”

Giving his view of the market now in relation to CIF he said: “While it may be still a bit early to predict, my own view is that the market price seems to have bottomed out and is likely to start trending in the opposite direction going forward as evidenced by the $0.06 appreciation in the unit price on Friday, when coupled with the significant decrease in the number of units.”