utopian201 wrote:For me, normally I'd say Contact is pretty good, but given the current volatility, i would have thought completely staying out of the share market with 100% cash would not be considered too cautious. Just look at FBU, the number 2 stock - has lost about 45% since the start of the year. That said, i will want to be buying before it all recovers; you dont get quality companies like FBU at such low PE ratios often (although FBU may be different, as it is tied to the property/construction market, which is currently experiencing declining growth)
Although I'm not sure if CEN it is likely to drop to a low similar to a few months ago (around $6.91)
Contact Energy is reviewing four options for hydro developments on Otago's Clutha River.
It has launched a website outlining the options and seeking public comment. By next year the company hoped to be in a position to announce a preferred option.
The four options were originally investigated by the Electricity Corporation of New Zealand and inherited by Contact when the company was formed in 1995.
Indications of the possible costs of the options range from $300 million to $1.5 billion. See attachment below for the full story
Contact Energy's Australian owner has Government consent for the largest foreign deal in New Zealand this year.
The Overseas Investment Office said Origin Energy's move to increase its stake in Contact involved assets worth $5.2 billion, putting the transaction ahead of all others in 2009.
Earlier this year, Contact said it wanted to pay out profits by issuing shares instead of dividends. So Origin has now applied to the Government for clearance because the change means it will increase its stake in Contact.
Origin cited large slices of land involved which are classified as sensitive under the Overseas Investment Act. These power generation plants and assets are at Otara, New Plymouth and in Central Otago.
They hit $10.15 when the BG-Origin purchase was first announced. Makes me wish I topped up some when they were around $6.90 several weeks ago.
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