Further declined in MEGB price is believed to be the reason of of SmallCap and Fidelity cash out its stake recently.
In my previous note on 14 Jan 2011, Fidelity disposal activity is within my expectation, but SmallCap which also starting to cash out its stake in MEGB that is new to me.
Small Cap sold MEGB during 12-13 Jan 2011, as shown below. After these disposals, its shareholding in MEGB was 5.48% or 22,449,200 shares.
Fidelity sold MEGB during 11-12 Jan 2011, as shown below. After these disposal, its shareholding in MEGB was 6.72% or 27,565,600 shares.
14 Jan 2011(last friday), 17 Jan 2011 & 18 Jan 2011, the trade volume in these 3 days were 5.3 million, 3.1 million and 4.2 million respectively. It was likely that there were SmallCap and Fidelity's disposal.
SmallCap will cease as a significant shareholder soon, once its shareholing is less than 5%, which is likely to be happened by next week. If based on the data above, Fidelity will be ceased as signficant shareholder after another sell of approximately 7.2 million shares (which is about 4.7 days trade if based on average daily selling volume of 1.5 million shares).
In view of cash out by these two significant shareholders, MEGB's price is hardly to improve in short period. But if these two sellers will cash out most of its stake in MEGB before end of January which i wish so and it is likely also, MEGB's price will definitely be much more below than what it is today, in other words price movement will be declining until they nearly fully cash out. I shall prepare to increase my stake in MEGB when the time comes.
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