Q: i got some BNRE:TSE share from my holding in BAM.A. Its an exchangeable share into BN:TSE share and get the same distribution as BN:TSE per share. Is it a good move to sell all shares of BNRE:TSE and buy the same about of BN:TSE though the price is $1 less as per today's closing price? (BNRE:TSE $45.18 and BN:TSE 44.17) It does not make sense because though the business of BNRE is insurance but paid our is based on BN:TSE which has some different mix of business. Need your general answer not based on individual based.
Thanks
Piyush
Thanks
Piyush
5i Research Answer:
Because BNRE can be swapped for BN, but has its own business and potential, it is essentially a 'one way' trade on how BNRE can do. If it performs worse than expected, it can always be swapped. Thus, for the small premium, we would be fine keeping BNRE. In addition, BN is taking steps to increase the trading liquidity of BNRE, which should help its valuation, over time.