Jaime CarrascoFording Canadian Coal Trust (Inc Trust)FDG.UN.TOBUYJul 25, 2008
Good long-term play. About 200 nuclear and 150 hydroelectric plants being built globally but won’t be ready for 7 to 10 years. Meantime electricity will have to be generated from coal, gas etc. Coal will be a prime beneficiary of this. Just reported greater earnings, which should continue. Their coal is used for steel and is 17% of the world’s supply. 12.25% yield.
Being acquired by Teck Cominco (TCK.B-T). If you are holding this in a taxable account, there are some very negative consequences. In an RRSP or RIF you can avoid the tax consequences. He sold the majority of his holdings into the market prior to the transaction.
Being acquired by Teck Cominco (TCK.B-T). Arbitrage companies were forced to sell. There is a financing gap and Merrill Lynch (MER-N) is part of that, so the market is concerned. The deal could fall apart.
If held in an RRSP, you could continue holding. If it's in a taxable account, consider selling the units before the new deal gets done. Take it as a gain as opposed to the tax treatment that will supposedly come on the consummation of the deal. (Editor’s note. Check with your broker.)