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Non-Tech : Berkeley Technology Limited (BLKYY)

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To: Madharry who wrote (622)9/15/2000 7:44:16 AM
From: RockyBalboa  Read Replies (2) of 955
 
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But analysts also highlight risks that may arise from London Pacific's dual approach of selling guaranteed income bonds while also investing in venture capital projects.

One risk is that mismatches may develop between the level of annuities that need paying out, and the income stream generated by venture capital returns. While insurers traditionally cover the risk by purchasing bonds on the international markets, London Pacific provides itself with only 90% cover in this way, the analysts say.

They also say the stock is potentially highly volatile because of the high-risk nature of the investment portfolio and the resulting unpredictability of asset values.
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One has to question whether the sales of the bonds are in compliance with regulations and if so, if the purchasers of teh bonds are aware of the inherent business risks.
If this is the case then one might expect increased financing costs...at least.
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