While I think the PPS lock we are seeing is being done by the institutions (not HFTs or MMs) but I don't think it is being done maliciously. Many of these funds have multiple irons in the BAA fire. Van Eck has two, BlackRock has three, I.G. as two, Franklin has two.
What exactly they are doing I don't know. There are times where it does look malicious. Possibly trying to shake out some weak hands. But the vast majority of the time I think many of them are simply shifting funds between their funds and this PPS makes it very easy for them to work with BAA.
Again...I don't understand the strategy. There may be rules...like they can only hold a security in a fund for 30, 60, 90 days and if it doesn't move then the fund rules require they take it out. What they do then is BlackRock Fund #1 buys it from BlackRock Fund #2. They keep it within their family but follow the by-laws and rules of their fund.
It sounds ridiculous I know but funds and especially EFTs like GDXJ have those rules for many reasons. They may want to hit a certain risk rating. Just like movies have PG, PG-13 and R investment funds have risk ratings. They also have volatility ratings. In order to maintain those ratings they need to make moves.
Sometimes it may not even have anything to do with BAA specifically. GDXJ for example may need to roll-over 100,000 shares. They throw a dart, it lands on BAA so they roll BAA and pick up some CGG or SAND or EXK or MUX.
Things will change soon. Namoya full production will be announced, Q2 production will be a record for Banro, Q3 production will no doubt top that. With the cuts to capex BAA will show a modest EPS in Q2 but in Q3 BAA should post a record PPS and it'll break that record in Q4.
I do believe that BAA will have a positive EPS for Q2 even though the consensus is -.02. I love that consensus because it is definitely beatable.
As EPS goes up the PPS will be required to rise!
AI
