Companhia Sanea (SBS)

[flatlander_60048]

Sorry about the delay getting back to you. Went Skiing for a weak and missed the post.

Well you are correct, the bonus program has been terminated and SBS is up 5% today. A close above 6.5 would seem to pave the way for a run to $8.12. The water diversion project should be completed next year and enable SBS to put the drought behind them. It will be interesting to see how much the water conservation mindset remains after the bonus program no longer provides the same economic incentives.

Even if use does not return to pre-drought levels, the system as a whole expands by 4-5% per year, so growth will occur due to comparisons to weak prior year results and due to system expansion to new users.

I'm encouraged by the political climate change in South America (Argentina and Venezuela, especially). We will have to see whether Brazil also embraces the shift to the center.

FL