Rumours & Volume & other elements impacting on Indonesia

It's unsurprising that today had such a spike on small volume. Firstly there's rumour, albeit clarified by the company today in CHL statement regarding share price movement (06th November 2013).Where there is no reason for the share price movement...

Well I'll start with the rumour; it comes with a caveat of 'risky' to say the least. There is rumour in Indonesia that that Government is trying to 'clear' up their issues and it’s more than possible for them to be speaking with Churchill Mining. I find the timing very unlikely, surely one would wait until after the Jurisdictional Ruling before engaging in such a process. However, my view is the jurisdictional issues are merely a game stalling exercise during the process. My simple view on International Arbitration process:

1) They had an asset that had considerable value, we won't debate the difference whether Discounted Cashflow, Profits or Net Asset Values or what the figures represents. 

2) Their investment in the asset was not protected and the process was abound with issues that Churchill should have been protect by the Regency of East Kutai. Alas this was more the opposite, nevermind the conflicts of interest that were there for the majority of the Regency 'determinations.' 

3) For those having read the Appeal Transcripts, my view is it was a farce nevermind as clear as mud. So when considering the above, the Foreign Investment Company (Churchill) was not protected either by the Appeal Court or by the Regency and as such they're owed compensation for the loss in value/value of the asset plus associated costs and disbursements.

Very basic description of the Jurisdictional Arguments, as such Indonesia is compelled to comply with the International Arbitration Agreement, Churchill was a Foreign Investment Company that had its assets unlawfully removed = payment. Anyway, back today, it was unsurprising the price rise with the rumours, but also the stock is so tightly held 1.4M will make it move especially if someone is gaining a position. Time will tell... Interesting times ahead assured….

 

Forgot the discussion of the Indonesian Minimum Wage Rises which may have an impact on investment and growth in the Country, will discuss another time!