Manx Financial Group's trading update came not as a
surprise but more so reflecting the current climate in the UK for lenders in
the higher interest rate sector. What is surprising is how "low" key
MFX is, whether its the company's inability to attract investors or the perception
of the likely negative changes in regulation. The Director's do raise a few
risks/questions for me, however I'll save that for another day.
MFX Report and accounts for the year ended 31 December 2013,
shows the company is on the turnaround. I withheld buying the stock at the lows
for a number of reasons, partly because I was busy with larger trades and
didn't want to be distracted. This was in addition to confirmation of the trend
changing, so did not get in until 12 pence (poor). The results from December
have improved significantly, with what was perhaps written off were the
outstanding liabilities in connection with the Litigation Funding which now
appear to be majority recovered. The assets are on the increase, but at a
premium (100%) to Net Asset value 8 pence ish, I've elected to bail on this
news. partially because there's a risk of shares being issues for the 'odd'
acquisition and/or raising monies to acquire. For those reasons, I'll be
looking to exit on good news today.
What is interesting is the Iron Ore market, parties should be aware of the contraction in the financing, due to concerns about multiple leveraging (known a long time ago). As if large Mills would have financed the same stock a few times over, surely not! Well apparently, the Chinese banks financing these items have been restricting lending until they have had "sight" of the assets leveraged. More so, with tighter controls comes a contraction in trading over the longer term.
Risk awareness promotes tightening in any asset where the
terms have been lose before. So with Chinese Iron Ore being at record levels
back in February, is anyone surprised by the depreciation in the price? With
the financing of import loans being the final straw some Mills may need to
speak to their lenders/Gov+t by September. Especially in light of the unwinding
of massive losses in the market. Yet amazingly no commentary whatsoever from
the "press" on any of this as its occurring.
As of today, Stocks are near 15% higher than at ports in
China since February, at near 115Mt's, with the price off between 25-33%
there's further glut coming to market as positions are liquidated. Of course
the sellers won't want the buyers to know it's because they've had their
financing cut (honey) and with the deterioration in positions means any equity
left in the trade will be down to 1% if they were remotely financed
appropriately.
Today, we take a minute's silence for Eastern Platinum and
wish them the best post their AIM delisting. They now just to delist from JSE
and TSX to have a full house! I'll won't miss Eastern plats as there wasn't
anything left to short.
With positive news on Gold and Silver expect this to be
mirror by those exposed to it! Has Gold finally given a decent indicator of direction
that was so desperately needed? Or more so the fact near $3.6B of gold swapped
hands yesterday. Shorts covering? Hmmm
No Football commentary! We're avoiding it...
Atb Fraser
Fraser- nice spot re MFX- a good list of positives for them today and your 12p buy is sitting pretty at present. Not one I followed, and its nice to see another long for you :-))
ReplyDeleteRe MET- so the former advisers have indicated they will go to trial (in 2015). I doubt it, but its nice to have a backstop to the proceedings and no doubt the negotiations are ongoing re settlement without admittance of guilt. The current cash at 26.7p per share and whilst some is restricted they may well return 15p in the near term. Some more buys today, at 26p and whilst there will be a cost to closing everything down in due course, I can see an extra 10p or so in settlements to come so I will sit on my hands. The advisors would seem to be the big targets so their previous success in this area with other parties is very important to me.
Re CHL- some stirrings re the Indonesian visit to the ICSID in New York and the attempt to access information re the Churchill case. That may be how things are done in Indonesian but it appears to have been met by some degree of astonishment at the court. It all seems to be positive for CHL albeit the court dates are set for next summer, if ROI take it that far, as they have made clear they will. Lets see....
Cheers. The Leggie
Indeed Leggie, more clarity on MET! Albeit I think it's my 4th smallest holding merely taking a position on speculation. The http://www.investegate.co.uk/metro-baltic-horizon--met-/rns/final-results/201406200903551355K/ final results give a little more clarity on the position and indeed 2015 is only but 6 months away. One assumes the respondents counsel are wise of litigation and the potential dangers of going the distance.
DeleteOne expects an update on CHL in due course, perhaps they'd be kind to comment on the other items so shareholders are aware.
The final thought for the evening is about Ian....the poor chap tried to fly on the wrong day! Arriving near 8 hrs later back at home to my thought of "what the hell is he doing here!" Turns out his brain is errr losing the plot! Perhaps this will be a reason for completing his promises?
TC F
Fraser- poor old Ian- oh dear oh dear- perhaps more tonic and less gin for him from now on :-)) Perhaps he likes it so much with you he has no intention of returning to his life in Cameron - that VOG pipeline needs drilling all around the capital so could he help with that instead of returning next time :-))
DeleteNotts have just won their first home T20 this year so its vin rouge for me now.
Cheers. The Leggie
Look forward to seeing the virtual FJP at Camp Alpha. Knowing your training days you will be well versed. Good plays on Iron Ore well done Chin chin John
ReplyDeleteJohn, indeed it shall be good, I'm training to operate 'the bot' Monday, drop me a line and you can pour some gin into the terminal! I'm in the smoke on the 30th, free AM intending to drag a few out for breakfast! (Free?) Atb Fraser
DeleteGood Play on Asos....
ReplyDeleteDear oh dear.... fire in the warehouse this weekend. Me thinks I`m glad I followed you short on Friday !
fjp it was poetry seeing your commentary from markets live end up in a risk meeting. keep up the exceptional live coverage married with here. Are you given a brief for ML or off the bat? If off the bat that some knowledge fountain.
ReplyDelete