Good Morning, the shorts should close their positions on my health the recovery is on! Despite a lack of sleep I feel a lot better!
Today's significant story that is lacking from the front pages...Mechel Quarterly Loss Widens Ninefold on Ruble, Coal Prices; how many more to come?! Mechel are an obvious candidate as they are in an unfortunate position with their two main commodities in dire straits and further impacted by their currency. With the issues unresolved in the Ukraine the Ruble (or Rouble pending preference) is unlikely to improve until Putin yields. Without knowing much about Putin its easy to assume he's a stubborn chap who's unlikely to give-in in a way most would expect. The economy and investment is drying up no matter how much he hugs China. This could have significant issues for BP.
Mwana Africa's (MWA) Christmas party isn't set to be a barrel of laughs. Group hug anyone? If MWA cannot manage this situation its likely to go the way of other stocks Range Resources (RRL); admittedly without as many issues as RRL. Not something shareholders or employees need. With the recent positives of Prescribed Asset status ("PA status") MWA are set for some troubled times that does not bode well for a company wanting to raise finance.
Oil is certainly the new black in terms of shorting, its amazing how many analysts do not know what is going on. Perhaps some basic lessons in economics would assist a few if you have more supply than demand. The denial was a few months ago, EMC commentary on China stopping strategic purchases. China have been cunning in this respect, the drop in oil could just reduce the probability of further stimulus. Over to be BP on the acquisition of some cheap high quality assets or perhaps a US Major to take the long view. On the small cap super major, there's gossip of an all share offer for Gulf Keystone brewing (please note all share offer).
Staying in the O&G sector, BG Group (BG.) should be congratulated with BG Group agrees sale of Australian pipeline for US$5 billion with a profit of near 50% in this climate should bode very well for the balance sheet.
In answer to the spam contingent, I was short FitBug and as it dropped quicker than expected I'm out. Apologies for not advertising trades, this is not a tip sheet nor a paid for provider. The muppets will be pleased to know that its at such a level there's not much stock on the borrow or available for borrow. They have made my Christmas list and as its extensive this year I will have to start writing them this weekend.
The Australian Dollar really does not need much space or analysis as rightly pointed out by many, the appreciate of GBP Vs. AUD was a sure thing. My targets of two years ago, admittedly a bit premature are being met. Australia economy should to some degree benefit from the weakness. One should always pay attention to prime ministers or Governments wanting a weaker currency, they may just get what they wish for.
Finally to gold that simply does not know what to do, with markets declining you have a rush to safety (gold), with oil tanking you have a rush to retail. Personally, one has had to side line gold until there is sufficient / consistent volume to avoid the gamble (higher risk) trades. With a dire % net return on gold trades over a month it's best to wait for better indicators. With the gold silver ratio at such a high, silver is looking as though it will respond exponentially...No prizes for guessing what is going on at Nyota Minerals.
Atb Fraser
Whats your tp on PRES?
ReplyDeleteHi- I don't think Fraser does target prices.
DeleteCheers. The Leggie
Anonymous I don't do a tipping service occasionally they get a mention but often they change/move. For Pressure Technology I reduced prior to nativity carnage...significantly, but maintain my negative view on the sp. This is not based on how the company is run its merely the unfortunate cycle of the oil and gas sector. This was totally off the radar to most and a reminder research pays off. Cheers Fraser
DeleteFraser- Hi- busy morning and hope the Nativity play has gone without incident or Altas holders popping up amongst the sheep onstage.
ReplyDeleteRe MWA- yes, v strange reaction from their biggest holder, CIMGC, who have 299m shares or 21.4% so they wouldn't have been able to block the reelection of the NED even if their votes had been counted. They did buy at 5.5p though so perhaps they are a bit disenchanted now. The $20m debt arrangement seems to be straightforward for funding for me, but the breakdown of comms with CIMGC isn't great for the share price going forward and Mr Mugabe has had a little purge too, which hasn't helped. Perhaps CIMGC would like a couple of NEDs of their own...
Re PPC- BE is quite right that they will need to raise some cash here, so a placing into the flow test figures (if good, which is likely) is expected. The key is that its Paraguays first oil so the World Bank will help develop if past is a guide here. Short term, the reaction is right as they will place, but fundamentally the results are likely to be a company maker if they prove them up. Interesting times, and with that oil price backdrop to complicate too.
Cheers. The Leggie
Evening Leggie,
DeleteThe important things...Nativity was carnage with all children between 2-3 years preferring to do there own thing whilst dressed according to the three kings and various extra parts. Mary exited left when she saw her mum, Joseph decided to kick the gold (foil box) around and my daughter decided dancing similar to Happy Feet was more appropriate. One of the wise men was preferring both fingers up his nostrils. However it was very amusing if not one to roll out when she's 18.
MWA, there's rumblings afoot so one watch.
PPC any placing at near the current SP will be admirable, good luck there.
Cheers F
Fraser- hehehe- sounds like chaos- one of our friends had a black eye last week and it appears he suggested a parent in front of him (on the front row) moved his camera phone down a bit so those further back could see-- he says the other guy came off much worse when they "debated" in the car park afterwards.... I hope you avoided physical violence..... unless you spotted that Altas shareholder that is :-))
ReplyDeleteRe SXX delay- strangely it could be seen as positive as we know the whole app has been a combined piece with SXX and the NYMPA bouncing things around for months, so would they really ask for a bit more info at this stage if they were going to reject??? I don't think so but I have known some who are so pedantic they would pull that trick in the business world. Most of mine are still above water (6.63p rings a bell) so will just wait and see know- the financing is the key for me, not given the IRR here but the sheer size of the funding need ($2.3bn for stage 1). Still not overcommitted given what may happen if they get a No. More delays as it would get referred to the Sec of State no doubt.
Cheers. The Leggie
The missed front page of Mechel that caught the city on the back foot & FT. Had a paper run with the importance and implications they would have been commended. Merry Christmas keep up the fantastic work. LTR
ReplyDeleteThanks LTR, I was chuffed with it but don't expect much, this is just the place for thoughts in a snapshot as part of the morning. Erratic in thought and commentary. There's some significance remodelling required.
DeleteI'm digging round ABN Amro, BNP Paribas, Caterpillar Financial Services Corporation, Commerzbank Aktiengesellschaft, ICBC (London) plc., ING Bank N.V., Natixis, Raiffeissen Bank International AG, Societe Generale, UniCredit, VTB. All seem to have large syndication of debt in Russia, should there be a statement if the risks continue in light of the potential revaluation or even default? Stress test anyone?
Cheers Fraser