Good Morning,
There's a spate of potential manflu which I
appear to have caught from my daughter! So having been up most of the night
with her one doesn't expect much activity today bar essential items. Staying
with the theme of manflu it appears we had yesterday’s South32 announcement from BLT
(BHP Billiton). The reasoning for the name is not because it gives a
good indication of which way the share price is expected to go but because most
of the assets are in the southern hemisphere. No doubt contradicting
those with common-sense for some time as people position themselves.
Yesterday also saw the announcement of LMI's Number One Furnace leaking molten furnace matte.
For the regular followers of Lonmin (LMI), one hopes this
isn't chrome related for saying that LMI have historic
grandfather rights to ConRoast (owned by JLP for 10
years) why didn't they make improvements last time? So with cash costs likely
to shoot up and net borrowing to increase (anyone's guess on the final
figure) will there be the requirement for another rights issue? One assumes
they won't be asking the International
Finance Corporation for $100M. Quite how LMI will
come up with a resolution to mitigate these issues shall be interesting.
Today's announcement came as no surprise for the FitBug placing the disappointment was I lost out
on a bet by a mere 12 hours. The loan conversion looks to be creating an
overhang as well with anything above 1.5 pence being in the money.
Rambler Metals (RMM) inform us of a
reoccurring theme that continues with a decline in grade and revenue. With
these sort of returns the case for a management change are
increasing. RMM's measurements of earnings per share are dire the
drop in grades and absence of disclosure of the grades sums things up. The
denial contingent will state things can only get better...
Tesco's (TSCO) came out today with some a
material statement which pending on demands will come back to in due course.
With no position either way, it's certainly an indicator of how competitive the
market is currently. Make this year count, next year's Christmas could well be
25% more expensive, so get the elastic waist expander and utilise those cheap
track suit bottoms.
Gold and silver have lost all
energy recently after some serious swings the trading implies no one wants to
hold a position long, up in NY, down in Asia and
back up in London. It would appear a few Australian's had a slap of
common-sense and finally got out of Atlas Iron last night. Those knife catchers
reading Bloomberg wished they'd ignored Atlas Iron Offers Cheapest Bet on Ore’s Rebound: Real M&A.
It makes you wonder what the position of Baosteel Group Corp (Chinese
Steel producer) is. Tony Poli must be thankful of the deal
earlier in the year, perhaps one of the best deals of the year.
With Chinese import data out on
Sunday, China's Nov iron ore imports hit second lowest this year on
Sunday it was no surprise where the bets were. The figures I'm reliably
informed have lead (I known!) to a lot of late night work for a few analysts to
review their opinion of Rio/BLT. One hopes their figures are better
than mine save for a GLEN bid which would be madness and my view is
unaffordable. Next stop for Rio is said to be 2600...
So much to cover and so little time, this morning it was the
day to close my Afren shorts with a view (no specific timeframe) to buy
the equity with the short profits. Afren, despite its positives, is a lesson on
when to take a loss sell and short. For those learning the arts of the dark
side (as one chap calls it) Afren is perfect example of when to change the
shorter-term opinion and get in there.
Atb Fraser
Fraser- Hi- manflu indeed--- a doctor friend once told a lady that if it ever crossed over into the female of the species it would probably be fatal given its strength... I hope you are feeling better soon- todays red screens should assist I guess :-))
ReplyDeleteRe TSCO- they did say that hadn't adjusted their full year £2bn target for profits in previous RNSs so todays "news" should have been expected-- perhaps Im being harsh but the reaction (12% drop) takes us back to my fair value figures, so I may look to buy a few later, but 1/15 will bring the Week Of Doom for the supermarkets so the main buys have to be then for me at least.
Re AFR- v well played- it could have come unstuck if SAPETRO had had the balls to buy big and even make an offer, so not one for the amateurs like me. Plenty of oilers looking dirt cheap now, the market will turn in the coming weeks (in my view) so some fingers will have to be risked on the way down my me pre Xmas. HAWK is my favourite given their super update yesterday, so I bought some more there and my watchlist seems to have more oilers on it than any other sector at present. The US is still the fly in the ointment as even if they slow down their 9bn barrel prod for 2014 will grow to 13.5bn barrels in 2015, and its that exponential growth that the Saudis are keen to flatten out.
Must go now as I have a day on the road today.
Cheers. The Leggie