Good Morning,
A brief one from me today with the luxury of time not being
afforded this morning. People should organise meetings well in advance, instead
of at 10pm the night before!
Asia and China is seeing higher
volumes of copper, the perception is this is likely to be shorts, however it
may actually be hedging for the larger boys, the three (Red
Kite, GLEN and Trafigura), and the consumers of the commodity.
Trading $2.55/lbs or $5621.78/t so just a smidge lower but
volumes are up...panic stations for those over-exposed with quite a few bets
going on for $2.11/lbs or $4673.79/t. Why $2.11 is confusing but perhaps time
will tell.
Having been short on WANdisco (WAND) from
some higher ground, there's perhaps a reason to review this and jump on the
bandwagon again. WANdisco's proposed
placing really says the cashflow is not there. Its worth some analysis
as WAND may not have the size to be viable on their own.
Perhaps, if rumours are correct WAND should have accepted the
offer earlier last year.
Wolf(WLFE) Wolfe Minerals building activities update shows things are
going along swimmingly. With commissioning for March 2015 and production due in
August/September 2015, the appetite for this stock should progress. The Chinese
market in tungsten down to circa $291/289 APT (Ammonium
Para-tungstate) will give Europe an indicator of next month’s
prices.
Enquest (ENQ) today have update the market of
their 'resilience' with trading
and operations update showing the covenants have been reset. With
rumours of a fundraiser being around for a month now, with little appetite
previously, will ENQ be pressing that button now? I doubt
it...the market may just reprice ENQ by Monday. Over to ENQ: Additional
Information
Funding. In 2013, EnQuest entered into
a revolving credit facility ('RCF') of up to $1.2 billion committed, plus a
$500 million accordion feature. In light of recent low oil prices and in order
to provide flexibility for EnQuest's capital investment programme, the RCF
lending banks have agreed to relax the existing credit facility covenants. The
net debt / EBITDA covenant has been increased to 5 times and the ratio of
financial charges to EBITDA is reduced to 3 times, both until mid-2017. As at
31 December 2014, EnQuest's net debt was approximately $1.0 billion.
2014 production, revenue and EBITDA. EnQuest
achieved provisional production for 2014 at the top end of its guidance range,
28,267 Boepd, up 17% on 2013. Revenue is expected to exceed $950 million and
EBITDA is expected to be in the range of $530 million to $580 million.
ENQ with the appreciation of oil (as should be
considered) was creating greater downside risk than upside. The disappointment
being I was unable to get out of one position. So the Atlas Iron holders can
cheers as all the profit disappeared saved only from a loss by the tighter
spread from a loss. Will reappraise...a very good coup for ENQ.
Food deflation is being seen by Premier Foods (PFD) trading
update, worth a read whether you have a position or not.
Atb Fraser
Fraser- Hi- busy here as the Boss is off so jobs being assigned every few minutes at this end... she is off to lunch with pal shortly so some some light at the end of the jobs tunnel... hopefully... keeping head down as she leaves now ;-))
ReplyDeleteRe WLFE- careful its Wolf not Wolfe... yes, tungsten APT is around $295/mtu currently and quite volatile via its weekly moves, but WLFE should have all in costs of $135/mtu in my books here so a decent margin when they get to first offtake deliveries in 9/15, with wet and dry commissioning over the next 6 months. A nice project and some good dividends if they continue on their steady course. I am happy to stay long long long here. (some would say stale, even comatose).
Re ENQ- the lenders have sensibly moved their funding repayments back 2 years, which allows ENQ with much lower capex to adjust quite nicely to the new lower oil price. The update is therefore v positive and the share price reaction correct after the hammering over the last few months (not long or short).
Listening to England beating the Aussie on the radio, but they can still grasp defeat from the jaws of victory so not counting chickens as yet.
Cheers. The Leggie
Enjoy the tasks Leggie, having not read the emails properly last night I'd have been wise to re-read them this morning "phone" gives a big clue! haha...
ReplyDeleteI have corrected and kept the wolf from the door! What are Sky are going to do now...looking like they're alternative is a JV with Voda??
Cheers F
Fraser- hehe- enjoying the tasks more than England as they are now losing heavily - its not pleasant so could turn the hoover on to drown it out soon :-))
ReplyDeleteSky/Vodafone has made sense for a long time, as you have made it clear and printed up all those Sky Loves Voda t shirts so perhaps the Hutch move on O2 will force their hand finally. I don't see O2 being in exclusive talks as being that good re BTs negotiations for EE, so they may end up overpaying now.
Cheers. The Leggie
Cheers Leggie, we'll see...
DeleteAfter a 'wonderful' meeting, it’s a pleasing to arrive and see MONI (Monitise) coming down to sensible levels. Will there be any takers for a model (save for some IP) that can be duplicated? There’s some gossip that “a” bank wants to have a closer look, over to Bank of China in collaboration with HSBC?
We are aware of the limited protection Shaft Sinkers (SHFT) has sought for one of its subsidiaries, will there be some vultures picking? http://www.investegate.co.uk/shaft-sinker-hdg-plc--shft-/rns/shaft-sinkers-pty-limited/201501231026309892C/
Some side thoughts with thanks to quite a few giving opinions today on Copper producers (smaller) turning off the lights and going to care and maintenance. What should be noted is the forecasting which appears to be modelled on warehouse stocks and consumption. This is by far the only indicator one should consider especially with offtake agreements and distressed positions (ignoring the Chinese ghost funding issues at the moment). Note copper is sub $2.50/lb currently.
The holistic shorting of miners is the intra-play of the day, will the 15:30 brigade be exiting! This one is...Atb Fraser