Good Morning,
A timely downgrade by Standard and Poor for Vedanta (VED), its likely after today the ratings agencies will have to revisit their work. VED's have had some decent results and record production Zinc, Copper, There's some positives with record production in Aluminium, Copper, Zinc and allegedly pig iron.
Its best not to attempt beating around the bush with VED. There's a wave of issues excluding the obvious commodity price woes. VED inform the market that "the Mines and Minerals (Development and Regulation) Amendment Act, 2015" is likely to double the existing royalty rates reducing margins for VED's operations in Bauxite, Iron Ore and Zinc.
Perhaps VED would like to update the market on the Pig Iron woes in Goa, (Sesa Sterlite). Contrary to the Q4 production report, VED may have to close their pig iron operations by the 25th April if the e-auction issues go unresolved. The limited availability of iron ore will have a knock on effect on VED's coking operations. So VED are strong arming the Government by informing the Dept of Mines and Geology that they 'may' not be able to supply the grid with circa 16MW of electricity. Slightly contradictory to VED's assertions that progress is being made (See: Times India article 9 April 2015).
A damn good piece researched by Neil Chenoweth was emailed to me the other day, with an interactive explanation of the movements and taxation benefits in layman's terms. Tax office pursues BHP Billiton and Rio Tinto over Singapore tax shelter. Rio Tinto and Bhp Billiton may just have to review their taxation and operation arrangements, the question for investors should be "what's the downside!?"
Having put some time into Blur Group (EMC: BLUR) and finding no reason to go long or short, the writing is now on the walls. Blur today confirm in their 2014 trading update, they appear incapable of turning things round. Worse, Blur apparently need the assistance of KPMG to determine "that a number of older projects started between late 2013 and early 2014, which have experienced delays, have shown a lower likelihood of completion."
Why KPMG need to be consulted on the likelihood of completion of projects is beyond me. BLUR as a result of today will be battered further. Having previously shorted this company, this weekend is a good time to review and test theory that BLUR's value is circa 2 pence. Statements like today erode any trust left in a stock.
There's been some speculation about Applied Graphene over recent days, simply put a) the shorts are out b) there's a buyer in the market and c) there's limited stock available. Anything else is unknown.
Atb Fraser
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