Good Morning,
Hanergy Thin Film Power Group will be in the
press a lot over coming months be it a squeeze or drop. The FT runs with Breakneck growth of Hanergy raises question. It’s a
different twist on the repeat in the solar cycle for China. There's been
significant consolidation, but do the earnings and receivables having a similar
whiff about them. It’s a tightly held stock with the founder holding circa 70%
of the stock, 5% out on loan, there could be a difficulty covering any short
positions in a further squeeze.
The article does not go into the trading elements on the
market, Hanergy's (HNGSF) price has appreciated by a
significant short squeeze. A stock which most traders have been waiting on the
side lines to about turn and ride down circa 80%.
For those not short-selling of any form HNGSF is
one for the packs, its already at a pivotal point and the shorters have (please
note past tense) clambered over themselves to obtain stock. This stock is worth
no more than 1.30HKD on a good day and the FT will no doubt be
reporting in due course about its share price movements in more detail.
The accounts are not the only issue
with HNGSF. Would HNGSF like to clarify what development
grants are within the accounts including any Government payments? HNGSF's position
may also be fuelled by the closure of positions that had been previously rolled
over in the Chinese brokers now under review and suspended from taking new
clients? Of course the China Securities Regulatory Commission (CSRC)
inspections will find no issues at all...but with Shanghai and Shenzhen holding around $175B of
leverages shorts it does not bode well if the industry got a regulatory
slap.
HNGSF as a listed solar companies is unusual,
due to its HKEx listing. You do not have to be too
shrewd to find a way on to the train. Normally OTC stock via NYSE, or alternative derivatives but its globally
available via even the most basic retail spread-betting portals.
One illiquid delayed trade that has been been good for long
until the trend now being at significant risk is the CSOP
CES China A80 ETF (SEHK). Fairly simple product and one that mirrors
Chinese Pref A Equities. With Chinese industrial profits falling, the
market is falling back/stagnating until further stimulus is announced.
In the land of the AIM, it’s amusing to see the markets
pricing in so backward with Mosman Oil and Gas (MSMN). For those
readers now aware of MSMN, (EMC: Up the creek), if you know a long holder, it might be
wise to lock their drinks cabinet and submit them for drug testing. Is there
any reason why this stock is above 2 pence? If you are wishing to email about MSMN please
don't the sympathy departed in December 2014.
We have another, Bagir Group (BAGR) (EMC Bagir Group May 2014 Sarcasm) today with their trading update , which comes with no surprises. Ever
since the IPO the warnings have come out, the revisions
downwards and the company I suspect will at best break-even. Listing at 56
pence, there's not much further for them to go. (Disc: no position now). There
should be some serious questions asked about the timing of the BAGR listing
and when they knew about the material downturn in trading so shortly after
listing, from memory 1 month after listing a warning was out.
The disparity between Brent and WTI is
not without sense, with various opinions going round about $50/bbl being the
new ceiling or floor. If $50/bbl is the new floor, how is WTI trading
at $45.47/bbl and Brent $49.06/bbl.
Iron ore really starting to put the boot in on
the listened smaller entities, those with higher leverage FMG
(Fortescue Metals Group) and Atlas Iron (AGO:
ASX). Whilst it was with some hilarity someone attempted to point out
why AGO's a buy based on dividend yield. If there is one? Christmas was your
exit, you've missed the boat!
JMAT (Johnson Matthey) today give the Q3
trading statement. The refinery additives and diagnostic division is going
to come under further pressure being reliant on the petrochemical industry.
The industry is currently sick as a dock and expenditure being scaled
back, why would JMAT be exempt?
The outlook for the car and haulage industry varies but the
majors guiding to a decline in production of circa 1% and as a result a drop in
earnings, stagnation is likely for JMAT at best until the cycle changes. The technology premium for JMAT should
be under review. Emission Control Technologies the kingpin of the company
is reliant on on industries peaking or little growth. There seems to be an echo
of EMC just getting it write (scuse the pun) EMC JMAT above its money and under pressure. One could
argue there’s no viable benefit in holding JMAT
until oil is 40% up…JMAT still missing their AAL (Anglo American) fees!
Little time for the other items...
Atb Fraser
Thank you for the well-wishers for my daughter, she's not playing again today and didn't sleep well. Being off on business soon I
hope she recovers from the lurgies.
