China’s Maike says copper set to rebound By
Henry Sanderson now the knife catching begins. Although futures and
orders contradict the statements by He Jinbi. With copper
futures edging lower for March at circa $2.7200/lb (flat) for May 2015 and
being limited in orders, it questions the 3 month outlook by Maike.
One would be wise to acknowledge that the outlook for copper in
the mid-term is good, in the short-term, as alluded to yesterday (EMC) the economic indicators are not as
positive as some would have you believe. What the pricing is suggesting is
China could have been the material cost in copper by
not their (ghost) speculation not their physical consumption.
With most traders looking at the technicals of gold bar the
obvious common-sense approach, both Gold and Silver made solid gains. Gold
(Au) $1236.40/oz. currently and Silver (Ag) $16.84/oz. Au is
likely to see headroom resistance at circa $1239.90 and Ag circa
$17.10. With the larger bets going in on NY and Asia for a material
tick up some $100+/oz., the surprise will be if Au breaches $1350 by
March 20th (Key date for those speculators reviewing more than H
Samuel restocking (Sarcasm).
Having to review my thoughts on Greggs
(GRG) EMC 15 December 2015. Showing its wise to follow the market (at times), with oil tumbling
at faster levels, the weather being more than favourable and food
on the go in season it was rude not to long through the Christmas period.
What today's trading update does show is I was categorically
wrong to call the fluke in September (EMC). Dixons Carphone (DC.) has performed as
well, but banking as it hit my target price. Who'd have thought the long/short
balance was near 50/50 for the Christmas period, albeit changing
as the obvious candidates drop further.
Greggs (GRG), momentum appears to be gaining strength and with no likely interest rate rises in the pipeline for
some time, low oil, retail and grocery + convenience is likely
to benefit save for a deterioration in their equation of positive trading (aka weather, retail and higher discretionary spending). Could the Supermarkets slower declines in LFL (like-for-like) have been saved by lower oil! Improving the costs in the
entire supply chain and on the shelf.
W Resources (WRES) is yet to change tracks
positively, and down to the Tungsten price...edging lower circa Tungsten
APT European $295/mtu (Metric Tonne Unit). It might be wise for Thor
Mining (THR) to revisit their expectations of prices at least sensibly
and reduce their expected $354/mtu within their upgraded Feasibility Study. Even with
some sensible revisions, THR's returns are looking half decent
allowing for a higher cash cost. In addition to the lack of gold benefits
as Crocodile Gold Australia Operations Pty Ltd ended
the memorandum of understanding in August 2014.
It was common-sense the oil trade (read as
don't be long) EMC Oil the Support, we're currently only two
bucks off my critical $43.20/bbls before OPEC has
to act at Crude Oil (Brent) $45.42/bbl. Whether they do or not is
another matter as the material downside has to be balanced appropriately
with the benefits. Strangely Quindell (QPP) had an exposé on the
short ownership as soon as nature would allow, it’s strange that Brent & WTI traders have
not ! Over to those complex trading houses with opaque ownership structures to keep silent and the press not to break the
status quo! No conspiracy theories here, just facts.
What the market is doing with itself is hilarious, CityLink entered
administration but it takes a huge great flag from UK Mail (UKM) today
to point out the obvious with their Q3 trading update. The comedy this morning being "the gossip" in my
in box with an alleged seasoned professional repeating an echo of years back when Better
Capital (BCAP) bought CityLink. Are parties aware that BCAP owned CityLink?
Its highly unlikely they'd be bidding for certain assets. BCAP years
ago was my favoured play, selling out and moving on to Blue Solar in
circa July 2013 for my low risk pension play.
Whether early on not today it’s a sad day to be closing the
shorts with Vedanta (VED). Having been shorting this stock since
mid-2014 its time to bank and wait for further indicators and an update from
the company. VED has a number of risks besides the commodities
prices...that being the majority shareholder and what he decides
for VED. With net debt at the last count
being $9,054.6 million its likely the tumble in commodity
prices has not improved debt, with a deterioration in cash but gross debt
maintaining the same levels of $17,234.0 million. Perhaps a little premature but one is always wise to bank profits. This will need a revisit soon.
Little time for everything else on such a big day...
Atb Fraser
http://www.investegate.co.uk/burford-capital--bur-/rns/trading-update/201501130700079104B/ BUR coming out with a sound trading update Fraser. Thanks for all the hard work. Liam
ReplyDeleteFraser- Hi and thanks for the updates as usual- too much for my brain at times but some bits could be getting through :-)) Copper position looks spot on to me.
ReplyDeleteRe Oil storage- the Chinese seem to be big players here, buying now and storing in tankers in the hope they will have some cheap oil for 2015/16. This will cap any recovery in prices as their demand will drop off so its a bit like a short for me, and the recovery will be slow and choppy imo at least. If it wasn't for their buying, the oil drop would have been even more scary for some, but demand seems to have taken off the table because of these tankers. Could we see a shortage of tankers if too many are full of oil and moored. Not sure but it could be an issue if this storage goes much further. Perhaps that's a bullish signal. Hmmmm. More coffee needed and stronger too :-))
Re FOX- the jam tomorrow co- and nothing new today, 2014s jam is now 2015 jam, but TW and his pals have their money on the table so FOX will have time to get some sales made and the weather delayed factory built. They have no direct mkt comparisons and the story is great but 2015 better be the big year or some will move on to new stories. The mkt reaction today looks about right (down 5%).
Re IOF- probably better than expected news from IOF, but the link to shale oil drilling is clear and that is the major red flag for me, plus will they need the water project is the Saudis get their way... No mobile units so cash is tight and being conserved for better use which isn't a positive sign re future growth but they live to fight another day.
Cheers. The Leggie
Fox Marble: http://www.investegate.co.uk/fox-marble-holdings--fox-/rns/pre-close-statement/201501130700099666B/ Indeed, Leggie the no news award goes to Fox Marble (FOX). In the absence of anything changing one finds it hard to justify the valuation (save for hope) in Fox Marble. With a hugged stock the question will be whether someone targets FOX as a strategic short. One perhaps to answer on a Friday! haha...
DeleteCheers F
Fraser- Hehehe- you do like your game of Whack An AIM Mole don't you ? :-)) And there are plenty that need a good mallets blow on the head, as we both know. CHL spike looks like complete lack of stock, which is probably far enough given the red/black nature of these arb plays. Cheers. The Leggie
ReplyDelete