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@hash: that’s very flattering. Re investment bank analysts (I know I’ve said this before): they’re not employed to give unbiased advice to their firms’ investment management clients, never mind private investors. They’re there to support their corporate finance departments, whose existing and potential corporate clients (such as Kaz) prefer to give their (very lucrative) business to firms with a strong analyst presence, preferably with a supportive view as far as share price forecasts are concerned.
In the webcast presentation they stated that if a deal was right they would have a partner we cant do this alone otherwise the debt is going to be over 7bn over the course of time
If you look at the Kaz website the money they earmarked in the third quarter was going to be spent on roads fuel and power supplies it clearly says on the timeline that work on construction will be in 2020
Furthermore like I have already mentioned in an earlier post Norlisk would like to work with them and thus would be an ideal partner as they have billions to spend
Cheers very much for your praising, I am flattered !
But I must admit that I am still rubbish at day trading, I keep missing the great selling and buying chances, it is a slow learning curve , maybe one day I will get it right and retired !
Definitely agree with you there about day trading, especially as often see gap ups or down, and personally prefer to hold my trades for a few weeks on cos like this - mainly use them as a leveraged play on commodity prices (same with one or two oil cos as well that always seem to be highly geared to the commodity price movements). VED used to be fantastic - even more so due to the chairman holding so many of the shares, and the low free float tended to exaggerate the swings up and down even more. Xstrata was another favourite of mine years back.
I dont think analysts in an investment bank have the insight that deserves attention.. there are people on this board like Shakhtar and rastuss Roydon1 , casual and many more who have a better understanding of kaz then these analysts in the investment banks who are merely be trying to be clever in hindsight........
so I suggest you do be better off reading their comments......
People here have far more experience than me, I would say a 'mix of both' would give you the best of both worlds. You need to understand the factors of the security you are investing in.
Would you not think the investment banks have knowledge of the security which they are dealing with to publish the target? The targets would aid their private investment departments to have their client invest in these stocks.
could not agree more. loved trading VED as well, thats where I developed taste in copper...but the thing to keep in mind is that 80 percent of day traders usually loose money......so its a good idea to be not too aggressive on kaz if you intend to day trade....
Its probably one of the best shares out there for trading in my opinion (VED and RRS used to be favourites of mine as well) and that adds to the volatility and exaggerates the swings - I've been trading it since 2009, but also see it as a good long term investment now that the business has been restructured/streamlined, compared to a few years back.
I think all these investment banks which publish the price targets are usually behind the curve....
in kaz there care 3 kind of investors
long term which I was one who buy kaz and just goto sleep and if kaz drops by 30-40% buy some more and again goto sleep wake up after few year and make 3x......and dont bother to follow the board or look up copper prices and share price...most of these guys are probably in red and not too happy about the current share prices
day trader who follow every price move of kaz and copper and global economy etc etc and try and make sense of how thats going to effect kaz price and usually get it wrong...which I was as well. some make a lot of money but rest loose....
mix of both who are long on kaz but keep making some money on the side because of the volatility and will one day make 2-3x of their long term investment investment...which I have ended up being. most of these guys are doing ok right now I guess....and the price volatility to them is usually an opportunity to make some more money on the side.....so they are not happy at current prices nevertheless not too concerned......
Quite possibly there were existing shorts open and then they hit it hard when copper started to slide and the markets dropped on Corona fears, to try and get it as low as possible to close all off their short positions prior to the production update tomorrow. It had already started dropping disproportionately prior to the copper dump anyway. I missed the bottom but was happy buying in the low 450s, although would have got cheaper had I waited an extra day.
Barclays gave a target of 680.00, Liberum = 770 and Peel Hunt LLP 710 all within this month.
Wouldn't it be better to hold until you reach 5-10% of the targets and then decide?
I am new to this, only a month in and trying to understand external factors which impact these SP.
I don't know....but the way kaz behaves is totally erratic... its difficult to manipulate the price but then surely it can be influenced...... the thing with kaz is that you can never be sure which way the price would go and by how much irrespective of external factors...look at today's price. kaz is up more than 6% and copper hasn't moved. yesterday and day before it was just being driven down on back of copper prices...
I had ended up buying on Monday and Tuesday..may be I will sell that lot today because you never know what happens tomorrow........but I am assured that kaz is still grossly underpriced but I dont mind selling even at 480-490 so that when prices goes to 430 I can again buy few more of kaz....
it has been mentioned before here, but do you think it has been
deliberately driven down by market makers,knowing there is a killing
to be made here, on day trading.
that's been my strategy for last 2 years and it seems to deliver....and yes the share price should be at least 7-8 and as and when they announce Baimskaya and copper is up the value will be 15ish.....
one of the things that we need to remember is that a partner for Baimskaya will be in someway linked to copper prices. only when copper prices are reasonably high they should do Baimskaya deal to get the best value....at current prices it may not be such a good idea as the value kaz might get from Baimskaya would be probably much less...
Where did you get this from, Auto? I’ve not seen any news on a partner and I remember they said they would be building a camp and a landing strip but that’s about it. Baimskaya is a huge project and it would take at least couple yeas before they actually start building. We should get a feasibility study result in a few months and that should provide some clarity on the budget and a timeframe, and if the results are good - and that’s a big IF at current copper prices - then they would need to find money, which may also prove difficult given the company’s highly leveraged position. I’m sure in the end they’d need to get a rich partner on board to get the project off the ground, if they want to move it quicker. And didn’t they say that the government has to build the power and road infrastructure first? All this takes time, years in fact. I don’t understand what’s all the fuss about this Baimskaja - Kaz should make a few billion from current projects and would pay down quite a bit of the current debt before they can actually start building this. Otherwise they’d be forced to get a partner of forced to put the project on a slow burner. And if copper prices rise their should be more money to increase the divi which I agree is miserably low. The fundamentals look good for Kaz and not reflected in its price. It should he at least 7-8 quid even at these copper price levels. Happy to hold for a few years and trade part of my holding in and out in the meantime to profit from volatility. GLA
totally agree with you and to add to your point it was done at a lower rate.
so not only 1 billion but oversubscribed and at a lower rate. this totally takes away any challenges in terms of cash avilablity.
my only concern is why do they need that extra loan because the current cash flow is good enough to sustain the current commitments... which means may be kaz is going to put more money in Baimskaya? that is not a bad thing bit surely that will drive the market sentiment down and we can expect share price to then be volatile.
I think the long term shareholders will eventually make some good money but till they find a good partner for Baimskaya and till the copper recovers the traders are going to have a party...
Yes I agree but why haven't we got a partner already the thing is starting to be built in a few months
Autonomy1: I think Mr. Kim runs it, on behalf of Mr. Nazarbayev. I doubt the Baimskaya investment was made without his say-so. The reason he wanted the deal made is not clear. It’s perfectly possible they will find a big j-v partner and the mine will be up and running on schedule and within budget. Even if it’s not, they should be able to meet their loan repayment schedules, by hook or by crook. If the copper price has a good rise by the time the mine starts production (on schedule), it may turn out to be a very good investment. The new loans, like earlier ones, are mainly to finance, or re-finance, expansion at Aktogay in order to achieve stronger cash flows to invest in Baimskaya. That’s what Kaz is all about now. It needs a good announcement of a rich j-v partner to get this share going, and/or a big sustained copper price rise. Not more loans. I do wish you and other holders good luck with Thursday’s figures.
I am sure you are right with your views on debt over several years something of which was mentioned at the half year results if copper didnt go up so it is a positive step that they have took action to address this and if they do go alone with Baimskaya then I am sure that the repayments will be over 10yrs or so
Just a shame that the share price doesnt move in the right direction and 7 or 8 yrs is along time to wait especially for older shareholders especially when you have been with it since 2012
Jan 27th 2017 share price 452 ,Jan 28th 2020 share price 450 people who have not traded this share have made nothing because the company is badly run or as Rastuss leads us to believe is run by a dictator it cant afford to pay any dividends more than about 1% because of its debt which has just gone up by 700m today
Looks like a partner for Baimskaya wont happen and they will keep adding debt every year or so to pay for it as they build it
Agree Rastuse always jam tomorrow with this company
I just cant understand when they nearly went under several years ago and bought it back to take so big risks and debts again
Surely the sensible thing to do was to consolidate just for 4 or 5 yrs and reduce debt and then build Aktogay 2 and the 3 or 4 yrs later to build Koskay which everyone seems to have forgot
Shakhtar: I don’t know what security the banks have negotiated on these loans. But if push came to shove further down the road, I think the Kazakhstan government would enable Kaz to repay the banks, without recourse to any such security. I think investors, many of whom had been looking forward to a decent flow of dividends, are concerned that all the cash flows and a lot of new borrowing are going to be absorbed by Baimskaya for the foreseeable future. The big shareholders in this must be pretty disappointed with its performance over the past year or so. You can get fed up with the promise of jam tomorrow.
I have to disagree here Rastuss. The independent banks would actually consider this type of government "support" a risk rather than a positive. After all, such support, if abused, may result in a loss of assets to the state-owned banks, so western banks would be concerned to lend alongside, even if they have priority security over these assets. I firmly believe the western banks provide lending to Kaz the merits of its business plans and security of future cash flows. They were obviously provided with information on the company's future plans during the due diligence which they were happy with, and this suggests to me that there are positive news to come. Hopefully soon.
And the fact that Kaz needs so much debt is not surprising at all given the Aktogay expansion capex and accelerating debt repayments on Chinese loans. This loan helps them extend debt maturity profile and do so at a low cost - something equity investors should be happy about as ultimately cheap, yet serviceable, large debt would translate to higher equity returns that investors could otherwise expect from a capital structure that relies on low debt and equity dilution. The big shareholders in Kaz clearly know what they are doing and I'm happy to ride along.
Hi, Shakhtar: you can certainly look at it that way. I think the demonstrated willingness of the Kazakh government to stand behind Kaz if it looks as if a major problem is looming is a very important consideration in the minds of the independent banks. The fact that Kaz see the need for such a large new loan at this point can be interpreted in less optimistic terms.
I’m much less concerned about Kaz than I used to be though, I don’t think it will be allowed to go bust while Mr. Nazarbayev is still on the scene (or behind it) and this puts a very different complexion on the perceived risk in Baimskaya. It’s tempting at this level. Good luck on Thursday.
Rastuss, the ability to raise new debt is entirely dependent on the company's free cash flows and risks associated with Baimskaya, among other risks. I know you've been saying that the major shareholder can "convince" Kazakh banks to advance new loans, but when 19 "Western" banks (including European, North American, Japanese and Chinese) commit a billion of new money (which they said was significantly oversubscribed), that to me means that 19 separate credit committees looked very closely at the company's future cash flows (over at least next 5 years) and assessed all the associated risks, including no doubt Baimskaya, and not to mention the already huge debt pile, and then were happy with all those to give the company another billion. That is a huge vote of confidence, don't you think? And from a very diverse group of banks, which tells me much more than the production report or the financial results we are all waiting for would. Massively positive news!