The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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Major European markets traded mixed premarket on Monday as investors closely followed developments in the Middle East.
On the data front, market participants are expecting new readings this week on consumer confidence in the EU, inflation readings in different countries in the region, and the overall figure for the EU.
The DAX and the CAC 40 were flat at 8:03 am CET, while the FTSE 100 rose 0.28%. The pan-European Euro Stoxx 50 inched up 0.19% a minute later.
The euro held steady against the dollar at 8:04 am CET, selling for $1.05660. In comparison, the pound grew by only 0.06% to go for $1.21296 at the same time.
Baha Breaking News (BBN) / JG
Happy Monday y’al
October 29, 2023
Daily nationwide power outages across Egypt have begun to last longer, with the government cutting the electrical current off from homes across the country for an hour and a half or more each day.
The power outages began in July, with Prime Minister Mostafa Madbuly saying that normal coverage would resume by mid-September at the latest. But the cuts continued into the first weeks of October and lengthened over recent days.
Behind the cuts are a reduced domestic supply of natural gas
Longer power cuts began on Saturday, Cabinet Spokesperson Sameh al-Kheshen said Sunday. He pointed to an increase in consumption as well as “a decrease in the quantities of gas supplied from outside Egypt, from 800 million cubic feet of gas per day to zero.”
Though Kheshen did not mention in his Sunday statement the normal source of Egypt’s gas imports, Egypt was formerly receiving around 800 million cubic feet of gas per day from Israel
More mazut could have been used to supply the deficit in natural gas resources and avoid nationwide power cuts, said a member of the House of Representatives Energy Committee while speaking to Mada Masr on condition of anonymity in July. But, they continued, “there was not enough mazut available, which is probably due to the lack of foreign currency.”
https://www.madamasr.com/en/2023/10/29/news/u/longer-power-cuts-as-gas-imports-drop-to-zero-says-cabinet-spokesperson/
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Here's a damn good question to ask CEO Horgan - is now a wise time to switch to Egypt's electrical grid to power Sukari?
There are a lot of $ being spent and then 'capitalized' via the Capital waste clearing as non-sustaining the EMRA does have the opportunity to allow or deny a portion, thus Centamin not being able to recoup it, resulting in a payback schedule to the EMRA.
IF such a discussion is ongoing for a significant amount (i.e. if the EMRA demanded Centamin only be able to capitalize a stripping amount equal to the original LOM plan of 5.3 to 1 then Martin Horgan would surely be required to make a clear announcement to shareholders of any cost-recovery disallowance?
For obvious reasons these are typically the type of things that tend to get buried into the fine print of company annual reports such as on page 152 labelled key audit matter here: https://www.centamin.com/media/2940/centamin-ar22.pdf
Further details regarding stripping costs being allocated as capital can be located on page 182 - where it also notes that the rise in such allocations was deemed significant (which likely would raise a red flag at the EMRA) 2021 being $59M and 2022 being $141
There is mention in the report of he 15 year tax holiday coming to and end in 2025 , but also stated that PGM will submit a 15 year extension as well.
Explanation is required on how a 50/50 profit split agreement could also be expected to pay income taxes and why such a holiday and extension would be needed ?
It is clear those that invested here at 2 pounds were investing on nothing more than feeling there was going to be a future profit, in other words following the sheep sentiment, sadly as so often,they did not look very hard at the fundamentals nor consider the risk, buying such a overvalued share ,at the time.
Yes I admit buying 10000 at 180 ,and not selling after the news. But I own many many more ,maybe to many.
But thats life, you live and learn. Invest only what you can afford to lose.
Like it always says investments can go down,be warned.
This one now is bargain basement buy.
If you cannot stand it get out ,and do not invest anymore in the market ,especilly now.
As Andrew Maguire says ,"how much physical do you hold".
Naguib Sawaris claims to own 20 to 30 % in physical, like housing , a secure investment.
IMHO.
Hi Keepplugging,
It's quite true looking at the full history of Centamin there there were some outstanding results , unfortunately they were unsustainable and the esults from 2018 have been erratic, unreliable and rated from disappointing to dire up until now!
True the previous management were very successful at cutting corners, glossing over the true facts misleading the shareholders and filling their own boots just before bailing out as the cracks appeared in the gloss and the pit wall, but that said they had exclusive knowledge of the true state of Sukari which obviously retail share holders did not!
Lets face it if the previous management had done things properly then they wouldn't have needed to bail out and the Centamin share price wouldn't be languishing at around 80p with POG @ $2000!
Reading this bulletin board just once in a while is now painful.
What ever happened to the Golden flip flop party Mr Tibbles was planning, I suppose I can throw mine in the waste bin now.
For recycling of course.
Spoon who threw you a banana....you have no idea what I'm doing ...I certainly didn't buy here at 2 quid like some others did.
You clearly have no knowledge of the full history of Centamin and the outstanding accomplishments of the company’s founders and previous management turning a piece of desert into a billion dollar mining operation.
Despite your obvious lack of knowledge you continue to repeat ill-informed and erroneous opinions based on nothing but your own misery and ill will.
Why don’t you examine your own investment principles and practices and work on improving those rather than continuously searching for scapegoats to satiate your seething rage over poor investment decisions - this course of action may well lead you to profitable investments.
Hi Keeplugging
It's understandable on the information and media releases made available by the previous management and indeed the brokers analysis predicting a share price at nearer £3 why people bought in at £2, but unfortunately Andrew Padey, the BOD and indeed members of the EL Raghy family were glossing over how they were achieved by high grading and failing to have in place a fit for purpose methods or any method at all of adequately dealing with waste ore, also the open pit walls angle of inclination were too steep and there was inadequate surface water drainage at the top of the open pit, this all contributed to the inevitable and narrowly avoided near catastrophic pit wall collapse when the crack in the open pit wall became so apparent that it forced the previous management to confess their years of bad mining practice!
You may be aware that in the original Sukari agreement profit share didn't begin until all CAPEX costs in the building of Sukari had been recovered which would have been all well and good if the original open pit and the underground operations had been developed to the correct speciations for long term operations, but this wasn't the case.
So do we now have a situation where the new management through the deception and poor mining practice of their predecessors are having in many respects to redevelop Sukari from scratch which incurs a huge increase in CAPEX , this I suspect is very difficult, if at all possible to recoup from EMRA who were likely of the impression all major CAPEX had been repaid!
In view of this could the management now trying to renegotiate some extension of terms in the LOM plan
(That is he 15 year tax holiday coming to and end in 2025 but it also says that PGM will submit a 15 year extension as well. )
You may recall Hendersom's postings recently warning of some unannounced bur impending bad news, I wonder ?
The Suakari potential problems were exposed in 2015 & 2018, it is now apparent they were justified!
https://rb.gy/5qo6z
For some of us longer term investors, the previous management made Centamin a hugely profitable investment for which we remain immensely grateful.
Don’t want to rub salt into the wound but I will anyway for a giggle 🥳😃
Sorry Mr gnome, I mistakenly referred to you as Mr Bond!
That's excellent Mt Bond who knows if we are lucky our share price may tick up to at least 83p for a couple of days!
I concur, an absolute stinker of an investment and a result of the management never being completely honest with the shareholders or the market!
Hi Sotolo,
I agree with you entirely on this, the "Fishy" smell is increasingly apparent the higher the sterling POG as is my rising suspicion that the management aren't being entirely honest regarding some rumoured changes in the agreement with the Eygptian government which reduced the amount of free cash flow!
More detail this morning from Berenberg on Citywire:
Https://citywire.com/investment-trust-insider/news/expert-view-aviva-moneysupermarket-gb-group-firstgroup-capital-ltd/a2428592?re=114049&refea=218441
"Don’t ignore Capital’s investment portfolio, advises Berenberg
Projects at Capital Ltd (CAPD), previously known as Capital Drilling, are on track but the market is giving no credit to its investment portfolio, says Berenberg.
Analyst Richard Hatch retained his ‘buy’ recommendation and increased the target price from 169p to 173p on the Citywire Elite Companies AA-rated mining services company, which closed unchanged at 77p last week but are down 20% this year.
A third-quarter update showed revenue slightly below Berenberg estimates, but it observed that ‘key mining and drilling projects are on track’ and the group ‘also provided an investment portfolio update, noting an increase in value by $5.7m to $47.8m’.
‘Capital’s holding of Allied Gold, which listed during the third quarter, with a market capitalisation of CAD1.3bn, was worth $10m as of 30 September,’ said Hatch.
‘Overall we view this as a steady update from Capital, but we highlight the positive investment portfolio update which is 25% of its market cap and given no credit in its valuation, in our view.’"
27 Oct 2023
In this week’s episode of Live from the Vault, Andrew Maguire is joined by Dave Kranzler, founder of Investment Research Dynamics and Mining Stock Journal writer, to discuss outstanding US Treasury Debt and its impact on precious metals.
The experts debate how the coming banking and financial crises will be far more devastating than 2008 and how this will impact the price of gold and silver before Dave reveals some of the stocks he’s looking at shorting in the near future.
https://www.youtube.com/watch?v=np1gzQbsqj8
https://investmentresearchdynamics.com/
This has to have been a terrible investment...especially those in at 2 quid......
I suspect that shareholders may not have been made fully aware of some changes which is why I am submodifying the following questions to the Investor Meet preservation for some clarification.
1.Whether he profit share with the Egyptian government been amended or changed at all over the past few years - with dividends being distributed to shareholders yet free cash flow remaining stubbornly low,has this relationship been tested at all?
2. What cash has been paid to Egypt through the profit share and royalty mechanism in the last 2 years and what is it anticipated to be for the current year?
Hi Tornado,
Possibly in some respects the CEO has no control over what the market decides to value stock at, but he has great power to influence the markets decision over the valuation of the company share price .
SteveJones often refers to the main factors that influence the market and the CEO and BOD making some substantial personal share purchases is a fact that legally requiring an RNS in this case a confirmation that the CEO and BOD have great faith in their future strategy of the company which would certainly influence the market valuation of the company ,likely to the better!
Irrelevant on support line Tony.
Facts and events drive indices not charts, charts simply respond to events.
Data yesterday PCE etc was surprised once again on the upside, so the FED bets are poised on hawkish, still, and we all know what this means- potential on rate hike remains on the table.
It's really as simple as this.
Spot on Tony.
If I was the CEO of Centamin I would say we have no control of when the market offers a ridiculous low price as discount on the value of the Centamin stock. Buying low and selling high is a problem for some investors to do, but now is probably a good time to be buying the stock and in fact backing up the truck and buying shed loads. I then hope he can put a buy in afterwards.
Tonight SP500 held the 4116 support line and the next support line now at 4050 is critical. Panic selling happens when it breaks. If it is a stock market crash next week what are the FED going to do when or after it happens as they will have broken the market and the banks are already in a fine mess State side. In the meantime, Centamin will earn loads of money on higher gold prices.
EGYPT: DARK PROSPECTS
10/16/2023
Egypt’s management of external accounts, which consists of buying time thanks to external support between two drastic exchange rate readjustments, is reaching its limits. The persistence of a significant external financing need, notably due to the amortisation of external debt, and international creditors (Gulf States and the IMF) who condition their support on painful and politically costly reforms, have led the Egyptian economy to a dead end. The banks’ net external position is deteriorating at an alarming rate. Restrictions on foreign currency transactions are increasing, with negative consequences on activity in a country highly dependent on imports.
Against this backdrop, the currency shortage is reflected in multiple rationing, the development of a parallel exchange market, a deterioration in the net external position of the banking system and, as a last resort, a sharp depreciation in the exchange rate. The Egyptian pound has depreciated by more than 50% since the beginning of 2022, while the exchange rate on the one-year offshore market has now reached more than EGP 50 for one USD, representing a gap of more than 50% compared to the official exchange rate.
Further deterioration in the external situation of the banking system and a widening of the gap between official and offshore exchange rates can be expected in the coming months. The planning of the presidential elections in December 2023 makes an exchange rate adjustment before the end of 2023 unlikely.
Furthermore, access to private external financing deteriorated, particularly following the downgrading of the sovereign rating by Moody’s, which mechanically led to that of the country’s main commercial banks being downgraded, given the link between the banking sector and the government. Public banks hold approximately half of the total banking assets, and government debt accounts for approximately 50% of the total assets of all public and private commercial banks. Government access to the international capital market has been closed for several months given the level of risk premiums (greater than 1,500 basis points)
https://economic-research.bnpparibas.com/html/en-US/Egypt-Dark-prospects-10/18/2023,48999
More than that Mr T today gold made another all time high in sterling, which matters to our sterling gold price ……which languishes around a decisore 80p due to management incompetence.