We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Hi damofari
I am an accountant, commercial not tax , and have been invested for 12 months
I looked at Malaysian tax changes and by my reading they have been deferred for 4 years - but I may be wrong
It must be said that the interim dividend was deferred due to changes in Kazakhstan tax rules not any changes in Ma la Malaysian rules which appear to be the possible restriction now.
A look at the principal shareholders on the website indicate why it might be an issue now
Us PI's in the UK,and elsewhere, are a significant minority in this case
The results for the year are excellent, the switch to KZT loans has eliminated a significant Forex loss, and clearly the company is operating in an efficient manner
Like you I don't like buybacks; let the investors decide where their funds are invested. One has to say that the proposed dividend reflects the stability of a well run company.
Eventually funds will have to be retained fo capital reinvestment but their success should enable such funds to be acquired at reasonable rates while continuing to give shareholders a return.
The company has , or at least by all the evidence, to have been well run but clearly the opportunities for the minority are subject to the status of the majority.
Let's wait and see - based on the dividend even with any Kazakhstan risk factors the share is significantly underrated and a great earner for the future
All my own opinion
I'm no tax expert but done a bit of digging today, and have to say i'm a little confused on why the taxation on this dividend is a problem - for this year.
The interim was cancelled to avoid taxation, stating at that time that it was interim as opposed to final divvys that would be subject to tax, hence todays suggestion of exploring alternatives to return profits (buybacks) to avoid such taxation.
A cursory google brings up a number of reports on the revised tax regime on overseas earned income, which highlight amongst other things, an alignment with Singapore on overseas income tax treatment and alignment with EU requirements for tax equality. These same reports, from amongst others the likes of KPMG state that there is a transition moratorium until 2026, namely that there is no tax on overseas income until then.
Not sure what this issue is NOW, and that timeframe gives plenty of opportunity to realign/redomicile etc....
Can any legal eagle tax fax contributors explain where my observations are wrong?
I am NO fan of buybacks - i struggle to think of one that worked - but in this instance if it puts the tax reduction into abeyance whilst a tax free solution is found, i think this could be the exception to the rule, as the boring but predictable, infrastructure like fundamentals of this business will owt, in time, for the patient. Even with any tax deduction, it's kerching.
5p divvy proposed, subject to adjustment for discussions on tax reduction. Happy days here. Hope they resolve it rather than a buyback.
Boring but enriching. Carry on.....
Jumped on board yesterday. Reported financials and analysis look encouraging, but not operating in a country I have detailed knowledge of, albeit I have some Uranium stocks with facilities in this country. Fingers crossed, and a nice looking dividend around the corner hopefully.
Fair Summary - couple of points
1) Producing @ full capacity - capex to increase capacity by 5% in mid 2022
2)Local market - Kazak cement market was 11.6M T - they supplied 13.9%
T sold increased by 2.6%
3)imports falling was simply switch to local sales
4) Kazak inflation about 8½% - increase in prices (ex works) was 15% - re costs depreciation is 17½% of COS so costs should not be increasing as fast as prices (see GP increase at Half Year- 46% vs 40%)
5)If at full capacity may not be able to benefit from UKR rebuild - the west will want it (remember Germany transferred all their CO2 producing cement plants to Poland which are closer)
6) fall in KZT against US $ is currently down 7% since beginning of year
- at worst point recently it was 20% down https://www.exchangerates.org.uk/USD-KZT-exchange-rate-history.html
Share price since beginning of year (45p) low point was 28p - 38% down
Perhaps affected by war as a member of the Collective Security Treaty Organisation (CTSO) but have not supported Putin (despite CTSO sending help to quell unrest in Kazak in January - of which STCM said they were not affected by
Just have to wait for full years results in June if same as last year, and see what they say about year's dividend after delaying the interim due to uncertainties re Kazak withholding tax
Numbers have always read well and whilst subject to vagaries of US $/KZT exchange rate seem to be coping well - also (from 2020 Accounts) borrowing had been switched to being in KZT so reducing currency risk.
Anyway my thoughts and observations
Nice to see the price going back towards where it deserves to be
Unsurprisingly moving back up, nothing has changed except the need for building materials has increased in the region. Possibly just vultures picking up cheap stock, but will be interesting if news follows
? Most big buys from same source. Let's see what happens when the ask price drops 2p.
looks like a bit of inside information going on before regulated news coming out.
i think you have pretty much nailed it on the head. it looks like the sp is begining to creep up looks over sold to me .
Is this summary accurate or do I need to think about other things?
1) is STCM running at near it's full production potential and selling most of what it produces?
2) STCM sells most of it's cement to the local market
3) there was a 57% drop in STCM exports to about 5.1% of production.
4) average production and price per ton increased over 2021.
5) export market may increase dramatically when the Ukraine war is over and rebuilding begins (STCM doesn't look well placed to take advantage of that expanded market; does anyone know who is?)
6) nothing the trading statement really justifies the drop in SP, but the drop in the value of the Tenge vs the dollar explains pretty well all of that SP drop.
7) Has the exch rate dropped due to the war?
8) Assuming STCM market is basically sound (which it looks to be) is reasonable to expect that it's SP will increase significantly should the dollar exchange rate improve.
I'd really appreciate some thoughts if there are any people researching this area. Happy also for PM's.
Thanks in advance
The drop is general market uncertainty/malaise, and probably a churn into what some consider more certain stocks. Production is near totally used internally, so export ban's etc don't really impact - albeit they could reduce imports which could only help STCM.
I don't see ANY reason to leave here; uncertainty/volatility yes, but the fundamentals haven't changed. Profits for the patient here. (and a cursory glance of 2 year SP pricing will show you this isn't the first time STCM has dropped for no obvious reason).
Probably people panicking due to them being next door neighbours to Russia
Only 10% of sales are foriegn question is how much is russia? I suppose a majority
Looks good this company though and a cash cow
im wondering if kazhakstan is supplying russia with weapons that might lead to sanctions being put on kazhakstan, i know theres a big sell of on the lse and else where but the fall on this one is over done in my opinion.
That's two trading days of getting smashed. Is this drop really all about SEB reducing its holdings from ~4% to 2.95%?
Been adding small on occasions here. Undervalued with an excellent dividend ..it’s going unnoticed imo
Yeah, I just noticed the comment on exports. A bit confusing to my mind as I can't see why it's relevant. In the end, I don't care who they sell the cement to as long as it's all sold...
Pretty sure the downturn in exports is because of the increase in domestic use. It does say in the rns near the top that they are concentrating sales locally due to production capacity. Pretty standard stuff really and im only a lowly conveyor belt fitter.
I suspect the following has caused some concerns:
'Exports decreased by 57.2% from 202,000 tonnes in 2020 to 86,500 tonnes in 2021.'
Unless I'm blind or an idiot (I'm definitely not blind), it was a solid update. I can't spot anything worrying, apart from the minor issue of the attempted coup... but it's seemingly had no impact on the company.
once the dust has settled and the country gets back to normal [dictating to the poor people again] this will recover, if it drops another couple of pence ill be topping up.
https://twitter.com/surprised_trade/status/1478696852023394304
BREAKING: *Information blackout* Internet has been shut down in entire Kazakhstan after mass protests and violence in country.
A new government might change the tax laws so we can get our interim divvy payments ;)
I expect this will be repeated in lots of countries this year; maybe in the UK and Europe, once people realise what the new gas/fuel prices are.
indeed, here's the latest from CNN just after 10am today
Dollar-denominated bonds issued by Kazakhstan came under pressure as traders reacted to the unrest.
https://edition.cnn.com/2022/01/04/asia/kazakhstan-protest-emergency-intl-hnk/index.html
That explains a lot. Top up time in the sales!p