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Good morning all from a very wet Suffolk ! Certainly an interesting news week with Wednesdays and Fridays events and probably a conference call thrown in. Two things I believe are currently holding this share back. One are the low charter index's and two the level of debt following the acquisition. The former which is not in the control of the company will hopefully strengthen as China launches its new economic stimulus package . The latter is most definetly under the control of the company and I think this news is key. I understand that some excellent economies of scale are now being achieved but clearly we want the debt deleveraging to hit the targets set by Ed.
Regarding the subject of Grindrod I am expecting very limited news. It has an egm in August with a view to distributing some of the cash from vessel sales to shareholders. The issue is the company is registered in Singapore and regulations there for delisting are fraught with difficulties. Shareholders of Grindrod expected TMIP to have another go after the initial effort and when it did not the shares fell back as a result. At some point I think it will have another go as the business case for keeping two companies wholly separate and with such geographical distance doesn't stack up. I believe the company has intimated this as such in briefings. Personally I think we will see a pause why they achieve the economies of scale and get the measure of staff before moving. Given that the company has aspirations to grow further as debt is bought down I just don't see the two remaining indefinitely separate. But really hoping for good news. I would be buying more now but no spare cash with an imminent wedding to fund !
Yes, I saw that and got a bit excited but it did little to the SP. Just hoping this week brings some good news, it’s so frustrating to see a company as this producing profit but such a huge discount to NAV.
What I'm looking for, from the releases due this week, is an indication that TMIP management is having an impact on Grind, and a clearer vision of how the two will move forward (i.e. remain as separate entities or combine as (say) Taylor Grindrod). A reduction in the debt in line with forecast would be very positive in my view, unless funded by more vessel sales. Let's see, should be an interesting week. I'm going to wait for the news updates before any further purchases here, so that should guarantee good news and an sp rally lol.
Just noticed huge buy of plus 1 million shares on Friday. Presumably an institution buying in . Good all the same
...thar was changed at CD the last minute but I suppose better being slightly delayed rather than wrong or something missing!
Companies webpage changed to July 26th for the above.
I hope you are right on your two year cycle ! Lets see what tomorrow brings and a week tomorrow.
....ha ha, just sitting watching at the moment.
My theory is that the BHSI moves in 2 year cycles (2014 -39%, 2015-42%, 2016 +109%, 2017 +5%, 2018 -5%, 2019 -18%, 2020 +39% ,2022 +117%, 2022 -55%, 2023 YTD -39%.
So later this year I will look at adding for the next upward cycle.
Hi Mike, don't know if you are still building a stake but if yes when are you tempted to buy ? Before tomorrow, or post July 28 ?
Krusty/Sam, annual report for last financial year out tomorrow so that will give us more information.
Then April-June NAV report out on 28th July, I expect a tiny improvement in NAV, say 1p/share -every little helps!
BHSI unchanged yesterday. Chinese economic numbers have been disappointing over the last few months but see to be turning upwards again.
HI Krusty, no probs. Never an easy decision when to buy in and would certainly not offer a view on that one ! I yesterday went through the last two quarterly update sheets. The last said the dividend was covered 2.1 times so fingers crossed there. Probably the more notable point was that the debt from the purchase between December and March had already started to fall. This was before Ed took over as CEO of Grindrod in April and before any economies of scale started to be achieved. I know since then they have been making very good progress on that front. The final point I noted was that a lot of 2023 has already been locked in at higher charter rates. In looking at the BDIY and BHSI indexes this morning just as well. Am waying up myself to buy more. My average has got totally muddled as I originally bought in dollars, then sold to buy in sterling in hargreaves and of course the pound dollar rate has constantly been changing.
Hi Sam, thanks for the update. I sold some here at 88p in January when I became anxious about the half-year report (at the time). I haven't bought them back yet but I intend to. It's a tough call whether to do it ahead of the first-quarter update or wait & see what it looks like before committing. There are lots of negatives currently but I believe they're priced in already so I suspect any sign of better news, plus a continuation of the dividend at the current level, could see a significant rerate. My average is currently 99p so it would really help if I get this call correct.
Hi Krusty, I know the number one goal of the company remains deleveraging after the acquisition. That figure is key. Baltic dry index and bshi not good so still picking up a few when I can.
....sounds good to me.....have a great weekend too.
Correction ... July 20th
Hi Mike, sadly yes but I am encouraged by the following.
1. Shipping is cyclical and when it recovers profit margins are excellent
2.China as it has done in previous years is finalising its latest economic growth plan/stimulus. As this commences rates should correspondingly increase
3. New ship builds for the next two years are low and as ships become redundant should also help rates.
4. Ed only took over as CEO of Grindrod in March so now we should really start to see economies of scale kick in.
I am taking a three to five year view here so at the moment am taking advantage of the low share price to buy more through the excellent dividends. By this time next week we should know. If in this challenging market they have managed to meet deleveraging targets then I will be delighted and it will have been no mean achievement . bst rgds for a great weekend
Sam, unfortunately I called it wrong and the BHSI has continued to fall particularly with the negative economic numbers in China.
By early next week I think we will see a new YTD low for the index , below the 421 we saw in April.
Hi mike, by the look of it they are at it again today. Thanks so much for your informative reply. You are much better at the indexes than I am ! I had expected to see a couple of more disposals to assist in bringing down the acquisition debt but no sign of any. Good to keep in touch. Sam
Sam, I saw that yesterday, the recorded sells were dramatically higher than the recorded buys yet the share price was up 2.46%?
The Baltic Dry Index has gone down for the last 2 days but is still up quite a bit from 3 weeks ago.
More relevant to us, the Baltic Handysize Index has been falling in recent weeks and in now 454 (got down to 431 on 15th Feb) but has hardly changed in the 3 days ago so I hope this is the turn to higher levels. Current spot Time Charter rate is around $8100/day. TMIP needs about $9,000/day to break even but fortunately the majority of business has already been locked in at higher numbers.
From what I can see for the second half of this year most predictions expect a moderate recovery in the Baltic Dry Index.
So annoys me when buys are reported as sells. Seems to happen with increasingly regularity for a number of companies. My 3000 plus buy reported as a sell. Mike, trust all good with you ? How have the indexes being doing if you have moment ? Getting slowly nearer to July 13 and release of annual report which will also involve a presentation of how they are getting on.. bst rgds Sam
Noticed a couple of very large late in day buys yesterday and a couple of days before. One for 150,000 and then a new one of 200,000. Originally marked as unknown transaction but then marked as buys. Fascinating if someone new and large building a stake at these low prices.
Same thing has happened to me on three occasions with this share. Another share I had in the past , cordiant digital had the same issue recently. Funny games. A unidentified transaction went through this week of a million and a half shares. I am currently buying more of this as and when funds become available. Was in my personal opinion under-priced 6 months ago let alone now.
Looks like buys are getting displayed as selling. The transaction at 10:36 this morning, price 77.18 is a definite buy
Hi Mike, you might be right about the inheritance. At the moment the shares I have a little in are doing exceptionally well, whilst the big investments like this one are doing poorly. Talk about the wrong way round. Fortunately the larger dividends are helping though.
Appreciate your comments, and very interesting re the indexes. The grindrod shipping price has been slowly recovering over the last few days but still well down. Such an uncertain world right now and with a likely govt change here at the next election I am trying to choose my investments even more carefully. Agreed re the early fixing of some charters, thought it was a good move when I first heard it but even more so now. I have decided to reinvest my dividend so hopefully we will not see a bounce before 11/12 when it is reinvested. Off to pack my swimming trunks !
Sam, the bigger Baltic Dry Index is down 33% YTD but the good news is that it has traded up in the last 3 days. The smaller BHSI has its own slightly different rhythm and is currently 526 but it still heading down and is now down 22% YTD but still substantially higher than the 2023 low of 431 reached on 15th Feb, I think this might also turn upwards in the next few days. China is trying to stimulate its own economy by cutting interest rates by 0.5% when much of the world is still heading the other way.
Fortunately from the April announcement TMIP has covered 24% of the fleet days for the current financial year to 31st March 2024 at a net TC rate of $16,250/day and so in well insulated from the current TC spot rate of around $10,000/day and a breakeven of around $9,000/day and sh should remain profitable this Quarter subject to no surpries in vessel values.. Unfortunately Grindrod Shipping will probably remain loss making at current levels. If vessel depreciation follows its long term pattern then I think the TMIP share price has recently fallen more than the NAV and if shipping recovers makes a good entry point. But as I mentioned last week , it might get worse before it gets better.
Enjoy spending the kids inheritance in Portugal!