OCN - the bull case....27 Jan 2016 12:42
Some evidence in support of buy case for OCN LN below:
1. Quote from Russell Napier (a great bear market strategist), lifted from the FT. Ok, it reads looks like a bear argument until you look at my points 2 and 3.:
“Never buy an emerging market equity when it’s cheap. Only buy an emerging market equity when the currency is cheap,” he said. "The problem is that while currencies for Brazil, Turkey, South Africa and other developing nations have been losing value against the dollar for years, exports have not yet risen to the point where these countries don’t require regular inflows of foreign money.
To be cheap the currencies must fall further, which risks problems for countries, and companies, which have borrowed in dollars or euros. Currency crises and sovereign defaults remain a real possibility," said Mr Napier.
2. Wilson Sons Limited latest quarterly volume data from Brazilian ports. Take a look at the Import figure (-11% - a collapse) but off-set by +ve export figures to give overall +ve grand total quarter on quarter and year on year change. Q: Is this an indication that Brazil is at or near the point where it does not 'require regular inflows of foreign money' - a constraint referred to by Napier above??
3. Read the small section from last week’s interim statement from BG on volume growth from deep water Brazil (and Australia).
BG Statement 20/1/16.
"Full year E&P production volumes are expected to average 704 kboed in 2015, around 16% higher than 2014 reflecting growth primarily in Australia, Brazil and Norway. Volumes in Australia more than doubled to 88 kboed and in Brazil, almost doubled to 146 kboed. In Norway, Knarr came onstream in March and has produced an average of 12 kboed during 2015. This growth was partially offset by the expected decline in Egypt, down 18 kboed to 44 kboed, combined with lower volumes in Trinidad & Tobago, down 13 kboed to 52 kboed.
The LNG Shipping & Marketing segment delivered 282 cargoes (17.9 million tonnes) in 2015, 104 more cargoes than in 2014 (6.9 million additional tonnes). Increased supply was driven by 77 cargoes from QCLNG and 31 additional spot cargoes. Of the 282 cargoes (2014 178), 209 were supplied to Asian markets (2014 121). BG Group delivered its first ever cargoes to Egypt, Pakistan and Jordan during the year."
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