I think benchmark Rand dollar was 14 based on Duffy's project 2022. With the dollar strength of late, the rand is now at 18.67. One would hope Duffy and their advisors will not have hedged too much at 17 and will benefit or lock in hedges at 18.67.
This is certainly one of the saving graces at present and hinted by Duffy in last RNS... "The impact of weaker diamond prices is partially offset by a weakening South African Rand, currently trading at around ZAR17.45:USD1 compared to an average rate of ZAR14.69:USD1 for the six months to 31 December 2019 (H1 FY 2020)." END
Currently ZAR18.67:USD1 which is up over 6%.
Finges crossed for Johnson. Come on Boris... pull through fella.
Gold tapping on the $1700 door again. I get a feeling that it's ready this time to break through and test $1800. CEY was trading at 130's with POG at $1590. Add in an extra $100oz and the price is down by 6p. Makes no sense at all but may be down to Van Eck selling a few more. All bodes well for a nice stron sharp upswing day assuming buyers outweigh likes of Van and co.
I'll be buying more tomorrow as this should be 170p+ based on POG around $1800 and 220p a share based on pog at $2000+
probably find out tomorrow that they've pulled out anothe rare blue gem and the mine workers have been buying up stock via their trusty brokers.
Joking aside, a rare diamond find is about due as this time last year they had bagged 3 already.
The irony is, one large rare diamond find worth $20m ish is 1 x the entire business market cap.
My guess is that they are close or have bought themselves 12 months+ living space with convenants relaxed and BEE deferral. Tullow rose from 8p+ tp test 30p recently off the back of their debt reneg agreement. Almost a 4 bagger.
4 bagger for petra would put it at about 5p based on the 1.2p range it's been consolidating for last few weeks.
My guess is 4.2p/4.3p tomorrow and if Rothschild delivers a deal that is good for shareholders, then who know's... 8p gap might be filled. It's always been 'all about the debt' for PDL and at 1.2p the market was sure it was going to the wall. It will be a phoenix like recovery if Duffy can pull this back to 8/10p levels. Then perhaps, get a rights issue off and slice some $50m+ off the debt which would make up for the last 4 to 6 months Corona woes.
If PDL updates on strategic review and mentions the words... seeking possible sale of business or some parts... then you could see a spike much higher to 4's and 5's as market has priced this to go to the wall.
I think the most likely update wil be on BEE pushing out $12.3m debt payment until next year and current Bond holders of the $650m agreeing to forego interest payments in 2020. The interesting thing is that the $650m bonds are trading at just 25% par value which means the market thinks they will have to take a hair cut. On the whole, if I wee Rothschild, I would try and get the following executed.
1. Debt holders interest payments deferred to 2021
2. $300m of debt swapped for equity on a 50% basis eg bondholders would own half the business
3. Prior to the above, rights issue by shareholders roughly £50m raised from £50m cap sp double shares in issue
That would leave around $250m debt in total, and you'd be looking at 2bln shares in issue
Assuming an sp of about 15p, that's £300m cap but it's based on $250m debt on a 2025 basis. If PDL were able to grow cash by $40m per year through to 2025, then it would add an extra 10p to the share price assuming debt reduces by $50m per year too.
That's the best I can muster on the positive side. On the negative side... it's straight forward... the debt holders go for the typical 97% debt for equity approach and shareholders get shafted with 3%.
There is a pathway back here to 20p but the stars would need to align and the diamond market would need to bounce back like it's 2011 again.
Cairn has a habit of spiking and then pulling back for a period before then returning to highs. Presents a double bite of the cherry for day traders. Assuming oil gets a boost from a deal via russians and saudi's, then Cairn looks good for a run to 140's.
It's a low cost producer and cash generative with nothing on the debt front to be worried about although would be good to see them slow down future capex/development plans as no rush required on those.
I think a few debt heavy companies are bouncing as markets begin to think that debt holders have little choice than to roll over debt for 6 months+ as Corona is a universal problem and seems that the banks are being told to not force admin or defaults unless completely necessary. Bodes well for PDL if true.
I cash in a few on Tullow at 29 as think 31p might be the top for now and was not risking a sharp pull back. Plenty of shorters getting hammered there so they will try and force it down to save some blushes.
Be careful out there it's dicey at best.
Any news of debt holders being 'kind' will certainly lift the share price from these levels if Tullow is anything to go by.
Better news from GEM Diamonds this morning so may have an effect. Diamonds still in demand... just a question of how much glut is out there and what the opportunity buyers are paying
Markets will be very concerned over Boris as indeed we all are. He ha sthe best doctors on hand, which begs the question why he would be admitted to hospital when all the same technology/equipement would be available to him at number 10.
I thougt he looked quite weak in his last appearance. The numbers on people going into intensive care and coming out ok are not great although the way countries are reporting numbers these days is a complete disgrace.
He's going to be the main focus of news over coming days and if his condition worsens, then that's going to be alongside the worst weak (predicted) in US. So very ugly stuff. If he bounces back (and I hope he does) then could see some relif in markets later in week.
I'm not liking this - that headline wouldn't be breaking unless he's in serious trouble. They could have got care and a best ventilators in number 10 and avoided headlines like this. Most bounce back after 7 days. Boris is stiil struggling and on dat 10/11.
Come on Boris... pull through fella
not liking some of the headlines at present
Trump now discussing option s with Canada to slap tariffs on Oil imports from Saudi and Russia which would effectively render the oil sale worthless. So putting it bluntly, Trump is saying do a deal or we'll ban your oil from US.
Saudi's and Russian's are not daft. They know this was a risk some weeks ago so this threat carries very little weight. The US and Trump are in deep sh....t when it comes to US O&G industry. Us shale is going to collapse soon and take a few banks down with it as the loan book is massive.
The Saudi's and Russian's have US over a barrel and the US flexing their muscles is the last thing we need right now if an oil deal is to be achieved. Oil war just increased from 2 countries to 3!
Russian's have offered to cut by 10% but that's way off what is needed. Saudi's and Russians (ince OPEC) need to cut by at least 20% otherwise it's going to have little effect over the next 6 months.
Out on bloomberg this am "Saudi Arabia Says Putin’s Comments on OPEC+ Deal Are ‘Incorrect'". It's clear that these two are not happy bunnies but there's something very unnecessary about the comments by Russia at this time. In fact, I would go as far to say... irrelevant. They both know a deal has to be done. Trump has hung his reputation on it. Although that can last all of a few minutes before a new reputation is created and the last one forgotten.
It's obvious that quite a few in the market got blind-sided by Trump's tweet. I wonder whether Russia have shorted oil/stocks over last 2 days knowing they can stall this for a few days or week. Lets face it, if nothing appears on Monday that is concrete, then Oil and related stocks are going down heavily. A few days later... and a deal is done. Trump nor many others involved just care about gettting a deal deal. A few days might not make a difference to them but it's going to carve some leveraged punters to bits if this gets stretched out to next weekend.
My guess is that Trump and co will get a deal brokered for release on Sunday eve. And if they can't get it done, then they'll put out a holding statement that keeps speculators in limbo until it's signed.
Any delay by Saudi's and Russian's on this will create another great opportunity for those that like trading with ninja type speed.
Bear in mind, Fed reserve do not want the DOW index getting hammered and if no deal is done over weekend and oil falls on Monday, then DOW is going to see another 1000pt day loss and the rest.
Trump and Fed need this deal big time. Saudi's and Russian's can afford to continue their 'spat' on a public level for a few more days if that's what Putin is after. The latter rarely loses face.
I said this morning that it should be 16p+ on debt news and oil cuts. 17p+ looks like a nasty nose bleed for some shorters especially heading into the weekend.
Not many days to celebrate for longs but this is certainly one of them.
Enjoy your weekends - bbq sunday unless police clamp down on too many burgers in a bun?
The DOW would be sub 20k now if it wasn't for Trump's oil deal. That's the problem for the hedge funds at present. They would have baked that oversupply in for bulk of 2020. With cuts, there will still be some signficant over supply, but the future is a bit clearer and as such heavy discounts on some Oil plays across DOW have rebounded strongly and these companies have high market caps already.
So without the OIL bounce, DOW is roughly 19900 ish and with Oil cuts talk, DOW is 21250. So Trump and Fed have saved another 2000pts (roughly speaking).
Yesterday, the unemployment figures were so poor it instantly saw a move into Gold by some funds. If this happens on each occasion of poor data headlines, then you can see why Gold is heading back to $1700's again. When the data improves, it will return back to $1500's. But that's 6 months off if that.
It certainly looks like the larger sellers have completed their end of tax year trading. Many will have sold down heavily to book the losses. Petra are due to make a $12.3m payment to the BEE debt holders in May. Considering that's just over 3 weeks away, I'd expect Duffy to be releasing an RNS soon. Only issue here is that why should BEE forego their interest/repayment sum in MAY if the $650m loan note holders hold out for full 100% interest payments??? Someone needs to take a haircut or at the very least agree to kick the can down the road.
Market markers look like they have passed on the 7.6m block from a week or two ago. If they are low on stock, then they'll nudge this up to 1.6p+ soon. Watch for tighter spread and lower volume moving price.
The higher Oil goes the more likely Shorters will add to positions in hope that any retreat back to $24 levels will see them out before a deal is struck. It's probably going to take at least another week before this is finally agreed but I wouldn't put it past the Saudi's to hit the Sunday news headlines with a cut number confirmed in principle awaiting US Texas authority response. US shale 'absolutely' needs to join in on cuts and Russia are more than correct in this. When you produce over 13mbopd, you have a responsibility to ensuring there is a working oil price environment. For years and years now, US shale has been riding higher off the back of OPEC and Russian moves. Now it's time for the US to step up and deliver some cuts.
If a deal is not confirmed over the weekend then I'd expect a pullback in wti to retest $23pb levels which now looks like a solid floor.
Had all involved not hit headlines with cuts, then next week would have seen WTI down near $15pb and even$10pb and at those levels it's really really hard to get the price up above $27pb WTI even on cut talks.
Historically, as oil rises, Natural gas follows. The market has so much fed cash sloshing around that it's single handely picking the bottoms on just about everything it can find which is leading to all kinds of rebounds.
I'm surprised Serica isn't back above 90p as that's roughly the level it saw some support on the last sharp fall. So on a sharp rise bounce back, 90p would be the target for traders. They will arrive soon when they realise that SQZ has barely moved in comparison to peers. It's about 10p shy of where it should be right now.
That is a significant rns especially during these tough times. I would expect other debt realted oil companies to do well off the back of this as it shows that the sentiment at present is for debt holders to support companies and just try and ride it out. What debt holders do not want to do is call in loans as that would upset BoE and potentially cause a run on banks.
In theory, if the BoE are giving the banks handouts to support them, then they expect the banks to support their clients in turn. The headwinds are still there though but with Oil deal now looking very likely and US shale clearly on a slide, it bodes well for many fearing sector survival.
I would expect Tullow to be back above 16p on this kind of news as it removes one of the major hurdles.