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If the shares are not cancelled, total shares issued remain the same, but Buy Back reduces those shares in circulation therefore the SP should rise, which indeed it has.
However, the shares still exist and could potentially be resold from Treasury to 'new investors'
Cna announced the Buy Back of 5% of "Issued share capital" on 15th Nov when SP was 87p, thus, 1.05x87 = a 'new' SP of 92p. (Ceteris Parabus), which has now clearly overshot....largely because US interests at last appear to be reducing US inlfation and western equity markets have risen consideab;y since Oct 15th.
In this context, Cna have risen from 66p to 96p, almost 50% in a little over 4 weeks.
In view of the above, I would expect a fall over the next few weeks until the inevitable "Santa Rally' takes hold.
All in my humble opinion.
Jack
On the announcement of a .75% increase in US IR, the Dow went up 400 pips to 33033Powells news conference was somewhat sobering - they haven't really got a handle on inflation yet, so expecting more rises to come. The DOW has now fallen to 32300 a fall of soem 700pips in an hour.It has a Gap to fill at 32000, so more to go I reckon.This ain't lookin pretty.....
Technically, we now have a double bottom from Oct 20, following the RI.
We also have what may be an "Exhaustion Gap" down this morning which is often a reversal signal.
If it's going to bounce, this is the best technical likelihood.
The Shorts have to close sometime and we know that from a rumour of a T/O earlier in the year that the SP rose from the 93 to 113 in around 30 mins, presumably because the Shorts were running for the exit.
Following disposals, RR has a much stronger balance sheet and outlook than in Oct '20, so I'm hoping this is the bottom.
Jack
Exactly right Whitehat.
I've lost a small fortune in Kurdistan since 2009, specifically on GKP since 2009 and laterly all my profits on Genel.
I'm out of this quagmire for good.
I can see KRG's POV, it's their land, their assets and their people, and why should they 'give it away' to Western Shareholders.
The KRG have cynically 'used' Western money to exploit ther assets and 'syphoned off' so much cash for their leaders & cronies, it's simply mind blowing....
One spectacular example for GKP was developing Sheik Adi at a cost of $300+ million, and then paying KRG $10m to 'confiscate' it.
Should have learned ny lesson then I guess.
Or am I being cynical?
All in my humble opinion
Jack
Thanks for the new chart Boyo,
I was beginning to think it was 'running away' against a most appauling backdrop.
I note a gap at 104 ish, andalso RDS have a 100 ish pip gap down at 1247 which will probably be filled.
Jack
Furthermore, if you look at ALL major indicies, they all "follow" the shape of the S&P / DJI.
Watch CNN "Closing Bell" They have slots to show all indicies. Once you've seen the S&P, you might as well switch off..
Quite why each country bothers with an indicies these days is beyound me.
Hi Boyo,
I wasn't talking about DOW futures 30, I was taking about the DJI.
The heirachy of indicies is:
1. S&P 500 - "The Daddy"
2. DJI - "The Mummy"
Where they lead, all other indicies slavishly follow incl the Ftse 100
Pehaps you might produce a chart of the above 2 + FTSE and see the strength of correlation.
My abiding question is, when are the world indicies & OP going to reflect realiity?
I'm reluctant to engage atm, as I feel sure that we will have a retest of the bottom on all indicies, and they will obviously impact individual shares.
ATB
Jack
Boyo,
The 'enthusiasm' came from the dow being 400 pips up = G@117 and when it dropped 400 pips, G = 112 - Simples
Oil also rises & falls with the Dow.
A rising tide floats all boats!
Top on the Dow for me is 24588
Let's see what happens after the "Big 5" report during the week.
G looks to me to have put in a "Double Top" at 117
Lets see
Jack
Thank you for the message and chart which which directed to me last Friday and apologies for not replying sooner.
With the very greatest respect for your excellent analysis over the past 2-years, and in view of G's continued resilience to the decline in OP, I think that the 3:1 G:OP ratio is no longer relevant.
It seems to me that G seems to react to the wider indicies more than Op atm due, in my view at least, to it's unusually strong balance sheet (compared to its peers), thus the current OP has largely become irrelevant.
Alternatively, the ratio has increased to a factor of 5.
The biigest risk for G in my view is whether the Kurds can remain sufficiently solvent to maintain their commitment to the reduced reduced payments schedule.
I read over the weekend that the KRG have offered to hand over ALL of its Oil production to the ICG for their share of the budget, on the basis that Iraq pays Kurdy IOCs.
My understanding is that the ICG's sovriegn funds can support the state for up to 6-months, by which time, oil supply & demand may begin to see some form of balance.
I'm looking for a re-entry around 90 - 98, but I'm begining to doubt this will happen, this side of another meltdown in the indicies, particularly in view of the funds that are being thrown at it to keep the show on the road.
Irrespective of how much cash / funding is thrown at it, I simply don't see where the demand for goods & Services is going to come from, this side of a global vaccine.
I personally believe that once the "sugar Pills" and "irrational exhuberance" has worn off, there will be another leg down in the indicies and possibly a retest of the Dow lows. We'll see.
As always, I'd be interested in your view of the wider picture.
Best wishes,
jack
Hi Boyo,
I have made this comment before and I make it again in relation to your 08.59 post this morning.
Given Gs resilience to the declining OP and the fact that the SP v OP ratio has now remained 'overstretched' for a number of weeks, I belive it is now reasonable to conclude that other factors are accounting for an 'adjustment in the long held 3:1 realtionship of SP v OP.
I would suggest that this is due to some of the following fators:
1. Nearly £400m in Cash to insulate against the weakness in OP which should enable G to 'ride the storm' for a couple of years.
2. Retention of Dividend
3. Imminent increase in production from Satra
4.Clarity in KRG payments going forward, all be they somewhat reduced - It's still a gesture and a contribution to costs.
5. Director purchases
In view of this, I dare to suggest that the SP v OP ratio is now around 4+
Thoughts?
Jack
I'm back in this morning having sold out at 120p as mentioned last week.
Seems to me there are 3 options for Wti:
1. Trump pays Shale to keep oil in ground
2. Texas Govenring body 'enforces' 20%+ reduction in oil production
3. Neither of the above and many shalers go bust.
Either way, supply falls to level that can be stored & OP rises.
Genels resilience has been quite remarkable this moring and sell trades appear to be 'pocket money' amounts.
The strong balance sheet, dividend and cash surplus puts them in the category of the 'fittest' and most likely to come out the other end, whenever that may be...
Good luck to all holders.
Jack
I'm still awaiting an RNS saying that G will be decreasing production by 23% in line with the required / agreed cuts from Opec +++.
Obviously, if Countries have to cut, then so do the firms producing the oil - No?
Perhaps I'm missing something?
Alternative views always welcome.
Jack
I'm also looking for a "double bottom" on Brent circa $25/brl
US virus data is the key to a rebound and they're a few weeks behing us I think.
Last night, they were saying on CNN "Situation Room" that whilst Trump & Co want to open the economy, firms are reluctant until thier workforces can be tested before returning, which really does make sense, and probably explains why the DOW is treading water.
Again, all views welcome
Hi Bunks,
I'm still awaiting an RNS saying that G will be decreasing production by 23% in line with the required / agreed cuts from Opec +++.
Obviously, if Countries have to cut, then so do the forms producing the oil - No?
Perhaps I'm missing something?
Alternative views always welcome.
Jack
Jack