Member Info for JohnLewis79

One and a half days trading to go for REA to hit 70, its just possible but unlikely. Yesterday a surprising c.26,000 were traded buys outpacing sells 1•33:1 shares fell 1, Cpo up 1.

The prefs have caught the 'Ords lurgy' and slipped to 80 well off lows unlike the Ords that trade around ytd lows.
I think we will have to consign this covid year and fundamental analysis into the litter bins as many Co values make no sense, well the ones I'm invested in for sure....

There will be winners those who have bought quality at covid prices, will in time be smiling all the way to their Banks. Shame REA investors won't be in the queue to deposit their gains. However if you believe in Grimms fairy tales anything is possible in Realand.

The Jan reference price and export levy for cpo has been set at $951•86pt up 9% from $870•77 in December. Export levies will rise to $225pt up from $188 in Dec a ruinous 20%. Export tax collected goes up from $33 to $74 another burdensome 124% jump.

In the face of these outrageous demands from the Govt foreign owned plantation companies must start to consider for the good of all some form of merger(s) to cope with these incessant taxes. As long as CEO 'egos' can be put aside two are stronger than one and the time has come.....

Rea 166 (58)
Cpo $813 ($971)

Oil $67
Gold $1526

Ftse 7587
All 4218
DJ 28,462
SP 3222
NS 8946

$1•34
€1•17
IDR 13,924

Covid-19
05:00

UK 2,382,865 (71,567)*
Indonesia 727,122 (21,703)•

* 53,135 cases
* 458 deaths
• 7903 cases
• 251 deaths

The wild ride on US equities cont yesterday, the Dow surged 150 at the bell and then on to an intrday high of 30589 (+185) but soon after traders hit the sell button and all the early gains disappeared as the Dow fell to 30,274. Boeing, Amgen & Disney were early gainers, along with Apple up from $75 on Jan 3, hitting a record intrday high of $138, an astonishing 90% gain ytd the best of the FAANGs. However late on Apple fell $4 (121m traded) after losing a major legal case against Corellium a Co that helps security researchers find bugs in Apple products.

Stocks in focus included Boeing down $5 ($216) as the MaxJet resumed passenger flights (no bums on seat nos). Intel added 5% on reorganisation hopes and Snapchat jumped 6% to $51 on a GS note re growth prospects. Tesla ($665) had a quiet session, 23m shares traded the stock $29 off recent record high. Musk has created many 'Teslanaires' those that have stuck with him since the $17 public offering and a 5:1 stock split. This year the stock is up 647% and will need a 'Lazarus rising' to repeat those nos.

GS economists upgraded US GDP Q1 forecasts to 5% from 3% annualised, citing consumer spending and the stimulus package as drivers. Home prices are at their highest since Oct 2014 due to low rates and tight stock. They also said that highly populated cities with service industries, leisure, hotels etc, will rebound strongly.
They pointed to the NY Metro area which has collapsed 66% since covid and is forecast to regain as much as 90% pre covid. They also expect that 75% of the pop will be vaccinated by 2021. Currently cases are just short of 20m, fatalities 347,000 (60,180) per 1m pop.

On the NYSE 9•5bn shares changed hands, losers outpacing risers by 1•70:1with 21 new 52s and no new lows. On the Nsdq Comp losers trumped gainers by 2•6:1.
DJ -68 (30,336)
SP -8 (3727)
NS +5 (12843) R
R2 -18 (1107)
WTI $48•24
10ytb 0•935%

Nos: Oil $51•38. Vix 23•08.
Gold $1889. Copper $3•572.
Palm $972. $1•354. €1•102.
IDR 14,080. FF +2. DF+72.
Morning all.

rugs many commentators are bullish on palm prices but negative on a certain palm stock. That's the conundrum. One usually goes with the other but as we know full well in REA increasing palm prices have led to a lower share price.

Of course decreasing palm prices would have led to REAs sp tracking down, so a no win either way. Extra levies & duties will take the shine off cpo rises next year whatever palm companies do. Realism over hopium for 2021.
You know as well as I do there's always something negative that roadblocks REA and when a Co has no price control over its main asset its at the mercy of the mrkt. I'm sure Anglo & Mpe investors feel the same way. Its long been the case that Indonesian palm companies work for the Govt and not shareholders. Dkl no doubt will be in the same boat in W.Africa if not already.

Window dressing largely done its the Santa Rally for London equities this morning, up 123 points atm. The 'rally' period started on the 23 Dec & extends to 5th January.

Going to be a boring few days for REA watchers as I'd imagine most investors have positioned their portfolios for 2021.
Easy for me as I only hold REA and a 'joint' in Zam another agri stock done down by 'outside' events, politics and currency woes. I have no say in Zam, a blind trust so to speak...heh, heh, heh.

So 59-70 looks tops for 2020 which gives the shares plenty to do next year as the downside (all the good /bad news priced in) is limited ahead of the TU. One would hope the shares tick up thereafter barring 'outside' events & if the nos are as good as I expect you never know a ton up might be on the cards!

Whether REA will ever react to the usual norms of sp moves instead of 'which way the wind' is blowing, etc...i dunno.

Japans Nikkei 225 closed up 714 today, that is a 30 Yr high (27,568) last seen in August 1990. Shanghai bucked the bullish trend as Chinese tech companies are coming under stringent Govt scrutiny evidenced by Jack Marr's Alibaba being 'looked' and tanking 6 sessions in a row.

Tokyo lags the junior Shangzen Exchange & S.Korea in ytd top gainers, Shenzen up 31%, S.Korea up 28% & Tokyo 17% all well clear of the rest.
Worst performer of the region is Singapore down 11% followed by HK off 6%. With just 2 and a half days to the end of 2020 no change is expected in rankings.

Of major concern to plantation companies future health and wealth is the Govts intention to expand its palm based biodiesel program to B50 (50:50). Currently at B30 the Govt still had to pony up $195m to cover the shortfall as levies and duties fell short of the anticipated amount due to lower palm oil prices these last few years.

This, they hope will be resolved by taxing the palm industry further. By 2025 the Govt intends the blend to be fully 50:50 and to achieve this the available acreage would need to be expanded by 20% to 37m acres to meet domestic demand.
This would be the equivalent to 20% of the size of Borneo. Papua New Guinea is being 'readied' to supply palm oil as Borneo is all but tapped out.

Hopefully B50 is a longway off and B30 is as far as the Govt will go, B40 is now only being talked about in back rooms and is being delayed due to funding problems. Much depends on crude prices into 2025. A move to B50 would be bad for many palm companies without massive Govt subsidies and B100 is 'one for the birds.' Its a 'Catch 22' for the Govt and we know how that ended for Yossarian,Milominderbinder et al in Hellers prophetic novel.

Closed.

Covid-19
05:00

UK 2,329,730 (71,109)*
Indonesia 719,219 (21,452)•

* 41,385 cases
* 357 deaths
• 5854 cases
• 215 deaths

Not a day goes by or so it seems since the H/Y that US indexes have not posted record highs and so it was on Monday as all major indexes ended the session in record territory. The 500 trading at 22x well above its long-term av of 15x is on target to close 15% up this year (29% last).
A huge sense of relief was felt by everybody when Trump caved in signing the stimulus bill into law and averting a Federal Govt shutdown. Payment cheques to the jobless were revised upwards to $2000 fom $600 late Monday yet to be agreed by the 'Reds'

A late Santa Rally has started and over the last 50 years this period has seen gains 77% of the time. Battered lockdown stocks saw buying across the sectors, Cruises up 3% and Airlines added $1-$3 in places.
FANGS were in demand, Amazon jumped $122 ($3295), Google up $44 ($1774) & Fbk put on $10 ($277). Apple topped the big board adding $5 to $137 on 124 m traded. Stay at homes were mixed Netflix up $5 ($519) but Zoom fell $22 ($352).

Corona 'fave' Moderna only the second US pharma to gain FDA approval slumped $12 ($111) on news of one patient developing a severe allergic reaction after his first jab. He was later discharged. US covid deaths rose to 343,182 on 19•8m cases.

Tesla ($660) fell after hours on news that production would soon start in India the shares have had a rocky ride since joining the 500. Boeing saw sellers losing $6 to $216 as news that Southwest was playing hardball on orders and Boeing debt had risen over 4x since the MaxJet was grounded.

WTI ($47•79) gained on hopes of travel restrictions being eased and a sluggish USD boosted Gold. The 'Greenback' has been a popular short trade among investors, $26•6bn short positions open at Dec,21st. On the NYSE gainers outpaced losers by 1•21:1 on 9•9bn traded.

DJ +204 (30,404) R
SP +32 (3735) R
NS +128 (12,839) R
R2 +3 (1125) R
WTI $47•79
10ytb 0•939%

Nos: Oil 51•07. Vix 21•70.
Gold $1883. Copper $3•563.
Palm $963. $1•348. €1•102.
IDR 14,150. DF +23. DF +144.
Morning all.

Rea (59-60) opens tomorrow against a rising background of cpo prices, which ytd has studiously ignored. The period 01/01/2018 to present has been the steepest sp decline on record some 275p much of this due to poor cpo prices.
Its a little late for a Santa Rally
which wouldn't apply to REA in any case so its on the cards the sp will close sub 70 for the year. As cpo knocks on the $1000 door which as we know is not the elixir it was once thought, given the Govts increasing addiction to fund its B30-40 bio program at the expense of some plantation companies.
REA sells into the local mrkt so is not subject to export levy and duty. However achieved prices will be broadly in line with prevailing global prices (adj for delivery costs). So no get out of jail card there!

Whether the TU in Feb is already priced in or not and i suspect not, will it be the catalyst for a wholesale turnaround in the company fortunes? I suspect not. The mrkt is notorious in not giving out of favour companies an even break however well they perform and unfortunately REA and other palms fall into this category.

The demon oil may be the most widely used commodity
but what's that got to do with anything? So far the only winners or soon to be winners are REA creditors. I sincerely hope I'm way off beam here and somehow REA can reach 100 next year. Pending the mrkts response i will soon find out whether its worth committing my money for another year of pain.

Shares in Asia & the Pan Pacific regions started the final week of 2020 in good cheer. Trump, finally signing the $2•3tn aid and spending bill, Europe launching mass vaccination roll outs hopefully to quicken the global economic recovery and the Brexit deal being agreed boosted investor confidence & hopes for 2021.

The Nikkei closed just short of a 3 decade high achieved last week, showing 115 gainers & 102 losers, volumes were 0•88bn well short of the 1•24bn daily average. The Nikkei trades 13•5% up ytd and some 10,300 point off 52wk low.
Australia closed with a 21 points advance, flat on the ytd, other mrkts cont in late afternoon trade. Mrkts will close on Thursday, 31st Dec.
TK +197 (26,854)
HK -46
SH u/c
SHZ -1
SK +2

Nos: Oil $51•10. Vix 21•53.
Gold $1891. Copper $3•593.
Palm $964. $1•357. €1•110.
IDR 14,168. FF +54. DF +168.
Morning all.

Closed.

Covid-19
06:30

UK 2,288,345 (70,752)*
Indonesia 713,365 (21,237)•

* 32,340 cases
* 347 deaths
• 6528 cases
• 243 deaths

If the lockdown continues through Easter a double dip recession is inevitable said H.Archer chief economic adviser to the EY Item Club.

Currently 24m people are under tier 4 restrictions and footfall was down 73% across the South East and 60% nationally as a further 220,938
premises have been forced to close this past 2 wks. Even before swathes of the country went into T4 almost 40,000 retailers were in financial trouble according to Begbies Taylor, insolvency specialist.

James Daunt CEO of Waterstons said lockdowns in Nov & Dec will cost the Co £20m in lost earnings, equivalent to 72% of last years profit. Ian Payne boss of 4300 pub chain Stonegate said its a matter of survival and in his 47 years had never seen anything like this as 95% of hospitality businesses have been forced to close. Landlords have missed out on c.£4•5bn rents this year much of that going to pension funds limiting dividend pay outs.

The tragedy is that many pubs, clubs etc, won't survive long enough to greet cash rich consumers, ready to spend once the shackles are off. A cruel twist for those down down by the virus.

Share tips for 2021 from the ST writers, don't look for palm companies they'd risk getting drummed out of the City or worse.
Shaftesbury
Pearson
Shopify
Easyjet
Pure Tech
Pets at Home
IP Group
Chrysalis Inv
Whitehead

Last year of the 9 tipsters, 5 made gains (Qualcomm a chip maker, 83% up) and bottom (Forterra a brick maker 30% down) against the All falling 13%.

Indonesia plans to raise between 36-45tn rupiah in 2021 to fund the compulsory B30/40 biodiesel program. To this extent export levies have been increased from a flat $55pt to a progressive sliding scale of $55-$255pt depending on price.
The Govt has raised an estimated 17-18tn rupiah from levies ytd, some 8•2m rupiah short of the amount (25•7mr) spent subsidising the diff between crude and palm.

While cpo stays above $925 it may be economic for the Govt to cont with the B40 bio program, any slippage might incur further base duty being increased or a re-jigging of the levy. At $945 the levy is $225 plus duty $52. This likely leaves palm companies at an 'achieved price' of break even at best. The Malaysian Govt must be laughing all the way to the Bank.

At some point the game won't be worth the candle although REA are well used to operating in the minus column and have survived over the years, Anglo & Mpe might balk in this environment. Cpo at $1000 would incur $348 total costs and bust most mid level players, local smallholders will be given a pass methinks.

This is a hugely retrograde step by the Govt. A near 35% tax at source added to Co Income Taxes and Estate costs leaves little for plantation companies to grow their businesses. A wholesale rethink is needed unless the Govt want to put out of business foreign owned plantation companies this is not the way to go.