Member Info for JohnLewis79

2009 REA nos:-

Rev $79m
NP $27m
IDR 10356
$ 1.56
FFBG 503K
OER 23.5
Div 4p
CPO $525-800.
CPO REA fob Sam av $591.

The first plane I flew on was a BOAC 'Argonaut' a 4 engine prop out of Heathrow to Entebbe. I was 12 years old. The Comet jet was 2 years away.
Anyways....for you more up to date flyers the latest on the Max jet saga.

Boeing are mounting a big public relations campaign hoping to appease concerns about its MJ which accounts for 40% of Co profits. There are c.200 grounded jets 90% ready for delivery.
But, there is a lot of fear and distrust by the public on Boeing's poor messaging in defending the planes design and control systems when clearly a major problem existed. In a recent survey just 14% said they would fly on the MaxJet when it returned to service.

Boeing faces a huge task in winning back public trust as the delay to FAA certification slips int Q1 2020. They are reported to have a $100m fund ready to compensate victims families though the Co and insurers could eventually shell out $3bn.

Many companies have overcome disasters in the past even plane companies and given that flying is now so embedded in the public's mind as the only way to get around especially in the US normal service will likely resume. Boeing by 'free to heavy discounting' on price will in time recover however wary on the MJ flyers are.

There are c.39,000 palm oil companies globally but here's Indonesia's top 10 by revenues as of 2018. Acerage added for info.

1. Cargill 41kha
2. Wilmar 242kha
3. IMP 246kha
4. Astra 297kha
5. PTS 138kha
6. TBL n/a
7. DSN 90kha
8. Lonson 114kha
9. Socfin 39kha
10. Asia Ag n/a

Probably need up dating as Socfin (no 9) revenues ($30m) are c. 1/4 of REAs with a smaller acreage.

It's all blue in Asia at start of wk 49 trading. At the session break TK was up 255, HK gaining 130 & SH 10 better.
All other Pan Pacifics were on the rise, mrkts reversing Friday losses on weak economic data coming out of Japan where factory output shrank 4% suggesting the China-US trade dispute is taking its toll on Asian economies.
However the mrkt was supported at Mon open by news of better factory activity nos in China during Nov suggesting weak growth, somewhat easing concerns about the second largest economy.

As to the trade deal 'roll backs' of tariffs are a primary concern of China and a major stumbling block to any phase-one deal being agreed.
It's said while unrest in HK continues China is unlikely to sign up to a trade deal.

The nos:- Oil $61.22
Gold $1465. Palm $676.
Vix 12.8. $1.291. € 1.171.
BMPI 7067*. FF +18. DF +103.

* Malaysia Plantation Stock Index.
Morning all.

Labour's plan to plant 2bn more trees by 2040, that's at the rate of 200 every minute is a stretch too far.

Obviously Labour need a root and branch review of their environment policy, for the Comrade is clearly barking mad.

FGV (Hldgs) BHD the world's largest palm oil producer forecasts CPO prices in the R2200-2400 in Q4 due to sustained demand in key mrkts. In the Q July-Sept prices est av of R1983 and well below the current R2726 close.
CEO Harris told a news conference to announce FGV 3Q results that the overall outlook is very positive.
He reported a net loss of R262.4m its 6th straight Q loss against a R849m loss a year ago. FGV internal estimates see CPO prices rising to R2400-R2800 in Q1 2020 supported by the biofuel demand and squeeze on supplies.

"This is something very exciting for the plantation business, we have had prolonged low prices for a nos of years and this will rejuvenate the business" he said.

India the no 1 buyer of palm oil could shift purchases to other edible oils after the recent surge in palm prices.
Palms discount to soy once as high as $150 has narrowed to just c.$10 reducing it's appeal as a cheaper source of oil.
India typically reduces its palm imports in the 3 winter months starting Dec and imports could slump as much as 15%.

However during the India, Malaysia spat over Kashmir buyers postponed purchases of palm and have been caught short by the rally in prices and are now short of supplies.
They have no choice but to buy at higher prices to cater for demand from customers.

Cpo(r) has slipped against the crude price this week to 3.9× while of little significance I like to see the cpo(r) at least keeping up with cpo% gains.
To be fair REA has aligned itself from the July lows of 5×(r).
Volumes we're half of last week's at 45,700 /12 deals which to be fair was flattered by a 50,000 sell order. With around 2600 stocks to chose from on the LSE I'm not surprised
Plantation companies rarely get a 'look- in' having to deal with the vagaries of cpo prices and the "hoohah" of the green lobby who tar palm oil with every known sin of mankind.
Very much a feast or famine sector so when theirs oil in the streets its time to buy.p

After a 4 day winning streak stocks closed lower on Friday a half day session. Trading vols on the NYSE were c.11% lower than normal and
c.14% lower on Nsdq.
However Nov has been a strong month for US equities and has over the last 40 years returned the most (1.40%) The Nov through Jan stretch av gains 1.20% the best 3 month period.
This Nov the Dow has put on 1805 (4%) the 500 added 103 (3%), Nsdq up 369 (4%) and R2 up (4%).
Contrast those nos with the UK All Share gaining just 14 points and a measley 1% on the ftse.

Thanksgiving on line sales were 20% up with 165m Americans out shopping for bargains and Black Friday alone is expected to post sales figs of $7.6bn.
The leader board was a mixed bag IBM, Wallmart, P&G and Disney the laggards Boeing, Cat, Intel and Exxon.
The 10yr t/bill rose to 1.77%, Gold jumped to $10 ($1470) but WTI crude fell back $2.60 (55.52). As Brent Jan futures closed Brent dipped to $60.75.

The nos:- Oil $60.75.
Gold $1470. Palm $679.
Vix 12.6. $ 1.293. € 1.173.
IDR 14105. BMPI 7067.

London Palms on wk48.

Ang +22
DKL +0.50
Pal -0.25
MPE +3
REA +3
CPO +$15

CPO prices since Oct 30 have averaged c.$637 for a 52wk 36% gain and $202 (42%) jump from July low (REA up 81%).
Morning all.

A few REA in the Black Friday Sale.

That Indonesian order for 200 Airbus is worth a lotta lotta money. The standard Airbus 380 costs c.$466m a pop.

Reports out of Indonesia re their push for biofuel essentially to reduce fossil fuel use by c.165,000 bopd saw CPO prices rise to over $670.
Worries are that Indonesia will have less palm oil to export as B30 ramps up in 2020. Malaysia has said their production for 2020 will increase by c.1% next year.

The on going spat with the EU over biodiesel (worth $650m) will be brought up when Joko Widodo meets EU leaders in Jakarta. No doubt he will remind them that Indonesia is Airbus bigest customer with 200 planes still on order.

With US mrkts closed yesterday Asia was left to their own devices and all are lower.
A "Black Friday" for HK, shares slumped from the bell and the Hang Seng is currently 571 down (2%). All sectors saw prices slipping with properties and banks leading the downward march. Ytd HK is up 2% way behind other Asian bourses.
Towards session close TK is down 113 and Shanghai off 26 with some trimming of portfolios at the end of month.

The nos:- Oil $62.95.
Gold $1464. Palm $676.
Vix 11.75. $ 1.291. € 1.172
BMI 7119. FF -23. DF -64.
Morning all.

Yer usual nothing days trade...no' ones that bothered as sp's move on jobbers prices and little else. Zero interest in this sector. That's good.

REA is on a downward path these last few days to 174 which is unlikely to attract buyers or any long term interest. Has the 'Green' lobby put off pis into investing in palm oil or other dodgy oilers?

My guess is not. I say this because most pis have a balanced folio of stocks
of which the "green" issue plays little to no part as I see it...... I have never been convinced of all the green lobby rhetoric that they will save the planet. It's just way too big a subject for a pis to go anywhere near to make a sensible invstm decision.

Mostly as there are opposing views worth a glance on the palm oil and fossill fuel debate.
Any sensible person can see the 'Greens' have a case on climate change
but it's not the 'b all and end all' of an investment case into palm oil or fossil fuel companies.

Given all the 'bad press'
it may pay for invstrs to sit on their hands pro tem......
or take a leap into the dark to see how things pan out and buy at current share price.
Front running is usually the preserve of brokers, here's the chance to join them in their own game.

Polled 100,000 voters calling a 68 seat majority for the Blues.

Most popular bet on the GE is Cons to win 344 seats at 5/6. A simple Maj is 326/650.
Talk of the Tories winning by 70+ looks wide of the mark imo.
YouGov who have a decent track record in poll forecasts (predicted a hung Parliament at last) is calling Blues by 55.

I concur hydrogen. An amazing number of mind boggling facts & figures. Where do they get all the data from?
The "green" revolution was never ever going to be an instant panacea to the world problems and this report has just confirmed that...even if only 30% of it is right.
Your right, def good for o....lies!

A slew of good economic nos saw traders push US stocks to new highs yesterday on much lower vols ahead of Thanksgiving today. The Dow added 42 (28164) the 500 put on 13 (3154), techs 57 (8705) and the small caps a new 52 wk high at (1634).

Economic data showed US GDP grew at 2.1% against a forecast of 1.9% as the nos of people applying for first time employment benefits fell sharply by 15,000 to 213,000. Durable goods rose 0.6% in Oct and consumer spending rose in Oct for the 8th month in a row.

The Feds 'Beige' Book reported US businesses in good health and economic activity expanded modestly Oct through Nov.
Recessionary fears all but disappearing from invstrs minds.

On the mrkt FAANGs had a
good day, Apple ($268) topped the Big Board with 1%+ gains for Amazon and Fbk. Hudson Bay jumped 14% on news of an offer for the Co.
Boeing slid $6 ($368) to the bottom of the laggards on news that a Boeing 777 fuselage had split during a stress test. Boeing is facing its bigest crisis ever as rumours persist about recertification, delays to the Max jet, the production line shutting down, orders being cancelled, suppliers on hold and Congress to hold a special meeting on Boeing. The stock has shed c.15% this year a remarkable performance considering the huge mess the Co is in.

In the Far East a very quiet morning session as invstrs absorbed Chinas tirade against Trump for signing a bill in support of the pro democracy protestors. It's not thought this will derail trade talks. TK off 26, HK down 15 as Alibaba gains $6 to just short of $200 and SH fell 9 with all Pan Pacifics in the red.

The nos:- Oil $62.84.
Gold $1456. Palm $666.
Vix 11.8. $ 1.293. € 1.174.
BMI 7130. FF-16. DF-78.
Morning all.

Only MPE moved today down 4 to 680 the others were unmoved on palm prices off c.20c.
The BMPI slipped 2 to (7130) which fed early into CPO prices which are holding up above $660.

That will certainly help the Q4 nos of palm companies but way too late to effect REA end year nos. It's all about 2020 which like for like will be up against $460 for H1 2019.
What REA will get I don't know but suspect it won't be much more.
REA need CPO prices north of $750 to have any hope of breaking even in 2020/1 and that looks a stretch too far atm given production and increased planted acreage has been on hold for much of 2019.

Any CPO forecasts after 2020 is for the birds. If CPO averages $550 (REA rec'd price) in 2020 we will cont the losing streak going back to 2014. As it's not best practice to rely on any future increase in CPO prices output will have to increase dramatically between now and 2030 to compensate for any weakness in CPO prices.

Somewhere along the way
one has to think the game is not worth the candle if all the Co is doing is servicing its debt and enriching the creditors.

Small lot selling is par for the course especially if you have turned a coin and the benchmark CPO price is heading up. They say buy on the rumour sell on the news or in REAs case take profits. Whatever as a holder whose horizons extend to 2020/1 i'm hoping REA will be nearer 300 by then.
For sure nervous holders are best advised to take profits before mrkt sharks snatch them away. Lots have to go in our favour to reach that sp, not least the bloody debt problem which I bang on about all the time has to come down. I'm sure you guys know how big a debt problem, (debt to equity ratio) REA faces even with CPO at $600+.

Last year we lost £14.2m or 33 pps give or take. Of this finance costs amounted to £7.9m (23 pps) an unreasonable % of the company debt. Essentially REA is paying out 55% of our operating income in interest payments to assorted creditors. This finance cost is unacceptable as in the longer term cash is being drained from shareholders funds and cannot be used to grow the business.

REA has probably been in a bear mrkt of its own since 2017/8 so was a great buy sub 125 as imo it faced a one time solvable problem of low CPO prices and little else. The risk/reward was favourable to the brave investor who spotted the opportunity. Good or bad we are where we are. Here's the thing if CPO remains at c.$600+....... finance costs will tumble and profits will rise. Currently we are using leverage (debt) to generate earnings, unfortunately the golden goose ain't laying any golden eggs!
Regardless I can think of worse places to be invested given we earn outside of the UK and should escape Brexit/ GBP worries. If Trump and the Chinese can agree a deal in 2020, then we have a clear path forward to a much better future.