Member Info for JohnLewis79

Thete were 24.500 late buys reported at prices of 170.5
172 & 172 boosting the days vol to 26,917.

I estimate (bofp) the value of REA planted ha of c.33.4k ha at £282m or 658 per share. That number may be on the 'lowish' side
as planted ha values have probably risen since Jan '19.
I have no idea at a sale of the Company whether that price inc in the overall EV could be achieved. I suspect not. There seems to be a disconnect between land value, EV and mrkt cap. Goes to how hard it is to sensibly value the company.
Given that the mrkt is seldom wrong in its valuation of companies, why bother with nav, ev etc.., when the sp is the only factor? Well, perhaps not....

....REA mrkt cap c.£75m, EV c.£366m (no account of prefs) & planted value
c.£282m. In sp terms, 171p, 831p & 640p. (Ev - pv) = 191p.

The 'haze' from all the fires in Borneo and Indonesia is expected to have affected palm oil production due to the lower size and quality of the fruits.
An area of c.858k ha has been burned this year and combined with the prolonged drought and cut back on fertilizers will have impacted on palm yields and volumes will not grow this year.

Planters are awaiting the rains so as to start fertilizing the ground which if delayed much longer will hurt next season harvest. The Indonesian weather agency said they expected the rain to start weeks ago.

*Apple and *Fbk both beat the 'Streets' forecasts by decent margins both stocks rising c.3% after hours and if maintained Apple could top Msoft to the no 1 position as the most valuable stock in the universe that's over $1.1trillion. Wearables, digital services (app stores), streaming, cloud storage and iPad all recorded stronger sales.

Despite revs increasing ($64bn/$50bn) profits slipped 3% to $13.74bn in the Q not helped by the 9% fall in iPhone revs to $33.4bn. Apple's top seller has seen 4 consec quarters of falling sales, however forecasts for the Christmas season hint at a record breaking bumper Q. After hours the shares rose $5 to $248.

The Dow is called 81 lower at open following the ftse down 73 near mid day on earnings worries. Lloyds poor nos(97% fall in profits (hit on miss- selling PP), Shell 15% drop on 3Q earnings and HSBC off another 5 to 583 all weighed on the ftse.

As London closed down 82 (7248) the Dow had opened 250 lower on renewed trade worries, mixed earnings reports and the Chicago PMI falling to 43 from 47 confirming the manufacturing sector is in recession. Job seekers rose 5000 to 218,000 remaining at near historic lows while consumer spending in Sept rose for the 7th consec month.
Core inflation was 1.7% last month below the Central Banks 2% target.

Companies reporting inc *Starbucks little moved, *Du Pont gained 1.6% ($66) on a 26% decline in 3Q earnings (better than thought) and *Kraft Heinz ($32) jumped 13% on beating the 'Streets' estimates. WB has a big holding here. Big board movers going up included *Apple ($249), *Coca Cola ($54), *Disney ($130), *Travellers ($131) & *Fbk ($192). Heading south, *IBM ($134), *Boeing ($340), Quantas has grounded (3) 737 jets due to hairline cracks. *3M ($165) Visa ($179) & Caterpillar.($138).
At close the Dow shed 140
(27046) the 500 down 9 at (3038) & the techs lost 12 (8296). 'October' saw the Dow gain 129, the 500 up 61 and Nsdq gained 295.

Caution in Asia over negative comments on the trade deal and local factors saw mrkts mixed.
Japan off 95 while HK +160 & SH gaining 24. "The house that Jack built" the juggernaut Alibaba was up $2 ($178) on the NYSE ahead of nos today.

The nos:- Oil $ 59.69.
Gold $1512. Palm $588.
$ 1.296. € 1.161. FF +14
DF +69.
Morning all.

A big jump in the Prefs up 6.5% to £78. Not sure why the jump which would indicate an easing in rates. Think that's unlikely given the neg rates UK offers (0.75%) when inflation (1.7%) is taken into account.

Funny when the mrkts closed they quote 170-172. Check the spread tomorrow, evens its back to 158-172. Annoying as that is if your here for longer than 5 mins you will be prepared to pay the going rate....fair or foul. Tbh I don't know how to realiably value REA, sub 100 was a great price sub 200 might be on the money, sub 300 not.
We will have to wait and find out or as someone once said "ya gotta be in it to win it"

Better day all round for London palm stocks led by Dekel up 27% to 2.15, Anglo +10, MPE +10,
REA +7 and only EPA unmoved.
Little company news to put some life into the sector other than CPO prices gaining. Take your pick 582-588-620 today. At least trending upwards and well above the 472/7 July low. Ways to go to hit that $750 area where (REA might turn a coin) but you never know.

What's killing REA. Let's take the non current assets which mostly consist of plant, equipment etc, of $408m (92p) out of a total $526m (119) add in $75m of current assets gives us total $601m (137p). The n/c asset figure varies with the weather (check prev years).
*Current liables/payables are $-112m (receivables/£-notes).
* non current liabilities consist of mostly £-notes, $-notes & bank loans total c.$179m (44p) a hefty chunk of the current sp.

At a CPO of sub 600 it's an uphill struggle for the finances to start any sort of recovery given reduced production this year. Debt will be eased by going the $ route (sorted soon), cpo prices might or might not increase in 2020 to the forecast $600 av. On balance its just about worth staying put. I just hope Hardman 2020(e) are undercooked if so the only winners will be the banks and note holders not what I invested here for!
A slight comfort is that REA have never had problems raising money but the leverage is getting out of hand while returns are nought in cash terms pis are paying to keep the fat cats in lifestyles I'm unaccustomed to.

Top palm oil execs, traders and analysts meet up on the island of Bali Oct30-Nov 1 for a major conference on the industry. Several subjects will be debated, first and foremost will be Indonesia's roll out of B30 starting Jan 2020. Industry experts predict palm prices will rise in Q1
banking on c.10mt being soaked up for biofuel. However an ongoing concern is the countries infrastructure capability and the discount between bio and gasoil.

On the agenda also will be concerns of a consumption slip of veg oils in India and China due to the ongoing US/China trade spat and the EU now considering banning palm oil in food products.

The continuing trade spat between India & Malaysia with no resolution in sight is keeping invstrs on edge.
Productivity is stagnating due to Labour shortages and scarce land suitable for palm growing and the difficulty of obtaining permits is holding the industry back and impacting on yields.

Not me Guv! Done many a stupid thing on this investment lark but not that crass. Obviously a ricket, either a fat finger or a 'pub' purchase, made a few of those while in my cups!

The Fed duly cut rates to 1.5%-1.7% range due to soft global growth, lower business investment, factory sector weakness, muted inflation and GDP expanded 1.9% in Q3.
Powell said only a "material reassessment"of the economic outlook would provoke a further cut now pushed out to a 50% likelihood in June 2020. The 10yr t/bill slipped to 1.77% just a year ago it was 3%+.

Stocks reacted positively the Dow gained 115, the 500 hit another closing high up 10 to (3047) and the Nsdq put on 27 aided by Msoft and IBM. Topping the big board were J&J, & McDonalds. Leading the laggards were Exxon, Chevron (WTI up 33c ($55.22) and Banks (JPM).

On the 500 GE ($10) surprised with a 15% jump in earnings the first time in 5 Quarters, shares up c.10% and Apple report Q3 after the close analysts expect a 2% earnings slip shares off $3 ($243) ahead of the nos.

The Nikkei & Hang Seng up, Shcomp down is the story in Asia. Poor economic data from China (weaker factory and non factory activity) pulled the mrkt lower. The MPI hit an 8 month low and 6th straight contraction. Japan & HK both up on the Fed rate cut with Pan Pacifics. In Japan Softbank and Sony gained and in HK Apple component maker Sunny Optical jumped 9% on Apple topping estimates.

The nos: Oil $60.44.
Gold $1500. Palm $581/595/$620. $ 1.292. €1.157. FF -3. DF +19.

Morning all.

From REA home page CPO $620 where are they getting these prices from?
Best I can see is $580-592.

Another quiet day for palm stocks REA 4642 traded since Fri close with an 11% spread which one could probably deal inside of but who'd take the risk?
The jobbers are probably happy to keep a level book
and see no need to show their hand given the almost zero level of trading. It's snoooozeville.
The board might be looking at a management buy out and could likely steal the company for a pittance and definitely way below that old chestnut net asset value!
Current value c.£70m is most likely right and why would they offer more?

MPE has been in play for ever and a day or so it seems and nothing happens and REA is def second fiddle to Evans so
Its 140-180 tops for REA for this year outside of CPO going crazy into the $700 - $800s and nobody thinks that's on the cards.

I think I'm getting the hang of this investment lark. Stupidly I thought great results would benefit the investors and the fund managers would be rewarded by the fees and any bonuses due.

One man has disillusioned me of that, a certain Neil Woodford who was once lauded as the UKs answer to WB, has achieved the impossible by producing dire results but taking home bucket loads of investors money. Check this out, between 2014-19 Woodford & partner Newman pocketed c.£118m, two thirds going to Woodford as lead miscreant I give you the following:-

* £10,000 inv in EI fund value now £8480.
* £10,000 inv in IF fund
value now £7410.
* £10,000 inv in WPCT
value now 3620.
* £30,000 invested above
returned £19510 you've done 63% of your money.

Hell hath no fury like an investor screwed and I fully expect to see W pop up on the Boeing board of Directors as special situations advisor.

India the worlds bigest buyer of palm oil is considering increasing import taxes on refined palm oil to boost local processing.
The Govt is discussing a proposal to impose a new levy in addition to existing import duty. Such a move would reduce imports from Indo & Mal and would be bearish for prices which climbed to a 17 month high recently.
Domestic demand is c.25mt annually mostly filled by Indonesia.

All 3 indexes slipped back with small losses the Dow off 19 the 500 down 2 and the techs down 49, only R2 (small caps) posted a gain up 5 to (1577) for a 17% rise ytd (UK small caps 5% up ytd).

Google failed to meet the streets expectations the shares fell $28 to $1261.
Current mrkt cap c.$23bn
with only 19.6m in issue and offered at $85 at the IPO. Trade talks going well and a 25 basis rate cut (1.75-2%) expected underpinned mrkt sentiment.
Boeing came under the cosh as both Republicans and Democrats laid into the CEO questioning him on his actions re the 737 Max Jet, one senator calling it a 'flying coffin and saying Boeing blaming the pilots for causing the two crashes was nonsense and furthermore accused Boeing of cover up tactics. Boeing stock gained $6 to $348 as it would in the hail of abusive censure.
To date of the companies reporting Q3 nos 78% of the 500 have exceeded expectations, that's above the 5 year 72% average.

In its latest global report on the economy the IMF has reported that in an environment of low rates investors have to search for yield among riskier asset classes and valuations have become stretched. They consider the US and Japan equity mrkts to be overvalued. Current Pe/r of the 30 is 19.4x yield 2.3% and the 500 24x yield 1.91% both below 2018. Japan's Nikkei trades on 20.6x

Asia opened lower awaiting moves on rates by the Fed. Mrkts are expecting a 3rd cut of 25 basis. TK,HK (HSBC lower again) & SH are marginally lower while other Pan Pacifics are gaining.

The nos:- Oil $ 60.96.
Gold $ 1490. Palm $579/590 (Nov). $ 1.287.
€ 1.158. FF -1 DF -26.
Morning all.

Labour look hopelessly divided on the Dec election as all Comrades glum looking colleagues sitting behind him look on in horror at the thought. The polls suggest the Tories have a large majority and will form the next Govt but the supply teacher had a bigger lead in the polls and look what happened to her a minority Govt.
I don't think Labour can win under comrade C who has royally upset traditional Labour voters by his backsliding and confused message on Brexit. He says he has a terrific manifesto to present but who the ***k is listening?
His personal approval nos are the lowest of any Labour leader ever or since Ethelred the Unready and if your a waiverer whose it gonna be the Comrade or Bojo?

We shall see shortly as the MPs vote tonight on when to hold the Gen Election the 9th or 12th Dec? A simple majority will clear the way for MPs to face their electors.

*Amendment to change the date of election to 9th December.
Yes 295
No 315

* MPs voting on whether to hold an Election on 12
December (simple majority)
Yes 438
No 20

Game on!

CPO prices quoted vary from 575-585-600 so make of that what you will.
The trend is upwards despite Indo and Mal area production of CPO has been in decline for many a year.
One would expect price spikes in 2020 as export production is switched to local consumption to satisfy biodiesel B30/B50.
For instance REA ffb production once forecast at c.900,000mt for '19 now exoected in the low 800,000 mt area.
Some authorities expect considerably higher CPO prices in 2020 than Hardman whom I suspect veered towards the cautious end of the chart.
Those companies with little to no debt will outperform the likes of REA where debt is now at an alarming 90% of shareholders funds.

I know the board intend to switch loans from rupiah to $ loans bearing a much lower int rate, expected H1 2020 which should take the pressure off somewhat. But as in o...lies the global price is the key to future profitability.

If you take 2019e/ 20e & 21e CIF prices to REA prices *achieved they are estimated to average a $90 difference.(540/*460) (600/*505) & (600/*505).
We might be achieving close to that now these last couple of months or since the $470 low. However if Hardman are right you can see the uphill struggle ahead if REA take just $505 next 3 years.

CIF for 2016/2017 & 2018 averaged $672 while REA achieved $528 a $144 difference and still lost money (from memory). Without doing some bofp calcs were gonna need CPO much nearer $700 if REA is ever to turn a profit. Can it happen? I dont know.
Take crude oil Tom Dick and Harry were forecasting $100 oil not long ago and where's the price now, just over $60.
Luckily for some o...lies their lifting costs are near zilch compared to REA. With dep & amor plus other costs knock $90m off the 2019e top line that leaves precious little.

A court in Indonesia has fined PT Arjuna Utama Sawit a total of $18.6m in fines and damages for fires on its land in Central Kalimantan as part of its zero tolerance approach against concession holders. The fires razed 2,400 acres thats the size of a med sized rubber estate in Malaya.

Winning a judgement is one thing, collecting the money another. Prior to the above Indonesia has successfully prosecuted 9 companies. Total consideration c.$223m in fines etc.., but to date just one company has settled for $5.5m.
This is an outrage. The transgressors should have had their permits revoked and their property and assets seized by the State. Some are trying to evade paying by transferring ownership or being taken over. The Govt need to act immediately. Non payers must pay up or face the consequences.

Given their nos and little prospect of profits or dividends the case for holding REA is wafer thin imo. Plusses are...increasing demand locally and globally for biofuel heading to B50, scope for a huge increase in planting expected to have 80,000ha under palm by 2025-6-7 and CPO to be squeezed higher as Indonesia and Malaya boost local usage for biofuel.
So something has to give if export of palm is cut back.
The Robinows adding to their c.28% holding is another good sign but cynics would say they would wouldn't they?
However they know what they are doing and usually one should follow Directors share buying particularly in loss makers. The mrkt seems to agree and as I have no suitable replacement atm I'll see 2019 out then reassess.
The big negative is the ever present anti palm oil lobby which is an annoyance and Govts need to do more on the deforestation, fires and bio-diversity issues but I suspect however hard they try
by restricting licenses, fines being RSPO certified etc.., they will never satisfy the activists who say Palm Oil is responsible for all the world's ills and be banned from all usage. Tell that to the near 5 bn people who use palm in one form or another.