Blackrock Com Share Discussion Threads

[aleman] 18/12/2015 15:46

We are getting enormous traffic jams in Yorkshire in recent months. UK automotive fuel sales volumes were up 14.3% last month on Nov last year. The last time there was such a huge jump to such high levels was in 2006. Is this a late cycle indicator telling us to sell up and buy oil stocks? Gasoline is about 55% of the conversion end product of a barrel of oil. Demand for oil should be rising strongly everywhere with prices so low and gasoline demand spiking. I've been reading that Saudi can't pump crude any faster. If demand keeps rising like this and Saudi decides to cut back, prices could rocket again just like 2008. I'm guessing we will see oil back above $100 sooner than people think.

(See page 36.)

[aleman] 18/12/2015 11:08

I doubt they can. It's an income fund. The articles of association will likely prevent that. To do that, it would have to be reconstituted as an income and growth fund.. It is actually an enhanced income fund as it states that the options strategy used increases current income at the possible expense of long term capital growth.

[celeritas] 18/12/2015 10:45

I'd rather them keep half the divi in order to keep a war chest for the bombed out stocks.

[aleman] 17/12/2015 18:20

Nothing really unexpected there. Perhaps a bit better than expected by me. It sounds like they expect not to achieve 6p of income next year but for the miss not to be too big so it's within topping up distance. I had considered they might cut the dividend forecast a bit to 5p so I'm very happy with my recent purchases so far. Sorry for anyone who bought at much higher levels as there is clearly some doubt about it being maintained

[speedsgh] 17/12/2015 16:16

1.50p final dividend payment confirmed + maintain full yr div target of 6.00p for FY2016. Mgmt fees are also being reduced which is a positive.

Dividend Declaration and Outlook -

Dividend declaration and outlook
The Board of BlackRock Commodities Income Investment Trust plc is pleased to announce that the fourth quarterly interim dividend in respect of the financial year ended 30 November 2015 of 1.50 pence per ordinary share has been declared by the Directors. The dividend is payable on 22 January 2016 to holders of ordinary shares on the register at the close of business on 29 December 2015 (the ex dividend date is 24 December 2015).

The last year has been a difficult period for commodity markets and, against this backdrop, the Board is pleased to have been able to meet the dividend target for the year of 6.00 pence per share. The Board has set a target of an unchanged 6.00 pence per share dividend for the current financial year in light of current conditions in the commodity markets, volatility levels in the derivative markets and dividend prospects for the Company’s underlying investments. This target will be reviewed should there be any material change in these factors. However, the Board would consider using revenue reserves or making distributions out of capital profits to bolster the dividend were income from the portfolio to be insufficient to achieve the target.

Changes to management fees
The Board of BlackRock Commodities Income Investment Trust plc (the ‘Company’) announces that, following discussions with its Manager, BlackRock Fund Managers Limited (‘BlackRock’), it has agreed a reduction to its management fee. The existing management fee is 1.1% of gross assets per annum. With effect from 1 December 2015, the management fee will be 0.95% of the Company’s gross assets per annum and will reduce to 0.90% per annum for gross assets in excess of £250 million. Where the Company invests in other investments or cash funds managed by BlackRock, any underlying fee is rebated.

[llef] 17/12/2015 13:42

Attached link says that the credit lines to a lot of the smaller independent shale producers are reviewed/renewed every April and October.

The last reviews were more lenient than many expected, but if current prices are maintained, then I reckon next April could see a lot of lines being withdrawn and producers being forced into bankruptcy

That could be the signal for saudi to ease off the pumping

"Banks are already preparing for the next re-evaluation of oil and gas credit lines, reviews which typically take place twice a year in April and October. The loans are based on the value of drillers’ producing reserves, which has shrunk as oil prices fell. Many companies are also losing protection as hedges that locked in prices as high as $90 a barrel begin to expire."



cheers

[celeritas] 17/12/2015 13:22

The Saudi's look intent on gaining mkt share at any cost, will they hold it once prices rebound.
My opinion is they won't want prices this low for long but will keep up the pressure to drive out competitors and future projects. I don't think they'll want to repeat this action for a long time as it's hurting their economy so will keep this going for as long as possible. Prices are falling because commodities are falling but the bottom for many isn't far away, thats the time to buy the strongest as they'll come through this even stronger with the weak swallowed up or bust.
The next lot of company results won't make pretty reading.

[8w] 17/12/2015 13:11

Personally looking for a capitulation in oil price before buying in.... say oil trading in the $25-$30 range. May never happen but if it does rebound could be swift and significant.

BRCI does appeal as a long term investment, just want to watch it for a while longer.

[celeritas] 17/12/2015 10:18

Better here than sticking it in just a couple of oilers llef.
brci although won't have the same gains should you have the right stock it does spread your risk across many commodity players.
I don't think the bottom is that far away, early 2016 at this rate should be close enough.

[llef] 16/12/2015 12:06

celeritas - I agree, no one knows where the short term bottom for oil is, but on a 12 month view, oil under 50 dollars is (imo) unsustainable.

In some ways, its better that oil falls to very low levels short term to force producers to default, rather than meander around 55-60 allowing them to limp on producing simply to service debt.

I think oil will head back to at least 70dollars by dec 2017, and that is why I am invested in BRCI.

cheers

[celeritas] 16/12/2015 11:42

I think the same but who's going to guess the bottom, many have for months now only for it to go lower.
Looks like the divi is priced into brci today, it's a little ahead.

[llef] 16/12/2015 11:33

the price of PDVSA (venezuela state oil comp) bonds implies its going to default.

hxxp://www.boerse-berlin.com/index.php/Bonds?isin=USP7807HAK16

I think that shows that current oil prices (and current oil producer share prices) are due a rebound


ORINOCO BELT, Venezuela, April 20 OPEC member Venezuela is currently exporting between 2.4-2.5 million barrels per day from national crude production of around 2.85 million, the head of state oil company PDVSA said.

[speedsgh] 16/12/2015 11:26

Aleman - Agree entirely. In fact perversely I will be disappointed if they pay out more than 1.50p as the final. I am all for the erring-on-the-side-of-caution approach.

[aleman] 16/12/2015 11:03

Accumnulated income is 1.74p versus 1.68p a year ago. Despite the slight rise, I think the huge fall in the oil price will lead to a declaration of a slightly lower 1.50p final to keep the annual dividend the same as last year. That would lead to Q1 starting with 0.24p accumulated income against 0.14p last time. It just gives a little more buffer and only pressure to maintain a 6.00p instead 6.04p or even a touch more. I think they would be wise to take the 6.00p and larger buffer option. It won't make a lot of difference, though. I think we are going to see some pressure to cut the dividend later this year. At the moment I do not think it will be a large cut but time will tell.

[neilyb675] 16/12/2015 09:28

should be getting divi announcement today IMO

[llef] 11/12/2015 18:58

some news re shale oil in usa

"Drillers removed 21 oil rigs in the week ended Dec. 11,
bringing the total rig count down to 524, the least since April
2010, The decline was the sharpest since October. That decrease brings the total rig count down to about a third of the 1,546 oil rigs operating in same week a year ago. Since the end of the summer, drillers have cut 130 oil rigs."

To me, a reduction of 2/3 in the no of oil rigs seems to fly in the face of the reported small drop in usa oil production. I ahve seen some reasons for this being reported: 1) comps are only using the most efficient/productive rigs, 2) comps are only drilling on their sweetest acreage 3) comps are just getting better/more experienced at drilling.

But I also read that the USA production figures are not actual counted no of barrells. They are estimates produced by a "Black box" computer program from the Dept of Energy.

So maybe the simplest reason for the disconnect is that the estimated production nos are just plain wrong. So US production is actually falling fast, just that it ain't been recognised yet?

[celeritas] 11/12/2015 16:07

Its the general trend, one battle doesn't win the war. Like a super tanker this will take some turning.
Lead i'd say has the best fundies followed by Zinc.

If you fancy waiting at least brci will spread your risk.

[aleman] 11/12/2015 16:03

It seems very odd indeed that FQM should turnaround and fall 10% through the day when copper has continued up this afternoon and is up 3% on the day. Indiscriminate commodities shorting/$ buying from the US ahead of the Fed meeting? I think the next week is going to be entertaining as coomputer algorithms are getting irrationally exhuberant.

[celeritas] 11/12/2015 15:47

FQM was the only one slightly up, now down 6.5%.
I do think one of the majors will go under at some point if prices stay down here.

[celeritas] 11/12/2015 14:58

Good post aleman, goes along with my thinking. These huge funds can push stock a lot further than you think, you aren't second guessing commodity pricing but just when the funds will turn.

[aleman] 11/12/2015 14:36

The base metals are all up today. If metals prices are starting to react positively to supply cuts, why are mining shares down? I think it is index shorting ahead of the Fed meeting and will unwind a bit after. Something similar could be indicated by the futures markets indicating oil will double in the next 5 years to over $80. The markets seem to be getting distorted or manipulated in the short term. There have been a few articles written recently that say the long $/ short commodities trade is a very crowded one and might unwind in a disorderly manner. I think we might see lots of odd things until some time after the Fed meeting. Some of the current commodiies prices are getting silly.

[celeritas] 11/12/2015 14:13

Commodity stocks still falling, not a good day for brci with it's big holding apart from fqm well down.
This rout must end at some point, calling the bottom isn't easy, anyone think brci could enter the 40s next week.