Clarkson Share Discussion Threads

[nickcduk] 19/4/2007 14:29

My fingers on the trigger or should I say my order is on the order book at 936p. Fingers crossed I get a fill.

[rivaldo] 19/4/2007 14:14

d4vos, if there was anything serious CKN's auditors would have demanded a provision - and CKN as a well-run company would have made such provision anyway. No provision was made, so presumably they're extremely confident this isn't a problem. End of story.

[idioterna] 19/4/2007 13:54

OK, found it. Sovcomflot certainly isn't a small operator..

[d4vos] 19/4/2007 13:19

No that was Adic Lawsuit that was settled this is another one....this is Sovcomflot.......

[idioterna] 19/4/2007 13:04

d4vos - I am not sure what you mean, but are you refering to the litigation case that was settled in January?

[d4vos] 19/4/2007 12:35

Anyone any idea what the situation is with the legal case threatened against Clarksons - to me this is the only reason these havent exploded upwards with all the fundamentals in place...on clarksons website there is a download - forecasting gets more difficult were the case threatened against it by the Russians is for $33mln....

In the Annual Report the simply painted over it by stating --
Other matters
As has been reported in the media, a legal case has been threatened against H
Clarkson & Company Ltd. relating to commission payments during the period 2001
to 2004. The board have reviewed this matter closely. Essentially, the case is
about litigation between powerful Russian interests in which Clarksons has been
caught up as a third party. All commissions were paid under the direct
instruction and authority of the clients. Indeed, Clarksons' shipbroking and
advice on all the transactions in this fleet renewal programme have been proven
to be advantageous to our clients.

[rivaldo] 18/4/2007 15:30

Idioterna, you may be right - I'm not as familiar with the composition of the BDI as you obviously are. In which case the BDI has another reason to maintain its current high levels for some time to come.

[idioterna] 18/4/2007 14:57

Since the TCE is priced in dollars and most freight rates are also calculated in USD terms, surely some of the BDI increase must be a reflection of USD weakness. Not that I disagree with supply/demand issues, congestion problems, etc., but it does appear relevant that the strongest BDI (2005 & 2007) has occurred with greatest USD weakness.

[rivaldo] 18/4/2007 14:45

Why would that be a factor Idioterna? Seems to me that all of the usual reasons cited (port congestion, global undercapacity, demand from and to China, India etc) are simply building and building and will continue to do so for the next few years.

[idioterna] 18/4/2007 14:36

Quite a spike, do you think it has anything to do with dollar weakness?

[rivaldo] 18/4/2007 14:26

I hope you're sitting down.....the BDI is up 99 today to 5,700 :o))

If anything the rise is accelerating now. And still the market sleeps with regard to CKN.....

[idioterna] 18/4/2007 12:31

I can't be bothered to argue about BP (but if it's such an unimportant division howcome they employ over 600 personnel, contribute billions in profits and are being investigated in the states?).. I missunderstood the manner in which the fx positions were hedged at CKN. Still hope the company doesn't lose another £2 million ($4 million) on currency this year. It's about time CKN made up the 25% represented by the 2 year gap to the FTSE100.

[rivaldo] 18/4/2007 11:54

Fromk Bloomberg today:



"The Baltic Dry Index, a benchmark for the price of shipping bulk commodities such as iron ore, coal and steel, rose to a more than two-year high yesterday and is up 27 percent this year following an 83 percent surge in 2006."

[rivaldo] 18/4/2007 07:48

When you look at freight rates which are at least doubled and actually tripled in Capesize since this time in 2006, plus the 23% size in the order book, the increasing hedge fund size, the diversification etc the odd few per cent in exchange rates has to be put in proportion - it's not worth worrying about imo.

The only question as I see it is how bullish the AGM statement will be.

[woracle] 17/4/2007 23:05

Idio, you fail to understand the hedge fund that CKN runs. It acts as fund manager for a Hedge fund for shipping related assets. Its not to do with hedging currency. CKN invested $20M to seed it, and other investors have added to make it make it about $47M at the time of the results. CKN will get value from its $20M investment and fees for managing it going forward. CKN don't actively hedge currencies yet..

"The group used spot currency contracts to convert
cash collected into local currency to meet operating costs. No forward contracts
were used during 2006. The weakening in the US dollar has resulted in an
exchange loss of £2.0 million (2005: profit £1.5 million). "

Fund management

Revenue: £0.5 million (2005: £nil)

Result: £nil (2005: loss £0.4 million)

Assets under management: US$47 million (2005: US$nil)

Management and performance fees amounted to £0.5 million for the year (2005:
£nil). The losses incurred in the first half of the year were reversed by the
year end. The fund had US$47 million under management as at 31 December 2006.

[nickcduk] 17/4/2007 22:31

I agree with Ian on the hedging issue. Clarkson are not a macro hedge fund and will only partially hedge off their dollar exposure against non-dollar costs. When the hedges run their course CKN are still exposed to the same dollar weakness.

I think you may also be misguided in your assumption that BP is just one big hedge fund with an oil exploration and production division on the side. BP make the majority of their money from selling oil and gas. When they sell this production they seek the best price for it. They employ traders to do this and hope that they beat their relevant benchmarks over the period. The actual gains are large in absolute terms but very small in relative terms. The traders may get an extra dollar over the benchmark in the period but that makes little difference when BP make over 40 dollars a barrel.

[ianmckean] 17/4/2007 17:42

I hope and believe you are right Idioterna! I think it has just fallen to the bottom of the trend channel. I added to my position this afternoon so here's hoping. Not too confident in currency hedging though. I used to work in BL years ago when they were buying bits from Honda for the Tliumph Accraim and they used to buy yen in advance. They always ended up losing money with their hedging activities. But perhaps CKN are actually trading FX and making a profit???

[idioterna] 17/4/2007 15:14

I anticipate this being the last test of 950 before the next leg up. Should it fall below 950 I will pick up another 1000.

nick - I think that there is still a failure to understand that CKN has a department specifically focused on hedging currency, particularly dollar weakness. We might even find that this arm of the company becomes rather more profitable than initially anticipated. Take BP, it generates more profit from its crude futures trading division than any other. Yet another share that the market has taken a good deal of time to wake up to.

[nickcduk] 17/4/2007 15:09

It must be galling watching CKN going nowhere despite the fundamentals and markets improving on a daily basis. I think the dollar rise is ultimately stopping CKN making much progress. Todays sharp rise in cable certainly isn't helping. I will probably try and get in again if we have an intra day spike towards 930p or so. If that doesn't happen i might buy a few ahead of the dividend if it sticks around current levels.

[rivaldo] 17/4/2007 14:29

Nope, and it just gets better and better! Today the BDI has accelerated up another 39 to 5,601....when will the market latch on to this? Late as usual.

This stock is one of the few where the PI can see what is happening ahead of the rest of the market.

[idioterna] 17/4/2007 08:48

One thing's for sure, the outlook hasn't deteriorated since results!

[rivaldo] 16/4/2007 15:26

True, a 24p divi will come in handy and the institutions will like it - but imo it's the AGM statement in May which will take CKN up to a new trading range if it's as positive as I believe it will be.

[idioterna] 16/4/2007 14:27

.... and, more impportantly, only 6 weeks to ex-dividend day...

[rivaldo] 16/4/2007 14:21

The BDI is up again today, another 9 to 5,562. Only a month or so till the AGM statement now.

[rivaldo] 16/4/2007 10:53

Still a lovely small 2.5p spread. From Bloomberg today:



"Costs for shipping bulk commodities already are rising because of coal. At Newcastle, Australia, the world's biggest coal-loading port, a record 71 vessels sit offshore waiting to load because producers can't fill the orders fast enough.

The Baltic Dry Index, the benchmark for commodity-shipping costs, has risen 26 percent this year to 5553, following an 80 percent surge in 2006 on London's Baltic Exchange."