Ft Tre Discussion Threads

[jiopl] 27/11/2008 22:15

On the country risks although its true that there might be a bit more risk in getting CERs from a South African project in isolation, as part of an overall portfolio of projects I actually see it as a way of reducing risk rather than say putting all your eggs in a Chinese basket of CERs.
As I understand it the market seems to recognise this as it is willing to pay a premium for non Chinese primary CERs.
So when Trading Emissions come to sell those South African CERs hopefully they will be more than compensated for taking on what could be seen in isolation as a small amount of extra risk.

[wormcatcher] 27/11/2008 10:57

Hi Liquidkid, jiopl & praipus,
There are country risks, as highlighted in the last set of results with several projects in China were not validated. Also, as jiopl states the current economic climate doesn't help.
Upside, plently of cash and good projects. As long as they keep their heads and keep the risks low, should ride out the current storm and emerge in a position of strength. As jiopl says, reasons for carbon trading will not go away, and long term this will be OK.
In the results they used an average CER price of 21.18EUR. So I guess, based on the current price, the portfolio valuation would currently be down about 25%.
So in simple terms NAV in results 226.69p, taking in to account 50p/share cash and portfolio down 25%, then NAV currently 182p - and this does not take in to account a recovery in CER.

[praipus] 27/11/2008 10:08

Hi jiopl, ah I see of course, thank you.

[jiopl] 26/11/2008 22:32

Hi Praipus i think part of the reason is that industrial production is falling and electricity demand is down so less emmisions...

[jiopl] 26/11/2008 22:28

Hi I noticed that the price of coal has also collapsed recently I wonder if that could push up the carbon prices short term,but long term I am sure they will recover eventually because the reason for the carbon trade has not gone away unfortunately!
In case you missed it there are some long term EUA/CER price projections here.

Carbon Market Round Up Q3 2008


By the way well done on selling the house in this market.

[praipus] 26/11/2008 22:27

Is it credit risk related? Or other factors?

[wormcatcher] 26/11/2008 14:03

I know the EUA 08 price is down (€ 15.70/tCO2) but this drop is not good.

[cascudi] 17/11/2008 12:03

TRADING EMISSIONS GAINS ON PROFIT RISE

Shares in Aim-listed carbon trader Trading Emissions (LSE: TRE.L - news) gained 15.75 pence to 118 pence on Thursday as the company reported pre-tax profits to June 30th at 194 million pounds, up from 152 million pounds, and confirmed it would pay a dividend in 2009. Trading Emissions, which generates carbon credits from renewable energy installations in developing nations, was also boosted by news that the delayed 'Transaction Log' project - linking the EU scheme and the United Nations - was finally active

[wormcatcher] 28/10/2008 17:33

Interesting - will look in to that one.
Yes, my short term trades have now gone in to my long term investment pot.
Happy will come good, not a lot going up in this market. Am looking at investing in some FTSE100 as well now, just picking which ones is the problem (house sold at last btw).

[jiopl] 28/10/2008 16:40

I am also a bit disappointed with the share price since the results, but I think the long term prospects look good so am happy to hold and wait for the dividends to start pouring in.
Isn't there a saying about a long term hold being a short term trade that went wrong or something...;-)

By the way I see ETF securities are introducing a carbon ETC.

[wormcatcher] 21/10/2008 11:41

Quite a few sellers around today - bit disappointing after good results.

[gdp2] 17/10/2008 01:19

GDP2 - 6 Sep'08 - 19:18 - 439 of 458 edit


Bought in on Friday, believe TRE's NAV to be around 225p so seeing this as a very undervalued share at the moment.


Well 1p off isnt too bad! May spread bet tomorrow morning. Great Results.

[wormcatcher] 16/10/2008 09:08

Ok
So 50p/share cash
Risk adjusted NAV 226p (the way they treat risk seems reasonable)
>100% margin on units sold to date
Looking to pay annual dividend
Share re-purchase
Special dividends
Have had issues in China by the looks of it in getting projects validated - some projects have had CERs risk adjusted to zero.
Other markets look good.
Want to get my head around this Investment Advisor (EEA) - performance fees have gone up from 26m last year to 40m this year.

[wormcatcher] 16/10/2008 08:18

So 226p NAV and dividend next year - now to read the detail.

[wormcatcher] 03/10/2008 16:20

Lloyds dropped their holding by about 1.3%

[jambo172] 02/10/2008 16:53

Overhang cleared ... up tomorrow !!

[wormcatcher] 30/9/2008 16:25

Hmmm - should have hung on for a couple of days.

[jiopl] 26/9/2008 21:10

I agree that TRE is not a very risky investment I am more worried about some other renewable companies I have invested in who will need to raise cash for R&D in the future.

CERs prices are above €19,the ITL-CITL connection has been tested successfully and the official link should be completed by mid October starting on the 6th,whoever wins the US election it should be positive for the carbon markets...
I am looking forward to the finals and I am thinking off adding at these levels.
After all it might be a safer place for my cash than may bank account in these interesting times. ;-)

There was an interesting bit in the June Tendances carbone about the risks in the CER market.

"The main risks on the demand side of the CER market are:
• The risks of delay in connecting the CITL to the ITL.
• The 1.4 Gt cap on the use of CERs for compliance in the EU ETS Phase II.
• The limited role of CERs in the EU ETS in the event of no satisfactory post-
2012 international agreement.
• The lack of liquidity in CER trading as compared to EUAs.
When compared to the secondary CERs, primary CERs bear additional
supply-side risks such as default on the part of project developers,
potential delay in obtaining approval from the UNFCCC and uncertainty in
the quantity of emission reductions. Risk associated with secondary CERs
is higher than that associated with EUAs. This risk profile is clearly
reflected in the market prices: from April 2007 to April 2008, secondary
CERs traded at a €7-10 discount to EUAs while primary CERs traded at a
€3-4 discount to the secondary CERs.
CERs are poised to play an increasingly important role on the market,
at least in the short term. The CER market is new and has a different profile
for risks and returns. The regulatory and technical risks should decrease as
emissions trading becomes more standardised. The success of this market
remains crucial for environmental protection and for the development of
clean technologies."



and a feature here about the credit crunch and the carbon markets.

[wormcatcher] 26/9/2008 10:04

Hi jiopl,
Agreed that the current financial crisis will have/is having an impact on just about every business and everyone's everyday lives.
TRE are quite diversely invested and (touch wood) have no reason to currently be raising further finance and in the last set of interim results had a strong cash position. They would appear to be well placed to ride the storm and renewable energy schemes along with emissions trading are here to stay.
I don't see the risk of investing here as great, although obviously there is a degree of risk with any investment.

[malkie] 26/9/2008 09:54

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Market makers should not be traders as well as there is a clear conflict of interests.

Someone took 20p for 135k GEM when the bid was 26p - over a barrel with Market Makers the only game in town.

On 10th September 450k SOLG sold at 1p when the bid was 3p.
Same stock sold back into the market over next few days for 2.5p-3p

Market Maker system leaves a lot ot be desired. This isn't "making an orderly market", it is profiteering.




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[jiopl] 26/9/2008 09:53

Hi asparks I agree companies like TRE and CLE are linked to problems in the banks but so are a lot of renewable energy companies.



I guess the problem with that bunch of bankers is they are linked to just about everything!

Anyway I am happy to take that risk at these levels.