Lonmin Share Discussion Threads

[lazyhisnibs] 18/8/2015 20:22

Currency / Commodities Article


Strong dollar / weak commodities currencies.

- topic discussed here a couple of times here fairly recently;

- oil gets the focus in the article;

- copper in the vid;

- but the article has a bigger subject range than that;

- the article didn't get in to delayed imported inflation due to currency weakness.


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Extracts:
“Divergence in currencies suggests a stronger dollar, weaker commodity currencies and hence lower production costs,” Jeff Currie, New York-based head of commodities research for Goldman Sachs Group Inc., said by phone."

"The cross-commodity downdraft led by oil, gold and copper has hit producer currencies hard,” Mike Wittner, head of oil-market research at Societe Generale SA in New York, said by phone. “The weaker their currencies get versus the dollar, the lower their costs. This further weighs on commodity prices and just adds to the negative spiral.”

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[dealy] 18/8/2015 18:58

Believe me, there is no comparison with AFR. AFR had:

- 1.5 billion USD of high yield / high covenance bonds
- immature operations
- zero management controls
- middle of capex program

Lonmin does not meet any of these criteria. Go scare somebody else

[bigsi2] 18/8/2015 18:10

Seems like another AFR- highly leveraged company struggling with falling commodities?

[bernieboy] 18/8/2015 14:47

Ridiculous price. That's why saying we will sort out the finances in 3 months is pathetic. What price for an RI in November!? 5p like POG! Why don't they go for a revolving credit facility like KAZ have just announced!?

[lazyhisnibs] 18/8/2015 14:46

It'll be revealing to see if the ECB's version of QE eventually gooses their equity markets in a semi-sustainable way but the US's didn't do mining stocks any favours from late 2010/early 2011 if those on the LSE are anything to go by.

If leading exchanges are due correction of ten percent as a bare minimum then all but a handful of niche shares will fall alongside the majority. That'll include beaten up resources shares save for moments where individual ones deliver really good news or news that is a hell of a lot less bad than expected. Regarding the latter maybe management here, perhaps with the help of partners of sorts, can pull something out of the hat. I'll be intrigued and a bit better educated if they do. Perhaps something that will buy a couple of years breathing space.

A fair few emerging market currencies are taking a right hammering and their exchanges are vulnerable. How all of that comes out in the mix for resources shares with primary listings in the first world could be debated till the cows come home. We'll find out sooner or later though.

On the SA socio-political front Lonmin may be a hot potato but what Anglo ultimately does seems to me to be the biggie for the time being. Glen too later on perhaps. Coal oal is so over supplied with only the US having cut back meaningfully.

Then there are the steel makers also talking redundancies. They might get import protection though. Instead? Something might come out of the mining project initiative thingy in October, I forget what it's called.

[careful] 18/8/2015 14:34

looking at some broker target prices issued over the last 4 weeks.

Jul 24 Panmure Gordon 255p buy
Jul 27 Credit Suisse 160p outperform
Jul 27 HSBC 82p hold
Jul 27 UBS 100p neutral

it is obvious i should mortgage my house and add but i am starting to lose my nerve.

[nomdeplume] 18/8/2015 13:40

Myriad uses, from the manufacture of nitric acid to basis of some cancer drugs.

[bouleversee] 18/8/2015 13:15

Careful -

So should I be taking profits on all my construction and Savill shares?

Apart from catalytic converters and jewellery, what is platinum used for? (Excuse my ignorance!)

[dealy] 18/8/2015 13:03

These analysts never admit they were wrong with their previous targets.

[careful] 18/8/2015 12:31

these blanket statements 'the markets are overvalued'.

there are many share that have crashed already and at very low historic valuations.
the oils and miners are in this category.
some.such as GSK have gone no where.

others such as builders, insurers and companies such as BT and some utilities are at record levels.

If anything i believe equities are undervalued.
the real surprise may be falling property values.
by any measure property is in bubble territory.
Something that the Governor of the B of E and the IMF are worried about.

[ukgeorge] 18/8/2015 12:22

to offset exposure to Lonmin, you could go long platinum and palladium

two bits of good news today and yesterday

Eland mine to be shut and Nkomati mine is on strike, only 70koz of plat production/a but a start.

Lonmin imo will go bust, and then production will be cut back further but the the mines will likely remain open.

[hectorp] 18/8/2015 12:12

FTSE in 1999 and now - and even today, it is very overvalued and due a major correction ( on the back of a large US correction). I'd avoid shares.

Meanwhile LMI has shot down but probably now well below fair value. But the market won't care about that.

[careful] 18/8/2015 11:49

in some ways it suits the management to have a falling share price.
they are trying to make tough but necessary changes to the business that unfortunately involve job losses.
this involves negotiations and agreements with the trade unions, who should see the need for urgent measures to ensure long term survival.

[worm_c] 18/8/2015 11:29

Maybe I am naive but ....

Can someone explain to me please how an analyst can issue a buy recommendation today with a price target £1.49.

I go onto my IG account and it tells me that of the 250 open positions held by clients 91% are long.

Platinum prices seems to be stabilising and edging back to $1000

... yet this share keeps falling??

Am I in a nightmare or part of some elaborate con??

[careful] 18/8/2015 11:26

I was pleased when the ftse100 went to 6530 in Oct 1999.
I could never have guessed that the index would be the same over 16 years later..

in those days worthless companies were ramped up to stupid levels.
today it is the opposite, valuable compnanies are shorted down to stupid levels.

in the 1999 era no-one who thought they were smart would ever sell.
today they refuse to buy.

[targatarga] 18/8/2015 11:17

Always amazed me, you'd get what appeared to be a good western and they'd all start singing, can't remember if there was a chorus though...

[dealy] 18/8/2015 11:12

Don't forget corus

[careful] 18/8/2015 11:09

Now that depends.
I wish i had hung on to my 8p TW.
'now there was a falling knife' as Crocodile Dundee once said.
today they are over 200p.

similarly barratt and persimmon and many many others.
There is money to be made from falling knives sometimes.

but as Lancy Howard said to the Cincinnati Kid.
'the secret is doing the wrong thing at the right time'.

[p777uly] 18/8/2015 10:49

I see only emotional attachment and no sound and rational reason to buy right now so only a gambler would do so, not an investor or trader (successful one anyway). Only thing worse than catching a falling knife is holding onto one desperately.

[careful] 18/8/2015 09:36

now below £200m cap.

[careful] 18/8/2015 09:27

are there any insiders here who understand exactly how the share price algorithms work once trading commences.

take todays 4.2% fall.
870,000 shares traded.
both ways this is a value of £300k.
if they were borrowed for shorting at say 0.3%,
and assuming cfd leverage of 5:1.

then the initial cash exposure would be £300,000 x .03 x .2 = £1800.
wow, no wonder these boys short.

[careful] 18/8/2015 09:01

To think i sold my original holding in LMI for £6.18 on Aug 23 2012.
Three years ago.

Market cap looking to fall below £200m.
Assets last year over £2bn.
debt low last year with gearing of about 20%.

[dealy] 18/8/2015 08:13

hxxp://sharedealing.nandp.co.uk/broker-views/LMI/Lonmin-news