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Markets live transcript 19 Jun 2009

Posted by Paul Murphy on Jun 19 11:04.

Markets live chat transcript for the chat ending at 12:05 on 19 Jun 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH)

PM:

Hello
PM:

11.04
PM:

Welcome to Markets Live
PM:

We’re late for a reason
NH:

Utterly disgusted.
PM:

Neil’s here and we’re both disgusted.
PM:

Seen a lot of things on the London market – -which has left us both rather sceptical.
PM:

But the stupid levels of manipulation that we are now seeing…
NH:

What are the regulators doing about it????????????
PM:

Index manipulation during the triple witching expiry is something that has been going on for the thick end of 20 years.
PM:

I can remember when the regulators first started putting official physically on trading floor to deter this naked thievery.
NH:

But they haven’t done ANYTHING to address the issue.
NH:

LOOK AT IT THIS MORNING!!!!
PM:

Get me the FSA
PM:

What’s the number.
NH:

I don’t know, I never call them.
NH:

You’re the one with the key mate there.
PM:

NH:

The good firm H&M Capital Management were sitting there with a nicely profitable short on the Footsie at 4000
NH:

A considered position, established some weeks ago now and held in the face of some testing market volatility.
NH:

we were nicely in the money.
NH:

And then triple witching comes along – and what happens?
NH:

Certain unnameable market “participants” choose the moment to try and drive us to the wall.
PM:

Squeezed the Footsie all the way up to 4367.
PM:

We could only sit and watch and prepare for the inevitable margin calls.
PM:

Cos we are not being shaken out of the tree here.
PM:

The position stays.
PM:

4000k target, 4444 stop loss.
PM:

We will not give in to market terrorists.
PM:

And we call on the authorities to bring them to book.
NH:

It’s outrageous. Anyway, you watch, whenever the index gets driven up like this during expiry, it comes straight back down.
NH:

I would not be surprised in the Footsie ends the day in negative territory.
NH:

That’s not a prediction. I just wouldn’t be surprised.
NH:

actually what I am hearing from brokers
NH:

is that someone was in a mess during the expiry
NH:

did get their biz done
PM:

Did not get biz done
NH:

had to buy after it closed and that’s why the market whizzed up between 10.30 and 11.00
NH:

only a theory
NH:

also I have a good note from Goldman
PM:

It will stil come down
NH:

on today’s expiry in the US
PM:

Oh do share
PM:

GS stuff
NH:

Open interest highlights for expiration Friday and potential
“pins”. Expiration-related trading could be important for stocks
with large open interest in at-the-money (ATM) June options.
Depending on how delta-hedgers are positioned, this flow could
generate liquidity and dampen or exacerbate stock price moves.
See Exhibits 1-2 for focus stocks.
NH:

Open interest in ATM June options may impact stocks on Friday
If broker-dealers and other options traders who delta-hedge are net long
ATM options, expiration-related flow may dampen stock price moves, and
“pin” prices to strikes with large open interest. Alternatively, if deltahedgers
are net short ATM options, hedging could exacerbate price
moves. It’s impossible to know how delta-hedgers are set up, but either
way, expiration-related flow should create liquidity in stocks with high
open interest in expiring ATM options, since traders are likely to be
adjusting their hedges as stock prices move.
NH:

We identify stocks where options activity could have big impact
Expiration related trades may cause trading activity to pick up for stocks
with a significant amount of ATM open interest on Friday. We identify
possible focus stocks with large ATM June open interest and compare the
underlying notional amount of shares to the average daily volume of the
underlying stocks. Expiration-related activity is likely to have more of an
impact if the open interest represents a significant percentage of the
stock’s volume.
NH:

We have a preliminary list, but situations may change by Friday
Our list of ATM June options with large open interest reflects positions
headed into expiration morning. Unless they are closed out early in the
day, trading could be active.
NH:

If broker-dealers and other options traders who delta-hedge their positions are net long
ATM options, expiration-related flow could have the effect of dampening stock price
movements, causing the stock price to settle near the strike with large open interest. This
situation is often referred to as a “pin”. Alternatively, if delta-hedgers are net short ATM
options (have a “negative gamma” position), their hedging activity could exacerbate stock
price moves. We’ll describe how this works.
PM:

er that’s enough
11:11AM
NH:

Ok
NH:

FTSE 100 update
NH:

72 points to the good at 4,354
PM:

Okay — so we are up almost 2 per cent — what’s the rest of Europe?
NH:

doing nothing at all
NH:

we weren’t joking about manipulation
NH:

Dax up
NH:

wait for it
NH:

5.4 points
NH:

Cac 43 points
NH:

still underperforming UK
PM:

hmmm
11:13AM
PM:

Anyway, talking about market manipulation, how’s Dana Petroleum getting on.
PM:

??
NH:

steady on
NH:

they are up as it happens
PM:

Rumour kicked off yesterday morning. It was coming from “usually shrewd sources” – and it then went like wildfire round the market.
NH:

up 38p at £13.60
PM:

That must be because the company are denying talks
PM:

Up it goes again
NH:

well that’s what some felt told Reuters
NH:

NH:

and while they may not be in talks
NH:

that doesn’t mean they have not had an approach
PM:

of course
PM:

But look, this remains RAW
RAW is market chatter – information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.
PM:

and i thought we weren’t going to do any raw
NH:

yeah
NH:

I’m gonna do a Bob Crow
NH:

industrial RAW action
PM:

This is cos of Taxloss’s outrageous complaints yesterday
PM:

Suggesting our raw was worthless
NH:

yeah, he even came up with an equation.
PM:

Bloody CFA students
NH:

yeah
NH:

CFA’s
NH:

who needs them?
PM:

Council for Administration
PM:

PM:

NH:

actually ACAS have intervened
NH:

and a dispute has been avoided
NH:

no strike
PM:

And we love Taxloss really
PM:

Mostly
NH:

as I was saying
NH:

not being in takeover talks does not mean Dana has not received an offer
NH:

or won’t receive an offer
NH:

RWE could well be plotting something
PM:

You are increasingly convinced by this, arent you Neil?
PM:

But we do NOT know anything firm
PM:

This story doesnt yet carry an ML bandit rating
PM:

Not enough info as yet
PM:

And may turn out to be entirely fanciful
PM:

so READER BEWARE
PM:

Just in case you havent got the msg
NH:

(Taxloss, we never said Chauver would go up. RAW can go up as well as down)
NH:

anyway
NH:

I reckon RWE are definitely up to something
NH:

of course it could that there interest has cooled following the speculation, but there is a sense from my sources that they have been running the numbers on Dana
PM:

(hotairmail — stop loss was reduced from 4675 to 4444 as the footsie fell)
PM:

have we had any feedback from RWE?
NH:

no
NH:

hit a brick wall
NH:

they won’t comment on market speculation etc
NH:

company policy etc
PM:

hmmm
PM:

pretty easy rumour to quash on their part
NH:

yeah, one of those sources that Reuters keep talking to could have easily quashed it
PM:

true, but you can read a lot of things into silences
NH:

I suppose you are right
NH:

anyway on the face of it this deal makes a lot of sense
NH:

and I think concerns over whether RWE could afford it after their recent deal in Holland
NH:

and concerns that Dana don’t have enough gas for them are overstated
PM:

right
PM:

we should explain here that Dana would fit into the RWE DEA division
NH:

looks a pretty neat fit
NH:

here’s some info on it
NH:

RWE Dea AG, headquartered in Hamburg, is an international operator in the field of exploration and production of natural gas and crude oil. The company deploys state-of-the-art drilling and production technologies along with the vast know-how and skills acquired in nearly 110 years of corporate history. RWE Dea is also a leader in terms of safety and environmental protection.
RWE Dea operates production facilities in Germany, the UK, Norway, Denmark and Egypt, and also holds exploration licences in Algeria, Libya, Mauretania, Ireland and Poland.
NH:

In Germany, RWE Dea also operates high-volume underground storage facilities for natural gas.
The Company is part of the RWE Group – one of Europe’s biggest energy corporations.
NH:

the gas storage bit could be important, because Dana has lots of North Seas fields that one day will be perfect for gas storage
NH:

you find more here http://www.rwe.com/web/cms/en/55098/rwe-dea/company/
PM:

OK, thanks
PM:

any analyst comment??
NH:

not really
NH:

which is surprising
NH:

but I have picked up a few things
NH:

here’s a note from someone who met the company yesterday
NH:

I have had to redact some of it to protect the sources
PM:

haha
PM:

Quite a fashion for redaction at the mo
NH:

BUY – TP £14.89 – FREE OPTION ON EXPLORATION FOR REST OF YEAR.

Meeting with xxx, xxx director – again reiterated the strength in the portfolio and the solid balance the company offers between producing assets, exploration upside, and balance sheet flexibility post recent debt / equity deal, with a significant discount to risked NAV.

NH:

First things first – no comment on the M&A spec today in FT Alphaville.

Now the story – The growth proposition remains intact – 300% reserve growth in recent years and 30% + production growth last couple of years backed up by a strong exploration success record and value accretive M&A deals.

NH:

Co talked about investment plans – Dana has loads of balance sheet flexibility post recent debt / equity deals to make accretive bolt on acquisitions (we forecast end 09 gearing of only 7%). Further M&A following the Bow Valley acquisition is possible. But even without that, option value will come from organic exploration in our opinion.
NH:

DNX still on track for a record 17 exploration and appraisal wells in 2009. Around 7 more to go this year, focus wells are West El Burullus in Egypt called Papyrus and Bamboo, due to spud in September and November. Analogues in the area have proved up multi TCF gas discoveries in deeper zones (BP and BG own these). Even sooner than that, we expect a result from high risk/ high impact gas prospect Tafejjart in Morocco in July (1 in 10 risk reward). Other notable focus wells are Jetta , Tornado and Trolla.

Even if all remaining wells fail for the rest of 2009, the RISKED NAV would in essence fall by around 130p – SO – from £14.89 to around £13.58 – TODAYS STOCK PRICE EVEN POST M&A BID SPEC IS £13.50 = FREE OPTION = Reiterate BUY.

NH:

and here’s some back of the envelope stuff a friendly broker put together for me last night
NH:

I put it up in the Long Room
NH:

But I think it is worth reprising
NH:

FT Alphaville today highlighted market speculation of a possible 1800p per share bid from RWE.

We believe there is good strategic rationale for RWE to be interested in DNX;

* Geographic location of reserves (FY08 71% of production in North Sea) – RWE key markets are UK and Germany

NH:

* Relatively large portfolio of producing assets in North Sea – ability to add scale in the region with a single acquisition

* Recent exploration success and rising commodity prices

* RWE has stated it aims to double hydrocarbon production by 2012

* RWE is keen on growing in the carbon capture market. DNX would provide more options for storage in depleted fields

* RWE has a strong balance sheet – paying cash would be immediately accretive

NH:

We calculate 1800p as equating to c$12.55 per barrel of 2P reserves. This compares to a price of $9.47/bbl equivalent paid for the recent BVX acquisition by DNX itself (North Sea producing assets). If we use the same per barrel value for DNX as paid for BVX we get to a value of 1371p per share. However, we believe DNX justifies a premium to such a valuation due to i) the size of the DNX portfolio – gaining immediate scale, ii) Carbon Dioxide storage potential, iii) exploration potential (North Sea, Egypt, Morocco, W Africa).
NH:

anyway
NH:

interesting the share price has held up
NH:

now 29p stronger at £13.51
11:25AM
NH:

and a couple more bits of RAW
NH:

talk in the market that Joe Lewis is adding to his holding in Mitchells & Butlers
Mitchells and Butlers (MAB:LSE): Last: 237.00, up 12.5 (+5.57%), High: 239.75, Low: 222.75, Volume: 2.00m
NH:

and also ING
NH:

talk of a big share placing
NH:

which some brokers think has been pulled
NH:

Apparently, the placing rumour is not valid anymore. ING was considering doing a EUR1bn placing to redeem hybrids, which would be beneficial for two reasons: 1) We believe debt reduction is necessary, as the hybrid ratio in ING’s insurance capital was nearly 30% at the end of 1Q09, above its target ratio of 25%, 2) It could make a ‘nice’ capital gain on it. However, given the decline of the share price the last week, ING believes such a deal would not be shareholder value enhancing anymore. Yesterday’s share price uptick on a broker upgrade has not changed that situation (yet), but ING might consider doing this deal if equity markets (and therefore its share price) recover again. The key observation is in our view the fact that ING does not have the capital to do significant debt buybacks without raising new equity, confirming our view it is the most capital constrained Dutch financial. We prefer AEGON
NH:

Just going back to point from Munger
NH:

on the Takeover Panel
NH:

I would say it is naive in the extreme to assume companies always tell the panel the truth
NH:

remember BOC a few years back
NH:

for months there was rumours of a bid from Linde
NH:

we had loads of detail
NH:

advisers
NH:

prices
NH:

what was being discussed
NH:

and Linde said nothing
NH:

in fact the usual soruces played stuff down
NH:

and then one day – BANG
NH:

recommended offer at stonking premium
PM:

Oh, come on Neil — there are so many examples of this
NH:

yeah remember Deutsche Post and Excel
NH:

that was another
PM:

dont go thru em all — we’ll be hear all day
NH:

Companies and lawyers play fast and loose with the rules
PM:

Actually, i was talking to a banker yesterday who was saying that he thought the panel had gone to sleep
PM:

hardly every heard from them these days
PM:

There is a Takeover Panel guy/gal who joins us each day here tho, no?
NH:

Yes, there is
PM:

Very shy lurker tho
NH:

wonder why
NH:

hello
PM:

Hi there
PM:

We dont intend to trouble you today. But you never know…
11:30AM
PM:

Anyway, on to the story of the morning
NH:

what Chaucer?
PM:

PM:

Glencore
NH:

ah yes
PM:

Glencore looking at an IPO
PM:

Which has all sorts of repurcussions for things like Xstrata etc
NH:

it does
PM:

Although i did have one banker ring up this morning to tell us, in case we hadn’t noticed, that the IPO market was shut currently.
NH:

PM:

Coming at some stage tho
PM:

We actually think that first, something else is cooking at Glencore
NH:

Could be buying something.
PM:

PM:

We know Glencore didn’t have any cash a few months back.
PM:

But things can change
NH:

I think you are right – might not have had cash six months ago – but for a business like Glencore that can change very quickly indeed.
NH:

Given the way certain commods have moved over last few months.
PM:

remember it has an option to repurchase the Colombian assets it sold to Xstrata — so that it didnt get diluted in the Xta rights
NH:

Maybe.
NH:

Finance?
PM:

Well, there’s always the chance that one of the banks agrees spme sort of financing deal, with a view to getting the mandate on the IPO – even if that’s two years down the road.
NH:

(Taxloss, you just don’t get it. That RAW on Dana came live when on air.)
PM:

Chill
PM:

I think taxloss has opted for an early lunch
NH:

right Xstrata
NH:

price firm this morning
NH:

but then most of the miners are
Xstrata (XTA:LSE): Last: 682.50, up 28 (+4.28%), High: 688.50, Low: 656.50, Volume: 11.04m
NH:

I suppose the way they are reading it is, Glencore are less likely to sell their stake if they get permanent capital
NH:

but there is a downside if they do list
NH:

which we noted
NH:

they could buy back the Columbian assets
NH:

although they may have the cash to do that anyway
NH:

anyway the mining team at Liberum Securities have gone into a bit of detail about what it means
NH:

which I can put up
NH:

Implications for 34% held Xstrata
NH:

We feel the implications for Xstrata are difficult to read. There are some undeniable positives: a more transparent parent with good reporting, governance and investor access is likely to improve market sentiment towards XTA’s biggest shareholder and by reflection Xstrata

A listed and better capitalised Glencore is one that is better able to cope with the financial demands of cyclical downturns and key partner retirements. Fears of forced selling of the Xstrata stake should become less of an issue going forward. Similarly, should Xstrata require capital again from its shareholders, Glencore will be better positioned to stand its corner.

NH:

a more transparent parent with good reporting, governance and investor access is likely to improve market sentiment towards XTA’s biggest shareholder and by reflection Xstrata. We also think the market is likely to be pleasantly surprised by the quality of Glencore’s management, business model and risk controls – changing perceptions as to how this major shareholder is seen
NH:

There are also some implications that may be taken negatively by Xstrata shareholders.

A better capitalised Glencore is one that is better positioned to exercise the controversial US$2.25bn Prodeco call option, which matures at the end of January 2010. Although XTA will gain from the transaction, on balance we feel the transaction scrutiny surrounding a called Prodeco would be taken badly by the market, on the other hand exercising the option would be a very bullish endorsement on the commodity cycle from the front line;

NH:

A listed Glencore is one that is better able to eventually merge with Xstrata – on terms favourable to Glencore. Given there are strong relationship agreements in place and that Xstrata’s board are robustly independent, we feel these fears would be misplaced – though we are aware not all share our view
We feel Xstrata looks good value here as 1) speculation that is looking to go hostile on Anglo American seems to be wide of the mark 2) it has fallen 15% in the last 6 trading days and now trades at consensus forward PER of c.12x, and a mere 12.7x on our spot market to market in 2010 3) we feel each of their key commodities has further to run this cycle and it remains a top draw operational story.
PM:

thanks for that
11:38AM
PM:

any moe on the miners?
NH:

yeah
NH:

Rio
NH:

gone very badly ex-rights
NH:

NH lots of theories flying around as to why
NH:

the Chinese might sell their holding
NH:

the Chinese might try and scupper the iron ore JV with BHP
NH:

Albert Edwards’ stuff on the Chinese lying about eco stats
NH:

and probably most realistic
NH:

that US shareholders are being forced to sell
PM:

PM:

how so??
NH:

have a look at this
NH:

RIO listed in US, so this isn’t registered as a 144A offering I AM TOLD and thus US sharesholders cannot can take their rights up – could be c. 20% of company
PM:

oooh
PM:

20% that’s a serious amount of flowback
NH:

it is
NH:

and there is also a potential problem with the ADR’s
PM:

really
NH:

yeah, have a look at this from Merrill
NH:

ADR holders will receive cash proceeds from selling rights
We have been fielding a lot of questions recently on the implications for Rio Tinto
ADR holders of the rights issue. ADR holders are NOT entitled to subscribe to the
rights issue, but instead can have their rights sold on their behalf, and the cash
proceeds distributed to them.
NH:

They can of course use these proceeds to invest in
new Rio Tinto shares. The price they receive for the rights should be equal to the
Rio share price less the issue price of GBp1400. In theory therefore, their
earnings dilution should be no less than holders of ordinary shares.
As to the timing, the rights are being sold over the next two to three working days.
JPMorgan Chase, the Authorised Depositary Bank, will sell the rights. They can
be contacted on +1 (201) 680 6630.
NH:

For investors who have further questions on the issue, we also suggest contacting
investor relations at Rio Tinto, contact details of which can be found at the Rio
Tinto website.
PM:

very interesting
PM:

we should try that number
PM:

what are Rio doing??
11:42AM
NH:

up 23p at £20.72
11:43AM
PM:

right — can we hit the re-set button re comments to the right
PM:

And also our relationship with the commenters
NH:

Okay, I have calmed down. Was going to ban Taxloss but thought better of it
NH:

we are big enough to take the hits
PM:

Well he was banned for an hour, but we’ve now lifted that
PM:

We should have thicker skins
PM:

Meanwhile — please dont squabble over on the right
PM:

It is the case that we don’t want people trying to puff penny dreadfuls
PM:

But feel free to draw our attention to interesting situations etc
PM:

And by all means share general thoughts
PM:

It’s friday
PM:

we should be cheery
NH:

yes we should
NH:

let’s chill
NH:

sorry Taxloss
NH:

right with that out of the way
NH:

lets move on
11:46AM
PM:

And jokes are good, of course
NH:

seen this letter Tui have fired off
PM:

You mentioned, but i havenet had a chance to read
NH:

well it is an open letter to shareholders
NH:

concerning a note Deutsche Bank published on the company this week
PM:

ooh yes
NH:

Dear Shareholder,
It will probably have not passed your notice that on Tuesday, 16th June the TUI share price dropped by more than 18% from 6.13 Euro to around 5.02 Euro. At almost 8 million shares, the number of shares traded on this day was well above the average. This development can be attributed to an analyst report on TUI by Deutsche Bank. On this day they published a research update setting a price target for the TUI share of 1.90 Euro and subsequently a sell recommendation.
NH:

Following a review of this valuation by TUI, it became apparent that the update contained technical mistakes in the sum of the parts valuation. This concerned in particular the valuation of the shareholder loan to TUI Travel and the pensions, the effects of which totalled approx. 4 Euros per share. TUI discussed this with the analyst at Deutsche Bank. Deutsche Bank corrected the technical errors in their valuation and released a corrected version to the original report on Wednesday afternoon. The revised target price is now 4.40 Euro (2.50 Euro higher than before)
NH:

The sell recommendation remains unchanged. On analysis, whilst the bank has corrected the mistakes, they have now also adjusted some of their original assumptions to the detriment of the TUI valuation. For example the report now includes a conglomerate discount of 20%. On the basis of the assumptions published on Tuesday and only taking into account the correction of the mistakes, the calculated TUI valuation would be around 6 Euros per share. This was virtually the share price level before the report was published and would probably not have justified a sell recommendation.
Best regards,
NH:

Berlin, Hanover, June 2009
TUI AG

The Executive Board

NH:

actually I am uneasy with this sort of thing
PM:

Thin-skinned corporate
NH:

they must have more important things to do
NH:

sure point out the mistake
NH:

but writting letters
NH:

and then querrying the conglomerate discount
NH:

they protest too much
NH:

entertaining though
11:49AM
NH:

right
NH:

in addition to the expiries today
NH:

they is also some reweights
NH:

and index changes happening today
NH:

and it could all get quite lively
NH:

here’s a rough idea of what people might ahve to buuy
NH:

of course a lot of this may have been done already
NH:

FTSE Reweights On Close Today** ( ) = Mkt est. shs to be bought by trackers.
1) + LLOY upweight (500m shares approx )
2) + LRE (250 inclusion, 6.7m shares to be bought )
3) – AML (out of 100 into 250) net 14m to be sold
4) + 3i (out of 250 into 100) net 28.8m to be bought
5) + LSE (into 100, 6.11m to be bot)
6) -HSD (out of 250, 690k to be sold).
NH:

Lloyds looks to be a biggie
NH:

as does LRE
NH:

that’s Lancashire
NH:

could be get sqeezy
Lancashire Holdings (LRE:LSE): Last: 472.00, up 6.5 (+1.40%), High: 473.00, Low: 464.00, Volume: 533.76k
PM:

cheers
11:52AM
PM:

I hadnt really focused on taylor wipeup
PM:

Those snaps earlier are very upbeat
NH:

oh yeah, trading update
NH:

things not go any worse
NH:

and that’s v good news, apparently
PM:

Severe downside for which company planning now appears less likely to materialise
PM:

Sent the stock up 3p at 34p
PM:

Got any research on this Neil?
NH:

I should have
NH:

hang on
NH:

Panmure
NH:

Taylor Wimpey’s trading statement is fairly upbeat in tone, which is
unsurprising given that comments from Taylor Wimpey regarding the UK
market have been a little more positive than others. That said, we still
have concerns regarding the sustainability of recent momentum in the
sector, and our recommendation therefore remains Hold for now.
NH:

KBC
NH:

sorry slow PC
NH:

Taylor Wimpey tries to accentuate the positive here, but
cannot shake off the wider issues of unemployment and a
poor lending environment. The pricing environment is not
going to improve any time soon and this is the worst
scenario for new build. May bounce after sharp correction
recently.
NH:

IMS gives no clues on margins – TW reports strong sales but it is losing money
heavily on every sale, as is the whole industry. Unless prices improve, which we
do not expect this year or next, margins will continue to fall, and if TW continues
to push sales, losses are only going to widen
NH:

US trading environment still poor – The US new build industry still has
massive inventory and a huge foreclosures issue causing continued pressure on
pricing. Again no comments on margin trend, but we must assume that these still
show little upturn.
NH:

Financial position much as expected – As we heard from TW only at the end
of April there are no surprises here. The debt is still above £1bn even after the
£510m fund-raiser and this is still a burdensome figure. The board remains
optimistic of positive cash flow through H2, but we are concerned that the
working capital cycle is beginning to turn and stock in particular will have to rise
in the UK.
PM:

(Very funny Lorcan)
NH:

We remain cautious on the market into H2 – Prices are expected to keep
falling, margins will remain under pressure and land values will continue to fall.
We continue to question whether the green shoots are real, given the economic
and banking environments, and see the valuation base for the sector using NAV
as very weak still. There has been a sharp correction in the sector in the last few
days and this may trigger a bounce, but we would continue to recommend selling
into any strength across the sector.
PM:

cheers for that
11:55AM
PM:

Now, we’ve missed the horses last couple of sessions
PM:

After the first day at Ascot, when the shrewdette had one winner and one second
PM:

Which kept me about level
PM:

Anyway — she’s been in touch saying she’s mega buzy, but here are some quick thoughts for today
PM:

3:05 the favourite Black Bear Island should make it this time after fairly poor show in the Derby, but he struggled with the pace then and Sea The Stars was in another league anyway.
3:45 today’s big race The Coronation Stakes: Rainbow View (Jimmy Fortune) – feisty filly and although disappointed in the Guineas think she could make amends here. Go EW @ 8/1
4:20 I’m going for a Jimmy Fortune double – Stone of Scone @ 15/2
And in the 4:55 here’s one especially for you … Popmurphy !!! Well surely worth an EW flutter at 12/1 but don’t hold your breath & don’t blow the Webby drinks pot.
PM:

If you want to get her tips director (and possibly loose all your money) email shrewdette@gmail.com
11:58AM
NH:

some questions about Saad
NH:

they have disclosed the sale of more stock in Berkeley today
NH:

and yesterday they confirmed our story about selling 25m
NH:

that was selling 25m shares in Imgination Technologies
NH:

the stock was bought by Intel
NH:

question in Imagination is what do Apple do next
NH:

they bought a 3% holding in December
NH:

and could respond by purchasing the rest of the Saad holding
NH:

which is around 7.6% i believe
NH:

and yes
NH:

it is Saad’s lenders – Citi and Credit Suisse
NH:

that are selling
NH:

called margin to 100%
NH:

Saad’s assets are frozen
NH:

they can’t meet the call
NH:

so they get closed out
PM:

You got that email earlier — from a middle eastern watcher
PM:

I had redacted a few bits
PM:

Make it fit for publication
PM:

Well, almost fit
PM:

Do you want me to post?
NH:

yeah
NH:

more signs liquidation
PM:

Saad Group’s Bahrain Bank, Awal Bank, owns (owned?) 2.9% of Ahli United Bank Bahrain (source: Bureau van Dijk). AUB is Bahrain’s 3rd largest bank and has operations in the UK, Oman, Qatar and Kuwait. Their average trading volume is around 500,000 shares over the past 12 months (source: zawya.com). Yesterday, trading volume was more than 90m shares according to the bahrain Stock Exchange. This would be around half of Awal’s stake and looks to me like another liquidation of collateral – on the day that Awal Bank held its creditor meeting in Bahrain. The big question is – who bought and why?
 This is a huge scandal that is being played out behind closed doors and I think we will never know the full story.  One thing is for sure – this is Saudi Arabia’s Enron. 
NH:

I know what the ******* stands for
PM:

NH:

libel alert
PM:

Im sure quote a few readers will guess
12:02PM
PM:

Okay we are done for today — and done for this week
PM:

Thank you for joining us
PM:

Apols if we were a little testy
PM:

techy
PM:

whatever
PM:

We will be back on Monday, relaxed and refreshed and hopefully brimming with idea
PM:

Footsie up 82 at 4363 doesnt help
PM:

NH:

get down
PM:

Seeya Monday — 11am
NH:

byeeee

This entry was posted by Paul Murphy on Friday, June 19th, 2009 at 11:04 and is filed under Uncategorised. Edit this entry.

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