Sakari   

Straits Asia

yep Easton! actually being an audience seeing all the action at the battleground between the bulls and bears also can be quite exciting...like many of us never short SGX yesterday...but worry for Idesa168...hahah` its the adrenaline rush too la..putting ourselves into the action without getting involve monetarily 

 

cyjjery, I don't play shorting game actually. But can't help but to highlight to nicky since this one has been on a straightline up for the entire week. Quite fun to see what he says. Also, if he says he is shorting then I'm selling. haha

 

Anyway, have a good weekend !!

 

u r welcome Easton...thought it would be good to highlight to u before u short Straits Asia...as for the SGX counter...think many of us also wouldn't be able to foresee the big jumps this week..what a contrast from previous week

 

Thanks cyjjerry85.... yes.. checked that after seeing your post... and using Sgpgal's quick check method... Williams, Acc/Dist, Chaikin all on uptrend. Can't tell if bollinger band is narrowing or not (sgpgal: hope i did not misrepresent). Ah, RSI also crossing 50

Also decide to move my comment back here so as to keep it neat. Can't use the quote this post feature across thread. Maybe a future improvement for Admin to consider?? 

cyjjerry85 Master	Posted: 28-Mar-2008 15:46        *  Quote this Post!
x 0 x 0 * Alert Admin	Hi EastonBay...pardon me but..i was looking at Straits Asia ...

 

even higher now.. 3.3. 5 straight days of gain. Nick, any action... ? moving in to do what you do best? Friday today..

 

wow...2.88 ?!?!?! cant believe it RIPLEY !!! this burger on combination of STERIOD and VAGRA har ?!?! wowOWOoowowWWwoowoowoOOooooWW !!

:D

 

Thank both of you for the information.

The price of strait asia resource was pushed up too high because of speculation. ppl's hopes are dashed after listening to these news and the yr end financial report. It is currently trading at PE ratio of 88 times..... is it very high for a coal mining company?

 

Coal prices for power generators at Australia's Newcastle port, a benchmark for Asia, fell to a 5-week low of below US$125 a tonne, due to tepid spot market demand and increased supplies from China.

Thermal coal prices fell US$5.22 from a week earlier to US$124.36 a tonne, the globalCOAL's NEWC weekly index showed in the week ended Mar 21, based on prices at Australia's Newcastle port.

Prices for prompt-delivery thermal coal, which galloped to a record-high of US$150 a tonne for a spot deal struck in early Feb, have dropped by about US$25, about 17% in the past month, as urgent demand from most North Asian utilities eased following a buying frenzy last month.

The resumption of some exports from Australia and China, combined with a decline in winter heating demand with the arrival of spring, have also put downward pressure on prices.

Industry sources said Korean utilities were relatively well stocked with about 3 weeks worth of coal supplies, while most Japanese utilities have enough coal to burn until late Apr.

"The spot market has been very quiet. There are hardly any spot trades and most buyers appear to be quite well stocked," said a sales manager at a major Indonesian coal producer. He declined to be identified due to company policies on speaking to the media.

"Australian producers have also put in a provisional price arrangement with Japanese utilities for '08 supplies. That's further dampening demand since the utilities don't have to shop for supplies in the spot market."

After suspending exports for nearly 3 weeks due to the expiry of licenses, Chinese coal producers, such as Shenhua Energy and China Coal Energy Co, resumed limited exports last week after the government issued new export quotas for 2008.

China last Mon issued its 2008 coal export quotas at 53 million tonnes, down 24% from its quota a year ago as the government aims to channel production to its own fast-growing economy.

Industry sources said China's steep cut in export quotas would hurt Japanese utilities badly as they were in the process of negotiating for 2008 supply contracts with both Australian and Chinese miners.

"They will be squeezed on both fronts and there won't be anywhere for them to seek refuge," said a Singapore-based coal coal trader.

Industry sources said Chinese producers were asking about US$130 a tonne for the export of its top grade thermal coal, free-on-board Qinhuangdao, China's largest coal port.

 

no reason wan lah from wat i see....pure mkt speculation !! :D

 

 

oh yes.....

do u know what is the underlying reasons for this selling down?

 

Not from 3 plus but from high of 4.31

 

I didnt keep track of this stock, does anyone know what happen to it? The share price dropped from 3 plus to current 2.5 plus....

Thanks.

 

wow..this burger was whacked down quite hard siah!! wondering any MEAT for further "eating" ?? hee...

 

Time	Last	Vol	Buy/Sell
12:29:59	2.510	1	S
12:29:57	2.510	18	B
12:29:35	2.510	3	S
12:29:30	2.510	2	S
12:29:23	2.510	5	S
12:29:23	2.510	10	S
12:29:19	2.510	2	S
12:29:17	2.510	10	S
12:29:17	2.510	5	S
12:29:12	2.510	1	S
12:29:02	2.510	1	S
12:27:47	2.510	5	S
12:26:44	2.510	1	S
12:26:40	2.510	2	S
12:26:32	2.510	5	S
12:26:31	2.510	5	S
12:26:27	2.500	10	B
12:26:25	2.510	3	S
12:26:16	2.510	5	S
12:26:13	2.510	2	S

 

Sorry! posted to wrong stock.

 

Published March 3, 2008
 
Lees withdraw offer for Straits Trading
They are accepting Tan family's $6.70 a share offer, citing volatile market conditions

(SINGAPORE) The protracted battle for The Straits Trading Company (STC)
has come to an abrupt end with OCBC Bank's founding Lee family suddenly
withdrawing its offer for the mainboard company and accepting the $6.70 per share
competing offer from the Tan family's The Cairns.

In an announcement released yesterday, the Lee family vehicle Knowledge Two
Investment Pte Ltd said that it was 'withdrawing its offer with immediate effect' and
citing 'volatile market conditions' among other things.

'Any acceptances of the offer prior to or after the date of this announcement will be
deemed not to have been made,' it added.

In its reasons for the withdrawal, Knowledge Two Investment noted that in response
to its offers of $5.76 and $6.55 per share on January 24 and February 14 respectively,
The Cairns had increased its offer price by $1 per share or 17.5 per cent from its
original offer price of $5.70 per share.

'This has increased total STC shareholder value by approximately $326 million,' the
statement added. 'Taking into account the foregoing as well as the current volatile market
conditions, the offeror and the Lee family companies holding in aggregate approximately
7.1 per cent of the total number of issued shares, have decided to realise their
investments in STC and accept the Cairns offer at $6.70 per share.'

This effectively ends a battle which saw two of Singapore's most famous corporate
families - the Lees and the Tans, which have been linked for decades through
OCBC Bank - on opposite sides in a contest for one of Singapore's oldest
listed companies......


By VEN SREENIVASAN (The Business Times)

 

This chic is a road runner...

 

CIMB have raised their benchmark thermal coal price assumptions to US$90/tonne for FY08 (US$75/tonne previously), US$80/tonnefor FY09 (US$70/tonne previously) and to US$70/tonne for FY10 onwards (US$60/tonne previously).

Their EPS forecasts for Straits Asia increase by 15% for FY08 and 33.0% for FY09, and their DCF-based target price rises to $3.57 ($2.66previously). However, they are upgrading their recommendation to Trading Buy (from Neutral) given expectations of a near-term rally in the thermal coal spot price and possible sizeable upgrades to Straits Asia's reserves and resources.

The increase in benchmark thermal coal price assumptions means they have raised Straits Asia's average FY08 selling prices to US$61.4/tonne (US$59.5/tonne previously), with FY09 pricing increasing to US$74.9/tonne (US$63.8/tonne previously). Their FY10 average pricing increases to US$64.2/tonne. Their sales volume assumptions remain unchanged.

Straits Asia's combined reserve and resources from Sebuku and Jembayan stand at approximately 65.0m tonnes and 255.0m tonnes respectively (including non-JORC amounts). They believe Straits Asia can announce sizeable additions to these amounts from Pulau Sebuku, the channel between Pulau Sebuku and Pulau Laut and additional reserves at Jembayan. It is possible such announcements could be made by 3Q08.

 

While CIMB's forecasts assume the Jembayan acquisition is consolidated from 1 Jan 08, their initial assumptions on Jembayan?s FY08 sales volumes, pricing and costs were too optimistic. Adjustments to these key drivers have produced a significant 36% cut in FY08 EPS. However, we have also factored inthe accelerated development of consolidated reserves to reach sales of 14.7m tonnesby FY11. The net result is only a minor 1% reduction in their DCF-based valuation to $2.66 (-1%). Straits Asia still looks expensive based on their benchmark thermal coal price assumptions of US$75.0/tonne for FY08, US$70/tonne for FY09 and US$60/tonne for FY10 onwards.

They calculate Straits Asia's DCF-valuation increases by 12% for every US$5/tonne increase in thermal coal prices assumptions. This means the company's current share price is discounting long term benchmark prices of $65/tonne. They believe this is aggressive given the risk of excess Chinese production moving back to the global export market.

Straits Asia states the Jembayan acquisition remains on track and should be completed by year-end. Jembayan is expected to have FY07 sales of 4.2m tonnes under its current owners, below its existing crushing capacity of 5.4m tpa and port handling / barging capacity of 7.5m tpa. However, Straits Asia is downplaying an aggressive ramp-up in production and is currently guiding for consolidated FY08 sales of between 8.0-9.0m tonnes. This is below their earlier assumption of 9.8m tonnes. They have cut their FY08 assumption to 9.3m tonnes, as they expect Straits Asia can increase its production plans once it has taken control of Jembayan operations. In Nov 07, they upgraded their FY08 benchmark price assumption to US$75/tonne and assumed average FY08 pricing of US$66/tonne for Straits Asia, given Sebuku's average coal quality and indicative forward sales.

We are now reducing our FY08 pricing assumption to US$57.2/tonne, since: 1) Sebuku has sold approximately 2.6m tonnes at US$52.5/tonne, and is currently selling its remaining coal at US$78-79/tonne; and 2) Jembayan has sold 3.2m tonnes at US$49.5/tonne, and selling the remainder of planned FY08 output at US$62.5/tonne.

CIMB have also increased their average costs given the higher 8-9x strip ratios at Jembayan, where Straits Asia's current guidance on production costs is between  US$30-35/tonne. Although Jembayan's average costs may come down with increased economies of scale, they are certain to stay above Sebuku. Their forecasts now assume average costs (excluding royalty payments) of US$28.9/tonne for FY08 and US$27.9/tonne for FY09.

Straits Asia has yet to provide capex guidance for the consolidated operation, but is indicating approximately US$10m on routinemaintenance and US$5m on exploration drilling in FY08. They have assumed the company will boost its capex spending once it takes control of Jembayan, in order to take advantage of current high thermal coal prices. This means capex of US$40m for FY08 and US$35m for FY09. Their current forecasts include the initial US$25m payment for additional concession areas in North Sebuku. Straits Asia expects to make an additional US$114m payment once parts of that concession have been reclassified by theIndonesian government to allow for commercial mining. They calculate Straits Asia can still move to a net cash position by Dec 08 even after making the US$114m payment.

Their forecasts assume a long-term coal price of US$60/tonne from FY10 onwards, while Straits Asia's current share price discounts a long-term price ofUS$65/tonne. Both figures are well above thermal coal's historical pricing range.

CIMB's initial adjustments for the Jembayan acquisition were too generous, and they have cut FY08 EPS forecasts by 36% after making changes to sales volumes, pricing and production costs assumptions. However, they have also factored in that accelerated development of reserves will produce sales of 14.7m tonnes by FY11. The net result is only a minor 1% reduction in their DCF-based valuation to $2.66 (9.5% WACC, 5% terminal growth). Straits Asia still expects completion of the Jembayan acquisition by year-end, and forecasts are likely to see further revision once this acquisition is complete.

 

Straits Asia Resources jumped to a record high after Macquarie Research reinitiated coverage of the firm with an "outperform rating" and a target price of $4.20.

Macquarie Research said that the mining company was well-positioned to benefit from high global coal prices and was a potential merger and acquisition target.

"We believe that Straits Asia is well positioned as an M&A target given its attractive assets and the potential for industry consolidation," said Macquarie Research analyst Adam Worthington.

 

tis' the news..

Straits Asia Resources Ltd. (SAR SP):