All quiet on the Bumi front... Is Glasenberg about to enter stage left?

It’s been a couple of weeks now since any real news on Bumi and all remains eerily quiet… All the while, the stock remains resolutely pinned to the 260-270p level.

We continue to believe that Bumi presents the best potential Xmas or New Year present in the mining sphere given the £4+ that is presently on the table and the desire of all parties (ol Natty, Bakrie and Tan) to retain the prized assets in Indonesia. One has to accept that they all know the assets better than anyone and the fact that they each want them speaks volumes. Natty thinks the assets worth north of £10 per share, ditto with Tan and the Bakries just need to find some cash…. Which led me to do a bit of digging surrounding the history of Bumi and which does not seem to have been picked up by the financial media…

The Glasenberg connection

It seems the Bakries are friends with global mining billionaire Ivan Glasenberg of yes, you guessed it - Glencore. It was speculated last year in various quarters that Glencore may come to the aid of the Bakries by way of a loan backed by Bumi shares. Hmmm… The Sunday Telegraph reported without citing sources, that Glencore was looking at providing some sort of “quasi-debt facility” to support the family.

At the time of the speculation surrounding the Bakries loan financing and in which they were ultimately bailed out by Samin Tan to the tune of $1bn, various analysts stated openly that Glencore would be an obvious buyer of any Bakrie shares, given that it signed a share swap agreement with the Bakries last year over 4.8 percent of the company and it marketed Bumi’s coal.

Read the rest of this story at www.spreadbetmagazine.com

Bumi update

Nathan Rothschild

Reports in the press today that Ol Natty is close to finalising funding for an additional $270m from investors which looks to be money to be used to buy out the balance 15% of Berau Coal from the Bakries.

Nat Rothschild, the financier behind coal miner Bumi Plc, has secured the backing of mining entrepreneur Robert Friedland for his proposal to unwind the London-listed company’s relationship with Indonesia’s influential Bakrie family.

Mr Friedland, the billionaire who founded Ivanhoe Mines, which developed the Oyu Tolgoi copper mine in Mongolia, has agreed to invest $50m, according to people familiar with the matter. Ivanhoe is now controlled by Rio Tinto, the Anglo-Australian group.

Mr Rothschild, who earlier this month made a counter-proposal to the Bakries’ offer to buy back Bumi Plc’s Indonesian mining assets, was finalising commitments from investors for $270m in equity funding, they added.

He told the investment bank advising the board of Bumi Plc that he had the support of Mr Friedland as well as several other investors, the sources added, and intended to provide further details of his plans shortly.

Mr Rothschild’s consortium is likely to include Hashim Djojohadikusumo, the Indonesian businessman and brother of general-turned-politician Prabowo Subianto, according to a person familiar with the matter.

Mr Rothschild has garnered pledges of support from several existing institutional investors in the group, the person familiar with the matter added, and is in discussions with a large North American pension fund about backing his proposal.

Read the rest of thisBumi Update At http://www.spreadbetmagazine.com

Falkland Oil and Gas sparks to life on oil find rumours

Falkland Oil and Gas, the South Falklands oil explorer, is currently up 17% to 64p, after dipping as low as 55p this morning. The company is drilling the Scotia prospect in the South Falklands basin and an RNS on November 7th indicated that drilling operations would be likely to be completed 4-6 weeks from this date, but clearly something has sparked the company to life out of the blue. The rumours are of a significant oil strike, but facts remain elusive for now. Plenty of volume with hopeful punters piling in. 

Seems to be the day for rumours, with Gulf keystone rising as much as 20% earlier in the day on reports that the court case with Excalibur Ventures had been settled. The shares have settled 8% higher at 192p.

 

Yet another great update from spread bet magazine

Is today the day that Research in Motion gets back into double figures?

With RIMM continuing to poke one in the eye of its unnumerable sceptics with the stock rising very close to the key $10 level yesterday (toeing a high of $9.80) it is interesting to see that a previous bear of the stock - Jefferies analyst Peter Misek late Monday upped his rating on the shares to Hold from Underperform, setting a new price target of $10, up from $5.

“Preliminary results from our quarterly handset survey indicate developed market carriers have a much more positive view of BlackBerry 10 than we expected,” he writes in a research note. “With greater carrier shelf space and marketing support, we now believe BB10 has a 20%-30% probability of success. While the likelihood is low and we remain well below the Street for the November quarter and February quarter, the potential reward is high.” Sorry Peter, but you are 40% too late with the stock rising by this amount from the lows in the early $6’s in late September and at which point we took the opportunity to double down on the stock.

Read the rest of this story and others on the spread bet magazine blog

Reports of renewed offer for Lonmin from Xstrata

With Lonmin shares rising over 6% on Monday and Bloomberg reporting, citing 2 seperate sources, that Xstrata are considering making a renewed offer for Lonmin, it is noteworthy that the shares are up again today against a flat market and in rising volume. With continued comments from the current Lonmin management urging shareholders to vote in favour of the rights issue, it seems to us that the clock is ticking for Xstrata to decide whether or not to bid, certainly before the vote on the 19 Nov. Relative to a weak mining sector Lonmin are holding steady and the stock looks to be pricing in a 50% chance of a renewed move by Mick Davis. As detailed previously, if he is to move, then it is likely to be sooner rather than later given the pressing timescale with the right issue.

Xstrata management are speaking to other institutional shareholders in Lonmin this week and, as is always the case with the City which is as leaky as a rusty old ship, we should be vigilant for any smoke signals in the stock price, for example sharp moves on no news and blocks of stock being purchased. It always amazes me how the “insiders” leave a footprint like an elephant in the price history yet the FSA cannot, it seems, secure more convictions for insider trading….

Read the rest of this story:Reports of renewed offer for Lonmin from Xstrata here

Cracking news for EMED Mining shareholders

We have EMED Mining as a Trading Buy, the position being entered at 9p on the 24 Aug. The stock has been covered extensively in our magazine and on the blog (tabs to the right) with the most recent commentary from our contributor Zak Mir who suggested the stock might be ripe for a squeeze higher - http://www.spreadbetmagazine.com/blog/2012/10/3/new-regular-blog-feature-by-zak-mir-starting-with-2-big-stoc.html.

Prescient analysis by Zak with the shares up 20% at the open today on the announcement of a funding package for the development of their copper mine in Southern Spain that was purchased from Rio Tinto.

The terms of the deal involve the issuing of $15m of shares at a price of 14.8p - a near 50% premium to yesterdays share price (there’s a novelty in the current climate of heavily discounted placings and rights) and an additional loan facility of $35m. The company will, in exchange, grant to its partner in the project - Red Kite- the “off take” rights of upto 27% of the mined copper.

Here are the highlights - 

The Subscription will be in two separate tranches with 50,000,000 Ordinary Shares being subscribed for in the first tranche and 13,829,787 in the second tranche. Both tranches will be conditional upon the approval by the Toronto Stock Exchange (“TSX”) and admission to trading on AIM of the relevant tranche (“Admission”). The subscription for the Second Tranche Shares (as defined below) is also conditional upon approval by the shareholders of the Company (the “Shareholders”) at the extraordinary general meeting of the Company to be held in December 2012 (the “EGM”). Notice convening the EGM will be despatched by the Company to Shareholders shortly.

Read more at spread bet magazine

Just when is the bond bubble going to go pop?

In February 1990, when Jimmy Carter was US president, the financial world was shaken to its very foundations. The cause? The failure of the Democrats and Republicans to sort out the economic problems of their nation.

Ring any bells?  

Once again, the two parties are at loggerheads; this time over how to avert plunging over the the “fiscal cliff” on 1 January. The politicians have just 2 months to sort it out. 

And if they don’t? Well, maybe… just maybe… we’ll see a repeat of what happened in February 1980. 

So what did happen in 1980? The implosion of the bond market bubble, followed by the complete collapse of the US Treasury bond market. The trigger: investor concerns about out-of-control inflation. 

But hang on. We don’t have an inflation problem, do we? At least not yet. 

Yes, that’s correct. And ever since the 2008 banking crisis, analystshave been arguing about whether we are or are not experiencing a bond bubble. 

Indeed, some argue that deflation is the greater danger. If they’re right, then bond prices will keep on going up and bond yields will keep on going down. Heaven help us all if that happens. Japan has been dipping in and out of the deflation trap for more than 20 years, with no convincing sign of escape. 

The rest of this story can be found at spread bet magazine