SPC   

SPC

one reason for price decline could be i1 was dropped from the MSCI index?

 

I really do hope that the oil price will fall as it have driven the inflation rates too high.

 

AK view is that no hurry to accu at this moment as US and UR are now probing into the posibility of CO price speculation among the traders. If you still holding it above $7, you may cosider seriously leow, though you hv collected the hefty div lately.

 

I'm diligently accumulating for interim dividends, to be announced end june/early july?

if total divvy = 70 cents, i will huat huat liao!  :)

shplayer      ( Date: 02-Jun-2008 09:21) Posted: Relax, I still think SPC is a fundamentally good stock....but because of the CO speculation, there is a good possibility of it correcting. I forecast that FY08 eps will be between $1.10 and $1.20. At a stock price of $7.00, this works out to be P/E 5.8 to 6.3X. Div is expected to be 70c....i.e yield 10%. Anyway, lets see how it pans out. ozone2002      ( Date: 02-Jun-2008 08:50) Posted: enough talk...SPC will move up..

 

BT 2 Jun 2008

WALL STREET INSIGHT

Oil prices call the shots for US investors Oil may hold key to US economic, corporate earnings recovery ahead   By ANDREW MARKS NEW YORK CORRESPONDENT   HAS the oil spike finally hit a ceiling? Is that bubble about to pop, and send the speculators, who appear to be the chief culprits in driving oil prices to economically destructive levels, heading for the exit in a move that will produce lower prices?   'There's a lot of upside if commodities tumble and some room for moving up if oil stabilises at this level.' - Hugh Johnson, chief investment officer at Johnson Illington Advisors Last week, oil prices skidded, raising hopes on a Wall Street that is now tightly focused on soaring oil and commodity prices, which have risen nearly 20 per cent since the start of the year. 'I'm hardly unique on Wall Street these days in that my main concern for the stock market has shifted from the credit crisis to the oil crisis,' said Hugh Johnson, chief investment officer at Johnson Illington Advisors. 'The biggest question in my mind is, will there be a recovery in the economy and in corporate earnings in the second half? And the answer to that question turns heavily on oil prices,' he said. It is investors like Mr Johnson, whose firm has nearly US$1 billion under management, who will determine whether the bull or the bear prevails on Wall Street this summer in an uncertain environment for the economy and corporate earnings, and his inclination to invest more in equities will be determined by the direction of oil prices. Indeed, investors turned bullish last week as the US dollar firmed and oil slumped. The stock market also received good news on the economic front, reinforcing the view that the economy is weak, but not in recession. Durable goods orders jumped 2.5 per cent, first-quarter GDP was revised upwards to 0.9 per cent from 0.6 per cent, initial jobless claims held steady, and new home sales increased a surprising 3.3 per cent in April. But as Mr Johnson pointed out, oil at current levels is running at 8.4 per cent of GDP, nearly double the number experienced during the last major oil hike. 'At that level, the economy simply can't muddle through, and stocks will be in trouble,' he said, in an observation echoed by most Wall Street economists. 'I believe that it's fair to say that commodities in general are bubble-like right now. Bubbles burst, but we don't know when. It might have already begun, with the government announcing it is going to look into manipulation of oil prices,' Mr Johnson said, referring to news that the US regulator, the Commodity Futures Trading Commission, is increasing its surveillance of oil markets. 'I'm itching to put more money into stocks. Every step down in oil prices builds confidence. There's a lot of upside if commodities tumble and some room for moving up if oil stabilises at this level,' he said. Still, Mr Johnson said he is unlikely to increase the firm's stock allocation above the current 45 per cent weighting, after he cut it down from 65 per cent last November. 'We've started getting some good signals, such as the dollar's firming, but I need more of them and for a longer period,' he said. On Friday, as oil edged up a bit from the week's lows to settle at US$127 - still significantly down from the previous week's high of US$135 - the major indexes finished the week in mixed fashion. The Dow Jones Industrial fell seven points to end at 12,638, but the broader S&P 500 added two points to 1,400. With the markets continuing to focus on high commodity prices, volatile trading is likely to result this week. There will be more than enough economic news for investors to digest, too, highlighted by the May employment report on Friday. But Fed watching and good economic news aside, crude oil prices are still likely to set the tone for the week. 'Sentiment has started to shift towards bullishness again, but it's a very fragile market psychology right now,' noted Mr Johnson. 'All it will take to reverse it is one day of rising oil prices.'

 

Relax, I still think SPC is a fundamentally good stock....but because of the CO speculation, there is a good possibility of it correcting.

I forecast that FY08 eps will be between $1.10 and $1.20. At a stock price of $7.00, this works out to be P/E 5.8 to 6.3X. Div is expected to be 70c....i.e yield 10%.

Anyway, lets see how it pans out.

ozone2002      ( Date: 02-Jun-2008 08:50) Posted: enough talk...SPC will move up..

 

GSS....SPC 6.87...good bargain..

 

enough talk...SPC will move up..

 

Correction...For instance the gasoline crack spread against Dubai CO recorded $39.66/b in April.

 

Indeed there is a lot of speculation in CO. However no one knows how long it will last and on the contrary I believe it may stay high up for a while. I could not see how CO will go drop drastically except from a bust global economy.

Despite the high CO, demand has remain strong except for certain products. For instance the crack spread against Dubai CO recorded $39.66/b in April. However margin for naptha is at an all time low.

shplayer      ( Date: 02-Jun-2008 00:12) Posted: I tend to concur with your views, but from a different perspective. Whilst I believe that SPC is still fundamentally a good stock, I think CO prices may have gone up too much too fast. Whilst the supply/demand imbalance may be a factor, I believe this round of upswing in CO has a lot of speculative element in it. One reason for my suspicion is tanker rates have been on the rise due to demand for storage purposes......see attached link http://www.marsoft.com/high_tanker.htm Sooner or later, speculators who have been hording CO will have to release this idle inventory (probably when they see sufficient profits) which will cause a price correction in CO. This may in turn affect SPC share price....due to the 3Q06 effect. When the correction in crude has settled, it may be a good time to consider accumulation of SPC again. Just my personnal opinion.... HLJHLJ      ( Date: 01-Jun-2008 23:22) Posted: Sorry, i should not contribute as i do not trade in this counter. However, i'm waiting for correct time to buy. I've just looked into the chart and TA is bearish. MA is not closing and williams at the bottom. I'll not buy for now.

 

I tend to concur with your views, but from a different perspective.

Whilst I believe that SPC is still fundamentally a good stock, I think CO prices may have gone up too much too fast. Whilst the supply/demand imbalance may be a factor, I believe this round of upswing in CO has a lot of speculative element in it. One reason for my suspicion is tanker rates have been on the rise due to demand for storage purposes......see attached link

http://www.marsoft.com/high_tanker.htm

Sooner or later, speculators who have been hording CO will have to release this idle inventory (probably when they see sufficient profits) which will cause a price correction in CO.

This may in turn affect SPC share price....due to the 3Q06 effect.

When the correction in crude has settled, it may be a good time to consider accumulation of SPC again.

Just my personnal opinion....

HLJHLJ      ( Date: 01-Jun-2008 23:22) Posted: Sorry, i should not contribute as i do not trade in this counter. However, i'm waiting for correct time to buy. I've just looked into the chart and TA is bearish. MA is not closing and williams at the bottom. I'll not buy for now.

 

Sorry, i should not contribute as i do not trade in this counter. However, i'm waiting for correct time to buy.
I've just looked into the chart and TA is bearish. MA is not closing and williams at the bottom. I'll not buy for now.

 

ok could u explain please?

Livermore      ( Date: 01-Jun-2008 08:54) Posted: Of course the answer is no. SupremeA      ( Date: 01-Jun-2008 02:52) Posted: maybe cos they have stocks of oil in their inventory that were bought at lower prices and therefore COGS were lower last year?

 

Perhaps I can weigh in on this discussion.

I disagree with L... that Upstream (US) contribution is limited. Comparing YoY 1Q eps, US for 1Q08 increased to 7.4c (from 1c in 1Q07). This is almost 40% of total 1Q08 eps.(<5% for 1Q07). With higher CO price, this contribution will improve. When more US projects come onstream, the US contributions will improve further.

As for Downstream, refiners like SRC are usually able to peg their product prices according to CO prices. However, if you recall 3Q06, the fluctuation in CO can be a double edge sword....when CO dropped quite drastically....SPC had to write down about $75m on revaluation of inventories....i.e. SPC was holding inventory of products/feedstock with CO bought previously at a high price.

Just my view......

 

 

Of course the answer is no.

SupremeA      ( Date: 01-Jun-2008 02:52) Posted: maybe cos they have stocks of oil in their inventory that were bought at lower prices and therefore COGS were lower last year? Livermore      ( Date: 31-May-2008 22:26) Posted: If rising crude oil price is not good for SPC, then how did SPC have a record year in profit last year when crude oil price rose from about US$55 three years ago to about US$90 last yea

 

maybe cos they have stocks of oil in their inventory that were bought at lower prices and therefore COGS were lower last year?

Livermore      ( Date: 31-May-2008 22:26) Posted: If rising crude oil price is not good for SPC, then how did SPC have a record year in profit last year when crude oil price rose from about US$55 three years ago to about US$90 last year L.....      ( Date: 30-May-2008 18:27) Posted: SPC's upstream is v limited... mainly refining .. and if CO is down.. shldnt it be better for SPC? cos supply side is cheaper... i thought rising CO squeeze SPC margin .. with CO going down.. SPC go down is not acceptable using this analysis... i think im giving up on SPC soon.... movement makes no sense.. once i see some green... im throwing it out and wait for lower to enter maybe 5.5

 

uncle, if shortists  n  accumulators hit spc tis monday, why not u do "technical" short 4 beer.....cheers.

AK_Francis      ( Date: 31-May-2008 17:44) Posted: US and EU had proped into the possibility of CO manupulation in open market???? What next??? Should dump all holdings now before too late???? AK may consider to do that next week, though not many left. Your choice leow.

 

If rising crude oil price is not good for SPC, then how did SPC have a record year in profit last year when crude oil price rose from about US$55 three years ago to about US$90 last year

L.....      ( Date: 30-May-2008 18:27) Posted: SPC's upstream is v limited... mainly refining .. and if CO is down.. shldnt it be better for SPC? cos supply side is cheaper... i thought rising CO squeeze SPC margin .. with CO going down.. SPC go down is not acceptable using this analysis... i think im giving up on SPC soon.... movement makes no sense.. once i see some green... im throwing it out and wait for lower to enter maybe 5.5

 

sorry, expected divy for jan to june should read 20 cts (not 40 cts) n for july to dec should read 40 cts (not 20 cts).

lookcc      ( Date: 30-May-2008 21:08) Posted: L....., rising c/o px DOES NOT squeeze spc's margin  n  falling c/o px also DOES NOT increase spc's margin cos spc gets paid refining based on the nbr of barrels IRRESPECTIVE of the px of c/o.......divy (40 cts.... expected same as last yr wud b announced in july n another 20 cts also expected same as last yr, wud b announed in jan next yr) totalling expected same as last yr wud b 60cts.......based on px of, say $7, yield is 8.66% p.a.......so y not keep for such good yield.......just suggestion......decision is urs, of  course. L.....      ( Date: 30-May-2008 18:27) Posted: SPC's upstream is v limited... mainly refining .. and if CO is down.. shldnt it be better for SPC? cos supply side is cheaper... i thought rising CO squeeze SPC margin .. with CO going down.. SPC go down is not acceptable using this analysis... i think im giving up on SPC soon.... movement makes no sense.. once i see some green... im throwing it out and wait for lower to enter maybe 5.5

 

Whatever busness you run, your product price must always play "catch up" if your feedstock price goes up