Sharp rise?

[WarrenWho_]

Anyone know why ARL had such a dramatic rise yesterday compared to the market? There appears to be no SENS influence? Fundamentals still sound.

[prancing_horse]

Remember the Competition Commision is looking at their market,day old chicks, broiler production and animal feed, so this sword has been hanging over them for a couple of months.I'm involved in one of the above businesses, and know that the CC is barking up the wrong tree, and their investigation will come to nought.On the other two I cannot pass comment.I have been punting the "chicken" stocks since the price of both maize (energy) and soya (protein) prices and futures have come down big time.They are certainly going to cream it the next 18 months on the poultry business, but not on the animal feed side.That's why I prefer RBW to this share, however the former is becoming more and more illiquid as Remgro buy up shares with delisting in mind.

[ws]

Hi PH,what is your view on maize and soya, what are the current prices and where do you see them going forward? With the strength in the rand,what about frozen imports?

[prancing_horse]

Yellow maize was trading close to R2000/ton 2008, we bought our year's quota at average of R1230 before storage and interest costs, and futures for 2010 are currently R1400/ton.Soya oil cake R5000/ton 2008 season, R4000 for most of this season, currently R3700, futures for april 2010 currently R2900, prices we haven't seen for years.Frozen chicken imports are always a threat,especially with the current strength of the Rand.I'm sure the "big boys" will be buying futures at these prices and hedging the currency.I know RBW called it wrong last year, sat with expensive maize stock which should have gone through the system by may 2009.The Rand is the "..... in the wood pile" at the moment, playing havoc with medium, let alone long term projections.

[SKALA]

Could be paying a good dividend again soon?? Time to get in I think.

[WarrenWho_]

I'm thinking the same... The year end came to a close end of Sept. Their previous financials showed and excellent display of cash management. Maybe there's too much cash on the balance sheet with concerns of retaining profits for capital investement? I.e. Annother good payout on the cards??

[ws]

Thanks PH for the info, I am also involved the business, albeit a smaller independent broiler operation,so it is interesting to hear your views. We buy feed from all the feedmills, wherever we can get the best price and we have found lately that with the drop in maize and exchange rate,we havent seen the relief in the feed price? Yes it seem all the co's in the sector have rallied some and could be in for some more over the next year (CBH, Afgri,Sov).