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Dear JSE

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Super Contributor
Please suspend trading on Kumba(KIO). In the absence of MTN, I am expecting some serious downside price pressure from these blood sucking vampires who has now shifted their focus onto KIO.
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21 REPLIES 21
yaah_neeh
New Contributor
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Frequent Contributor
Personally, I hope it goes down more. If I could buy Kumba shares for 1c each, I would beg and borrow the money to buy it. Those vampires who want to sell me the shares are probably the same ones who will be buying it back from me at 10 times the price.
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Super Contributor
J12, i guess you were not around during the last two days of ABIL demise! It was brutal. At 1c, you keep cash in the bank or instrument that can give you a higher yield.
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Super Contributor
J12, i guess you were not around during the last two days of ABIL demise! It was brutal. At 1c, you hold cash or invest in an instrument that can give you a higher yield.
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Super Contributor
China Iron-ore futures on Dalian exchange decline 3.2%, most since July 8, to 349.5 yuan/MT, weakest since July 28.
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Frequent Contributor
Well, by 'not around' I assume you mean that I did not have shares in ABIL because I've been trading on this platform for over 7 years now. Anyway, the reason I didn't buy ABIL was because I always thought they were a really ***** company years before they crashed. I think Kumba is a bit different to ABIL though so the comparison is not quite valid. For e.g. Kumba may become loss making at some point, but if the price recovers again, they will be fine. In a company that lends, they will usually need to re-capitalise before they start making money again. Also, Kumba has assets which still have value after the company is loss making. ABIL has to take massive impairments to it's main asset (the loan book) before it can sell them. My point, though, is that as things stand today, the value of Kumba is still significant and if somebody were to sell me shares of the company at 1c TODAY, it would be like an early Christmas for me. Actually, if anybody sold me Kumba shares below my valuation and a decent margin for safety, I would just buy the shares wholesale and hold on.
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Not applicable
the moment you decide that KIO no longer represents a good growth investment, you will offload your position - and that will then put you - by your own definition, into the blood sucking vampire category
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Super Contributor
@skaaptjop, Are you employed by Mtn?
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Super Contributor
Dry bulk cargo shipping rates is at multi year lows due to overcapacity and collapsing commodity demand. Everything associated with commodities are contracting BIG time. The collapse of the iron ore prices will only recover if and when demands kicks in. Like Ivan Glasenberg told commodity producers: "Stop digging". Supply is way above demand and that will continue to put pressure on prices. They are in effect digging their own graves. Best not to call a bottom on something like KIO, because the KIO what will survive this (if they do), will be a shadow of what they were at the height of the commodity boom. http://www.economist.com/news/business/21677207-worse-still-come-many-bulk-carriers-hitting-bottom?f...
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Super Contributor
BHP , Rio Tinto, Vale (SA) is effectively reducing the useful life of these mines at an accelerated rate. Good luck to them.
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Super Contributor
but isn't KIO also mining, so effectively also reducing their useful life of their mines, by definition of mining, thats what they do the minute they start to dig? not? the guy with the most cash will most likely win this battle, they're all going to pressurise each other on falling prices because of over-demand... Preston you might have to wait decades to get your money back on this, if it ever gets that high again... remember if they start to deleverage and also sell assets due to cashflow constraints its much harder for them to get back to their production output of the boom time. About Ivan Glassenburg, he kicked his former lecturer/mentor out of the business when he acquired Xtrata, but now that guy raised funds for a new company and will probably be a predator on these struggling mines to build up a new giant in the years to come! watch this space!
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Frequent Contributor
@kwagga, I think you're right about Kumba not quite going to recover to it's former glory, but assuming that the current environment is the new 'normal', then Kumba is still a satisfactory investment at current prices (for me). An exec from Rio apparently
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Frequent Contributor
Some clarification on that average price... it's the average price over the last 20 years that's $49 per tonne.
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Super Contributor
Werner, do you work for MTN?
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Super Contributor
What do you think will happen to your dividend at $44 per ton, because that is the 2016 forecast by Goldman Sacks.
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Frequent Contributor
It will probably be s*****ped for this year, which is unfortunate, but if prices remain stable at $44 into next year, they should be able to resume dividends at around 4%.
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Frequent Contributor
hahahaha. Looks like I can't even type [email protected] without sensoring.
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Super Contributor
@kwagga, technically no div's but a notional increase in Owner's Equity due to saving from not paying div's.
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Super Contributor
well, i don't think my comments towards MTN has been very nice. If one works for a company you probably should try to promote it and not say they deserve the fine and that they're unlawful and unethical as a result... how did you come to that conclusion Preston?
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