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Sasol

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Siener
Contributor
Any thoughts on Sasol? Share price looking very shaky right now. Standard Bank Equities research say Sasol is likely to be downgraded to junk and they could very likely suspend divided for 3 years - all of this due to their disaster in America. Apparently Sasol's long term ROI forecast on this project(zero profit!) is based on long-term chemicals prices, not current prices, and chemical prices are more sticky, up and down, than oil price, so any recovery in oil prices ain't going to help Lake Charles project. In fact, Standard Bank's downbeat assessment is based upon a recovery in oil prices to $70. So it sounds as if Sasol is a disaster even if oil recovers to $70, and it will be a lot worse if it doesn't. Any contrarian thoughts?
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14 REPLIES 14
CHATTYCHAT
Super Contributor
I cashed SOL in at 49300cps on 17th March 2016 and have never had any regrets. This move makes me think that the gods had mercy on me once in my life.
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The_Trader
Frequent Contributor
Risk on for me. Looking to accumulate at R380.00
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Siener
Contributor
The oil price will have to recover significantly before Sasol becomes a BUY again (at least above $80). If the oil price DOESN'T recover and the Rand strengthens, watch out below. This could get extremely ugly.
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koos2
Super Contributor
so, do you suggest a shelving of the 5/10 year plan in favour of wot ze boogie man says?
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Siener
Contributor
Haha. 10 Year Plan? Mate, then everyone will be driving around in electric cars and Sasol's fuel division won't exist anymore. So it depends at what price you value their chemicals division (like the R165 billion Lake Charles plant that isn't forecasted to make any profit...)
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kwagga
Super Contributor
Sasol on it's way to R363. If you want to buy, wait for that level to be reached. If it breaks lower, then run for the hills.
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koos2
Super Contributor
forcast by whom? and to what end, & is this forcaster a junior clerk that is scheduled for unemployment next month? is all naging little queries. That a pogrom is on, is not in doubt.
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THRESHOLD
Super Contributor
? OK - I'll bite... why a "pogrom?"
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Siener
Contributor
Forecasted by whom? Um...Sasol themselves. Recent SENS. Share price took a bit of a dive when they announced that...
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The_Trader
Frequent Contributor
If you say that it means your saying that oil is going back to $26 a barrel or even lower, because that is the only way I see Sasol going to those levels.
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kwagga
Super Contributor
No. Sasol is consolidating. Clear as daylight. 365 bottom of consolidation, 485 top of consolidation. Poor results means we're probably going to test the bottom again. 394 and counting.
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The_Trader
Frequent Contributor
Where do you see the brent price consolidating? I see it a leg lower to the 40 bucks region.
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kwagga
Super Contributor
Not just Brent at play here. Look at ZAR as well.
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The_Trader
Frequent Contributor
Well if you must. I'm struggling to see it strengthening to more than R13.80 to the greenback.
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