It is interesting to see MRE share values
It dipped from $5.36 on 26 May to $4.76 on 30 May about 11.3% @ in 4 days.
Earnings lowered 1% for FY 08e and 4% for FY 09e - which is not so severe considering dollar exchange rate and nickel price in world market.
Normally you would expect the directors know their business better and show the strength of their investment
Between 11 March to 12 April 08 two non executive directors have invested more than $51 millions to buy MRE between $5.87 to $5.96. Were they nut to see their investment to go down more than 20% in one month or does MRE down turn giving some opportunities ? Please see the attachment.
Did I see or read some thing wrong,
What is written in the wall considering JBM went so well and MRE just completed $100 M expansion ?
Any thoughts on nickel and MRE researchers ?
Well Miner,
If I am not mistaken MRE is the 2nd largest Nickel capacity to produce 40k tonnes per year ( Xstrata 50k tonnes with several mines compares to MRe with only one mine)
If you read Smart Investor the march 2008 edition there is an interview with Peter Jonston he advised " if Nickel price stays range between $25k and $35k per tonne over the next few years, you can make very solid returns"
They also have revamped their refinery and have a successful heal leach plant to treat low Grade Nickel, will reduce the cost unit price.
So if you believe and you believe in the big boys who have the interest in this stock:
Barclays Group 7.43%
JP Morgan 7.69%
and also what wise owl is saying in todays edition:
The wise word
Late in the week we witnessed some minor, yet notable wobbles in commodity prices, which had thus far been stand out performers throughout 2008. Commodities are renowned for their price volatility, and intraweek movements are not normally worthy of closer inspection, however some interesting themes were behind this week’s activity.
Base metals and oil were the affected markets, where prices pulled back in response to some minor grumblings from the US Dollar. We have mentioned many a time that weakness in the US Dollar was promoting higher commodity prices. With these goods priced in US Dollars, they need to rise as the greenback declines in order retain their ‘real value’ and purchasing power.
Therefore we may expect any strength in the US Dollar to have the opposite impact on commodity prices, assuming constant supply and demand. Short term confidence in the greenback was boosted by an unexpected upward revision to US GDP figures during the week. For the first quarter of 2008, US GDP growth is now estimated to have been 0.9%, up from 0.6%. Our views on the figures remain unchanged from when they were initially released – although this rate of growth is nothing spectacular in itself, it is quite solid in light of the dour economic context which the US is currently viewed.
Despite the sub prime crisis, the ensuing credit crunch, an equity market correction, falling house prices, rising inflation and unemployment – the US economy has still managed to expand over the last two quarters. A growing number of optimists are now asking whether the US is running out of time to have a recession?
How does this affect the US Dollar?
Stronger than expected growth may prompt the Federal Reserve to increase interest rates to control inflation. As we have seen with our own currency, rising interest rates can stoke currency appreciation from yield hungry investors. Whether these short term rumblings exert a prolonged impact remains to be seen, as the US Dollar has been in a firm downward trend since the start of this decade, as measured by the US Dollar Index.
However the prospect of a Dollar rally, regardless of its odds, has prompted us to take a close look at some key commodities to consider which prices could be at greatest risk in the near term. While a comprehensive base metals review is more suited for a lengthier forum such as our Pearl report, we have enough space here to consider the recent action in nickel. After a bubble in nickel prices burst mid way through last year, the price of the metal embarked on an encouraging consolidation pattern above $US25,000/t. However in recent trading the price has broken below short term support levels formed during this consolidation. The metal's long term uptrend remains intact, and we suspect that rising inventories, a supply indictor, are partly to blame for this bout of short term weakness. After building throughout the second half of last year, LME nickel inventories have now reached their highest levels since 1999! However at current levels around $22,000/t, nickel prices remain around double their 1999 levels.
In the context of the commodities bull market, this recent inventory build could represent another wave in what has been a cyclical pattern of rises and falls over recent years. Hence the increased supply and inherent price weakness could just be a short term phenomena in an ongoing bull market. The recent spate of corporate takeovers in the sector, and a strong push by the majors to increase their exposure to the metal is a testament to its longer term prospects, which are closely linked to steel production. But it is important to consider all possibilities, and we will be monitoring the nickel market with a very keen eye.