STO - Santos Limited

[trillionaire#1]

STO's LNG project suffers cost blowout - share falls 6%.

That surely is not unexpected... not when you have 20% worth of the nation's GDP devloping LNG projects at the same time. So what's next? OSH? ORG? WPL?

Australia's ever narrowing focus on iron ore ,coal and lng is keeping people up at night.
Australia=banana republic

 

[Smurf1976]

SThat surely is not unexpected... not when you have 20% worth of the nation's GDP devloping LNG projects at the same time.

That says it all really. Australia's economy is unbalanced to the point that it's getting ridiculous.

It's like having a school of 300 students, only one of whom is any good at maths. But as long as that student keeps topping the state in math competitions, the school looks good. Then that student finishes their studies and leaves. Then everyone finds out that the school isn't much good after all....

 

[blackjack]

That says it all really. Australia's economy is unbalanced to the point that it's getting ridiculous.

It's like having a school of 300 students, only one of whom is any good at maths. But as long as that student keeps topping the state in math competitions, the school looks good. Then that student finishes their studies and leaves. Then everyone finds out that the school isn't much good after all....

i bought into ESG and got shafted
then held STO and guess what?

I got shafted again.

mmmm note to self - dont buy shares - work for company find out whats going down then you will know the truth

 

[skc]

That says it all really. Australia's economy is unbalanced to the point that it's getting ridiculous.

I worked for an engineering firm back in the days and 80% of the 200 strong office was working for a signle client. A few of the senior management raised their concerns but others can only see the dollars.

The year was 1999 and the client was OneTel.

They let a whole chunk of the people go and destroyed morale for some time after.

Anyway - back to STO. I actually went long today

 

[Clean Energy]

Santos EIA for expansion of GLNG Project

Does anyone know when the government decision on Santos' application to expand their wells from 2,000 to 8,100 around Roma in the Surat Basin for their GLNG project will be handed down? Public comments closed in late February.

 

[brettc4]

Not sure if many people have been watching tis stock but I have a question about activity after the market closed.

Looking at the Course of Sales @ 3:59:59 the price was 14.34
@4:10:31 - after the market was closed, the price dropped to 14.28 with probably close to 1m shares traded - about 20% of the days volume.

I can't find any news announcements, so can anyone explain why the drop in price after hours??

Thanks,
Brett

 

[skc]

Not sure if many people have been watching tis stock but I have a question about activity after the market closed.

Looking at the Course of Sales @ 3:59:59 the price was 14.34
@4:10:31 - after the market was closed, the price dropped to 14.28 with probably close to 1m shares traded - about 20% of the days volume.

I can't find any news announcements, so can anyone explain why the drop in price after hours??

Thanks,
Brett

FTSE and S&P quarterly rebalance today and some instos take the opportunity to move large positions around. Sometimes they hit an air pocket in terms of market depth and cause large movements on the closing auction compared to the price immediately prior.

As to why these instos are so stupid? I can only assume they don't care.

 

[brettc4]

Thanks SKC.

How do you find out when S&P do their rebalance and what the new weightings are?

 

[DeepState]

How do you find out when S&P do their rebalance and what the new weightings are?

The methodology for the S&P/ASX:



Weightings are proprietary. You can get sector weights off the S&P site. Individual weights are normally provided for a subscription fee. You can scalp indirect approximations...

Market on Close gapping appears to be index related. Index managers are paid to match the index. The reconstitution in weights and prices are based on MOC, so this is the way that some manage the changes. Price is no object. MOC volume of approx. 3m is about 1 x avg daily volume. It's the kind of volume they would pump through. Check out the pop on LNG-AU.

 

[skyQuake]

Index managers are paid to match the index. The reconstitution in weights and prices are based on MOC, so this is the way that some manage the changes. Price is no object. MOC volume of approx. 3m is about 1 x avg daily volume. It's the kind of volume they would pump through.

^
I love how the index funds/etfs/authorized participants worry more about tracking error than market impact

 

[Smurf1976]

^
I love how the index funds/etfs/authorized participants worry more about tracking error than market impact

It's probably just another item on someone's "to do" list.

1. Update records of something trivial.

2. Buy / sell a million shares in XYZ.

3. Order more toner for the printer.

Maybe not quite that extreme, but just someone doing their job and needs to get it done before they go home for the day. Market impact? Nobody said to worry about that....

 

[brettc4]

Thank you DeepState for the explanation.

While aware the re-weighting happened, I wasn't aware of the timing and didn't realise it would result in such a large after market change.

I am guessing you could anticipate change to indexes, specifically additions and removals to say the S&P 200 based on market prices leading up to the S&P announcement, short anything that is likely to be dropped and buy a company likely to be added.

Are you aware of anyone using this strategy?

And if we follow that strategy through, does this lend itself to - what amounts to inside trading - from within S&P as they know changes and the impact those changes can have on the market especially considering the way numerous funds just buy and sell based on that information.

 

[DeepState]

1. Thank you DeepState for the explanation.

2. While aware the re-weighting happened, I wasn't aware of the timing and didn't realise it would result in such a large after market change.

3. I am guessing you could anticipate change to indexes, specifically additions and removals to say the S&P 200 based on market prices leading up to the S&P announcement, short anything that is likely to be dropped and buy a company likely to be added.

4. Are you aware of anyone using this strategy?

5. And if we follow that strategy through, does this lend itself to - what amounts to inside trading - from within S&P as they know changes and the impact those changes can have on the market especially considering the way numerous funds just buy and sell based on that information.

1. No Probs

2. It can be large, but not always so. Outcomes are highly varied for individual events. Further, it is one thing to get set on a pop and hoping to get out at a profit after the MOC event passes. These arbs are statistical, you take your chances. Nonetheless, a profit opportunity exists due to a difference in objectives in market participants that occurs acutely for a snap.

3. It is based on free float cap and relative liquidity. There is also judgment involved which makes prediction uncertain.

4. Various hedge funds, enhanced index funds, some active funds and SkyQuake . It's been around for at least 20 years and probably much longer.

5. S&P exercises discretion despite a set of rules being available and widely disseminated (see MVF-AU for example. The market was clearly surprised at the ASX 300 restructure announcement recently. See notes from Pixel and I). This adds a layer of complexity and risk around the announcement period trade if you want to get predictive. Heading into the index change, the index fund managers may use the MOC as a bogey, but they make things difficult for the arbs by altering trading methodology. This increases risk to the arbs, at the risk of some tracking error for the index funds. Overall, this is how an index fund tries to avoid being shafted with impunity. The volumes involved in the closing auction are generally tiny relative to their AUM.

 

[DeepState]

^
I love how the index funds/etfs/authorized participants worry more about tracking error than market impact

I guess it depends on what your bogey is with market impact. For an index, it is MOC. They are getting no mkt impact if snapping it in. It also happens to minimize their tracking risk. For their mandates, it is exactly what they are paid to do and, in a narrow sense, their optimal move. If there is a stupid thing going in, it is within the mandate construction rather than the practice.

I guess it is reasonably argued that our market impact is relative to cash (or something other than MOC) given our own objectives. That causes us to behave differently to the indexers. Our incentives are just different.

The trading strategies utilized are not generally snap with full volume on close, though. At least for the majors, I understand that it is more than that. We would not see the return distribution we observe in the event space if it were not so.

Anyhow, it is a happy thing when one set of investors can do their thing by minimizing MI and eliminating TE because they are acting as agent for clients who want it this way. At the same time, another set can regard such risks as irrelevant and take money out of the market. Joint utility maximization. Supposedly a win-win. This is why the game has lasted decades.

The record of indexers vastly beats most other active participants. So, personally, I'm not too hasty in calling what they do particularly stupid given the wider context and bearing in mind that the nature of the end game for indexers and others is ultimately to make money.

 

[Potter]

Potter

Just bought into Santos views please

 

[burglar]

Re: Potter

Just bought into Santos views please

Hi Potter,
Welcome to ASF!

 

[piggybank]

Re: Potter

Just bought into Santos views please

Hi Potter,

Why do you needs views given that you have just bought into the stock Surely you bought it because:-

• It is in an uptrend (which it isn't)...
• You were told by someone (who's advice you trust) that now is the time to get in...
• Or maybe you are just shorting them given it formed a double top recently and broke through the $14 mark that is a good resistance/support level for this stock.

I certainly wouldn't be buying into if I was going long.

All the best,

Cheers
PB

 

[tradernor]

Article from Seeking Alpha about Santos (STO), Beach (BPT), Senex (SXY) and Drillsearch (DLS), see the middle of the article:


http://seekingalpha.com/article/2566285-petroamerica-my-additional-take

 

[tradernor]

This is a very bullish call on oil from Continental's CEO, the article is from Businessweek:



http://www.businessinsider.com/r-us-oil-ceo-hamm-goes-out-on-a-limb-scraps-hedges-2014-11

 

[So_Cynical]

Re: Potter

Just bought into Santos views please

Comment above posted on the 28th Sept so you paid about $13.50, shocking timing, personally i only get interested in Santos when its under 12 bucks...STO trading down another 9% today at $9.20...clearly an opportunity in the making.

The Monadelphous thread has pages of bargain hunter comments etc as MND fell like a stone, yet Santos gets nothing. :dunno: Monadelphous down 6% today as well.