Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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Hi guys, what is really happening here?? -When MSC declared HY results on 30th Jan, sugar prices were at a 25yr high at $750/tonne, last night they dropped to $555/tonne due to projected oversupply from the big 2(Thailand & India),. thats a 25% drop in world sugar prices. -World sugar company stock prices have been battered over the last couple of days due to this as they expect reduced earnings - Due to the incoming glut, for may in world sugar coupled with Comesa pressure and abolition of the import licences, the imports will commence and mumias should see a significant drop in 2nd half profitability. - Co-gen is only adding something like 7 cents to the bottom line -The only thing that would be going for it atm is perhaps the ethanol Personally, I dont think mumias is worth the 10bob its trading...if it drops to the 5-6 level then maybe, it might be worth looking at, again only a personal observation. I also doubt their earnings will cross the much touted Kshs.1.60 that most brokerages are purporting. Is this mere speculation here?? http://www.bloomberg.com...ive&sid=aWofw11JBpHI
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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1. Last year MSC produced 240,000 tonnes of sugar and exported only 2,450 tonnes - 1% 2. Sugar imports into the country are controlled Conclusion: drop in world sugar price has little effect on MSC revenue Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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Sugar imports are not " directly controlled" they only attract a 40% duty and despite that, imports are still cheaper. Also the tariffs are removed or zero rated in 2012. I doubt, MSC or anyother local sugar manufacturer is rady for such type of duty exempt importation of sugar --local market prices ie retail and wholesale sugar prices are governed by international sugar prices --then what would u say was the reason for its drop in profitability in 2009 ? I thought it was to do with cheap imported sugar glutting the market.... http://www.theeastafrica...2/-/r316aoz/-/index.html
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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@Horton, Drop in profitability in 2009 was not due to glut.They milled 240,000 tons in that year against an initial target of 308,000 ton....Something to do with breakdown of equipment. Nothing great was ever achieved without enthusiasm.
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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Looking at world sugar prices from mid-2006 low, there's been a more or less steady rise until recently. In contrast, Mumias has been on steady decline from end 2007 until recently.
Positive results helped MSC recover to around the 9/= level. I'd say it'll take a minor 'black swan' (unforeseen politics, climate) to return to 5/= level.
@Horton, your question raises a bigger issue - To what extent does local market actually mirror external factors?
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Rank: Member Joined: 1/15/2010 Posts: 625
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I think the stock is under-valued. Ethanol, acquiring of other sugar companies, increased rainfall and demand for sugar. I see this stock at 20 within 1 year.
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Rank: Member Joined: 5/8/2009 Posts: 263 Location: Gigiri, Nairobi
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Horton wrote:Hi guys, what is really happening here?? -When MSC declared HY results on 30th Jan, sugar prices were at a 25yr high at $750/tonne, last night they dropped to $555/tonne due to projected oversupply from the big 2(Thailand & India),. thats a 25% drop in world sugar prices. -World sugar company stock prices have been battered over the last couple of days due to this as they expect reduced earnings - Due to the incoming glut, for may in world sugar coupled with Comesa pressure and abolition of the import licences, the imports will commence and mumias should see a significant drop in 2nd half profitability. - Co-gen is only adding something like 7 cents to the bottom line -The only thing that would be going for it atm is perhaps the ethanol Personally, I dont think mumias is worth the 10bob its trading...if it drops to the 5-6 level then maybe, it might be worth looking at, again only a personal observation. I also doubt their earnings will cross the much touted Kshs.1.60 that most brokerages are purporting. Is this mere speculation here?? http://www.bloomberg.com/apps/n...ive&sid=aWofw11JBpHI
@Horton
 Mamamia! It is good to use media information to assist in making judgement on stock purchases but it is only good if you read widely.
However, this should only make 10% of your investment decision as a component of external environment in business analysis.
Depending only on bloomberg is like depending only on Daily Business paper to decide when the next seizemic wave will hit Haiti.
Global sugar prices have slid by some 30 percent since end-January, when prices had touched a 29-year peak. Still, prices are up more than 70 percent compared with where they were in early March 2009.
Remember, as oil goes up, so will Sugar prices as more sugar is used in fuel blending. Think Brazil etc.
I've got 180,000 shares of Mumias and would not mind sharing with you all the dossier I have on the same.
Read this sir. http://www.guardian.co.u...ess/feedarticle/8977838
Otherwise, welcome to the club.
>>>>>>
A thing of beauty is a joy for ever:
Its loveliness increases;
It will never pass into nothingness;
But still will keep a bower quiet for us,
and a sleep full of sweet dreams,
and health, and quiet breathing. - Keats
>>>>>>>In life,there are three classes of people,
1. Those who make things happen,
2. Those who watch things happen
3. And those who ask what happened.
Where do you fall?
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Rank: Member Joined: 1/15/2010 Posts: 625
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Pretty that's a lot of Mumias shares u have right there! They need to consider you for a chair on the board. Given that you must know a lot about this stock, I wanted to find out the following - What happened to the Mumias water product? They'd mentioned it a while back but I'm still to see any Mumias Water. And what's the progress with TARDA? How about the buying of one or two of the sugar companies up for sale? And how about the ethanol, improved electricity generation and carbon credits? Is this why you are deep into Mumias?
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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People,
There was also this case concerning an importer who imported a large consignment of sugra in Mumias branded sacks i.e fake .Does anyone know what happened to the sugar,was it destroyed?
@pretty,
Were all those shares bought with your own sweat ama they were inherited?
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Rank: Member Joined: 10/18/2007 Posts: 217
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Chaka, its very easy to have a high no of mumias shares, i bought about 100,000 of them in 2003 at ksh 3/= that after the bonus now stands at 300,000.
I believe mumias are on the right strategy given their investments in other areas, ie. bottled water, ethenal, tarda e.tc. and with the raising crude prices, over production in China and India (if these two are major sugar producers- i have little information on their sugar production level except for Mauritius)will have very little impact.
secondly, so long as the somali pirates are still fishing ship in the Indan Ocean, importing from those two countries will still be expensive.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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Good stuff....yeah 180k is good quantities...some day, i hope i could get to the 6 digit figure!! nice to hear the views of guys(n gals) who know the market so well....cheers!!
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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@horton you have been MIA. Life is short. Live passionately.
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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@chaka, shame on you for insinuating that @pretty cant buy that much, Is it because she is a lady and the mart is a man's world?
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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wote wrote:Chaka, its very easy to have a high no of mumias shares, i bought about 100,000 of them in 2003 at ksh 3/= that after the bonus now stands at 300,000. Let me get this straight. You're still holding 300,000 Mumias shares that you bought at 3/-??? Gosh! Sell them all! NOW!
BBI will solve it :)
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Rank: Elder Joined: 2/26/2008 Posts: 4,449
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Sell some so that I can buy some more..
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