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Kenya Airways FY 2012/13 after tax loss of 7.8bn
Rank: Elder Joined: 2/26/2012 Posts: 15,980
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VituVingiSana wrote:murchr wrote:VituVingiSana wrote:murchr wrote:VituVingiSana wrote: And combine the losses from hedges? 2 for 1 deal for the folks who sell them hedges! KQ has made gains from hedging in the last 2 financial years. But these guys need to concentrate on travel first before they think of anything else I would like to see the detail as presented in GAAP Accounting that includes the premium/s paid. When you hedge [depending on the hedge] you may pay a premium [upfrot fee] so the break-even comes when the gain equals the premium paid. Not to mention the premium has to be financed. KQ enters into hedge contracts with financial institutions, to fix the price at which fuel will be bought in the future. Fuel prices are volatile, and the hedging gives a limit of exposure. If the market prices go below the hedge price, KQ pays the difference to the contracted financial institution. If the price shoots above the hedge price, KQ is paid the difference. As to predicting if the price will be higher or lower, that needs an expert who is not only an accountant but a strategist who can read the geopolitics of the day. I dont know of an upfront fee...what i understand is you negotiate a price let say to buy jetfuel at 90 if it shoots to 100 the fin company gets to blow, if it melts to 80 Kq suffers the blow...simply put, its a gamble When you have a strike price, you may need to pay a premium to enter into the contract. There are negotiating fees, advisory fees, etc. Also we use the term 'hedges' but are they forwards, futures, swaps, etc? Ofcourse those fees are there by standard, but if one plays smartly, they are good. What i described ni futures "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 10/13/2009 Posts: 1,950 Location: in kenya
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Now this just puts it in perspective   '......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Member Joined: 2/18/2011 Posts: 448
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Its touched that magic low today, 9.80.....pigs being slaughtered indeed.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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murchr wrote:VituVingiSana wrote:murchr wrote:VituVingiSana wrote:murchr wrote:VituVingiSana wrote: And combine the losses from hedges? 2 for 1 deal for the folks who sell them hedges! KQ has made gains from hedging in the last 2 financial years. But these guys need to concentrate on travel first before they think of anything else I would like to see the detail as presented in GAAP Accounting that includes the premium/s paid. When you hedge [depending on the hedge] you may pay a premium [upfrot fee] so the break-even comes when the gain equals the premium paid. Not to mention the premium has to be financed. KQ enters into hedge contracts with financial institutions, to fix the price at which fuel will be bought in the future. Fuel prices are volatile, and the hedging gives a limit of exposure. If the market prices go below the hedge price, KQ pays the difference to the contracted financial institution. If the price shoots above the hedge price, KQ is paid the difference. As to predicting if the price will be higher or lower, that needs an expert who is not only an accountant but a strategist who can read the geopolitics of the day. I dont know of an upfront fee...what i understand is you negotiate a price let say to buy jetfuel at 90 if it shoots to 100 the fin company gets to blow, if it melts to 80 Kq suffers the blow...simply put, its a gamble When you have a strike price, you may need to pay a premium to enter into the contract. There are negotiating fees, advisory fees, etc. Also we use the term 'hedges' but are they forwards, futures, swaps, etc? Ofcourse those fees are there by standard, but if one plays smartly, they are good. What i described ni futures Thus why I say they should rebrand from Kenya Airways to Kenya Airways hedge fund or something in that line. What is their core biz, profits from fuel hedges (bets) or air transport? $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 6/2/2011 Posts: 4,824 Location: -1.2107, 36.8831
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Did Naikuni see this cartoon. Or he is just another African dictator?  The plane crushed and is in the ICU, yet the pilot is very happy since he doesn't own it and monthly salary is intact. What did the jungu at EABL do after profits dipped? Receive with simplicity everything that happens to you.” ― Rashi
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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this is why its tricky to trust gava with ur hard earned invested cash. its like they have nothing to lose. why can't this airline be privatised, to become the saf com of the skies The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 3/2/2009 Posts: 26,331 Location: Masada
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Aguytrying wrote:this is why its tricky to trust gava with ur hard earned invested cash. its like they have nothing to lose.
why can't this airline be privatised, to become the saf com of the skies Isn't it a private company?  Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Impunity wrote:Aguytrying wrote:this is why its tricky to trust gava with ur hard earned invested cash. its like they have nothing to lose.
why can't this airline be privatised, to become the saf com of the skies Isn't it a private company? well yes, more private...he he. gava has too much control now. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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hisah wrote:murchr wrote:VituVingiSana wrote:murchr wrote:VituVingiSana wrote:murchr wrote:VituVingiSana wrote: And combine the losses from hedges? 2 for 1 deal for the folks who sell them hedges! KQ has made gains from hedging in the last 2 financial years. But these guys need to concentrate on travel first before they think of anything else I would like to see the detail as presented in GAAP Accounting that includes the premium/s paid. When you hedge [depending on the hedge] you may pay a premium [upfrot fee] so the break-even comes when the gain equals the premium paid. Not to mention the premium has to be financed. KQ enters into hedge contracts with financial institutions, to fix the price at which fuel will be bought in the future. Fuel prices are volatile, and the hedging gives a limit of exposure. If the market prices go below the hedge price, KQ pays the difference to the contracted financial institution. If the price shoots above the hedge price, KQ is paid the difference. As to predicting if the price will be higher or lower, that needs an expert who is not only an accountant but a strategist who can read the geopolitics of the day. I dont know of an upfront fee...what i understand is you negotiate a price let say to buy jetfuel at 90 if it shoots to 100 the fin company gets to blow, if it melts to 80 Kq suffers the blow...simply put, its a gamble When you have a strike price, you may need to pay a premium to enter into the contract. There are negotiating fees, advisory fees, etc. Also we use the term 'hedges' but are they forwards, futures, swaps, etc? Ofcourse those fees are there by standard, but if one plays smartly, they are good. What i described ni futures Thus why I say they should rebrand from Kenya Airways to Kenya Airways hedge fund or something in that line. What is their core biz, profits from fuel hedges (bets) or air transport? Financial weapons of mass destruction...Warren Buffetpossunt quia posse videntur
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Kenya Airways FY 2012/13 after tax loss of 7.8bn
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