Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Team, 1) How do you decide whether to take up a SPP ,eg the current DRO & TGF ON OFFER 2)I am confused by the very different coal prices quoted on different websites, eg the https://markets.businessinsider.com/commodities/coal-price you recommended vs XAL1:COM Coal Futures 3) Is it possible for MM to incorporate coal prices in the commodities table of the Morning note? Thanks
Hi Sidney,
1 – with regards to SPP’s it comes down to a couple of primary factors, firstly does MM want to increase our exposure to the stock/company and secondly does the price being offered in the SPP represent good value compared to the price the stock is trading at in the market. If the answer is yes & yes then we take them up i.e. buy. As a rule of thumb, a 5% discount or more is attractive for larger cap stocks.
2 -we’ve mentioned coal prices in previous reports, unfortunately it’s not an actively traded contract, prices are only indicative hence the contradictory information on offer across different services. We use the coal futures out of Newcastle under Bloomberg code XWA. We will look at incorporating this in the AM note from now on.
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