Not a fan of CPO.

Airasia too complex.
Will not be an easy trade.
Many things not looking good.
Total debts now over 11 Billion!!!!!!

juz share mine key indicator.

Oil price drop..i still monitoring becoz i assume stablize smehere at USD80....hope im correct without further down.

Air Asia - ringgit getiing weaker vs USD. must note their loan under USD..therefore theire loan interest have to paid more.

CPO and el nino i have same thought..somehow science forecast assume is 70% correct.

Thanks for sharing la.

If you have the time read and compare Airasia's quarterlies.

Tony is a hedge gambler!!

As it is, as of Sept 2014, he has hedged a lot of positions already.

Fir jet fuel, the actual financial data shows he is way to early with his bets.

And yes, if you read my earlier comments the main component in his company is the USD.

11 billion debts....mostly denominated in USD!!!!

Currently..his forex hedge is looking good. Hedged ay 3.22++

hedging could be a measure to control risk as the fuel cost could be estimated in short or medium term, which I think quite important for a LCC. Well, even WB made mistake in investing Tesco. In fact, WTI at 80 USD per barrel is a comfortable price for all (even O&G producer), i think OPEC won't cut production so soon.

This post has been edited by holybo: Nov 20 2014, 10:59 PM

Yes but if you read the quartelies, the data showed clearly the characteristics of a gambling.

See the data.

When the jet fuel started dropping, Tony bought more and more jet fuel swaps.

As it is, the data showed that Tony bought too early. See previous page postings.

Few years back, I remember Tony losing few hundred millions in oil and forex hedges.

Damage was so massive that Tony was forced to make press statements. Go google and you should find articles on it.

Good news for SKpetro
http://www.theedgemarkets.com/my/article/s...ilfields-us400m

The Dow and S&P 500 finished at record highs on Thursday. Could be a green day today.
http://www.theedgemarkets.com/my/article/d...a-intel-outlook

Good news for Eduspec~! Will fly high soon!!!!

http://www.thesundaily.my/news/1233733

holybo

Have some time now....

Run a search on Goog using the simplest phrase "Airasia hedge bets"

First article: http://www.bloomberg.com/apps/news?pid=new...id=awrmaa4rin3o



Cannot remember exactly the losses...
But if I am not mistaken hedge losses ran into the hundreds of millions.

Fact: The previous quarter, AirAsia hedged 1.1 million barrels of jet fuel

Fact: Most recent quarter, ie. period ending Sep 2014, the hedge positions rose to 2.74 million barrels!

Fact: For comparison sake, last year, ie period ending Sep 2013, AirAsia had only 0.43 million barrals of jet fuel!

Fact: Yes, jet fuel declined sharply for the period ending Sep 2014.

Fact: Since Oct 2014, jet fuel declined even more!

Fact: The 2.74 million barrels of jet fuel WAS HEDGED at a much higher price compared to current hedge prices.

Question (since I no accountant... LOL!) : Would those 2.74 million jet fuel hedges be accounted as losses in its books?

That probably will raise a huge debate.

As it is currently...
I believe not all school kids have access to computers at home.
I believe the kampung stats are even worst....

So how good will this idea sell???

If govt takes the initiative to provide laptops/pc... at what cost? at whose cost?

And also.... if it does go thru....... SASBADI could be a huge loser.......

The impact of hedging to future financial result is very complicated, especially for LCC like AirAsia. They sold future flight seats. If the oil is hedged in tandem with those future sales booked now, it's not a gamble. Just a locked-in cost component. From business perspective, is the right thing to do. Selling future seats without locking in future cost - THAT is a gamble. You get cash flow now, but future revenue is fixed against a variable cost. LCC also do not sell all their future seats, for sure. They don't disclose what is their % seat sold for future quarters. That number is indicative of the bets they are making.

That said, airline business is very complicated. I don't fully grasp it's business, so I stay away.

And interesting the chart shows signs that perhaps the stock is stabilizing around current prices.

And this kind of exemplify my point.... when a stock falls, don't be so kiasu and try to buy the stock fast..... let the fall subside first before making any buying decision.

Again, YES , I am aware all business needs some sort of hedging.

But hedges can easily be abused and turn into a form of gambling !!!

If you know that past of 2008 and the hundred of millions of dollars lost via its hedges....
you would rather be extremely cautious with what Tony has done recently.

Found it....

For its fourth quarter 2008, AirAsia booked a 428 million loss under exception items which was described as follows:



Page 14 of the pdf file from AirAsia profit report: http://www.bursamalaysia.com/market/listed...ncements/590694

Point now: 2.74 million barrels of jet fuel hedges was made by end SEP 2014.

Compare those price to now... see back previous posted chart.



If based on that chart... end Sep 2014... the fuel closed lowest at around 109.
Assume la... AirAsia managed to hedge all all that low price of 109....

Now jet fuel price has collapsed to around 96/97.....

So those fuel hedge made earlier...... all carrying huge losses! no?

hehehe stayyy awayyyyy

and i'm not too hyped about SKPetro either as of now

heeeeheeeee ......

why stay away laaaa ?

hehe follow your words ma

Stay away if you are unsure or not confident in a stock

Btw, what do you think of CIMB?

getting hammered quite badly

Errr.... I don't see anything too wrong.

haha and Im guessing you see the same for MBB as well?

Haiyaaaa..... I don't simply lump everything together one...

and I don't simply simply say things one.

This company... below.... u say doing good or bad?