In today’s briefing:
- Mongolia Mining 975 HK: Q3 FY24 Operational Update, Gold Project Progressing Well
- Dyna-Mac (DMHL SP): Hanwha’s Final Offer Could Get the Deal Done
- Scenario Analysis of Korea Zinc’s Share Buyback, Cancellation, and Tender Offer + NPS’s Five Options
- US Rig Count Rises After Falling for Three Consecutive Weeks
- [IO Options Weekly 2024/41] IO IV Surges and Put Activity Rebounds Following Golden Week
- [US Nat Gas Options Weekly 2024/41] Henry Hub Extends Decline as Hurricane Milton Destroys Demand
- [US Crude Oil Options Weekly 2024/41] China’s Weakness Poses Risk to WTI’s Recent Two-Week Gains
- Hurricane Milton and Orange Juice Prices // CTA Update
- LSB Industries, Inc. – WTR Small-Cap Spotlight Recap
- 10 in 10 – CNMC Goldmine Holdings – Mining more Gold
Mongolia Mining 975 HK: Q3 FY24 Operational Update, Gold Project Progressing Well
- Mongolian Mining (975 HK) released its quarterly production update. While production remained flat QoQ, destocking led to 16.3% YoY sales growth in coal.
- The resources at the gold mine (476,000 oz) did not change, but construction of the plant was 55% complete compared to 30% a quarter ago in June.
- Trading at 5.6 PE, with opportunities for growth and future dividend payments due to repayment of the perpetual, this is an exciting idea to explore.
Dyna-Mac (DMHL SP): Hanwha’s Final Offer Could Get the Deal Done
- Dyna Mac Holdings (DMHL SP) disclosed a revised conditional offer from Hanwha Aerospace (012450 KS) and Hanwha Ocean (042660 KS) at S$0.67, an 11.7% premium to the initial S$0.60 offer.
- The Estate (largest shareholder) stated that the previous S$0.60 offer was not compelling. The final offer addresses most of the Estate’s valuation concerns.
- The Estate’s view and IFA opinion in the circular (despatched by 23 October) will be crucial to the acceptance rate. They are likely to support the final offer.
Scenario Analysis of Korea Zinc’s Share Buyback, Cancellation, and Tender Offer + NPS’s Five Options
- We discuss the next steps in the fight for the control of Korea Zinc, after the completion of the tender offer by the MBK Partners and Young Poong alliance.
- After the tender offer, MBK and Young Poong’s stake in Korea Zinc increased from 33.13% to 38.47%, coming close to more than half of the voting rights.
- We continue to believe that at current stage, MBK/Young Poong alliance has the advantage in the fight for the control of Korea Zinc.
US Rig Count Rises After Falling for Three Consecutive Weeks
- The US oil and gas rig count rose by one to 586 for the week ending 11/Oct, marking an increase after falling for three consecutive weeks.
- The US oil rig count increased by two to 481. Meanwhile, gas rigs decreased by one to 101, after gaining six rigs over the last two weeks.
- For the week ending 11/Oct, US energy producers added six rigs in Texas and one in Oklahoma but cut two each in Pennsylvania, Louisiana, and New Mexico.
[IO Options Weekly 2024/41] IO IV Surges and Put Activity Rebounds Following Golden Week
- SGX IO Futures declined by $1.94/ton over the week, closing at $106.21/ton on October 11th, with prices ranging between $103.05 and $115/ton.
- DCE premium over SGX surged to 10% on 8/Oct as DCE reopened after Golden Week, but the spread narrowed to 4.8% by 11/Oct. SGX underperformed DCE early in the week.
- Weekly options volume surged 188%, dominated by puts with a 1.04 put/call ratio, concentrated on November expiries and key strikes at 100 and 105.
[US Nat Gas Options Weekly 2024/41] Henry Hub Extends Decline as Hurricane Milton Destroys Demand
- US natural gas prices fell 7.8% for the week ending 11/Oct, marking a second straight weekly decline as Hurricane Milton reduced electricity demand, driving down Henry Hub prices.
- Henry Hub Put/Call volume ratio fell to 0.69 (11/Oct) from 0.98 the previous week as put volumes fell by 27.3% WoW, while call volumes rose by 2.8%.
- Put OI increased for contracts expiring in November and April while call OI rose for expiries in December, January, February, and March.
[US Crude Oil Options Weekly 2024/41] China’s Weakness Poses Risk to WTI’s Recent Two-Week Gains
- WTI futures rose by 1.6% for the week ending 11/Oct, as the simmering tensions in the Middle East outweighed persistent demand concerns.
- WTI options Put/Call volume ratio fell to 0.52 from 0.64 (04/Oct) as put volume dropped by 50.9% WoW while call volume fell by 39.8%.
- WTI OI PCR was unchanged at 0.76 compared to last week. Call OI rose by 5.7% WoW, while put OI grew by 5.8%.
Hurricane Milton and Orange Juice Prices // CTA Update
- CTA Update Last week, the research division of UBS shared an update on the positioning of CTAs.
- Contrarian’ trades: bullish Energy, Cattle Feeder, Lme Lead and Lme Nickel, bearish Coffee, Cocoa, Platinum and Palladium
- Go with momentum’ trades: bullish Lme Tin, Copper, Gold and Lean Hogs, bearish Soybean, Soybean Meal, Wheat and Corn Hurricane Milton and Orange Juice Prices Orange juice futures rose as Hurricane Milton approached Florida throughout the week.
LSB Industries, Inc. – WTR Small-Cap Spotlight Recap
- LSB currently operates three downstream integrated ammonia production facilities.
- Behrman said key competitive advantages include a cost structure underpinned by access to low-cost US natural gas feedstock, strategic proximity with plants located in three states (OK, AK, and AL), and good logistics with access to waterways, truck, and rail.
- About half of LSB’s output is geared toward agricultural applications (fertilizers), while the remaining is geared toward various industrial applications.
10 in 10 – CNMC Goldmine Holdings – Mining more Gold
- 10 Questions for CNMC Goldmine Holdings What is CNMC Goldmine’s business about and what are some of its key business segments? Our flagship project, the Sokor Gold Field, spans 10 square kilometers and has been producing gold for more than a decade.
- Given that a large portion of CNMC Goldmine’s revenue is tied to gold prices, how does the Group manage the potential volatility?.
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