nzr

[keepitsimple]

whats up with nzr today do you think

[COLIN]

whats up with nzr today do you think
Its certainly an unusually high movement by NZR. In the absence of any public news this surely calls for NZX to ask for an explanation. If there had been an explosion at the refinery I'm sure we would have heard about it by now.
It must surely be linked to the refiners margin, under NZR tolling arrangements, which I understand is set in Singapore. Is it something to do with today's announcement that China is going to reduce oil subsidies (by 25% I think) thus reducing demand in that part of the world?

[macduffy]

whats up with nzr today do you think

With the heat on the price of petrol it may be speculation that the govt is going to regulate margins in the industry.
Hope it's only speculation but this govt has the form to do something politically popular, especially this close to an election.

:(

[sideline]

With the heat on the price of petrol it may be speculation that the govt is going to regulate margins in the industry.
Hope it's only speculation but this govt has the form to do something politically popular, especially this close to an election.

:(

The refining margin for NZR is capped anyway to US$9/b by agreement between the oil companies and NZR.
(the oil companies also own 80% of NZR shares).

Having said that, the move is unusually large. Maybe somebody knows something about the numbers for
the half-year. Since the period is almost finished, it would not be difficult to calculate what they would be.

[Dr_Who]

I am struggling to understand why the still have this company listed when they own 80%.

[POSSUM THE CAT]

Or is it a shortage of the grades of crude that they can refine (so that they become uncompetitive with other refieries that refine diferent types of Crude) in terms of retail product

[macduffy]

I am struggling to understand why the still have this company listed when they own 80%.

There is an argument that the 20% help keep the other shareholders honest.
I couldn't possibly comment.

;)

[malcolm]

There is an argument that the 20% help keep the other shareholders honest.
I couldn't possibly comment.

;)

OIL COMPANYS WOULD BE AS HONEST AS 22 NZ FINANCE COMPANYS----PS AUST, asian @ NZ REFINERY,S like light sweet crude as thats what asian mkt demand more (refinery margin):rolleyes:

[manxman]

Its certainly an unusually high movement by NZR. In the absence of any public news this surely calls for NZX to ask for an explanation. If there had been an explosion at the refinery I'm sure we would have heard about it by now.
It must surely be linked to the refiners margin, under NZR tolling arrangements, which I understand is set in Singapore. Is it something to do with today's announcement that China is going to reduce oil subsidies (by 25% I think) thus reducing demand in that part of the world?

Have inspected said refinery. NO EXPLOSION.

Refining Margins are based on Singapore, but NZR is capped at $US9 per barrel and current margins are well in excess of this, so anything short of a calamitous drop would have no effect. Probably the biggest risk to their bottom line is the spot price of electricity. They are effectively guaranteed throughput by the four major oil companies, in return for which they charge 70% of the Singapore spot price for their services.

Their other revenue stream comes from transporting oil from Marsden Point to Wiri and Auckland Airport via pipeline. The rates for this are based on tanker charter rates on the Baltic Exchange, which is probably a back room of an ancient little hostelry in London somewhere. No huge change in revenue there either.

I was a long term holder of NZR and it is subject to the woggle effect. Being so thinly held, if a boy scout needed a new woggle, he could shift the value of a $1.5billion company with a trade of 50 shares. I recall that a $7 million overshoot in their power bill knocked $40 million off their market cap. But today we had serious volume, so that explanation falls short.

The major shareholders are the four oil majors, who won't be selling, and one American institution. I sold my shares to hold onto NZO. Perhaps a few people really short of money to convert NZO options divested themselves of NZR to pursue growth opportunities elsewhere. NZR is a great company, and it has had a great run, but maybe the SP has run out of growth.

It will be interesting to see if there is a reason for the SP drop, but my money is still on the reef fish. No buyers and a couple of weak sellers in a spooked market can do an awful lot of damage.

Mx

[macduffy]

Hi manxman

I hold similar views. Have been a holder at various times since the original float in the early 60's but not recently.
Today's performance was enough to entice me back into a small position which I bought late in the day. Here's hoping it's not a sign of impending govt regulation!

;)

[Neon_Spork]

I think manxman is pretty well on the ball. The only reason I could think of was someone selling down to convert NZOOD.

With the completion of thier expansions on track for the end of 09 I would think there was still a bit of room for the sp to grow.

I took the opportunity to pick up a few more NZR on friday for what I consider a ridiculous bargain.

[lakedaemonian]

As posted elsewhere here, NZR is the only public equity I hold........

Althought still in the black, and still cahsing dividend cheques, it was a big haircut yesterday!

I spoke with my wife about it and I don't quite see the logic in the fall.

I'm tempted to pick up a good bit more at these levels, but will probably wait a couple more trading days to see what happens.....I'm a bit cautious on the buy trigger at the moment.

[russki]

Massive spike of volume on Friday 500,000 shares. That would have to hoover up a lot of buy orders.

[macduffy]

Massive spike of volume on Friday 500,000 shares. That would have to hoover up a lot of buy orders.


And over a million traded so far today! Price currently up 55c.
Nice to still be able to do a profitable deal in this market!

;)

[Placebo]

Well that's been weird.

So, your trading levels are pretty predictable - a few tens of thousands, maybe 100k tops... and then, in the space of 2 trading days, you have a surge of over half a million one day, then over a million on another, the price spikes down dramatically... then there is a recovery.

Is this normal? What happens with another stock when you get 10x the volume of trades and a 15% drop in value? Shouldn't the market regulator be asking a question about such patterns?

What gives? Where's the NZX on this? Maybe nothing sinister but I think they should still ask some questions.

[macduffy]

Best explanation seems to be cashing up to convert NZO options. But certainly strange and one would think it warrants a "please explain".
The other weird thing is that the media don't seem to have noticed either. Maybe that's not so strange!

:rolleyes: