Week 46 of 2014
Another strong week for the Major indices. The Dow closed at 17635 and the FTSE 100 at 6654. There’s no stopping the US index’s. After the markets wobble just 4 weeks ago, the DOW has taken a trip from 17350 to test 15850 and then promptly stomped back up to punch through new highs. Japanese QE the reason? Or the impending Mario EU bazooka? Whatever it is – it’s filling the US QE gap.
Next week OPEC meet on 27th to decide on whether to cut back Oil output and bolster the OIL price. The Saudi’s appear to be happy with Oil at $75 but that’s just talk. Any inaction on the 27th could see prices fall to nearer $70pb or even $65pb. Countries like Brazil, Russia, Iran and Iraq are all feeling the squeeze. Historically – OIL price normally rise into the US and EU winter seasons. It will be interesting to see how next week plays out. One would guess that $80pb would tick many boxes but not certainly not all. Putin needs $110pb to help balance cuts via Sanctions. Iran who are apparently heading towards a key deadline on talks with UN/US over Nuclear program – also need oil alot higher. US shale players would welcome oil at $100 again but that’s looking unlikely based on current demand.
A virtual portfolio has been set up using the 2013 final trading day close figures as a starting point and £1000 has been invested in each stock. This does not include buying fees or stamp duty and is purely intended to be used as a benchmark or summary for each week. Two newspaper top ten picks for 2014 have been included to help monitor/compare against.
Week 46 stock picks performance review:
Another week ticks by and with less than 6 weeks left, the Independent moves to within a whisker of making it 3 years on the trot and finishing in the blue. The Telegraph is not far behind and could launch a late challenge for top spot.
On the small caps and commodity players, some decent bounces from popular stocks like XEL, GKP and Afren. All are beaten up after months of sp falls. I wouldn’t normally put Afren in the small cap mix but with a market cap under £1bln now, it’s very much a small cap player. It wasn’t that long ago it was worth £1.6bln. 2015 now looks like the year for Afren to bounce back based on increased production and drilling catalysts. 2014 is best forgotten. Some new management roles/senior appointments would not go a miss and is something to look out for. GKP heads into the usual ‘funding’ period of the year. The IMS (which was not an IMS but an ops update) confirmed they had just $100mln left in cash. That said, they did have around $250mln owed. Perhaps GKP shareholders should be charging the KRG a rather large 16% interest rate if payments are not forthcoming soon? XEL are heading methodically towards FDP submission. When completed – it may well become the benchmark or blueprint for other cash strapped operators as alternative partnerships are agreed which circumnavigate the usual exposure to risk that comes with the normal farm out route. The next 6 weeks could be the most exciting for the small cap picks which says a lot as 2014 has been a year to forget (again).
Current standings / Week 46 Results
1. The Independent’s Top Ten 2014 -0.60% (Weekly gain of 2.38%)
2. The Telegraph’s Top Ten 2014 -3.63% (Weekly loss of 0.24%)
3. TheShareHub’s 2014 B-List -26.27% (Weekly loss of 0.28%)
4. TheShareHub’s 2014 Hotlist -38.81% (Weekly loss of 0.38%)