ARR rencently has been upgraded and book value increased. They are not as levered as they were before and so I don't expect the big drop as you are predicting. mReits can go up with rising rates.10yr at 5% doubt highly we see that by end of year. Yellen is not that hawkish, just ending QE.
September 11, 2014 11:20 AM EDT
Compass Point analyst Jason Stewart upgraded mortgage REITs CYS Investments, Hatteras Financial and ARMOUR Residential REIT from Neutral to Buy today with price targets of $10, $22.50 and $5, respectively.
Stewart commented, "The outlook for Agency focused mortgage REITs (mREITs) remains mixed. Historically inexpensive valuations and the potential for an improving earnings outlook balance against an interest rate and MBS spread environment biased higher and wider to produce a neutral risk versus reward for the sector. However, we see a positively skewed risk/reward for shorter duration Agency mREIT investors and upgrade CYS, HTS and ARR to Buy from Neutral."
Delays and licensing was only maybe 20% of the move down, ree prices crashing is 80% of the move down. If you do not believe please look at where the stock price was from 2010 to 2011 when China cut production and exports which caused the ree price spike during the same period. About you prediction: I don't think there is any "real" correction about to take place, choppy sideways at worst. It has been buy the dips rally all year.
The European Central Bank surprised on Thursday by cutting interest rates to record lows and announcing it would purchase asset-backed securities (ABS) and covered bonds to boost the economy and boost inflation.
From September 10, the rate on the main refinancing operations will be decreased by 10 basis points to a new low of 0.05 percent. The rate on the marginal lending facility will be decreased by 10 basis points to 0.30 percent and the rate on the deposit facility will be cut still further into negative territory, to -0.20 percent.
The euro fell by over 1 percent against the dollar after the rate announcement. European stocks traded sharply higher.
In his regular press conference at 1:30 p.m., Draghi announced a bond-buying—or quantitative easing (QE)—program. Some economists had expected this, given the ECB's announcement in August that it had hired Blackrock to advise on a possible ABS-buying program.
Under such a program, euro zone banks would sell the ECB their loans and other types of credit that have been packaged together. The aim would be to strengthen the euro zone's financial system and increase lending in the real economy, by boosting banks' balance sheets.
Maybe you should provide a link to "a yahoo finance article". Usually, the bond markets are what influnces reit prices. We are one day from the ECB meeting, and 2 days from the NFP number.
The future looking bad? You have said this probably 50 times by now. By the way "contraryj", contrarian
investors have ballz, they invest when the future looks bad, you sir have none.
What is your definition of slammed. Most in the space were only down 1% or less. REIT indexes were flat. REM was flat.
11:57AM Sep 2, 2014
"With the Temporary Operating Licence (TOL) issued to the Lynas rare earths plant expiring today, the Atomic Energy Licensing Board (AELB) has agreed to grant the controversial plant a Full Operating State Licence (FOSL).
AELB director-general Hamrah Mohd Ali confirmed with Malaysiakini today that the board agreed at a meeting last week to issue a two-year FOSL to Lynas."
This is not the POL, but should help in the debt negotiations. No word from Lynas yet.
Latest inflation data from the EU .3%. Draghi has said below 1% is the danger zone. They have been in the danger zone for about a year by now.
"LA and CE prices for non china customers will be controlled by MCP and Lynas."
Current non chinese consumption is 35%. Current chinese production is 90%
OK. Here's another report. Feel free to challenge with your "ideas"
"Illegal Rare-earth Smuggling Affects The Chinese Industry" March 25 2014
The Chinese government started cracking down on the smuggling of the rare earth elements. In 2013, they LOST AN ESTIMATED 19,000 TONS of RARE-EARTH OXIDES, which were illegally mined and exported. The country’s legal production of rare-earth in 2013 was 80,400 metric tons.
It is estimated that china has about 30 percent of the world’s rare-earth reserves. They discovered them in the 1980s and have since seen a growing stable demand for rare earth metals, which are used in various technological devices. According to the report “Situation of Rare Earth Industry Economy Operation in 2013” which was published by China’s Ministry of Industry and Information Technology (MIIT), China exported rare-earth that were about 12.6 billion USD last year alone. Because of the strict rules of China and controlling of the market of rare-earth, many illegal activities by the organized crime targeted mining and exporting of these rare elements. The wide use in electronics and motors industries caused the market to be thirst for it.
Smuggling harms the economy by depleting the resources and deflating the market price. Smuggling caused the Chinese government in 2013 to cancel 161 licenses of rare earth element and another 126 companies for smelting and separation were ordered to cease their activities and wait for correction and rectification. The government also has decreased the rare earth quotas to reach 15,110 tons in 2014 and identified 26 producers which can participate in mining and related industries to these quotas. This is not surprising, considering China lost 1.3 Billion dollars in 2013, because of the lowered prices mainly because of illegal activities.
Taken from article "China’s rare earth exports below quota in first half of year" InvestorIntel July 30 2014.
Obviously, current global demand for rare earths is recovering outside of China. However, the problem that China’s rare earth market is still dominated by illegal operations at present, China Mining Association reported on July 29th that current illegal or unlicensed rare earth ore production still reached about 40,000 tons to 50,000 tons in the domestic market. Which resulted in a serious oversupply of rare earth elements in the country and a sluggish rare earths price.
Lynas has spent a decade and hundreds of millions of dollars trying to break China’s stranglehold on rare-earths supply, but now the Australian miner’s shareholders worry that its big bet may have gone sour.
When prices of rare-earth elements used in products such as iPads surged three years ago, Lynas’s value shot up to around $2 billion on expectations its new mine and Malaysian processing plant would play a big role in meeting a shortfall in global supply.
Now, Lynas is battling to protect profits and put its finances on a more solid footing amid a collapse in rare-earths prices.
It is cutting jobs and shifting its headquarters to Kuala Lumpur from Sydney, while seeking new lenders to refinance its debt as hefty repayments loom.
Global mining companies are grappling with slowing demand for commodities ranging from iron ore to coal, but a near-90 per cent pullback in rare-earths prices since the third quarter of 2011 means Lynas has been hit harder than most.
LYNAS Corporation says it has made substantial progress in talks with its financiers, as it unveiled its fourth successive quarter of improved rare earths oxide (REO) production and sales.
The rare earths miner said it had continued to work with Nomura and its existing financiers regarding the potential restructure of its existing financing facilities.
“The detailed terms of these negotiations are subject to further due diligence and completion of definitive documentation,” Lynas said.
Shareholders responded poorly to the update in early trade. At 10.35am (AEST) Lynas shares were 18.29 per cent lower at 16.75c, against a benchmark index lift of 0.2 per cent. Lynas shares touched as low as 16.25c during the morning session.
In the June quarter, Lynas produced 1882 tonnes on an REO equivalent basis, a 73 per cent increase on the previous quarter.
Total tonnes shipped were 1630 tonnes, on an REO equivalent basis, up 117 per cent on the prior quarter.
The rare earths miner said June quarter production represented 47.5 per cent of its fiscal 2014 production, while June quarter shipment volume represented 54.2 per cent of the full-year total.
Production for the 12 months to June 30 was 3965 tonnes, while shipments during the year totalled 3008 tonnes.
Very to easy to explain. Number one issue with lynas was not reaching 11tpa by July. Number one issue was they were running out of cash. In the last quarter showed they were not going to survive unless they raised cash. Lynas raised 40m without difficulty. Upcomming report will show much better cash level than previous quarter.
This interview you are refering to does not give any current production numbers, only the CEO makes a generalized statement about about reaching 11tpa by December. You seem to believe this was "make or break" for them to achieve that in by July, it certainly is not. In the interview the also CEO states "project profitable even at current depressed prices".
This company actually is in the best postion it ever has been, the next report will be huge improvement from the last just based on cash level alone.
Trend clearly shows the stock is going higher. I think there is a wave of speculative money getting in with expectations of a better quarter. At the same time, copper and aluminum prices are higher, a good sign for industrial metals. REMX showing a good up trend. I think investors are now starting to buy what is probably the cheapest under valued space in the markets.
Euro banks are up on good euro zone PMI data for today. Beyond that, the stock will probably rise ahead of earnings on the 31st.