Hi marvdog - your question: 'Is it possible that the recent "issues" with ROC and KAR, even though not directly related to MEO, could effect "sentiment" in the Oil and Gas industry, and hence the MEO SP currently and post announcement?'
IMO I think the current Global Financial System is still choking on the recent debt crisis. This is affecting Europe and America more than East Asia and Australia but we always go with the flow. The resources sector is always hit hard, not only ROC and KAR. Nevertheless, negative sentiment towards a stock is always amplified in such times.
Simple economics show that the prospect of lower demand returns lower prices. In other reports at the moment, though, it is being reported that we are looking at a shortage of oil/gas in the future. They are talking about peak oil occurring this year.
If this is true and we reach the top of the bell curve then shortages in supply will force the price of oil/gas up. Economies of scale will mean that all other prices will go up, population will still increase and so on, adding to the strain on the financial system.
How this will affect MEO in the short term is whether the content of the announcement is enough for people to risk their money in a climate where people fear a recurrence of the GFC.
What we need to differentiate is the effect of actions within an individual stock/company compared to the outside global effect. ATM the global economy is having more of an impact than the success or failure of individual companies. Next week it may be different. Every day opportunists use these influences to manipulate the markets.
On any day we may hear that either the ASX is down because of economic data from the US affecting the DOW or Abu Dhabis excesses have left them in debt, or Spain can't sell their bonds. Conversely the ASX is up because a company has reported a smaller loss than first anticipated or a neighbouring King has bailed out Abu Dhabi etc etc.
In the mean time shares in MEO have gone up and down in unison. But what has changed in the company. Nothing. The fundamentals are the same. We are still waiting for the announcement. We have enough money to drill Artemis if necessary and so on.
ATM no sentiment in MEO by the market is being amplified converting it into negative sentiment - helped of course by being capped for some time now.
I notice the company hit hardest in the Americas on Thursday was Petrobras, down 6.84% to US$162.7 billion which is a loss of US$11.9 billion. Brazil's mining giant Vale and U.S. oil company Exxon Mobil ranked second and third in terms of the losses they suffered - source here.
Of course massive companies show massive losses in a sell down which is why I always refer to percentages but the resources sector all over the world have been hit. They will rebound though. The DOW made nearly a 200 point turnaround during the last two hours on Friday. Perhaps that is a good sign - or maybe a dead cat. Monday will be interesting.
What we need to do is make a decision based on why we are investing in MEO and how long do we mind leaving our money tied up.
Is the prospect of a resources boom in Oz (especially the LNG market as noted by geoffalford in another thread), along with the capacity of MEO's long term growth and involvement, sufficient to warrant a possible extended investment.
If so, by holding, are we willing to accept a possible paper loss in the short time (which some of us already are) before the correction - can our nerves hold out?
Of course all this depends on how we are reading the signs given, relating to the MEO and the impending announcement.
And TAs, who trade to different strategies, their outlook would be different again.
That's the good thing about being a retail investor - we get to make our own decisions. Let's hope they are profitable.
Only my opinion of course:>))
MEO Price at posting:
35.5¢ Sentiment: LT Buy Disclosure: Held
