Fundamentals Platinum is still relatively strong - price wise - despite weak industrial demand. One needs to be mindful of other factors in the short-term - US Dollar movements and its impact on GOLD price. China will continue to use GOLD as its hedge against its massive $1.7 trillion investment in the currency. So it would APPEAR gold price will be maintained, and therefore so to the shadow price of platinum.
Price Movements - ST The obvious cap being placed on NKP is, on the balance of probabilities, linked to the determination of the debt facility pricing. However, short term indicators may provide difficulty for the debt buyers as traders see its ST price fall from the 36.5c double top has created a buying opportunity for the next leg up. I would think between 43-45c, is the next target ST.
Longer term - the period i am in for - industrials will rebound as consensus that the western economies are recovering becomes the accepted norm. This is the statement made from the European Union just yesterday as they are developing an Exit Strategy from their stimulas to consolidation. FTSE rebounded immediately. By the the time the small punter wakes up, he would have missed the lion's share of the short term rebound.
NKP is a sleeper - sensational risk reward - cashed up, with little to no exposure to any production or capital risk. The only risk to the stock - the pulling out of the deal by Xstrata. However, i suspect, as time goes by, the risk of this happening would be less and less, as economies rebound and price consolidates. If anything, Xstrata would best be placed to make a move for NKP now or walk away- its price down the track would preclude would only be more expensive for any predator.
If the BFS is good - which it should be else how else would they have attracted UK investors by their roadshow - then even if Xstrata pulls out - someone else will be close by to pick up the crumbs.
In a year or two, a few hundred thousand shares invested on this via CFD (to maximise your leverage) will be millionaire making stuff.
Oh and i cant help but shake my head at those that continue saying that it's doubled in price already - yet they fail to mention it's still trading at 70% of its average price of the past two years when they were further away from the deal or BFS.
Good luck to holders - DYOR and be aware of the ST price impacts of USD, inflation, and pricing of GOLD
Disclosure: Very Large Holding, Long Term Investor
NKP Price at posting:
32.0¢ Sentiment: LT Buy Disclosure: Held
