Originally Posted by
Bilo
Some Oil priced for October delivery to the USA may be down by 4pc in USD.
NB
· not oil based on the Tapis standard
· Not in NZD
· Not that that price is anywhere near the price that is factored into broker valuations
Instead of making a 90pc contribution to profit from revenue NZO is only getting 80pc. Most companies are delighted with 5 to 10pc of sales.
Lets face it – indexing oiler share prices to the WTI index is another excuse for those in the know (big investors hedge funds and brokers) to manipulate the share price for trading gains. The ASX does it - all the major bourses in the world provide mechanisms to do it, it must be right.
A 4pc reduction in the price of oil for October might reduce NZO’s profit by $40,000.
The 4pc reduction in share price shaves $24,000,000 off NZO’s market capitalisation.
What is wrong with manipulating company share capitalisation to indicies? Nothing at all. Yeah right.