Seven’s share slide. On August 27, 2014, when Seven West Media reported its 2013-14 results, its shares closed at $1.72. Last Friday the shares ended the week on 82 cents, a record low. That halving of the share price in the past year is a violent downward adjustment in the value of the company ahead of the filing of the 2014-15 results on Wednesday. Those shareholders who took up shares in April’s issue at $1.28 are also losing heavily — that 82 cent close on Friday represents a drop of 36%. In a June update (after Nine shocked with its downgrade) Seven said at the time that underlying net profit after tax for 2014-15 was still expected to be between $205 million and $215 million. That would be down on the $226 million earned in 2013-14, and the $225 million in 2012-13. Seven West CEO Tim Worner has extended his contract a year to 2018, but the real story for the company is the harsh judgement the market has delivered on not so much his performance as CEO, but on the company’s future prospects in the rapidly changing media landscape. — Glenn Dyer
Gold’s glimmer dims. The kerfuffle last week from Western markets about China’s “devaluation” caused interest in to gold pick up, then fade at week’s end. But what was an odd reaction was the way gold bugs failed to pick up on a small rise in China’s gold holdings in July as the country’s central bank took advantage of new lows to top up its holdings. It didn’t spend much — just over US$660 million buying a little more than 600,000 ounces to lift its holding at the end of July to 59.93 million ounces, or 1677.3 tonnes. That was after China revealed for the first time in six years that it held 53.31 million ounces (and at the end of May, China had 33.89 million ounces, so in June and July it snapped up 20 million ounces. And yet that demand had no impact whatsoever on gold prices (the People’s Bank of China spent the best part of US$22 billion in two months), which sagged to six-year lows in July. In fact, in July, Comex gold prices (the world marker price) fell 6.5%. That is the big point from this data and the most unpalatable “truth” for gold bugs — China’s strong buying failed to halt the slide in gold prices. No wonder analysts at Bank of America Merrill Lynch cut their gold price forecast by 6.8% to US$1122 an ounce for this year and expect the price to fall below US$1000 an ounce next year. — Glenn Dyer
Little oil, big bust. Its official: Samson Resources Corp, the latest investment embarrassment for KKR, plans to “collapse” next month by going into Chapter 11 bankruptcy and wiping out US$4.1 billion in cash KKR and others invested in Samson. Samson will set an unwelcome record for KKR, its investors and the markets generally as the biggest casualty so far in the 14-month slide in global oil and gas prices. Samson will deliberately miss a bond payment due tonight, our time in the US and use a 30-day grace period to seek support from other creditors for the Chapter 11 move and its restructuring. — Glenn Dyer
Biter bit. Glencore, the global commodities trader and miner run by Australian-South African Ivan Glasenberg, has long paraded itself as the only “rational” company in the resources business, disciplined, able to make tough decisions. Glasenberg has criticised rivals and rival managements at Rio Tinto, BHP Billiton and their peers, and in 2013 and 2014, talked to Rio Tinto, with the ambition to buy the bigger miner. Rio told Glencore to go away, which it did (it is back trying to buy Rio Tinto’s NSW coal operations). But now Glencore is being stalked. US$135 billion Chicago-based investment group Harris Associates has built a shareholding in Glencore and is starting to push for cost cuts and higher returns to shareholders. This week Glencore will reveal bad results: the company’s value has sunk 40% since it floated back in May 2011 (BHP and Rio shares are also down 47% and 40% respectively in the same time). — Glenn Dyer
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