EM CEEMEA CREDIT: PDLLN: De Beers elevated diamond stockpile adds to pressure
Petra Diamonds (PDLLN; Caa2neg/B-neg/-)
De Beers Group elevated diamond stockpile adds to pressure for PDLLN
- PDLLN 9.75 Mar26 still quotes on an offer cash price @ 79.00 area indicatively, but we have little visibility of where a firm bid could be. In yield terms, the bonds are somewhere in the 30s area leaving little room for manoeuvre.
- We expect further pressure for PDLLN following the latest update by De Beers on their estimated USD2bn worth of diamond stockpile, as reported by the Financial Times. The article cites among other factors behind the large inventories a prolonged weakness in Chinese demand, increase in fungible alternatives and post-pandemic changes in lifestyle.
- Recently, PDLLN credit ratings got downgraded by one-notch to B- and outlook negative by S&P, as reported in our note PDLLN “A downgrade is not enough, pressure stays”.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EQUITIES: Opening calls
Estox 50: -0.03%, Dax: +0.14%, CAC: -0.12%, FTSE +0.28%, SMI +0.14%.
GILTS: Focus is on the Gilt open
Early focus is on the Gilt Open, given the rallies in Bonds and STIRs , although the resistance in Bund noted at 134.25, has so far held.
- Gilt calls, 95.47/95.49.
AUDUSD TECHS: Trend Structure Remains Bearish
- RES 4: 0.6762 High Oct 9
- RES 3: 0.6733 High Oct 13
- RES 2: 0.6613/88 50-day EMA / High Nov 7 and a reversal trigger
- RES 1: 0.6542/50 20-day EMA / High Nov 25
- PRICE: 0.6488 @ 07:57 GMT Nov 27
- SUP 1: 0.6434 Low Nov 26
- SUP 3: 0.6400 Round number support
- SUP 3: 0.6350 Low Aug 5 and a key support
- SUP 4: 0.6339 Low Nov 10 2023
A bearish theme in AUDUSD remains intact and Tuesday’s fresh cycle low reinforces this condition. The break lower maintains a bearish price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350, the Aug 5 low and the next key support. The pair remains below initial firm resistance at 0.6542, the 20-day EMA.
