Trading Analysis - 18th Sept 2018


18 September 2018

End of Day

The overall chart for the day:-

At first inspection things look very simple, slightly boring in fact - up 2.91% on what appear to be very steady trading, a one-way chart with little to challenge the attribution of trades.

However this chart has only been arrived at by careful inspection of the trades, specifically the timing which reveals five trade duplicate pairs. These are all priced as sells and are shown in green on the chart above. Note how despite these all being large trades (500K, 250K, 250K, 300K, 300K) not one has any effect on the bid or ask. 

As inferred from the correct interpretation of the Erongo sell down these can all likely be interpreted as 1) A genuine PI Sell / Warrant Holder pre-sell followed by 2) an inter-Market Maker transfer. As such 2) makes no contribution to the Market Maker nett trading position shown in the chart above - they are simply shuffling the shares amongst themselves.

Our only remaining question is are these shares coming from a PI, or are they shares yet to be created when some warrants are exercised in the future. The lack of any impact on the SP suggests strongly it is the latter for if they were pre-existing shares coming from a PI then the MMs would more than likely want to get rid of them quickly and they would do this by cutting the price.

Thus today we have seen a total of 1.6M shares transferred into the market via this mechanism (plus potentially more if there are further corresponding trade duplicates yet to be reported.)

Today is the first time in the last two weeks that we have seen such duplicate trades reported - this of course is a remarkable coincidence when it was only yesterday that I was suggesting the possibility that one Market Maker might have access to the warranted shares whilst another may be holding onto a short position hoping to get lucky. Now that game has been hypothesized we suddenly see strong evidence of Inter-Market-Maker transfers - this may of course be no coincidence.

Assuming that this implies 1.6M more warrants have been consumed by todays activity this can be added to yesterday 1.6M which we also believe to be coming from warrants (though shares for their own pot, not someone else's) - that's 3.2M gone, probably from the 6.26M Warrants held by Atlas, and which were last exercised in the current price band. Half way there now !

This article only conveys the personal opinion of the author. Whilst every effort is made to ensure the content is accurate, we cannot guarantee the accuracy of the data shown. This article does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions.

Site content is not authorised by the FCA and you are not safeguarded by the Investor Protection measures of the Financial Services and Markets Act 2000. See our full disclaimer