Sasol has a recovery plan , they have assets with a combined value more that its current value. There was some confidence in this recovery plan and by end of August we would know if they will avaid or to what extend they might have to do a rights issue. this recovery plan had some bad news issued 4 days ago and was the beginning of the correction. The USA project commissioning one further month delay. They also spoke to the South African Covid risk to the operations . Any warning will dampen the spirits of recovery.
I believe there is scope to overcome this risk and therefore i am strengthening my position with a long term view. I do not believe we will test 100 level and that this reaction was purely a worry. I guess all people need to do there own assessments of Risk appetite and if you want are concerned about the covid risk to this business in South Africa then maybe you should set a stop loss at around 12500 ......and wait for August for the Company to reveal how they will handle the debt. By then you will be able to mare accurately determine if the recovery is feasible for your risk profile.
I therefore is sceptical about the view that it will drop to 10000
for now i am going to believe that the delay in project start up and the ability to handle the covid risk is still intact and therefore I use this dip as another entry point with a hold and long view. Should the global sentiment change towards Sasol ii will stop loss at 12500
this is a view beyond analysis and everybody must make their own assessment of the situation
well well with the results of yesterday and a full dilution on the cards ...the upside may be gone for now ...looks like this share will now be in lockdown for growth...But we made our money from this one when we can. now moving on
jhtwinkeltoes
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I have a similar long term view with my stop at R115. I believe Sasol has enough good assets to weather this storm and this is evident by the sale of Air separation units at Secunda announced this morning. Willing to hold long for another 6-12 months. Good luck!
@Rekash, hi i cannot tell you what to do ?...however , I doubt if we will see a price above 155 , I think people will wait for the August update on the progress to reduce debt. Then again we can have a correction ,especially if the plans is not delivered on ...if they are not happy will see a downward adjustment . So it is not clear and therefore you need to act on available info or be ready to react to sudden changes