shareswizard of 10years and still going strong

TODAY MY TOPIC OF MY LECTURE IS
---WHY MERCATOR is my darling for 2010????
LET ME SHARE WITH YOU PAST EVIDENCES

from shares book,available from bookstores

POINT ONE--EXCELLENT COMPANY FUNDAMENTALS
1.mercator never suffer losses in subprime crises,only plunge in profits.look at NOL---HEAVY losses,NOL during bull run pathetic profit margins
evidence--
a.Oct 28, 2009
Mercator Singapore Reports A Net Profit Of USD 20.2 Million For First Half 2010 (1HFY2010)
b. May 14, 2009
Mercator Singapore Reports 45% Growth In Net Profits To US$ 75.8 Million For FY2009
c. May 07, 2008
Mercator Reports Three-Fold Jump In FY2008 Net Profit To US$52.2 Million, Supported By Growing Fleet And Buoyant Dry Bulk Shipping Demand

2. Good dividend play
a.Sep 23, 2009
The First And Final Dividend Of 1.16 Singapore Cents Per Share One Tier Tax Exempt For The Year Ended 31 March 2009 - Allotment And Issue Of New Shares And Payment In Cash

from mercator website-www.mlindia.com

1.Ownership Structure

Shareholding pattern of Shares as on September 30, 2009.
Sr. No.
Category
No. of Holders
No. of Shares
%to Capital
1
Promoters' Holding
10
89524066
37.94
2
Institutional Investors
0
0
0.00
3
Mutual Funds / UTI
13
12154228
5.15
4
Banks, FIs, Insurance Companies
6
1528045
0.65
5
FIIs
42
43673589
18.51
6
Private Corporate Bodies
2479
23811827
10.09
7
Indian Public
98007
62221838
26.37
8
NRI's / OCB's
1813
2543585
1.08
9
Other Non Promoter Directors
8
474895
0.20

Total
102378
235932073
100.00

Mutual Funds invested in this company
Scheme
% of asset size
Sundaram BNP Paribas Select Midcap - Dividend
2.32
Sundaram BNP Paribas Select Midcap - Growth
1.71
LIC MF Unit Linked Insurance Scheme - Dividend
1.44
LIC MF Balanced - Plan - Gr - Growth
1.39
LIC MF Balanced - Plan - Div - Dividend
1.39

2. mercator wins awards--

Mercator Lines (Singapore) limited wins "Singapore Corporate Awards"
Mercator Lines (Singapore) Limited, a subsidiary of Mercator Lines Limited, has won Singapore Corporate Awards 2009 (SCA), in two categories viz; Best Annual Report Award (Bronze) in the "$300 million to less than $1 billion market capitalisation'' category as well as the Best Annual Report Award (Silver) in the "Newly-Listed Companies'' category.
Mumbai, Maharashtra, April 30, 2009 /India PRwire/ -- Mercator Lines (Singapore) Limited, a subsidiary of Mercator Lines Limited, has won Singapore Corporate Awards 2009 (SCA), in two categories viz; Best Annual Report Award (Bronze) in the "$300 million to less than $1 billion market capitalisation'' category as well as the Best Annual Report Award (Silver) in the "Newly-Listed Companies'' category. The award was presented to Mr. Shalabh Mittal, Managing Director and CEO, Mercator Lines (Singapore) Limited on April 23rd 2009.
Historically, it is for the first time that an Indian owned company has received such recognition. It has not only boosted company’s image but has also brought India on Singapore’s landscape of corporate governance, industry sources revealed.
This is one of the five awards which make up coveted “Singapore Corporate Awards”, others being the Best Managed Board, Best Chief Executive Officer, Best Chief Financial Officer, and Best Investor Relations. The SCA’s are organised by Singapore’s leading business publication house Business Times and supported by Singapore Exchange; there are several other partners to the organizers; ranging from professional institutions to academia to consulting firms.
The Best Annual Report Award is given on the basis of quality and timely disclosures of financial highlights, Industry report, corporate governance report, risk management reporting and several other factors through two-stage screening process by high powered panel of judges.
“We are delighted that our Singapore subsidiary has won this coveted award in two categories within the first year of their listing, the awards reaffirm Mercator’s commitment towards high corporate governance standards” said Mr H.K.Mittal, Chairman, Mercator Lines Limited. “It’s a matter of great satisfaction and pride that an Indian company’s subsidiary has achieved this honour despite stiff competition in Singapore” concludes Mr Mittal”.
Notes to Editor
Mercator Lines Limited, the second largest private sector shipping company in India (by aggregate fleet tonnage capacity), has global presence through its subsidiaries. The group has diversified interests and is a strong player in Tankers, Bulk Carriers, Dredging, Coal Mining; Logistics and Offshore and presently owns or operates a fleet of 1 Rig; 13 dry carriers; 11 tankers and 4 dredgers. For further information please log onto http://www.mercator.in/ or http://www.mllsg.com/
From: Mitesh M Kapadia, Sentinel Public Relations / Sentinel Advertising Services, B-603, Samajdeep, Near Bhanu Park/Seasons Restaurant, Adukia Road, Off S V Road, Kandivli (W), Mumbai 400 067. INDIA. Tel: (91 22) 28625131/32. Cel: +91 98205 03876. Fax: (022) 28625133.

pt.3

Mercator Lines aims to become a $5 billion company
04 Nov 2009
It all started with an idea floated by a co-passenger in a flight. Harish K. Mittal, owner of India’s second largest private shipping line, does not remember the passenger’s name, but his suggestion on starting a shipping firm way back in the early 1980s stuck in his mind. Mittal, then running a chemical factory in Muzaffarnagar in UttarPradesh, mentioned this idea to Atul Agarwal, who is married to hiswife’s sister. Agarwal was at the time auditing some companies thatincluded a few shipping firms. In 1988, Agarwal mentioned that Mumbai-based Mercator Lines Ltd was onthe block. Mittal, then also into the business of buying ship scrap,did not hesitate. He bought the firm for Rs1.2 crore from theRamchandani family.From Rs65 lakh in 1988, the firm’s revenue increased to Rs2,200 crorein the year ended 31 March. Mercator Lines today runs a fleet of 28vessels, up from three barges in the year Mittal bought the firm.The shipping line, riding high on the wave of India’s economicliberalization since the 1990s, listed on the Bombay Stock Exchange in1993 and has never missed paying a a yearly dividend to shareholders,Mittal says.The 59-year-old entrepreneur now wants to make his firm a $5 billion(around Rs23,550 crore) company, an “ambitious dream,” but notimpossible for a shipping line that reported a revenue of just Rs60crore just five years ago.From a traditional tanker company, Mercator today has a presence inbulk shipping, tanker shipping, dredging, offshore oil exploration andcoal mines.“We have already acquired four coal mines in Indonesia and one inMozambique. We are now looking for acquiring one more in Indonesia.This will enable us to offer a complete logistics package includingcoal, ship and local logistics,” says Mittal, who holds a 1973postgraduate degree in technology from the Indian Institute ofTechnology, Roorkee, then known as the University of Roorkee. A majority of new Indian power projects are eyeing imported coal, mainly from Indonesia, to run their plants.Mittal attributes his success to his management team. An analyst agrees. “Mercator Lines management was always aggressive tograb every opportunity that came before them, be it dredging, coalmines, offshore or dry bulk ships,” says Kapil Yadav, an analyst withdomestic brokerage Dolat Capital Market Pvt. Ltd. Yadav tracks thefirm’s scrip.“The business model of Mercator Lines is to diversify to severalsegments to derisk, while locking in its vessels for long-termcontracts to mitigate the volatility of freight rates,” he says.Mercator Lines has acquired four dredgers and plans to add six more toits portfolio. Indian ports continuously require dredging to keep theirshipping channels deep. State-run Dredging Corp. of India Ltd is unableto meet the entire requirements of the country’s ports. Someinternational dredging companies have set up shop in India to tap themarket potential.“We are very serious about dredging,” says Mittal. “Apart from dredging, we are also upbeat about the offshore sector.” Mercator Lines, as part of a strategy to derisk the cyclical nature ofits core shipping business, entered the offshore drilling business withthe delivery of a Rs1,000 crore jack-up rig. The rig was immediatelydeployed on a three-year contract with state-owned Oil and Natural GasCorp. Ltd through Great Eastern Shipping Co. Ltd.“We are constantly looking for other areas of offshore business,exclusive offshore support vessels. This could be anything, highspecification rigs or other areas,” Mittal says. “Mercator wascontracted two oil blocks under the seventh round of the newexploration licensing policy,” Mittal said.In December 2007, Mercator Lines listed its Singapore-based subsidiaryon the Singapore Stock Exchange and raised over Rs500 crore. Last year, shipping firms were hit by the global economic downturn thatled to a steep decline in world trade and caused freight rates to fall.“Though there are some signs of revival, I think the next two years aregoing to be tough for the shipping sector,” Mittal says. “Ourdiversification model is going to save us during this crisis.” “Though Mercator has done everything to de-risk by diversifying, as ashipping company it will be exposed to volatility since it is acyclical industry,” Dolat’s Yadav says. Mittal, however, remains optimistic. He says all the business segmentsof his firm are growing and he would continue to invest in these.“Nothing stops us from aiming at being a $5 billion company.” Source: Livemint

Rs23550CRORE????
latest at nov 18th 2009
61.90 +4.50 +7.84% 18 Nov, 15:58:43
Volume
5,202,426
Prev Close
57.40
Day's H/L (Rs)
62.90 - 57.20
52wk H/L (Rs)
76.75 - 21.00
Mkt Cap (Rs Cr)
1,460.84

1460 TO 23550????????????????15 times????????????????AHHHHH HUAT AH!!!!!!MERCATOR AT 4.50 SGD???????????????????????????????????

POINT NUMBER 2--BALTIC DRY INDEX HAS ROCKETED, broke june 09 highs--making sure that the economic recovery is intact.

FROM WIKIPEDIA--The BDI is termed a leading economic indicator because it predicts future economic activity.
Because it provides "an assessment of the price of moving the major raw materials by sea," according to The Baltic, "... it provides both a rare window into the highly opaque and diffuse shipping market and an accurate barometer of the volume of global trade -- devoid of political and other agenda concerns

FROM WIKIPEDIA--
Impact of 2008 financial crisis (on BDI)
On 20 May 2008 the index reached its record high level since its introduction in 1985, reaching 11,793 points. Half a year later, on 5 December 2008, the index had dropped by 94%, to 663 points, the lowest since 1986., though by 4 February 2009 it had recovered a little lost ground, back to 1,316. These low rates moved dangerously close to the combined operating costs of vessels, fuel, and crews.
By the end of 2008, shipping times had been already increased by reduced speeds to save fuel consumption, but lack of credit meant the reduction of letters of credit, historically required to load cargoes for departure at ports. Debt load of future ship construction was also a problem for shipping companies, with several major bankruptcies and implications for shipyards.This, combined with the collapsing price of raw commodities created a perfect storm for the world's marine commerce.

YET MERCATOR IS PROFITABLE!!!!

POINT NUMBER 3--
MERCATOR IS GOING INTO COAL MINING BUSINESS IN 2010--

from wikipedia also...

Mozambique gold mine
In early 2008, the company's overseas arm, Mercator Lines Singapore Limited, was awarded a coal block in Mozambique. It turned out to be a gold mine with an estimated reserve of 3 billion tonnes of coal. Mercator owns 85% economic interest in the mine and it has a 30-year mining lease. The mining will begin in 2010, and the company will pay $1 per tonne royalty to the Government of Mozambique.

POINT NUMBER 4--STRONG CLIENT BASE--LESSER RISK OF DEFAULT!!!(source--SHARESINVESTOR)

Mercator displays prudence amid shipping slump
Sunday, August 2, 2009 at 6:00pm


Its reliable core group of customers along with prudent risk management equip Mercator Lines to weather the shipping slump. By Ridwan Abbas

It has been a rough few months for dry bulk shipping charterers as the industry grapples with a tight credit market and a slowdown in demand for commodities.

Freight rates have tumbled and the Baltic Dry Index (BDI), used as the global benchmark for the cost of shipping commodities, has plunged nearly 100 per cent since June. Vessels which were commanding US$50,000 daily as recently as September are now scraping through at US$4,000 a day rates, according to one analyst.

But Indian bulk shipper Mercator Lines is not hitting the panic button as yet, and with good reason: 73 per cent of its 11 bulk carriers are running on long-term contracts – ranging from one to five years – and have fixed prices locked in. This in turn limits its exposure to the volatile BDI used as a benchmark on the spot market.

“We know that the market can be very volatile and in 2007, we bought four ships Shalabh Mittal, chief executive officer of Mercator Lines. and were very happy that we chartered them out at US$35,000. But by the end of November, we were looking like fools as the market was US$90,000; today it looks fabulous because the market is at around US$6,000 and we’re chartering it for US$35,000,” says Shalabh Mittal, chief executive officer of Mercator Lines.

The company’s prudent risk management strategy, which includes allocating at least 70 per cent of its fleet for long-term charters at fixed rates, has been vindicated in these challenging times.

For the first half of financial year 2008 (FY08)ended September 30, the group registered a 239 per cent increase in profits to US$48 million on the back of an 84 per cent rise in revenue to US$108 million.
Strong customer base
Mercator Lines specialises in the transportation of coal into India from Australia and Indonesia, as well as iron ore from India into China, Japan and South Korea. India accounts for roughly 25 per cent of the group’s revenue, with its biggest customer being blue-chip power utility firm Tata Power. I

n June, the two companies signed a contract worth US$320 million to transport three million tonnes of coal from Indonesia to India, which will require five Panamex vessels to be deployed over four years.

Tata is the major power plant that provides energy to Mumbai and its neighbouring suburbs. Being a key customer, Tata contributed roughly 34 per cent to Mercator’s earnings for financial year 2007 to 2008.

Coal is indeed a major source of energy to the Indian economy with over 54 per cent of domestic power generation coming from coal-fired power plants, according to India’s Ministry of Coal.

Having already invested US$1.2 billion in two Indonesian mines in 2007, recent reports have suggest that Tata Power may be looking for more coal mine deals to increase its power-generating capacity.

DBS Group Research noted that India’s state and private utilities aim to almost double the nation’s generation capacity from 141,000 megawatts to 250,000 megawatts by 2017. It also added that the demand for dry bulk carriers for shipments of thermal coal into India and iron ore out of India should increase as the country’s GDP grows.

Outside India, Mercator also has a welldiversified customer base which includes North China Lines Shipping and Siba Ships of Italy along with Arcelor Mittal, the world’s largest steel producer by revenue.

“We tend to work with not only good names but also end-users type of customers. People like Tata and Arcelor, they’re all power plants or steel plants themselves and they transport iron-ore, they transport coal, they transport steel…even if their volume decreases, they still need these ships to move the cargo out,” says Mr Mittal.
Possible headwinds
The global wheels of trade are beginning to show signs of creaking as worsening market conditions mean that banks are more reluctant to issue Letters of Credit to commodity traders, which is traditionally required to load cargoes for departure at ports.

Slower economic growth for the next year or so would also affect steel production and the subsequent demand for iron ores. While recognising that demand in China and India would clearly dip, Mr Mittal still feels that the situation in these markets “would not be that bad.”

The Asian Development Bank predicted that even if growth in China and India decelerate, both economies are still expected to expand by about 9.5 and 7 per cent respectively in 2009.

Mercator may be buffered from the weak charter rates on the spot market through its fixed cost long-term contracts, but it also means that its rates are at a massive premium compared to other industry players. Hence, isn’t the company worried that its customers may renege on these contracts?

“Yes, but from our experience, we haven’t seen such a thing happen before. You don’t expect names such as Tata Power and Arecelor Mittal to come back and default on their contracts…but the risk will always hang there because the difference in the contract price and market price is dramatic,” says Mr Mittal.
Staying on strategy
Having been fairly profitable in the first six months of FY08, the company is sitting on positive cash flows and has no refinancing obligations for the next five years.

Not surprisingly, Mercator is intent on staying consistent with its strategy. Aside from allocating at least 70 per cent of its ships for long-term fixed rate charters and selecting reputable end-user type customers, Mercator’s ships are only bought against contracts already agreed upon.

“You need to have business in hand; customers in hand or you could have a ship and have nowhere to run it,” says Mr Mittal.

“In good times, it’s very easy to run ships because the demand is very high. But these are testing times so you need your customer base, people who you have a relationship with. You understand their constraints and you can come up with solutions rather than just giving a ship on hire,” he added.

In these challenging times, traditional business principles of prudent risk management and enduring relationships could not be more relevant.
Copyright © SMARTINVESTOR
Smart Investor is available at leading magazine outlets To subscribe, call 6393 9772 or e-mail http://ja-jp.facebook.com/note_redirect.php?note_id=107374509237&h=44da7a487faef5ebef76ea5ff073cb41&url=http%3A%2F%2Fwww.prosperitypersonal.sg%2Fcommunity%2Fmailto%3Acirculation%40lexicon.com.sg For feedback, e-mail: smartinvestor@lexicon.com.sg

the ABOVE research was done by YOURS TRULY---
havent the thorough research answer your questions on WHY MERCATOR?
WHY 2010?