Jatoil stocks trading below list price

After a few delays Jatoil Ltd (ASX: JAT) shares finally began trading on the Australian Stock Exchange this week. Trading of JAT share has been quite vigorous with 3.6 million shares changing hands in the last three days. The list price for the float was 20 cents per share. By the end of this week JAT shares are trading at 75% of their list price at 15 cents leaving the company valued at $5.25 million by the market. Not bad for a company that is yet to actually sell anything (previous post)!

Source: The Age (thanks for the tip Sreenivas)

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3 Responses

  1. Jatoil lists on the ASX at discount
    January 30, 2008

    Biodiesel company Jatoil Ltd has debuted on the Australian stock exchange at a 20 per cent discount to its offer price following its $10 million float.

    The company issued 35 million shares at 20 cents each to raise up to $7 million for its initial public offer, which was oversubscribed.

    Its shares began trading at 16 cents on Wednesday and fell as low as 12 cents before closing at 13.5 cents, down 6.5 cents.

    Jatoil plans to supply rising international demand for biofuels by growing and selling low-cost biodiesel feedstock overseas.

    Its main commodity will be Jatropha oil – derived from the seeds of the Jatropha curcas tree, grown on deforested land in Indonesia and Sri Lanka.

    The plant is non-edible, unlike other biofuel sources such as soya bean, so it does not compete with human food, the company says.

    The Sydney-based company said the global biodiesel market has an annual value of over $8 billion.

    Jatropha is a species listed within the Kyoto Protocol as eligible for trade in carbon credits.

    “Along with the potential to earn carbon credits, every 10,000 hectares planted could potentially support 10,000 jobs in areas with high levels of poverty and unemployment,” the company said.

    Jatoil recently acquired 50 per cent of PT Biodiesel Austindo, a company incorporated in Indonesia with projects involving planting Jatropha curcas.

    The Jatropha curcas tree is native to Central America and the Caribbean.

    Source: The Age

  2. It is misinformation for a crop, such as the Jatropha tree which is inedible, to assume that it doesn’t compete with food crops. A farmer needs to plant his most profitable crop. If he decides to plant crops that are inedible, as opposed to his normal edible crops, then ultimately there has to be less food to go around. This will work wonders for our obese population, but will do little to feed the poorer countries of the world.
    The Jatropha plant is banned in some states of Australia as a poisonous noxious weed because of its ability to survive in adverse conditions, and when planted in farming land it thrives. This is what justifies its weed status.
    There is already plenty of info on the web about the carbon imbalance of growing “green” fuel from deforested areas. Many countries are refusing to recognise palm grown from plantations in recently deforested areas as being “green”.
    But, if we don’t think too deep, we can have a clear conscience, the investors get richer, and our kids have a future they can’t live in.

  3. Ben,

    When thinking in the Australian context I agree with your thoughts on Jatropha. We have limited farmers and if they are growing Jatropha they are likely not growing food. However, in the Asian, Indian and African contexts, where there are many more farmers, labour is far cheaper and the income required to support a family is also much lower I see Jatropha based biodiesel production as a good thing. Yes, it does grow best in good soil but a Jatropha based biodiesel industry can provide income to many living on marginal land.

    The whole palm oil thing peeves me as well. Even the Round Table on Sustainable Palm Oil has set the “sustainability” bar very low. The rich countries are all too happy to plunder the resources of the poorer countries and in that situation it doesn’t seem to matter to those making money that they are causing irreparable harm. Unfortunately history is repeating itself and I’m not sure there is anything we can do to stop it. Another thing to add to the list on my yet to be created advocacy page.

    Luke

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