CAO

CAO: Back in 27 Nov 2012, CAO sought to buy six cargoes for lifting for Dec 2012 and Jan 2013, according to Bloomberg. This is possibly due to an increase in demand for jet fuel capacity. Coupled with several reports on China boosting both consumption and its drive for urbanization for its 12th Five Year Plan, eventually trickling down to China's aviation sector, seeing a continuing increase in traffic numbers in the sector- which has been evident on the 3 major carriers in China. Fundamentals at the demand end seem favourable. On the Company at the supply end of its fuel trading segment however, recall the Company went into losses of US$550m, due to speculation in fuel options. After the incident, CAO stated they will improve its mgmt and risk-prevention ability and step up on internal supervision over the company. Post the incident, it seems that the Company has been increasing its risk-preventing measures.