Analysis of BAA trading after Namoya violence:
The first day, Jan 26 the day the violence occurred. Some investors panicked like US 9.11 and some investors thought a good chance to accumulate big stakes. As a panic sell-off result, BAA traded the biggest volume for more than 3 months. After the fight between seller and buyer, BAA closed +2%, which made many posters here surprised.
Now the question is:
Is the one death and several serious wounded violence a good thing or a bad thing? Sure, it is a bad thing! But why was the share price up if it is a bad thing? And who would want to buy BAA on the shocking day? So, some investors, including me, must think it is a good thing. Why?
Although I did not know the detail there, but I can imagine a story to mimic Namoya situation.
Congo now much likes China 30 years ago (This is not imagine, it is true). Due to an incomplete law system, few lazy and brute persons get rich by stealing and robbing, even killing people for wealth. The local community people are always under the few persons' threatening. When BAA came this few persons found a new rich target to blackmail, but they could not get anything from BAA because BAA property is protected by Congo national police (much like China 30 years ago, government protects foreign investment). So, they hate BAA and stoned BAA contractor haulage trucks in 2012. That may be one of the reasons why BAA Namoya mine production delay and delay.
Now, the head of the local gang was killed and the tumor on BAA Namoya and the local community people was removed. The local community people feel safe now (much like my feelings in China 30 years ago). So, the knew people, or big boys are buying and the un-knew people, or retails are selling.
The following 3 days, Jan 27, 28 and 29 BAA tradings further confirmed the violence was a big good thing.
AI
