A Final Word on Olam
Everyone has their say on Olam now. Loudest ones veering towards, “I knew it” and “I told you so”.
But there is a silent majority of “I do not believe it” and “Temasek will not let this happen to us”.
Yes. I agree with silent majority.
Gangnam Style, Asia Style, Singapore Style. They hang the drug traffickers here and I have no comment about the drug lords (sentence changed).
First thought on hearing Olam news, was Muddy Waters have the nerve to infringe on Singapore’s territory. Singapore is not Canada ! They will be squeezed out of their shorts soon.
Olam will not go. This is not China Aviation Oil, the last major public scandal I can recall, not counting the little Jurong Shipyard hushes along the way. The small ones do not get much fanfare but the big index stocks like Olam gets people sitting up.
I have complained about Olam bonds incessantly since the last one I traded a few years back. I have not come even close to buying a single one personally. Just plain do not like the company even though I have great admiration for their DeBeers model, front to back from the fields to customers. The board of directors do not give me comfort.
Why do I feel Olam will be ok?
Just look at the libor scandal onshore which has now spilled on the NDF fixing investigations. Not even a single middle management casualty so far, or there ever shall be. Everyone suspended has been of the lower or middle ranks. Yes. Singapore will have the highest number of traders admonished (can see that headline in the near future) but as far as their heads or bosses are concerned, there will be no trouble.
Thank you, Muddy Waters. I have utmost respect for you since the Sinoforest incident. I really admire the spirit behind your audacity to challenge the status quo. It only serves to strengthen my resolve to remain vigilant because my motto is to never die of ignorance.
Hi Tradehaven,
Thank you so much for sharing with us your thoughts on Olam and more thanks for your comments on the last post this morning.
There are quite a few doubts that has been lingering in my mind for the last few days. But before that, mind if I just clarify with Sir, are there any special reasons that the “ 1Y 2013 Olam paper is at higher risk than the 2022” as you mentioned in the other post this morning? From a layman point of view, I have the impression that since for the 2013 paper Olam is going to redeem in couple of months there is less risk than talking about Olam to be still around ten years later. I might be conceptually wrong, I am not sure.
Right after Muddy Waters bad-mouthed Olam on Monday, the Olam share plunged quite significantly but has since recovered much. Fluctuations of a good couple of cents seemed quite normal for Olam even without the recent episode of scandal. However, I have the impression that the Olam bond price decreased very significantly to around 91 range for the 2022 paper and it has remained that low till I last heard about it today. I was puzzled why the bond price went down so much more than the share price. It is my impression during that during the Lehman Brother crisis, SGD corporate bond prices went down much less than their respective shares in general, if I did not remember wrongly.
Sir, may I also seek your highly respected opinion on a few areas:
a) What would be the most likely chain of events and final outcome of this scandal? MAS investigating Olam? I have this idea that since Olam is one of the ST index stocks, MAS should have kind of screened through their business and company reports in some ways, I don’t know.
b) How likely is it that Olam will default because of this and bond holders getting “negligible” (as what muddy waters suggest)? I came across a report which says “While the accusations are serious, we believe Block’s argument is inconsistent as the group will not fail even if the entire value of its biological assets is written off.” I am sorry if what I am asking sounds silly, but what does it mean by “as the group will not fail even if the entire value of its biological assets is written off.”? Does it mean that it is unlikely that Olam goes bankrupt and even if it does have some major restructuring, bond investors will still get back what they invested?
c) If Muddy Waters is unsuccessful to significantly and adversely affect Olam, since he has short sold Olam, I supposed he needs to some how buy back Olam shares even at the same or higher price whatever it may be. I am not sure how this works but am I correct to say Muddy Waters will probably give up after a while if he is not successful and not let this go on forever? I am wondering how long probably this scandal will go on and how long will it take for Olam ten or 6 year papers to go back to near par values (days? Weeks? Months?).
d) I have the impression that the CEO of Olam has made some statements regarding share buyback if it falls drastically and he would intervene with the bond price if needed too. I was wondering what are the possible actions he will take with regard to the bonds. Is there a remote possibility he will call back at par or maybe push the coupon up so the bond price will trade higher? I am not sure what actions have other companies taken before.
Hope to be blessed with Sir’s respected views and opinions soon. Thank you so much, Sir.
Wow. Many questions.
Yes bond price going down is good for Olam. Because their liabilities are marked lower. That is how the banks made “profits” during the GFC (global financial crisis) because when the bonds crashed, it becomes a profit for the company as they can buy back the debt at a much lower price. Unless of course it escalates into default.
No chance they would buy bonds back at 100 when they can buy at 80 cts. Haha. Quite common sense.
I cannot comment on the default probability because nobody has access to the Muddy Waters report which is a good thing because it is a secret weapon !!
Anyway its obvious there is no default yet if they say they are buying the shares. And rest assured, in the case of a default, bond holders will get paid First ! That is the whole purpose of buying bonds right ?
MAS has no responsibility to the public to screen companies. We live in such a closeted world in Singapore that we expect the government will do everything for us.
No one is responsible for anything except in the case of FRAUD, which Muddy Waters has not alluded that Olam is guilty of.
I say the 2013 paper is at higher risk if we run into a case where the company is unable to repay (default), say if they run out of cash. So it doesn’t matter if you are holding the 2013 or the 2022, you will get back the same principal. Just like in the case of Greece, bond holders of this April 2012 paper this year suffered the same loss because they got the same haircut as the holders of the other papers. Quite tragic.
Back to Olam…. If you want to know what i really think ?
I think its irresponsible and a trifle “strange” that banks in Singapore brought out sooooo much of their paper to stuff into the hands of mostly retail investors just sooooo shortly before the Muddy Waters report came out !!(Seriously, I heard 60% of the papers went to retail investors !!! ~ unverified)
If we were in American or anywhere else, maybe can start an inquiry ?? But we are in Singapore. So better just keep quiet and let the authorities handle it.
Straits Times ? Help ??
Hi tradehaven,
Thank you so much Sir, for sharing your wisedom and knowledge. There is one thing which I really couldnt understand, why is it that the bond price seems to be afffected to the same extend or even more than the share price. It has been my impression bond price will be less affected.
I understand that it would be better for the company to buy back the bond at 90 instead of at par but was thinking they will do that “out of good will” so investors will have more confidence in them and it might be somehow good for them so it will be easier for them to have new issues when time comes. But I now know I am probably wrong to think this way. haha
Sir, may I ask, for the ten year paper, what is a plausible trend of the price in the near future? It is trading at around 91 or so I guess, what will need to happen to let it return to near par value? Or will it probably return to the pre Muddy Water’s accusation state if we dont hear from Muddy Waters anymore? Muddy Water’s 80page report which is supposed to be out few days ago is yet to be seen. I thought he’ll be hoping to release it asap so that the share price crash and he can make a fortune?
I understand the chances of default may be hard to comment on. But say if it does happen, based on the data, how much will a bond holder probably get back? 10% ? 50% 80% 95% of what the bond worth?
Temasek holdings is the second biggest shareholder of Olam if I am not wrong. The presence of Temasek does give a bit of confidence but I am wondering what could or will a significant shareholder, which is financially very stable, do when a company it invested in is on verge of default? Will it just let it happen? But that would mean Temasek would lose quite a fair bit of money too although its neglible amount to Temasek.
Hope Sir can share your wisdom on this issue. For a bond holder, what is the best thing to do now? To sell the bonds at a significant loss or hold it and wait and see? Would deeply appreciate if Sir can share with us your insight on this.
Thank you for all your wonderful post and comments again.
I cannot even fathom a guess here. Given their financial leverage is 4 times… Calculating default risk is a fine skill and that is why the experts are paid big bucks to do it. Investors(mostly hedge funds) who had bought the Greek bonds in April at 15 cts have made over 200% in profits lately. Retail investors would mostly have run scared then.
But in my entire career, I have never seen a company buy back a bond at par when it is trading at a discount out of goodwill. They would rather support the share price first to make sure the market cap remains stable.
Temasek – no comment. This would not be their first loss making investment but they are “long term” ie. 30 year time frame.
But it would be interesting to see if they would exert their influence in attaining a resolution or if they choose to divest. If they divest, better run ! But your information would be delayed because minority stakes do not need to be declared immediately.
Best thing to do ? do collective action suit against the bank !! Kidding. You probably won’t get anywhere here, in my cynical opinion, so please do not take my words to heart.
I just found out my dad has some Olam shares so I feel for you. He bought them at over 3 bucks !
My advice to him is that if he is not comfortable with losing the whole sum, then liquidate while the company is doing the open market purchases now. Even if the outcome is that Temasek or some other white knight injects more money into the company as a result, you have to weigh the probabilities. 1. Roll the dice and wait for a miracle or 2. use the remaining proceeds to invest in something else which will give you a higher chance of making your money back.
For bond holders who are more significantly invested in 250k chunks, I say it is a harder call. If the situation drags on, the chances that more investors will be spooked are higher and there could be a mass exodus and banks will not be able to stomach the sales on the street. Imagine 1.6 bio of bonds running for the door ? How much can the banks buy from you ? Who will they sell to ?
Ask yourself, how important is the investment. If it is a small part of your diversified portfolio or it is the core ? This is common sense and not some financial advice as I am not qualified to give any.
Good luck !
Much as I also feel that Muddy Waters track record is pretty mixed, (they got Sino forest right but so many wrongs as well. Eg focus media and oriental education etc), Olam has a lot of issues that rhyme with past scandals like Enron. 1. Complex biz model, 2. Creative accounting – biological gains?!?, 3. Lots of mega transactions, M&A and huge projects – Autonomy / HP comes to mind. So Olam is more than meets the eye
It makes me shudder because I have long admired their entire supply chain model but their rampant acquisition headlines in the past few years struck me as quite reckless.
Thank you so much for sharing your wisedom and knowledge again.
I have not been tracking major financial market news all the while. I was wondering are there any other previous examples on how Temasek usually respond when a company that they invested significantly in got into some form of a crisis. If Sir know of a good couple of such cases, kindly let me know. I have this impression Temasek increased its stake in Olam from 5 percent to 16 about 3 yrs ago.
I understand that companies like Capital land, DBS, NOL, SIA, Singtel etc, Temasek is a major shareholder. I was wondering how many other pretty well known companies are there, like Olam, where Temasek is not the major shareholder but second major or significant shareholder.
Muddy Waters claimed there is a 80page report which is supposed to be released few days ago but is yet to be seen. I was wondering for the bond/share price to go back to the previous condition which of the following two factors are essential:
a) Muddy waters just keep his report (if it exist) for a prolonged period of time and MW will lose its credibility and investors (retail as well as institutional) will chosse to believe Olam and Ernest n Young etc since its MW who have to prove otherwise, (MW so far didnt really come out with anything that new analyst are not aware of) OR
b) It is now Olam’s problem to prove that they are correct, so if MW dont release the report it is even worse for Olam cos there is nothing that they can prove its wrong.
I think CEO of Olam was interviewed few days ago after the MW attack. He is not ruling out the possiblity of Olam going private or splitting Olam into private and public domain. Hope Sir can enlighten me on how will this affect bond holders if one the two situation arises or how likely it is to happen. I was thinking it would mean, for bond holders, they will get back at par or is it that going private is another way of saying it is “defaulting” so bond holders get nothing or suffer heavy losses. Hope Sir can share with us the implications of going private.
Thank you for sharing your most valuable thoughts and insights again.
Hi Wilson
1. I don’t think Temasek is a major shareholder of DBS and Capitaland. Well known companies so far in the news… Stanchart ? Temasek expressed displeasure with their management recently.
2. Singaporeans are creatures of habit. I think the press reports show the entire analyst community rallying against MW and there is a certain bias towards reporting. So I think we should get back to status quo soon. It doesn’t pay to be a bad guy here.
3. Privatisation does not sound good for bondholders but you will have to read the Info Memo for the fine print to see if there is a put clause for bond holders in case of privatisation. I am not so sure if that is included in Olam’s case because there was little risk of that at that time.
4. If there is no put option for bond holders when the company turns private, you just end up owning bonds of a private company which makes them less liquid and transparent which probably means less trading (having said that, there are many private companies that issue bonds so do not worry).
I cannot comment any more as I do not have more information than what you are reading out there.
Good luck.
Hi Tradehaven,
May I express my deep and renewed thanks for sharing all these with us again. All your posts are indeed enriching and enlightening. Will follow your other posts too. Yes, I need the luck, hope luck will be with me. Thank you Sir.
Olam bonds lower by 3-5 after Muddy Waters Report.
The 2013 is now 92/97 from 98. The others trading cash value 88-91 and the perp is 84 ish.
Link to report.
http://d.muddywatersresearch.com/wp-content/uploads/2012/11/MW_OLAM_11272012.pdf
Glad to see Sir’s updates on the bond price. Look forward to more updates when time comes too.
Don’t know if this is a joke but a local bank are bidding up Olam bonds (at least on line) at 85-90 cts while others are offering much lower at 84-87 cts.
Quick buy from the foreign offer and sell to local bank for quick profit.
Morning low in Olam 6% 2022 was 81-83 cts but I am not sure if anyone sold at those levels. It is a mind game. If you did not sell yesterday, you probably wouldn’t sell today.
Further discrepancies…. the final price for the day published for the market on the 2022 is 87.50-90.00 but there are still banks offering at 83.00.
I am glad I am not part of this.
Appreciative and glad to see Sir’s update. Wondering what will happen next. MW had revealed the report and Olam had explained with a 45page report too but the price continued to fall. What need to happen for it to revive? I got the vauge impression, Olam bonds rebounded sharply to near par after their explanation when Olam was previously doubted by another researcher in 2011. Not sure if it mean Olam’s 45page report is insufficiently convinicing this time round 🙁 Praying that doom is not near.
Certainly looking forward to see Sir’s further update and sharing more wisedom.
Olam 2022 lower again … seeing local bank bid at 85.00 now but mkt offering at 80.675.
Hearing that bankers are aggressively marketing the bonds to retail clients and still offering leverage of 50% in some cases.
Olam Perp is looking like 72/78 but seeing local bank offering at 81.00.
The Olam 02/2013 is also a hot deal now being marketed at 12% but the market is only bidding at 36%.
And the best arbitrage would be the Olam 09.2017 because the banks are quoting tight. One bank offering at 84.65 while local is showing at 85.25 bid.
I am as thankful as I am delighted to see Sir’s updates again. By the way, would Sir mind if I ask what does it mean when Sir says “local bank bid at 85.00 but mkt offering at 80.675”? What does “local bank bid” means? When local banks want to buy bonds, am I right they buy from “the market”? In that case they will be able to get it at once at 80.675? Why do they need to pay significantly more? Or local banks only buy back bonds from the retail clients of the bank? I think I have some misconceptions about the way the whole thing worked. Does the price one is able to sell at bank A or broking firm A be necessarily the same as the sell to bank B or broking firm B?
Olam shares went up by around 10% or more in US the night before and the SG Olam bonds went up by 0.96% after a 4% rise the day before too. I was anticipating the bond price to at least stablise or improve a bit but it fell more instead. Really very confused why is it so. The Olam bonds price plunged when Olam share plunged too, shouldnt it improve when the share improve as well?
I think MW is suggesting Olam to have its debt rated by S&P. Sir, may I ask, how long does it normally take for S&P to rate a bond? (days? weeks? months? a year?)
Hope to see light from the end of the tunnel soon. Thank you Sir for sharing your insights and knowledge again. Hope to be showered by Sir’s wisdom and insight again.
Hi Wilson
Was just joking.
Now they have taken the prices off cos too many questions asked.
Yes. Interbank means B to B. And the prices are not the same. Depends on how much you can rip from each other or the customer and second guess their intentions and expectations. There is absolutely no transparency in the market at all.
S&P can rate rather quickly… couple of weeks but I hope, for bond holders’ sakes, they don’t.
Could be ugly and that is the main reason why Capitaland rejected their rating of BBB- some years back, preferring to be unrated.
So if Capitaland is BBB, then what should Olam be ?
First of all i would like to thank you, tradeheaven, for sharing the insights and assuring us investors who are caught in this whole saga. As for Wilson I’m a olam bond holder as well. I bought it for the yield to beat inflation. In investment sense it is not sound to sell off your investment in a downturn(cant say for trading) unless you are sure olam is going to be insolvent. With Temasek as a backing and banks holding on to olam bonds I highly doubt they will allow it to happen. Short term wise, the bond price may be volatile and can be badly hit, it boils down to why did you buy this investment tool in the first place? In any case just hold to maturity and Olam will buy back from you at par level. (provided you have the holding ability and Olam stays solvent). My view is that after this whole saga dies down the bond price will be back to almost par within a year or two, meanwhile I’ll just collect the yield. 🙂
Hi Keith
You sound like you have planned your investment strategy well.
Good luck !!
Hi Keith,
Glad to hear from other bondholders and sharing your thoughts and investment strategy. That is what I am thinking now too, to hold for a while and see how it goes while collecting the coupon. Btw you care to share, which particular Olam bond you have and what price you bought it? Just asking hoping to understand your investment strategy. I buy bonds basically to counter inflation effects too cos the the difference in the inflation and interest rate is high now and seem to be remain this way for quite a long while more. Fixed deposits give actually negative returns 🙁
Hi Tradehaven,
I am most delighted and thankful to hear from you again. Yes, I fully agree with Sir, I dont actually think Olam will agree to let S&P do it too. I have the impression the CEO has mentioned it during some conference when reporters asked him on that.
Sir mentioned in your latest new post that for things to make a turn for the better, they need to find buyers for Olam bonds. Why not Temasek or Olam or some fund managers or that have some faith in Olam buy them? At the low price, wouldnt the yield is really good if they buy now? Am I right to say that Olam will be making a profit if they buy them back now? (They sold it at 100 and now buy back at 80ish, that means they make 10ish and furthermore it lowers their debt and improve their reputation when price goes up – my oversimplified layman interpretation)
I am wondering, if assuming MW after a few weeks (or months) give up on Olam maybe he has earn enough from shorting Olam or simply think its too troublesome to go into long court cases etc, what is likely to happen to the bond price of Olam? Is it likely for it to rebound to near par value? Or it looks like it will stay this way for an extended period of time (till Olam has positive cash flow?). Olam bond price, I heard, rebounded quickly previously after they dispelled negative comments on them.
Thank you Sir for all your comments and more thanks for sharing your wisdom and insights in your latest post too. Look forward to see more updates from Sir.
Dear Wilson,
Hate to say this but the reason why Olam bonds was mostly sold to retail was because there was not a lot of institutional demand.
You are right. At these levels, maybe some institutions will take an interest but if you ask me, I think they will wait for signs of further reassurance.
My hope is still for a white knight, maybe some Middle East fund.
But they have little hope of them meeting their funding requirements through the bond route next year. So it will have to be equity. And maybe a change of management would be a good start to buy time.
Best wishes
Dear Tradehaven,
Thank you so much Sir for sharing your invaluable thoughts and insights again. They were really helpful. It is sad to learn that there is little institutional demand on the Olam bonds. Hopefully there will be some significant buyers real soon. I hope presence of Temasek will be able to give the buyers some assurance.
Its not often that BT or ST discuss about Olam bond price in detail. But I think last Saturday (Dec 1), they quoted some bond specialist predicting the Olam bond price may drop further this week. No detailed explanation was given. But something came across my mind. I am wondering if the more share buy back a company does, would imply less money the company has and hence the lower the bond price since the bondholders will get back even less in the event the company goes bankrupt since a company has less money after share buyback. The bond price is already so terribly low, hopefully it will make a turn for the better soon. If the price doesnt rise, even if the company stays solvent, it will take around four years for the coupon to cover the capital loss and this doesnt include the inflation loss 🙁
I understand it may be difficult for Sir to recommend on whether to sell or hold the Olam bonds from the present hazy situation. But if Sir happen to come across any other reports or notes from banks etc such as the UBS note you mention in your latest post, it will be great if you can share with everyone. Not sure if the details of such notes were available anywhere online or there’s any link to it.
May I express my most sincere and renewed thanks for Sir sharing your thoughts and wisdom again. Look forward for more updates and invaluable opinion from Sir.
Have a good week ahead, Sir.
Hi All, I was looking at Yanlord bonds 10.x%. it was $74.xx last year Nov. Today it trading around $111/$112. I got this info on Frankfurt Stock Exchange. Anyone could re-confirm these figures. If this true, Olam bondholders can take heart on the present situation. This bond still has another 4+ years to run.
Hi Jim
You are right. Yanlord 10.625% 03/2018 was beaten down to low 60’s last year but that was not an isolated crash. It was in line with the rest of the Chinese high yield names like Country Garden etc. It came back strongly along with the rest this year and it is trading at 111-114 now.
I would not encourage the public to rush out and buy Olam now for the reason of Yanlord but to do their homework carefully before they make a purchase decision especially under aggressive marketing from their bankers.
Good luck !!
looks like Olam may do a rights issue, they have requested trading halt to their shares with an impending announcement affecting shareholders?
I hope you are right and hopefully underwritten by a white knight. Should not be too hard to convince a Middle Eastern SWF to come in, I hope.
(used “Hope” 3 times here !!!)
Hi tradehaven,
Thanks for checking & providing these figures. Hope today’s one day tading halt can bring cheers to Olam stakeholders.
Strangest thing. This morning Olam 6% 2022 stabilised at 84.00 and now i notice one bank gapping it lower to 77.50/85.00. I think a wave of selling may have hit the street. But the USD Olam 5.75% 09/2017 is still holding the 84.00 cash price, so that is a good sign.
Yes. The “initiative involving shareholders” should be good news.
Someone pointed out to me that all the corporate scandals of late have to do with “biological assets”, companies like Chaoda, Sinoforest, China Forestry, China Fishery etc.
Worthwhile noting.
Just to share a thought. I felt that Yanlord in Nov 2011 didn’t exactly have a easier time than Olam. Their credit rating was slapped & downgraded twice by Moody within 4 months. Once in Nov 2011 & the other March 2012. Moody is deemed as a very neutral entity as compared to Muddy Waters.
Yes. Just like Evergrande managed to survive the accounting fraud scandal/accusation by Citron(same as Muddy Waters) and bounced back along with Yanlord and the rest.
Chinese property high yielders fluctuate with politics.
USD Olam bonds recovered about 2 dollars today to about 87-89 but the SGD 2022 one still around 80-82 level. I guess we have to wait for more buyers to emerge after tomorrow’s announcement.
Yes. Just like Evergrande managed to survive the accounting fraud scandal too and bounced back along with Yanlord.
Chinese property high yielders fluctuate with politics.
USD Olam bonds recovered about 2 dollars today to about 87-89 but the SGD 2022 one still around 80-82 level. I guess we have to wait for more buyers to emerge after tomorrow’s announcement.
Yanlord (and for that matters other Chinese property developers) “survived” last year onslaught as they are forced to relook at their business model and start to cut back on landbanking, conserving cashflow. I guess for Olam they have to do the same- you cant be so aggressive, and rely on the private banking clients to fund its huge capital needs.
any thoughts on Olam’s announcement of rights issue of bonds and warrant this evening.
Not sure how it works and implications
Temasek taking up the rights. We know Temasek’s track record. Even SIA is selling Virgin at a loss.
I am slightly disappointed that they did not manage to get another white knight.
The bonds ?
Very upset now. Because that is not in the interest of ESPECIALLY the folks who bought their perps.
Then again, the situation could reverse in a year’s time, if they are still around.
And frankly, I think their management needs an overhaul.
But that is just my personal opinion as a non stakeholder.
can you kindly explain how the detachable warrants work?
I think this is a strategic move. Temasek is just backing and taking up whatever that is leftover. Not a placement to Temasek. With Block’s strategic move of the S&P rating of which either way Olam loses out, the bond market at distress level and Olam not able to buy back the bonds because it will be seen as profit from liability? This is the only way to save the bond market. Shareholders who wants to exercise the rights will have to call back their borrowed shares from short sellers and force them out.
Gearing ratio may not increase if this amount becomes free cash flow.
HONG KONG – Olam International Ltd’s bonds due 2017 rose as debt markets gave a thumbs up to the Singaporean commodities trader’s fund raising plan, unveiled after an attack by short-seller Muddy Waters triggered a sell off in its stock and bonds.
The Olam 2017 bonds jumped to 91/94 cents on the dollar from 89/90 after announcement of the plan, which is raising US$712.5 million through an issue of bonds with warrants to buy shares.
The 2017 bonds, which are the most actively traded since they were issued only in September, are once again trading below 8 per cent, not far from their levels before Muddy Waters’allegations two weeks ago that Olam’s aggressive spending, accounting practices and debt levels had left it on the verge of collapse.
Yields had risen as high as 10 per cent during the sell off. The bonds were issued at a yield of 5.75 per cent in September. — REUTERS
Morning bid on the USD 2017 was 91.50 and now fizzled. Market is 89/90 now making the new bonds out of the money.
I think the perpetual is the highest risk at the moment and worthy of considering a switch into the 2022 especially if the difference is not alot.