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Could be a number of things - might be waiting to cancel en masse once current buyback is complete; they might actually hold them back and sell when (if....) share price recovers; or they might not actually be focusing on this given the buybacks total about £10m and this sum is being lost in market cap every day for some time now - £400m below 'book' value. The entire infra sector, much like the stock market in general, is a busted flush at the moment. Latest hit is HS2 - not that anyone is actually investing in that basket case as its a capitally funded project but why let reason get in the way of investment manager strategy. SB
Why are these buyback shares being held in treasury instead of being cancelled ? Where are these shares going to end up ?
They can take 7yrs for all i care...by which time the compound effect of divis at these levels will be a reason to rejoice when it does eventually reflect proper value. no brainer for me to hold this long term..
Buyback seems to be having the opposite effect from its intention......now trading at a full 40% discount to NAV. There must be some very awkward conversations with II's taking place - all market confidence in the Investment Adviser seems to have evaporated. Looks like another 500K buyback today but that seems to be accelerating the decline. £240m of its £1b loan portfolio due to be repaid in the next three years will allow £100m RCF to be paid in full with surplus cash available for buybacks, capital returns, special dividends - but negative focus on electricity future price drops seem to be creating a rush to the door. Sit tight....? SB
Bonds I would argue are becoming very much back in favour again now interest rates are peaking. Bond yields now exceed the average FTSE dividend yields and we all know the FTSE100 and FTSE250 have badly underperformed in the last 5 years.
My average is in the low 70s here so am slightly down but will be holding. GLA.
This is behaving like bonds. Bonds are out of favour at the moment. Just look at TLT which is the 20yr bond ETF in the USA. It is at a multi decade low. So until we have orderly interest rate cuts and not interest rate cuts due to a shock in the economy that they are trying to avert, GCP will suffer. Something to keep for the next few years and as long as they keep on paying the divi.
I've been wondering the same myself spindok....economic conditions and interest rates are clearly part of the problem but at nearly a 40% discount to NAV this does appear to be either completely oversold or there is a loss of confidence in those running the fund. Lots of trades today - some relatively big - lets see how many were buybacks. I'm personally buying at these levels - heck of a yield - and even with some bad arithmetic on the management side there must be scope for a decent upside next year imo. Major investors must be in touch with mgt - capital markets day in October with latest NAV announcement. SB
I sold out of this sometime ago and since I did it just keeps falling. For once I made the right decision. Trying to understand how a infrastructure fund is such a bad investment is dificult to comprehend...
At a 35% discount to NAV, new deals are not a good use of funds. While this persists, far better, as capital comes available, pay of debt and buy back shares. I.e. an orderly wind down in all but name.
No the move would not have reduced debt but consolidated it in a bigger entity. The only problem now is the lack of investment capital to make new deals which may be a slight concern but for me, the strategy is a good one and it's a staple of my PF for this reason.
Read that the merger talks with GABI have been called off without a successful outcome. Was this a good move in the first place or a means of reducing debt. New to this share.
Hugh Pill's comment last week that he intended to stick at 5.25% did wonders for adjusting rate expectations and indeed GCP stock price.
Reality maybe dawning again. CPI should come in at a woeful 7.0% this month, UP. We are still behind the curve and trailing the FED ( 5.5%) that have inflation under control. Anybody would think it was the other way around and is was this side of the Pond we had inflation under control. Meanwhile we cowtow to the commentators that beg for cuts, Liam Halligan in particular, like the MPC are imbeciles for considering rate rises. No consideration for the fact inflation has been four times over target for two whole years and that you we need five years of deflation to get back to target. Of course the 2% target is meaningless now. Over the eighteen year cycle, inflation has averaged 2.8%. The Chumps on the Committee have missed target by 40% and nobody believes in the target anymore.
Quite. Motoring along nicely. Famous last words….😂
Certainly perking up this week... looking better:)
Just bought a load more to take my average down to 71 1/2p. Fingers crossed we are around its lows now 😳
It's now 50% of my ISA. Will hold a year until back to near £1 whilst collecting 10% dividend :)
Has a lot to do with the wholesale prices of electricity falling over 80% this year no doubt...that said the prices were up 7% yesterday and nearly 30% for the month. Hence why this is now 40% of my PF :)
https://tradingeconomics.com/united-kingdom/electricity-price
Amazed the drop has continued down to 68p.I'm afraid the Doves have caused this negative sentiment on Bond proxies. Instead of a short sharp shock the Bank have messed about with quarter point rate rises..Dinghra and Tenreyro tried to stick at 3%, which now seems laughable in the face of record service and wage inflation . Meanwhile debtors are moaning about negative real rates and the Establishment make all the wrong noises which the Market perceive have an inflationary bias, not even close to a 2% target. Sorry but if you are behind the curve the pain will last longer, only Cath Mann on the MPC appears to realise this.
Drop is way over done. I took another 10k shares today as this creep back up on the slightest bit of good news
I have recently topped up and have an order in for a further top up today.
I intend holding taking 9.5/10% dividend until interest rates settle down.
I will probably continue to hold for income. I am hoping the proposed merger in the short to medium term helps the share price improve, this is now surly way under valued.
Sit this out indeed and take the 10%. Interest rates will stabilise and when they do, this will fly. Tempted to go in again.
According to latest report as referred to in todays RNS / NAV is based on very conservative valuations - almost at the very bottom of assumptions. If they priced at upper end of valuation assumptions NAV is c.£1.30 - close to price where there was a premium to NAV 18 months or so ago. So approaching a 50% discount in a best case scenario. The markets are no longer acting in any coherent fashion - 400k shares bought back today and we lose £15m in value. What happens when interest rates go up again….and perhaps one more? SB
The BoE are selling UK bonds into a falling market .... in unwinding QE. This is deliberate to force companies into bankruptcy increase unemployment and put pressure on earnings killing the wage inflation spiral and forcing the 600,000 or so CV19 retirees back to work to save the UK from .... yes you guessed it Brexit malaise.
It's been riding at a 4% yield discount to the maximum available one year fixed bond on the open market, where you can currently get 6%. So hitting a 10% yield was to be expected.
The inflation outlook is frankly beyond awful, record wage inflation this century, record service sector inflation and a core rate mired at 6.9%. The BOE have basically completely lost control, they will have to keep raising to probably a 6% base, and no relief in sight until 2026. Meanwhile the Market is mindful that journos are putting pressure on the Bank to pause rises . But all this quarter point slowly approach does is mean rates will have to stay higher for longer (years). Debtors need a 6% immediate base rate rise, because restaurants are rammed, you can't get a trader for love nor money. There is simply a chronic labour shortage and billions sloshing around in unearned Covid printing. 90 % of consumers are still loaded.
Market seems to put no value on NAV. Just have to sit this out and wait for the smoke to clear.....