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"means a price of 70p."
Seems a fair target - smaller companies in the same sector have already been hammered. Enjoy the dividends and trade the noise if you can.
Good Luck.
SONIA currently 4.4% / GCP 8.8%......meanwhile the 7.2% wage rise for the year was another real shocker. Base rates are 4.5% are lagging horrendously to get ahead of the curve. The fact that Bailey is showing no remorse or apoligy for his imbecilic comments that the post Covid inflation was transitory shows how little accountable the MPC have for their massive errors and loose Monetary policy back in 2021.
My comment that this had tracked the base rates 4% over Sonia was based on approx. 9% over 4.5% currently. Were Sonia to go to 5.5% as predicted then this would need a 10% yield which means a price of 70p.
It was obvious last September when Truss got into number 10 that the BoE and government were working in opposition partly because of the number of early retirees post the pandemic to force these folk back to work through higher inflation.
Trusseconomics was borrowed from Reagan in the mid 1980s and the last dash for Brexit growth scuppered by the international bond markets .... that UK is paying for now.
BoE is selling bonds into a falling market and the bottom will be where the bottom is.
I expect most other economies to recover sharply with low spot energy prices while the UK still has the legacy of 2016 around its neck.
One can't blame the BoE for dumb voters.
It's the lack of hedging that makes me think that the loans GCP makes are floating rather than fixed.
As far as I am aware, GCP is paying 2% over SONIA (unhedged) but I think people are overlooking the fact that around 90% of GCP's investments are senior/subordinated loans and, although the accounts don't spell it out, I rather suspect that any rate rises are passed on thru to their lendees (the accounts have a lot of general IT waffle that they are required to include but are light on certain salient information that actually might help investors)
I bailed out of GCP at 91p on the day the Bank of England yet again admitted that it had got its inflation forecast badly wrong. As this appears to require a 4% premium over Market rates then the direction of base rates suggested to me that another revaluation was coming. It may now have hit the bottom, too late for me have locked into FSCS 5% bonds.
Unfortunately the MPC are the nine foolish men ( Cath Mann excepted), they have been totally wrong for three years now, they are accountable to no one and there are a couple of idiots that have been voting not to raise for months now. That against the backdrop of the fact we are in a league of our own with Turkey and Argentina in the incompetence stakes . I think this is a hold at these levels, but redemption may be a long way off until people believe the MPC is prepared to bring down inflation.
I've seen quite a few in this sector shorted to a 9% or so yield .... UK bond returns related ... I use INXG as a benchmark for direction on bonds.
Looking forward to the rebound myself.
Despite GCP continuing buy backs - 500k alone yesterday - price still in free fall. 80p breach not good - possible floor broken - could be another difficult week. The aim to preserve capital with a decent yield now shattered. SB
And so the madness continues.....I guess Jefferies were right on the historic underperform call....if interest rates continue to climb does this get driven below 80p? At what point does a larger fund start to see value here in the medium term and try their luck. Divi next week, results in a couple of weeks, new NAV due mid July. Not likely to make any impact in current sector decline. SB
Whoop de whoop...Jefferies raises GCP Infrastructure Investments to 'hold' (underperform)
Over 8 1/2% yield on these now. Tempted to buy in. Interest rates look like they are headed to 7% with an accompanying recession. What a mess.
All my portfolio is on a down trend. The resolution of the debt ceiling may help tomorrow but until we get some confidence back its is going to be a tough call as many are putting their cash into banks and building societies at 5% with no risks up to 85000.....
6 consecutive down days.
A few days after a positive update. Inflation, interest rates and govt bonds killing this sector. Almost 40p off year high. Madness. SB
Just that
.. but you make a profit if you sell and buy back lower.
Good new is bad news. This might go on awhile. Take your divs, sit back and be happy. You don't make a loss until you sell.
The real problem is the pile of poo we have in Bable House in London. They have spent since the last down in 2007/8 wondering what to do and ridden a property bubble based on ultra low interest rates. Now it is all coming home to roost and UK Plc is holed beneath the waterline. Admitably Ras Putin has muddied the water we have a large number of over 50's who have made a tasty profit and are now trying to downsize so they can enjoy a early retirement. Rising interest rates make it even more attractive to sell and downsize and living of the cash difference.
I have been turning slowly into cash because i can get 5% and invested in dividend traps is a waste of time..
It’s a dumb market. Plenty of infrastructures and alternatives now giving 7 and 8%+ dividends.
Buyback appears stopped or on hold. At this price you would think they would be piling in. Hit 8% yield and yet nothing but sellers in the market. Beginning to think there may be more to this decline than market dynamics. SB
I bought here for the SIPP dividend income but did not expect this to go near the covid 2020 levels. Quite baffling given the reasonably solid portfolio which benefits from high utilities and inflation pricing. Largest discount in sector by some distance for a share now yielding almost 8% at current price. I would say crazy but nothing surprising in current market. SB
Pfff
On the basis of todays announcement I opted to reinvest the March 2023 cash dividend back into GCP shares. I am hopeful we will continue to see ongoing improvement in the NAV - with the next update expected in late April. SB
There is currently no scrip offered. Re invest means you buy at today market price. The current sp is about 20% below the Nav... The markets are not putting any value on it..