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Just one more point on inflation. My gut feel is that in the UK (& to a lesser extent the US & EU), its trajectory will be quite uneven.
At home, the energy price cap drop in April - & probably again in July? - will have a major impact on headline inflation. That’s likely to lead to increased calls for the BOE to cut interest rates more quickly & aggressively. But they’ll be looking at underlying inflation & wage settlements too, which may well tell a rather different story. The 9.8% NLW increase from 1 April will, in itself, be quite inflationary.
Having been way too slow IMHO to increase interest rates initially, I suspect the BOE will now have to be equally slow & cautious when it comes to dropping rates. Had they acted sooner, they could have squeezed inflation out of the system far more effectively, but hey ho.
Ubik_Fresh - I agree, market sentiment should improve generally as interest rates gradually start to fall. This could be particularly beneficial for SMT’s unlisted holdings & the prospects of one or more of them IPO’ing.
I don’t think we’ll have to wait until next year for the tide to turn, though I suspect both inflation & interest rate drops will be far slower & more drawn out than current market consensus.
Nice. Also the first time I've been significantly up on my position having bought in the 7s and 6s. I think patience will reward us. Next year should see rates ease and equity come back into favor. Still a lot of cash on the sidelines and in money market funds (me included).
Well put LLOL, this has been the best day SMT has seen in a long while. I am finally back in profits! Once I am 10% I plan to sell half then hold the rest. I think having most of my eggs in this basket has been a bad call on my part. I will diversify with the half I sell but I am a big believer in SMTs portfolio so will keep the rest for at least 5 more years.
On 15/03/2024, the Company announces the purchase of 2,559,132 Ordinary Shares at a price of 814.49p. The shares purchased will be held in Treasury.
The answer is yes, loads of people selling after just 5% rise, mind you we don't know what they bought in at, or what their holdings are, I'm sticking to my guns and will hold until £12 or more, then sell 10%, and buy 10% at about £6, but you never know...
Will there be a sell off from the people going short, who are happy with another 5%..?🤔
So they announce a buyback of up to £1bn over 2 years (representing about 8.7% of SMT's current market cap) & the share price instantly rises over 5% (despite no new repurchases being RNS'd today).
Maybe they should do it more often!
Seriously, though, such a significant upgrading of their buyback scheme suggests managers are confident & feel the current discount to NAV is unjustified. Will be interesting to see the longer term impact.
CaptLard : Management may have accepted that shareholders have been making noises and its time to appease them. Not just bury your head in the sand and continue the beaten path they've been doing watching the spread between NAV and SP as wide as it is.
I like the fact they're returning capital to us. There is always doubt regarding buybacks and how much value they add. Sure EPS should go up, but in the end, the open market votes.
I think the positive catalyst has to be interest rate cuts. As well, SpaceX IPO would serve them well.
I'm seeing headwinds in the Semiconductor space, so they'll need to keep an eye on ASML, NVIDIA in 1H2024.
"Surely that 1bn should be invested into a current portfolio company or grab a new one. Ideally publicly traded."
Only if they take the view that the £1bn can be deployed well. And making the money available for buybacks doesn't take it off the table if something better comes up.
It might be the case they have a view of when some of the currently privately held companies are going public and taking a view that buying some of the resulting price action at a discount to NAV is a good move.
Capped - I agree, it might be something Vodafone should do (although the benefits always seem rather theoretical to me) but it seems a bit odd from an investment company. Motley Fool always whinge that it shows a company can’t think of anything better to do with its money, but in this case can’t the company think of anything better to do with its money?
SP responding well. Need this to go up. Third of my portfolio is SMT with average of £5 per share. Seen the highs and wished I'd cashed out. Still think it will come back in the next year when inflation falls
Good Morning
It's good news but will that translate into a narrowing of the NAV? Only time will tell.
It may help the SP, but I am dubious of why they are doing this. Surely that 1bn should be invested into a current portfolio company or grab a new one. Ideally publicly traded.
Excellent news on the £1bn buyback. At that level, I'm sure it will have a material impact on the share price and the discount to the NAV. Just need to sit and wait.
Will have a decent effect on SP - probably lots of good news from the unquoted companies that don’t ordinarily provide transparency that negative market would like.
SMT NAV trading 18% premium to SP.
Yes, an interesting development, though I’m slightly dubious the Senate will pass it.
And even if they do, how enforceable would it ever be, what with VPNs etc?
"The US House of Representatives has passed a bill that could lead to a nationwide ban on TikTok
It would require the Chinese tech giant ByteDance to sell its stake in the app within six months or face a ban from US app stores and web hosting platforms"
SMT would be top of the list if it was near it's high like the three above it on the list, SMT would be almost double it's present value.
SMT ain't all bad, if you take a long term view of investing...number 4 on the list is pretty impressive
https://www.theaic.co.uk/aic/news/press-releases/isa-millionaires-0
So I reckon it goes something like this. The more the NAV rises the more the cynics say it can’t last so the less attractive SMT seems from a risk perspective. Absolute nonsense but it’s surely driving the depressed price. Everyone waiting for a tech sell off so the expectation is a SMT cash is just around the corner.
The NAV is rising nicely, the share price is cheap at the moment.
I mean, does anyone know what percentage of SMT is SP500
As to US stocks worth noting that the pound is up 1.42% against the dollar since Wednesday (as I write this) and much of that was in the last 24 hours.
Does what know percentage of SMT is SP500?