Member Info for bald_eagle

This is where political idealism/dogma clashes with the reality required by the financial markets. Perhaps the UK economy could be reshaped by some of the changes being dreamt up but will the money markets sign the cheques?!....answers on a postcard to Kwasi Kwarteng (or whoever has his job tomorrow!!).

LGEN doing quite well this morning compared to my other investments.
I see that the BoE has announced a plan for an 'orderly transition' for when the bond support ends at the end of this week....I suspect that may be tested. Although the actual amount of the intervention so far is a tiny fraction of the £65bn initially suggested, which bodes well. It seems to be a matter of confidence and hopefully that has been restored.

stuGGTTH, yes, if there was a takeover offer for ITV the SP would rise and your recent investment would be worth a lot more than 55p.
IF....
So takeover good, dividends good (as long as profitability can sustain the dividend payment).

Raydio, having terrestial TV is neither here nor there. The number of people getting TV content through an aerial will decline but hopefully they will not stop viewing ITV, simply how they view it (through a tablet, smartphone, PC, streaming etc). But with added choice comes added competition for viewers attention and that is where content will create the winners & losers.
The problem is that ITV cannot really compete with Disney, Amazon, Netflix, etc. Perhaps they can find a profitable niche as an independent company but I doubt they will ever be a 'big player'. Much more likely to be taken over....especially with £ so weak. I wonder if the Tory government would even blink at the thought of a foreign owner. But the million $ question is when/if there is an approach. Nothing would surprise me, there could be one tomorrow or we could drift along in the hope that ITVX - or whatever supercedes it - actually takes off.
Reminds me of those first world war generals who created seemingly impregnable defensive lines (Maginot) and the dastardly enemy simply bypassed them & came in through the back
door!!

"ITV is the biggest and most popular commercial TV channel in the UK. "
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Raydio, would you be upset if a foreign investor made an unsolicited offer to take ITV private or made an offer to buy a part of the company?
I suspect the days of terrestial TV are coming to an end. I was watching TV on freeview the other day using an aerial and the signal started to cut out....had to switch over to streaming.
To a large extent what happened in the past is quickly changing as technology gives more & sometimes better options. Obviously content is king....and ITV should be strong in that.

"...I have no problem in being corrected if I'm in error."
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stuGGTTH, who said you are 'in error'? That would imply you made something factually incorrect. I don't believe I said anything factually wrong either. It is a matter of opinion.
I believe you agree with me in some crucial points...'investing is never binary'. Sure ITV are making money but are they going to become - or are they already - a small fish in a large pond with sharks for companions? Even the BBC is facing a raison d'etre (not helped by tory government hostility)
Also, I thought ITV has been perennially talked about as a 'takeover target' for years....and I seem to remember something in the AJ Bell sharemagazine last few months that had them in a list of potential targets (but lower down the list). Netflix and Amazon have spent millions on buying/building new studio space for making content but seemingly aren't interested in ITV.
So I really don't know about ITV. It should be a great British company but it seems to lack the vision or the regulatory environment to flourish.
And with the SP reaching new lows and a strong dollar the attractiveness of the business must be increasing for an overseas 'investment'.
PS I'm not 'disrespecting ITV', quite the opposite. I'm trying to work out what it is really worth. Is the potential being missed or has it further to fall (and is that decline systemic).

Yep, but none of that is reflected in the SP. Either ITV is an absolute bargain OR this is a ship without a clear destination of where it is heading.
If it is the former then presumably it might attract interest from dollar rich buyers....perhaps they might be able to provide a rudder too.
Problem seems to be that new technology firms have upset the cosy business model of ITV & the like. Can they adapt to the new environment or are they an asset to be utilised by other players.
ITVX going into a recession seems a brave move....probably 2-3 years late.

It must be very hard to value ITV. A few years ago people would have laughed in your face at the thought of 55p per share, but now we are seemingly wondering if this is the floor or perhaps £2.36bn market cap is a tad over-valued.
Every other day I see an article about ITV as a takeover target by American buyers....but nobody seems really interested.
So we are left with organic growth from a half-hearted attempt at streaming services....and the four yearly advertising boost from the world Olmpic cup...and of course the Love Ireland thingy to keep us going.

Reading the article suggests Blackrock are part of the solution and were not part of the problem....pointing the blame at those who determine the 'LDI risk mitigation strategies' (pension trustees and their consultants).
I presume LGEN have a similar role to Blackrock i.e. they 'simply' implement the strategy that other players come up with.....the monkey as opposed to the organ grinder!!

....or perhaps important!!

Todays speech will be impotent

"One would certainly hope that pension trustees ARE au fait with leveraging & the risks associated with LDI funds,...."
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TheTrotsky, for sure they ARE aware now of the risks of LDI....but I believe it is common knowledge that they weren't before last Wednesday. But having become 'experts' over the last week or so doesn't overcome the lack of prior knowledge....barn door, horses bolted!!
Perhaps the trustees were well aware of the risks but that would create huge unanswered questions...like why didn't they de-risk. Perhaps there was a 'code of silence' or maybe they just hoped things wouldn't get too bad....both terrible philosophies in business.
The pension regulator is facing similar questions. They definitely had experts who were aware of the looming & increasing risks....as the amount of levereging increased over the long term and the default risks recently increased. Questions will be asked....lame excuses will be given....knighthoods & damehoods will follow. Incompetence gets you promoted!!

" Not sure what impact there would have been on the sponsoring companies if their pension schemes had run short of cash to meet liquidity calls!"
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If there is a long term shortfall in the pension assets then presumably the 'sponsoring' companies will be asked to increase pension contributions.....but that's probably digressing because it wouldn't impact on companies like LGEN. In fact it might even increase LGEN's business, as has been pointed out, as companies divest themselves of the pension management.

"the fact that the buyer didn't think the yield could go so high and it did, doesn't seem a ground for compensation... these things are open ended risk....and you kind of know that when you take the leverage and margin "
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It entirely depends on how the product was described when it was sold and who advised them to buy the product. I suspect a lot of pension trustees aren't to au fait with leveraging & the risks associated with LDI funds (most people hadn't heard of them until late last week). So the relationship they have with their financial advisors & the contract with them will be paramount.
We can only keep fingers crossed and hope LGEN isn't invloved in any litigation, which hasn't even been mentioned so far......and of course LGEN today said they have no exposure to LDI on their balance sheet.

"Heading back up to £3 again IMO."
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Perhaps if Truss deregulates the pension/financial industry. But her plans aren't going too well at the moment.

Pokerchips, yes they are all 'Big boys & girls' and should all bear some of the responsibilty.

The lawsuits would not come from individual pensioners...although I suppose that is a possbility. The primary liability would be the pension trust administrators seeking compensation from their advisors, the intermediary agents and the LD funds for misselling.
IF I ran a trust and was advised to buy a certain product without being properly informed of the risks then I would seek compensation when/if that product proved risker then I had been told. The trust administrator will have a legal obligation to protect the assets of the trust. If they are aware they had been missold a financial product and did not take legal advice then the administrator could be opening themselves up to litigation by the beneficiaries of the trust.
Note: As a non-legal person I may sound what I know what I am talking about - please correct me if I am wrong. I do know that trustees have very strict rules to follow and can have liability if they act inapproriately.

Has anyone mentioned lawsuits? I wonder if the pension companies are getting called by ambulance chasing lawyers trying to drum up litigation against the LDI funds & the intermediary agents for misselling. In USA I'm sure that would be a given. In a UK they may be expected to take it on the chin.
It is slightly worrying that only a handful of people in the pension industry knew about LDI and the risks involved. Perhaps they should have but that's what they pay advisors for presumably! And if that advice turns out to be less than optimum then they may start asking their advisors - or former advisors - if they have professional liability insurance. I know I would be thinking about it & pension administrators have a responsibilty to protect the assets of the pension fund.
I don't expect this will be the last we hear of LDI....hopefully LGEN's exposure will continue to be minimal.

A very positive trading update. LGEN is solid and relatively immune to LDI risks.

However once the BoE intervention ends the hedgies will presumably test the market again to see what happens!! This time I expect they will be more prepared.

"The Bank of England announced last Wednesday its intention,.... to carry out purchases of long dated gilts in a temporary and targeted way....These steps have helped to alleviate the pressure on our clients. We are continuing to work closely with them to achieve appropriate hedging levels in their portfolios."

AMO1, welcome aboard.

"The BoE and Pensions Regulator are as much to blame as the Government."
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I don't think anyone is coming out of this smelling of roses.
Like most 'accidents' it usually takes a series of events - missed opportunities to intervene - thta lead to a serious incident. Probably in the mix is our addiction to QE and the BoE's mistimed attempt to wean us off the stuff.
The new government hasn't helped with their distain for the normal rules of financial communication and a rather scary adoption of the theories of academic outliers like Professor Patrick Minford & trickle down economics.
The pension regulator are probably damned either way.....if they had warned on the risk of financial instruments linked to UK gilts they would be slammed for 'running down our country' by the Brexit devotees.....but now they are going to get grief for risking our pensions.
I suspect everyone has a share of the blame.
I'm not sure we are out of the fire yet....what do others think?
BoE has only commited to support UK government bonds for a couple of weeks I believe. Hopefully this will give organisations time to unwind their positions in their riskier investments....the ones we know about!!
Known unknowns.