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55.....I suspect that not everyone is as well-versed as you in the complexities of the gilt markets, so I offered what was intended to be a simple,if somewhat abridged version, of the causes of yesterday's events. If you don't need it don't read it.
Monte... As with most crises, they will pass if you're patient enough . I hold here 'cos think that LGEN is a well-run company in a profitable business and will over time provide good returns. The actual cost to LGEN of yesterday's events won't be clear until the next interims (in march '23)unless they feel the need to update the market before that. There is no doubt that recent events have damaged the short-term prospects of almost all FTSE 100 companies but if like me , you are prepared to wait, I expect to see the SP recover by 20-40% over the next year or so, and to continue to pay a healthy divi., and it remains a core part of my folio.

I've been trying to put together a simple explanation of yesterday's events, here it is :
1. Pension funds are required to hold assets to pay for current and future pension liabilities.
2. Many company pension funds have been transferring these assets and liabilities to firms like LGEN to simplify their accounts and relieve them of a function.
3. As I have mentioned before pension fund providers are required by law to hold liquid assets , primarily UK gilts so that in times of economic crisis they can sell these to meet their needs, these sums are enormous. ( The last figure I can find is for 2018 and it was £6trillion.)
4. Pension providers are required to maintain a balance between liabilities and assets for ( I hope) fairly obvious reasons!
5. We all know (don't we?) that as bond yields rise, prices fall and in the last few days UK long gilt yields have risen sharply and hence values fell.
6. So yesterday many pension providers started selling gilts before they fell further and as no one was buying, the value of these gilts started to plummet uncontrollably, sort of like a run on a bank , only in this case the bank is the BOE or more or less the UK GOV.
7. In order to stabilise the market the only thing to do was for the BOE to step in and offer to buy any gilts that were for sale, and once it became clear that there was a big buyer in the market and the price would stabilise the panic selling stopped.
That is, as I said a simplification, but , I think, good enough to make sense.

Bald.....I never get involved in political debate, nor Brexit wrangling, my post was, like all of mine , merely a reflection of what is actually going on and an attempt to explain some of the background to market moves .

It's worth doing a bit of homework to understand the difference between "liquidity" and "solvency", in simple terms liquidity is the ability to meet short-term expenditures, solvency is the long-term financial viability of the company. The recent panic has been a liquidity problem. As I posted earlier there are strict rules on the balance of assets to liabilities needed for financial firms. Without getting into pro/anti-Eu arguments there is a view that the restraints placed by the
EC Directives in the wake of the GFC are too inflexible and may lead to situations like yesterday's. It is the expressed intention of conservative governments to re-examine those rules and re-draft them.

Clued ...you make a good point, but as LGEN's liabilities are almost all in sterling the solvency rules make it mandatory to hold sterling-denominated assets, the authorities are more concerned with preventing a solvency crisis than allowing greater profits. Various mutterings in the Kwarteng speech the other day hinted at greater freedoms for UK financial institutions but we may have to wait for the next formal announcements before we know what, if anything, is to happen in this area.

I posted here on 10 August making the point that investing in LGEN is a bit like investing in a leveraged FTSE tracker, today's price action confirms that, the SP here responds to sharp moves in the FTSE often by greater %age than the FTSE moves. Here is the key para. from that previous post
"The nature of UK banks and insurers and the stringent solvency conditions they operate under since the GFC, mean that the need to hold very large quantities of assets to meet the strict solvency criteria put in place as a result, because those assets are required to be liquid , ie easily sold in an emergency , they consist primarily of equities and tradeable bonds. They are proscribed from investing in long -term high-value infrastructure projects and are expected to hold much of their portfolio in sterling-denominated assets, to eliminate FX risk. "
Obviously, those assets have, in total fallen sharply today, lowering considerably the value of assets LGEN has, hence the SP fall.
If/when the FTSE recovers you can expect to see the LGEN SP rise, probably more than the FTSE does.

Hi guys i've just added here and to move on from the IMV, fruitless takeover speculation and strike related issues I thought I'd lay out in simple terms why I am back in.All stats taken from or calculated on the basis of last years finals published in May.
First and foremost is my assumption that ,despite the current media and market turmoil(which are again IMV closely linked!)BT will not go bust and the SP will, in the medium term, rise from here.
The key stats supporting that assertion are these:
In last years finals the board said that FY 2023 revenues will grow from £20.9 bill., ebitda will exceed £7.9bill despite a planned capex of £4.8 bill on the rollout of FTTP and FCF will be betweeen £1.3 bill. and £1.5 bill. All figures committed to are likely to be hit (and in the nature of things will be conservative- sensible boards don't set targets they can't hit)even though strike action may affect them in the short to medium term.I am assuming that commonsense will eventually find a resolution to the strike.
FTTP rollout is proceeding at a rate of ~3mill. households pa and whatever the telecoms landscape looks like in a years time BT will still be the major player.
At the present SP, downside is (again IMV) limited, the current P/E is about 10 (below recent averages - source Finbox) and the divi even if maintained, not raised, is >6%
Those criteria return BT to my folio standards and as said I am adding and will, down to 100p should it get there

Value , we each make our own decisions based on our own analysis, I wish you well if/when you re-invest whether here or elsewhere. I am comfortable with my position here and willing to wait for the medium term(a position which I keep in constant review), OCDO is one of 40+ positions I hold so it's not terminal if it goes down, though obviously, I expect to make profits in the medium term. As is always the case, I look beyond the crisis headlines and doom-mongering of the media In the expectation that this "CRISIS" will pass and in the next year or two will almost be forgotten. I have been an investor for almost thirty years (I started very young!!) and know that there will be a point in time this year, next year, the year after where good stocks will be much higher than today, I can afford to wait and will do so.
cheers
casa

Theo.... strictly speaking, the UK need NEVER default on its debt as it issues its own currency, and AFAIK it is the only country never to have done so.
Current 10-year rates are here:
https://www.bloomberg.com/markets/rates-bonds

The total number of mortgage fixes due to renew in the next 12 months is about 1.3 mill. out of about 11mill. mortgages, in total 18 mill UK households are mortgage free.

We should ALL track LTI's trades, by my reckoning he's on a 1 quadrillion to one winning run!

Gazz, the problem is that huge numbers are now an inescapable part of the modern world and huge national debts are commonplace, see

https://www.usdebtclock.org/

or China's $7 trillion debt , about 250% of GDP, cf the UK's debt at around 100% and the second lowest relative to GDP in the G7(only Germany is lower)

Value,... Ocado are signed up with a major player in all of the world's developed areas, see
https://www.ocadogroup.com/our-solutions/our-global-partners/

Realism suggests they should be well on the way to fully building out services in the US and Canada, Western Europe and Asia before venturing further afield, indeed it is quite possible that Ocado's technology is at present unsuited to all of Africa and South America, because of logistical and geographic constraints. From my travel experience, the only major markets not yet touched are places with large-scale capital cities in SE asia,indeed it may well be that Ocado think they are at or near, saturation in terms of countries with a wealthy and dense (geographically!)population.

A bit of macro context for the last few days market hysteria-
According to figures produced for the house of commons library the cost of government aid in the Covid crisis will be between £310 and £410 billion in about two years, see

https://commonslibrary.parliament.uk/research-briefings/cbp-9309/

while current estimates of the cost of the recent Kwarteng "financial event" are put at about £160 bill over five years see
this extract from Bloomberg
" UK Chancellor of the Exchequer Kwasi Kwarteng's fiscal giveaway totals £161 billion ($180 billion) over five years, according to figures ..."

Compare and contrast the media hype and panic market reaction !!

Ocado have contracts to build 40 more sites and a capacity of ~12 per annum, for 6 partners in 5 countries(source half-year report 2022), with a work programme of almost four years in the pipeline I see no urgency for new contracts.

Brixton premium bonds rate of return is 1.4%

....the weekend whine festival, but I thought I'd offer some thoughts on the merits of LLOY shares as an investment following the chancellors statement in parliament on friday!
Upfront declaration- I have been planning to sell LLOY in the not-to distant future if/when they reached the 55/60p level, banking a substantial profit on my holdings , mostly assembled in mid- 2020 at prices in the 20's.However on analysis of lrecent events I will (probably ) hold on to most of them for the following reasons.
It is clear that interest rates have further to rise, even tho' I suspect that the Chancellor and the BOE are not singing from the same hymn sheet (or indeed following the same religion!)Kwarteng is going for broke on growth , while the BOE cannot yet pause the restrictive policy of rising rates.The outcome IMV is that rate rises continue, with the benefits to banking of a better NIM and hence greater profits, offset at least partially by more defaults as customers inability to pay loans rises.Previous contractions have suggested that banks have default rates better managed than in the past and are required to hold more than enough robust assets to meet their needs.On balance recent events are bank-positive.
Suggestions in the chancellors speeech that the bank "surcharge" reduction planned for next April(down from 8% to 3%)is still likely to take place- and maybe accelerated/increased? will help sentiment in the short term.
A further suggestion that the balance sheet levy might also be reviewed(and by implication and in sympathy with the overall tone of the speech reduced?) also holds out the prospect that a less aggressive tax policy for banks is intended.
Finally, the increases to the stamp duty levels are a positive to the mortgage business as they will offset(partially) the previously expected downturn in the housing market.
Once the initial hysteria has died down and serious , balanced analysis of friday's announcements has taken place, I expect to see a slight overall recovery in the UK stock market and SP rises ,particularly for banks, builders and defence stocks .
I will plan my short/medium term startegy accordingly.
Ok guys, back to pointless bickering about socio-political matters,
cheers
casa

Before you invest it would be sensible to earn at least a little about how the LSE works Daz and nitro read about the uncrossing trade, the role of market makers , the spread, auctions, in fact, understand what you are doing before trading!!

Freudian slip in my last post " anti-UK" bias!!!

stupmy...for the last year in which it was included in RR's accounts (2020) ITP had revenues of £705m and profits of £68m. I'm pretty sure that RR did not want to sell, but it was the most financially and logically discrete component of the business and was(according to my info.) a sacrifice demanded by the underwriters and subscribers to the massively discount RI in late 2020.