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Bt bond / debt structure is generally locked In long term fixed rate bonds. So debt repayments won’t go up much plus gbp6bln of the debt is lease arrangements with those lease prices already agreed.

Bond holders, not bt will take the opportunity hit on debt.

But bt can put price of services up with inflation too.

It would be positive for its pension fund too as cost interest rates rise and those the cost of buying annuity pensions come down, which actuary valuations are used as benchmarks in valuing the pension fund. Ie the pension fund can start to get returns on higher int rates from government bonds etc, which currently is zero to negative but the pension fund has to be partially invested in to keep the fund money safe and diversified.

I think there will be inflation stoking up down the curve, as the world supply chains become more diversed and local, rather than the world generally relying on the China cheap supply chain.

Additionally the amount of money printed has to cause inflation eventually.

However, inflation in my view will be good inflation so that people’s wages can go up too and debt gets inflated. Inflation is generally good for utility type companies too as margins can be increased by inflation too and BT’s debt will be deflated in real terms vs it’s assets rising in value.

I don’t think inflation for the over inflated growth stocks as higher eventual int rates will see money pulled from those ridiculous over valued stocks.

Historically int rates over 30 years have averaged 3 to 5 percent avge ftse pe is 16. Bt is 5.5 ish pe and with inflation can come price rises as above.

I think the world will need inflation in future to out inflate debt

I definitely see a improved sentiment change in this business soon, not only with Ocado. But there will be a big increase in back to school clothing for the kids, plus general wardrobe autumn upgrades as people are out and about more trying to boost economy.
I feel at this sp, we can definitely see an improved sentiment change over mns shares over coming month, than is now.

Hopefully weak longs taken out, to allow the price to go back to where it should be ie over gbp2

I’ve had to buy a little more at 96.44. It’s getting a little silly now the price.

https://www.google.co.uk/amp/s/www.thisismoney.co.uk/money/markets/article-8583873/amp/STOCK-WATCH-shadowy-billionaire-set-ring-changes-Openreach.html

Interesting story.

For me price is ridiculous cheap, but still clearly weak longs till 79p for possible complete wash out.

However have to be invested at this price. The company did no wrong in q1 considering cv19 intense period of lockdown, with small businesses and pubs closed for bt sport revenue.
I can only see q2 onwards stronger, with q1 being ok too, especially for current share price

The price clearly is just ridiculously cheap, unless mkt knows of a bombshell pension revaluation, when it announces in future at its end of June triennial revaluation.

The other concern is debt went up even though dividend was reinvested and ceo said their debt interest is going up, so need to keep eye on bond mkt and maybe by are forced to sell Openreach just to keep its covenants on its debt?

To me it’s all that is wrong with passive fund investment, which many pension funds/ large institutional in the global world of money follow.

They continue to add to best performers and continue to sell worst performers creating unstable valuations eventually.

Clearly
The big 5 tech valuations are absolutely ridiculous. Great companies but valuations are obscene.

Hi captain hornblower.

The only platform that may offer Bt option pricing to retail investors is Saxo bank. I’m not sure how much margin they add onto retail option premiums though, compared to fair value.
Also I’m not sure if you can do option spreads either ie zero cost risk reversals or call spreads etc.

But may be worth a look.

One thing for sure volatility levels lower than they were but with results coming up implied vol may be higher and therefore call options may be expensive into the results Thursday session

https://www.home.saxo/en-gb/products/listed-options?wtkw=%2Bshare+%2Boptions&ds_ag=share_option&searchcm=UK_EN_G_Generic_Stock_Option_BMM&cmpid=ppc_google_71700000029063764_58700004074999289&gclid=CjwKCAjwsO_4BRBBEiwAyagRTWubItdR6ulOmTZvXX1kLDxv_IWjfRYfEu1pQkB9gREMLE1vexugKxoCjv8QAvD_BwE&gclsrc=aw.ds

Mkt definitely taking positive. Especially the comment that they see the cost not being more than the initial gbp500m

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BT’s initial assessment of revised policy on Huawei in 5G networks
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In January, the Department for Digital, Culture, Media & Sport (“DCMS”) proposed restrictions on the use of Huawei equipment in 5G and FTTP networks.

Today they have announced a revised set of proposals to remove Huawei equipment from 5G communication networks in the UK by the end of 2027, and consult on the future use of Huawei in FTTP networks.

In light of this, BT Group plc (“BT”) announces its initial assessment of the financial impact of these revised proposals.

“BT currently estimates that full compliance with these revised proposals would require additional activity, both in removing and replacing Huawei equipment from BT’s existing mobile network, and in excluding Huawei from the 5G network that BT continues to build. However, now we have clarity on the timing, it is estimated that these costs can be absorbed within BT’s initial estimated implementation cost of £500m, as announced by BT on 30 January 2020 in order to comply with the previous proposal by the National Cyber Security Centre.”

Sounds like he confirmed mainly what’s out there and giving the companies time to extract equipment. Positive though is govt will encourage new doesnt verified suppliers with incentives to do so, which may mean the replacement may be cheaper than the alternative current replacement costs, if not using Huawei. But fleccy and below are the experts in this field for their translation of Dowden speech

Dowden speaking now

Thx allybally.
Good start today in so in anticipation. Hopefully no bad shocks that cost bt a small fortune. Although feels mkt has discounted in price disappointment, so maybe upside still this afternoon

Does Anyone know time the govt statement on Huawei is announced tomorrow?

Fleccy - re rating agencies. I agree, they are always behind the curve and just confirm mkt current opinion and not out in front.

Fleccy - yes I read that, which looked Slightly different To bt guidance
Ie a 2p ish full year dividend for 2022 and 7.7p dividend for 2023. Whereas guidance was 7.7p for full year 2022?

Affirms bt credit rating at bbb

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-bt-group-at-bbb-outlook-stable-30-06-2020

Good article by telegraph on mkt valuation of bt

https://www.google.co.uk/amp/s/www.telegraph.co.uk/business/2020/06/20/foreign-owners-suit-former-state-monopoly-bt/amp/

Toff
I’ve worked on trading floors too for 25 years around the world and I can assure you many prop traders use charts and most banks hire technical Chartists too.

Market maker traders will also use chart points when pricing for institutions.

Also toff the best traders don’t get it right all time, like you proclaim yourself. If you did, you wouldn’t be here.

It is about the risk / reward being in your favour, but that doesn’t guarantee being correct.

I agree charts are tea leaves and witch craft, however if enough people /institutions/algos follow them, they can become self fulfilling.

Looking at chart, it looks to me we are now very set up for attack on 130/135 level within next week or two.