Member Info for EMMJANE

Bt would still benefit even with longevity insurance A’s longevity insurance is just a hedge snd cost to protect fund that everyone lives to 100. However if avge life expectancy within the fund comes down there’s still massive savings as by definition bt has much reduced liabilities. The insurance premium is paid no matter what life expectancy ends up but if it goes lower bt benefit in their fund on liabilities.

Additionally a steaper govt yield curve benefits pension fund liabilities too. Ie low interest rates at short end snd higher int rates at back end. Last 10 years you’ve constantly seen a flattening of the yield curve affecting bank profits and pension fund liabilities as cost of annuities goes up. However since the vaccination announcement you have seen the yield curve start to steepen again ie higher expectations of higher int rates in 10 years time but not within next 2 years. This has helped bank shares predominantly but also benefits final salary pension scheme liabilities too

I’m seeing in the charts the medium/ longer term trends starting to point more positive with higher lows being set on retracements.

135 is next big resistance area if that breaks definitely 150 next stop.

Thanksgiving weekend ahead now on mkts so won’t see too much fund flow and those next couple days price action will be interesting on current positions alone amongst the market makers

Interestingly many brokers now calling for ftse100 to be best performing global indicey for 2021 year end. Morgan Stanley pricing it 20 per cent above current value in their 2021 forecasts.

It’s a fair call if you believe value stocks consider their recent run.

Amongst that call. I’m calling bt to be amongst the top 5 best performing stocks in the ftse 100. So much value and upside for mkt to chew on when global yields so low and the worst of the uncertainty out way.

Bt has a big next 6mths imho too with regulation, pension , brexit and stock mkt returning to value stocks all playing out.

If you have been on this journey for by last 6 to 12 mths it certainly would be foolish to get off now imho

May explain why bt trdg bit heavy last few days. Imho though it’s a scare story

https://www.bloomberg.com/news/articles/2020-11-23/u-k-weighs-huawei-installation-ban-next-year-to-sway-lawmakers

119/120
This is major support area for me and see a rally from here to retest the 133-135 area

Aus what you are saying is already priced in mkt ie look at uk stock valuations vs Europe and us.

I also believe uk will be fine breaking out snd sorting it’s own trade deals as they have with Japan already. We will have our ccy own central bank policy and find our way in the world with our fantastic pharmaceutical, financial service sector and the valuation gap will close

The tailwinds are very strong for bt shares to go higher as the reversal of brexit discount and value still mega undervalued gives rise to so much upside potential

Imho bt share price won’t be majorly influenced on deal or no deal. If anything a deal will accelerate the current rise.

The big factor now vaccine out and monetary policy so accommodative is the flow of future capital funds.

As ray dalio said yesterday on Bloomberg global forum, Basically bonds give you ntg and trade equivalent to 100 times pe on a yield basis. Where value like bt on a yield basis when it reintroduces starting dividend at 7.7p on current price trades at 15 times on yield only basis not earnings basis.

So there is so much more upside to bt to get anywhere near filling those valuations gaps.

At 200 it’s cheap let alone here or a quid. The vaccine has been and will continue to see capital flows changing passive funds will help self fulfill bt higher too

Looks definite like to at least challenge 133/135 area which is quite a big technical area. If can get through that 150 will be here quick. 119/120 looks major support now

Any bt news out having a bit of a pop to topside quick move?

By still trading at 7 ish times earnings and int rates so low, plus recent stock mkt performance and narrowing credit spreads will help pension fund a lot too

This has a long long way to go up. £2 is still cheap on pe basis and considering int rate and prospective yield when dividend resume

By 2 day rise actually pretty much in line with all the beaten value stocks.

Finally the great passive fund bubble is bursting and the safe havens of bonds and tech shares have now been turned on their head to be unsafe, pushing the potential of trillions of usd hunting for value stocks like bt. The vaccine was the catalyst but the bubble is out the bag and so many long/short funds starting to reverse out long tech short value. Expect more fast violent rises in next few days imho

Lockdown could be beneficial to bt again, especially as professional sport can go ahead and more people turning to bt sport and telecoms for entertainment in winter (not sure about being beneficial to pension deficit)

https://www.skysports.com/more-sports/news/11095/12119758/coronavirus-prime-minister-boris-johnson-announces-five-week-circuit-break-lockdown-across-england

Additionally let me know please what business that has circa gbp2bln profit with now fwd looking growth outlook and valued less than gbp10bln ie 5 times pe. Dividend being brought back in a year time with yield of 7.7 per cent as starting point, debt reducing slowly.

Govt int rates zero to negative.

Am I missing something apart from pension conspiracy theories vs other equity valuations which are also cheap at moment outside tech?

I don’t think they can get worse if you understand the make up of the portfolio and how the liabilities are valued.

Ie most of bt pension is in govt bonds which offsets about 50/60 per cent of liability risk. Rest is in corporate bonds Property and equities.

Same time if Traditional economy absolutely gets trounced further causing equities to go lower, the pound will take an absolute hammering too, due to its debt mountain that it now has, which reduces the liability in Sterling terms.

The risk reward from here in pension deficit improving is majorly in favour of improving by a long shot. As long as by trustees don’t play around with their investment balance too much as to me they have the correct balanced risk profile vs liabilities. However, they currently are being valued at the worst time, especially with global equity dividend yields low at this current time

The pension deficit almost cannot get any worse as the liabilities are based on global yields and therefore are valued like cost of an annuity. Ie no one in their right mind would currently buy an annuity as to get inflation linked pension of just gbp2k pa would currently cost you gbp130k in cash from your pot.

Therefore the pension valuation going forward can only get better. So to have so little deficit on a gbp55bln pension pot is not going to hinder bt in medium / long term

99.12p close after settlement. Pretty unbelievable considering results. Mkt as lost it’s marbles on value

Bt should agree with bt pension fund on gbp1bln of the planned shortfall payments into pension fund that they buy 10 per cent of bt into bt pension fund. Which would be great investment for the pension fund and good for shareholders alike as akin to share back but using already designated funds

Mkt is crazy today. These being forced to a quid all day. Wonder if there’s a large option expiry today expiring as looks like it’s been completely manipulated all day versus decent results.

Although can see broker upgrades in coming days to move properly up soon

Debt nearly gbp1bln lower too

Look decent and raising lower end of year end ebita expectations to underpin dividend planned payment 21/22.

At this share price should be positive as pe and outlook pe look extremely attractive.

Solid results imho