I listened to a talk from the fund manager speaking last., they are expecting a 20% fall in commercial property values over the next year. Today's rns indicates that this is already starting to show with the sale price being 11% below Junes nav valuation. The question is to what extent is this already priced in with the 50% discount?
I agree, I still have a small holding here but not adding as their comments about deferring developments indicates cash is tight. I think that it has long term potential, but it is another for the bottom draw for now....
According to Bloomberg only 10% of the gas stored in Europe is owned by the national governments the rest is held by traders and companies who can sell to the highest bidder.
They will be in no better position than us in the winter.
Thanks for the comments, I realised that they had already delayed it once but what I was trying to understand the economics behind this action. Is there a significant cost to delaying until next year or is it just about credibility?
Is it a case of the BoE having said we will start so they proceed, even if the current circumstances (and market responses) indicate that they may be better waiting further?
'The Bank of England denied a Financial Times report saying the central bank is delaying the start of its program of gilt sales, prompting a selloff in UK bonds.'
We have just had a whole raft of taxes cuts removed to stabilise things. Last week the BoE was buying the bonds, how does starting QT square with working with the Treasury to provide stability as Bailey said the weekend.
It has to come at some point but surely this is not at this time? Genuine question - why is the BoE so keen to start on this now rather than next year? (Usually they prefer to be behind the curve!)
At this moment NG are paying £26MWh, tomorrows next day average price is £62MWh only about the second or third time it has been below £100MWh this year.
An article in Bloomberg at the w/e indicated that the EU may not apply now an electricity cap -
'A number of countries have also called for severing the link between gas and power prices through imposing a price cap on the fuel used for electricity production, an idea that the commission is not planning to put into operation. While such a model has lowered prices in Spain and Portugal, it bears some risks if introduced across the bloc, it said in the draft.'
It will be interesting to see what they do end up doing here. For what is supposed to be a 'boring investment' renewables have been more of a roller coaster ride than some of my small caps!
Now it looks like we will end up with a price cap, higher discount rate and no benefit from a reduction in corporation tax. Truss certainly knows on how to deliver 'growth' to the renewables sector!
Although I have not seen it mentioned, because the government are making up the difference between the market and capped prices energy is one of the largest areas that they can make 'savings' from the mini budget in, the cost of support could be as high as £100b which dwarfs the £2b of impact from the change in the higher tax rate. Expect them to squeeze as hard as they can.
Another 20 seats signed up, this takes them to 496 so there is a good chance they will exceed 500 this year as expected.
Hopefully this will stop the slide in the share price. I guess the next news will be the sale of the UVsan and HBE probably with a sight of numbers after the October half term holiday periods.
Yep, the government certainly know how to encourage inward investment.
The US is subsidising their renewables industry (to the annoyance of the EU) and the EU look to set a cap three times of the one suggested for the UK. If you were an Intenational investor in renewables, you are hardly going to be looking to the UK to invest your money.
It was very likely that UKW would have done a placing this Autumn to reduce the debt for Hornsea and therefore release monies for their next investment. it is hard to see that happening now so we already can see the negative impact of government policies/lack of clarity which is crazy when they are looking to expand investment in renewables.
I am also puzzled how this will work with supplying electricity to Europe via the interconnectors, will they be benefiting from cheaper power because we have hamstrung our own renewable industry?
BSIF presented an updated analysis of the impact of recent changes (ie post mini budget) on their nav at their presentation of their H1 results last week. The combined changes in discount rate , inflation rate and corporation tax rate changes amounted to a 3.5p discount to the nav, higher forward price curves more than compensate for this decrease.