Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Lloyds got out in time with the Telegraph sale!
https://www.proactiveinvestors.co.uk/companies/news/1046465/telegraph-titles-for-sale-again-as-government-blocks-uae-deal-1046465.html
Anyone else starting to think the rental returns on Citra probably won’t top 2-4% after costs (and is starting to look like a lame duck)? Portfolio growth over the long term may drive asset valuation but with risks of defaults, maintenance etc… I don’t think Citra will be that big a money maker. Cash would be better off in an American stocks fund (maybe missing out Lloyds haha)
Lloyds is never a sitting duck. I’d expect - Politically - it would never be allowed for an external / non UK company to purchase what is a critical UK asset. To big to merge with another provider as well (as CMA would step in).
FTSE podcast. Well worth a listen (and Lloyds has a few mentions as well).
https://www.bloomberg.com/merryn-talks-money-podcast
It’s going to be a long time before the war is resolved. Ukraine can’t back down or agree a stalemate unless US and western countries pull funding. The stalemate around Crimea allowed time for Russia to regroup then launch a new attack (albeit it took a few years to launch the second invasion). If they have a stalemate and cede land (more than Crimea), it’ll probably go quiet for a bit then another attack launched when Russia regroups (which is probably what Putin wants), so Ukraine has little option at the moment but to keep going. All talks of a cease fire seem pie in the sky thinking.
Strike123 - I’d assume the market has already priced in the estimated fall, but if worse than forecast, low-mid 40s maybe on the cards in my opinion, then propped back up by buyback. Maybe a temp sell off on results day (worse case) so maybe a dip to buy some more in mid 40s. If they make another provision for car loan farce, then low 40s is probably a realistic outcome (but would be great for the buyback numbers). Still aiming for 60p year end if all holds. If not will continue to hold for the dividends and ride the wave. Barclays looking the better bank at the moment for a bigger/ quicker bounce (so keeping an eye on both sets of results). DYOR
Looks like Q1 results season is going to be interesting,
“The country’s largest mortgage lender, Lloyds, will kick off earnings week on Wednesday, and is expected to reveal a 26% drop in pre-tax profits to £1.7bn for the three months to March. That reflects analysts’ expectations for a drop in net interest income, as well as a 15% rise in impairment charges to protect itself against a possible rise in defaults.”
https://www.theguardian.com/business/2024/apr/20/even-a-rate-shock-for-british-mortgage-borrowers-may-not-help-the-banks
Rates go up good for NIM but can cause issues with defaults/ bad debt and a more limited lending market. Fine balance between increase in profits and tanking either way
So if the liability is built in already, by virtue, it’s holding back the share price and when resolved, in what ever format, the share price should be free from the issue and therefore rise (or worse case fall further). Doesn’t really matter when the liability was factored into the share price, the issue is it’s factored in, so holding back…
LTI - I don’t disagree with you, if an adult signs up to something and didn’t shop around, more fool them. Car loan scandal/ debacle is any easy reference for issue. Its a clear issue holding Lloyds back from where the share price should be… I think the PPI raised a similar issue and know of people who reclaimed even though they knew full well at the time what they were signing up for.
Thought I’d do a post about Lloyds to mix it up haha. Car finance seems to be holding back Lloyds but with current money set aside, they could easily scrap/ reduce any future buy back in 2025 to more than cover the estimated £2billion loss and still maintain the divi payment (would hope they don’t get stung for it but based on past shenanigans I’m sceptical there won’t be some form of payout). Interest rates don’t look like they will drop much for 2024 (maybe 0.5%?) so lending returns should be good (and defaults recently haven’t been that bad considering). Economy looks like it will trundle on so unless big spike in unemployment and defaults, can’t see much movement in share price until market forces play out. I’m thinking IR fall August at earliest which should bolster price but not much movement till then. Car loans scandal I reckon will drag on for another 12-24 months so I think we will be back in the doldrums for a while yet. Buy back can hoover up the shares to prop up price in interim. Role on 2025 Rodney!
The car “scandal” is already built in to some degree but I’d agree it’s holding back share price. Bigger factor is getting pension companies and int investors to come back to UK market. Only way I can see that happening is by incentivising the market, get rid of stamp duty on purchases and relax pension fund investment. Share price could rocket but tax breaks are a dirty word politically, despite there being huge potential for buildings the wider economy.
Could we see 53p Friday? Not so much a rollercoaster more a small merigoround. Upping target price to 60p end of year if all things hold up and a small reduction from BoE July onwards. Time for horsey to break out into a canter rather than going round in circles at a walking pace.
To quote another article which references the uplift in house prices,
“ The ONS index is arguably the most comprehensive measure of UK house prices as it is based on final sale figures compiled by HM Land Registry. But its limitation is that it has a greater time lag than other HPIs, such as those produced by RICS and Rightmove. As well as being published two months after the data period, the prices it records may have been agreed several months before the sale was formally registered.”
Or in some cases, land reg figures can be over 12 months out of date before sale prices are updated with further adjustments as data comes in….
I’d suggest the ONS figures are horse 💩 overall and the article is just regurgitating usual guff from big estate agents who have a big grip on media output. Bigger properties are selling which inflates the price - basic maths - but reporters no longer check the source. House builders aren’t positive, just look at the layoff stats and companies going into administration. Massive drop in planning applications, so if the market is so healthy, why are all the indicators showing the opposite?
PT51 - I’d take the RM release with a pinch of salt. Note the article says “asking prices”. from what I hear on the ground, overvaluing is rife at the moment for agents to secure a sale property, then a few weeks later, they are discounting to get an actual sale (circa 10%, but is highly dependent on area). Also more higher value property coming onto the market, which depending on how they manipulate the data, could be inflating the index price. Saw a refurb property last month, asking over 1/4 million and even the agent said it was unrealistic and over a £100k where it should be marketed at. Can’t see mortgage rates coming down soon, so expect the property sector to be continually squeezed throughout 2024.
Back to Lloyds, they may get caught by the changes to bulk purchase under build to rent for Citra living, so it will be interesting to see how this impacts on the emerging BTR portfolio
https://www.pinsentmasons.com/out-law/news/uk-budget-2024-abolition-residential-property-tax-changes