The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Houndog, I agree with your conclusion that EVRI are taking market share. Royal mail parcel volumes in Q1 this year were down 9% compared to the previous year. EVRI are clearly confident that they will retain these new customers which is worrying for RMG as the aim to return to profitability 2023/24 relies heavily on reclaiming customers lost during the recent industrial dispute.
@Moneyshark, Inflation is declining, mainly due to the fall in energy costs. Core cpi declined from 7.1% in May to 6.9% in June, that's just 0.2% in a month. It is moving glacially slowly in the right direction, but still a long way to go to the 2% target.
ND, buy order just got filled. 2X 1.2 million buys. Looks to me as if sp will continue to decline. Govt. is intent on stifling the economy with base rate increases, peak at 6%? who knows, but disposable income is being squeezed consumer demand will contract.
Money, I agree about liberium. However, the best source for guidance is the horses mouth, IDS's own report. Since the report monetary policy has been tightened by another .5%, further reducing discretionary spending. Q1 report next week will give a clearer picture but it is not going to be good.
This from IDS annual report:
"The current financial year, 2023-24 is expected to be another
challenging one. In the first half, a combination of the 6% pay
increase in April 2023 and the currently weaker revenue trajectory
are expected to combine to mean the adjusted operating loss in H1
is expected to be higher year on year"
Fool have consistently lived up to their name. Proactive investors outlook is closer to IDS's own guidance.
Core CPI rose from 6.8% in April to 7.1% in May. Average regular wages were 7.3 per cent higher annually in the three months to May, matching the previous three months. That is the joint highest since records began in 2001, excluding the period when data were warped by Covid upheaval.
Base rate currently 5%. How high will rates have to go to control it? I think at it could go above 6%. There's going to be a lot more volatility before inflation is under control and the market will go up and down with it.
Maybe we'll find out if we're reclaiming lost market share?
As you said, the market is not finished yet and there will be a few more ups and downs in the macro economy, and the SP will follow. Regarding interest rates, I'm not sure they've been effective yet, but there will be a lag between their announcement and tightening of the economy. This article from daily mail is interesting, is inflation becoming built in to the economy? Certainly food for thought :
https://www.dailymail.co.uk/news/article-12285801/Fears-rates-HIGHER-figures-wages-soaring.html
Significant fall in business confidence.
The Institute of Directors said its economic confidence index slumped to minus 31 from minus 6 in May, the lowest level since December and the aftermath of last autumn’s political turmoil.
Here's a link to the article on Bloomberg:
https://www.bnnbloomberg.ca/uk-business-confidence-slumps-after-inflation-shock-iod-says-1.1940309
TheMoney, haha very funny, definitely your style of of writing Anger. Yes, the board has been a bit flat recently, and yes I do have optimism longer term for IDS. The argument with interest rates seemed to revolve around the polarities of either controlling inflation or tipping the economy into recession. BOE have upped by .5% deciding recession is the lesser of the two evils. Absolutely correct, inflation must be nailed, then interest rates will revert to more tolerable levels. Before that happens though people will tighten their belts and the economy will contract. Not good for SP's.
Was a very funny joke Money. Glad you're back, usually have a good grip on the facts and sharp on the response to BS .
Red, No idea why you would 'expect' me to anticipate a recommendation, but generally I recommend a post if I find it useful, as would anybody else.
Yes, I am invested here, and have been since the IPO. I am of the opinion that with their infrastructure and experience they should be taking market share from competitors. Currently this is not happening, and so currently my optimism is being tested.
The last 30+ comments have got zero recommendations. Tiresome, ego driven drivel nothing at all to do with IDS.
Getting back to the point;
.5% hike in base rate.
Inflation stuck at 8.7%.
June's PMI readings worse than expected.
Uncertainty regarding CWU ballot.
Dreadful full year results.
I try to be optimistic regarding the future of IDS, but at the moment it's difficult to find positive news in either the macro economy or anything specific to IDS.
Thanks for that JB. However they've got Citadel advisors Europe, 0.79%; Shortracker is usually accurate and has a more recent record of Citadel advisors Europe, 0.49%, 5th May 2023. Nonetheless it confirms that disclosed shorts are a fraction of actual shorts. Not sure how much room there is for shorts to make a profit. Put shortrackers chart against the sp. chart. The correlation between shorts and sp is clear.
JB, I've been wondering what the 'actual' short positions are rather than the 'reported' short positions. The way short positions are required to be reported means that we don't know if/when they are actually closed.
Qube raised their short by .02% to 0.5% on 30th May 2023. Their last reported position was on 28th Nov 2022 when the sp was 235.5. During this period they could have extended or reduced their positions any number of times if they remained below the reporting threshold. I had a look back through the list to find the shorters who most recently have fallen below the 0.5% reporting threshold:
Citadel Advisors LLC 0.49%, 6th June,2023;
Citadel advisors Europe, 0.49%, 5th May 2023;
Worldquant 0.48%, 4th Jan, 2023;
Blackrock Investment 0.45%, 8th Dec, 2022.
Considering Qube's position has been maintained below the threshold for more than 6 months, it's certain that others also have open short positions. The actual total short position could be at least 3 or 4 times more than the reported short positions.
I'm wondering how this pans out. All of the shorts know that the sp will eventually bottom out and currently all are in profit. SP has been trading in a very narrow range for the last 10 days and unless this is the new normal, which I doubt, something has to give.
The question is, are we approaching the point at which the shorts take their profits and start buying back in order to close their positions? Dog eats dog and no one wants to be left behind, would be pretty good for the sp.
Anger, I once worked for a US pharmaceutical company worth billions who banned the issue of pens until further notice. It seemed quite a strange thing to do, and although I didn't consider it a problem, I was slightly perplexed. Looking back on it, the purpose was to focus the minds of people on waste in general by planting a seed in their minds that all equipment and materials have a cost. The manager was an American so maybe it was a psychological jolt method.
Article about Kretinsky's net worth:
https://www.msn.com/en-gb/money/other/royal-mail-investor-czech-sphinx-to-pocket-650m-energy-firm-payout/ar-AA1bB85P