The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Anger, from memory there are 17 categories, mostly high tech, to which the National Security & Investment Act 2021 apply. One of these is communications, which I would have thought meant electronic comms, so may be a grey area whether VESA were legally obliged to refer themselves under this act. Didn't Vesa refer themselves voluntarily?
Another positive mentioned by Phunt is that CWU and management have actually met and talked. If energy prices are frozen this cuts inflation and the outlandish inflation linked pay demands. To me these are all big positives
Red, should be an interesting day.
Also, I should have written 'probable energy price freeze'. Truss will certainly do something big re. energy costs. Important to start new premiership on a positive note, very good for PM's popularity.
Red, I'm keeping my fingers crossed, FTSE 250 up 1.5% so far, unless anyone has other news I'm attributing general market rise to energy price freeze and the relief this will give to average uk citizen. Reinvestment of divi also helps.
Positive opening. Dividend paid today, many holders opt to reinvest divi.
If Truss does freeze energy costs, not only does it ensure many people have disposable income, and remain potential customers, it also cuts inflation massively!
The more you look at energy price freeze, the more positive it is for the economy today!
Appears that energy prices may be frozen at current levels by govt., which would save average household best part of £2k pa. Would be good news for RMG as millions of people anticipating zero or negative disposable income will now continue to be active in the economy. FtSE 250 reversed it's decline and RMG sp increased a few pence. Until there is confirmation this remains conjecture.
Anger, completely agree with you on the way the CWU have handled this. Amateurish, negligent, and appear to have done nothing to understand the legal position. I feel bad for the workforce having these donkeys leading them, and following their advice, like some calcified voice from the 1970's, but they voted for it. Even after RMG said GLS could be spun off, CWU are still ranting about £700m profit made in most recent, covid boom time, ignoring the fact that GLS made half this profit, and that the boom is over, and that the struggle to compete in a new post-covid world is on.
Meanwhile, RMG management have got all their ducks lined up with a series of triggers to pull, and they have made CWU aware of this since Q1 results. CWU response was rhetoric and to have separate strike ballots on conditions and wages. Not sure why they did this because they are absolutely intertwined, just seemed like bloody mindedness, but perhaps that was the point, be as awkward and intractable as possible ensuring a strike during a recession. Idiocy.
Nobody will be a winner. Strike will be expensive for both sides, but for the workers and families it will be felt personally. For RMG it will mean lost business during a trend of declining volumes, and these lost customers are likely to stay with a cheaper competitor.
According to the telegraph:
"Executives and legal advisers have been collecting evidence to allow them to trigger the break clause in Royal Mail’s legally binding contract with the Communications Workers Union (CWU)". "To pull out of its contract with the CWU, Royal Mail must demonstrate that it faces one or more of the exceptional circumstances detailed in its break clauses. They include events that have a “material adverse effect” on its business or prospects, such as nationwide industrial action. Royal Mail can also ditch the deal if it believes on reasonable grounds that the restrictions imposed by the agreement are making a part of its business financially unsustainable.
No final decision has been taken, sources said, but with losses mounting and few other weapons to deploy in a dispute that appears to have reached an impasse, Royal Mail is said to be ready to act. Sources said it expects that serving notice would prompt legal action from the CWU and is working with advisers from DAC Beachcroft on its potential response."
Management are streets ahead of CWU, and look to be in a strong position to legally ditch the agreement with the CWU.
Meanwhile Dave Ward said:"Royal Mail wants to change the whole basis of what the company is about. The board's proposals will turn it into just another parcel courier – they are about abandoning the universal service obligation and making as much profit as possible.
We think they are taking liberties, not just with our members but also the public, and that is why we are taking strike action."
So, a "we think" approach? Dave, it's about time you knew something, that's the least your members deserve.
Don't know if this has already been posted, but worth reiterating. Outlines legal path RMG may take to circumvent Moya Green's 'Agenda for Growth, Stability and Long-term Success' agreement with CWU. Spoiler, there are get outs.
https://www.msn.com/en-gb/money/other/royal-mail-devises-new-tactic-as-it-takes-on-striking-union/ar-AA113MLl?ocid=msedgdhp&pc=U531&cvid=aac6b45b34979f4c090345362c29696a
If the dispute is resolved I would agree. However, this dispute has become increasingly bitter, and as far as I am aware the two sides are not even talking. I think it could last a long time, business will suffer and lose market share.
Not sure it would be good business to spin off GLS during an economic slowdown if, as has been suggested, RMG may sell a stake in it. Personally don't think it would be a good idea to sell any % of GLS. Extremely profitable and consistently high growth, why would we want to share that?
pages of bickering, nothing of interest regarding RMG, pull your ego's back this is getting really tiresome.
JB, with the current economic background only getting worse, inflation forecast to reach extraordinary highs(18%?!), base rates, mortgages raised as a counter, tax cutting Truss probably new leader, and RMG's own peculiar set of circumstances, I can't see Blackrock missing an opportunity like this.
It's difficult to predict how low this will go, but when there appears to be no end in sight re. bad news, the shorts will see their chance. This could go on for years, with Putin holding the key to energy prices and our economies. Energy prices can only normalise if Putin agrees to pump more gas, and for that he will insist on a large chunk of Ukraine. After the horrors committed by Putin in Ukraine, it will be a difficult deal to make.
I agree, Blackrock will be back.
18-Aug-22 09:32:27 272.00 4,000,000 Unknown* 271.30 271.70 11m O
Significant trade. Any ideas what/who this could be?
Angersharkz, I agree about the drop off and return to work, people have got mortgages, children, energy bills, a strike now is financial suicide, but here we are. Not sure what the position is for the returnees, since if they stop striking would that mean workers have agreed to the implementation of managements conditions? which would mean ST gets what he wants.
Anger, I think management and CWU are both committed to a strike, which could go on, a day a week here and there, for a good while, with posties making up some of their lost wages with overtime. CWU votes have been overwhelming, showing a real depth of commitment, and Management see this as an existential moment for the business. I don't see any common ground between them. I think ST will be inflexible on the changes to work practices deemed necessary, but may have some latitude on the wage increase. Deja vu, it's all going a bit Rico Back, whilst on the continent GLS continue to sail serenely on making money so quietly you'd hardly know they were there..... I wonder when we will be hearing from them...
Just looked at CWU facebook page. News of no negotiations this week was released an hour ago, which corresponds with the brief leap in the SP. Confirms that some buyers see this as good news, and a taste of what markets reaction will be if GLS is separated from RM.
SP has fallen back quicker than it climbed. Odd. JB, when was the news released regarding CEO's refusal of talks? Could be that some may see a refusal by CEO to engage in talks as a sign that GLS separation is moving forward?
*Any , not Ant!
SP spiked 5p in last 10 minutes. Any news re negotiations?
Anger, had a look at the us markets after I posted and saw the rise. Still have the feeling the shorts are going to make a move. Strike action could also do it. As you note, this is RM so anything could happen.
Today: The Federal Reserve said it would increase its key rate by 0.75 percentage points, targeting a range of 2.25% to 2.5%.
Shorts increased again today, also today US interest rate up .75%. CWU strike action lurking in background.
Could tomorrow's ex-div drop be the trigger for the shorts?