Member Info for TheTrotsky

I agree that if DVRG elects not to pay the advances as they fall due then the Lenders can opt to convert at a lower price but it would necessitate DVRG issuing a conversion notice (and notifying the market). If the Lenders are driving the price down its in expectation that DVRG is going to elect (they'd be selling shares they don't own - shorting- in expectation that they'll be able to meet their orders from the shares that DVRG issues on conversion). It's possible but it would require them knowing how much cash DVRG has and knowing for certain that DVRG is going to elect (otherwise they'd risk having to use the cash repayment to buy back shares in the market so that they can fill their shorts).

Most lenders don't want to get involved in speculation - conversion is only a last resort. Also, if the lenders are shorting the share price, it rather kills off any future business relationship. I remain to be convinced that the lenders are crashing the share price for the sake of £500k. We'll just have to watch for any announcements. There has been a persistent seller in the market for over a year now, long before the lenders came on the scene, and it would seem more likely that the persistent seller is selling. The most likely seller is Helium.

Shaikhy, Why don't you actually read the original RNS? The conversion price is fixed. 20p per share. It's right there in black and white in the section headed Conversion! Stop speculating about something you clearly haven't taken the time to read.

Also, don't forget that the conversion price for the initial loan was 20p (if the lender issued a conversion notice to convert any unpaid balance into shares then the number of shares they'd receive would be based on 20p per share not the current market price). So, it would seem highly unlikely that the lender would be converting their loan and selling their resultant shares at the current market price - they'd only receive about a quarter of their loan back!

DVRG cannot draw down on the loan facility without issuing new warrants. They are required to dislcose the issue of new warrants to the market. There have been no new warrants issued. QED there have been no further drawdowns on the loan facility.

I currently hold AEWU, GCP, GSF, RGL and TFIF. Unfortuantely, like most companies, few, if any, IT have been immune from recent market turmoils but I'm a long term holder looking for good, and increasing, dividend returns and (hopefully) some modest capital growth.

AEWU and RGL operate in the commerical property sector and were the ones I personally chose but I also considered SHED and WHR amongst others. I did also hold GRIO at one point but it's been dragged down by all the adverse press coverage surrounding ground rents and reversionary freeholds. It's a well run IT and hasn't got up to the shenanigans that have given the sector such a bad name in recent years but it's share price has nevertheless been dragged down by the general market sentiment. I still think it's an interesting sector but until the government settles on how it's going to reform the sector, if at all, it remains difficult to see the wood for the trees.

If you want to compare and contrast ITs (and UTs if you so choose) operating in the same sector I suggest that you have a look at Trustnet: https://www.trustnet.com/. Also, Questor in the Telepgraph does some good write ups on various ITs from time to time. As always, caveat emptor ;-)

Holding gilts wasn' the issue. Leverage was the problem i.e. using the gilts as collateral for loans so as to be able to reinvest and but even more gilts and repeating the exercise several times.

The simple answer is no. LGEN is just the fund manager. Any redemptions are paid by the fund from the assets held within the fund, not LGEN. This is a typical problem for unit trusts. When investors start cashing their investments the fund either has to meet the redemption calls from the fund's cash or sell assets. It's rare to be able to sell roperty quickly at the best of times and when a fund's cash starts to run low it's not unusual to see the fund seek to defer (stop) redemptions (deferment can last for months; sometimes a year or more). LGIM is saying that at the moment there is enough cash in its Real Assets funds to meet current redemption calls but that the situation is being monitored and the situation may change.

Personally, I always avoid unit trusts (especially property unit trusts) and only invest in investment trusts; unlike unit trusts, where investors own the underlying assets, investment trusts own the underlying assets and investors own the shares in the trust; so, in theory there's always a market and you can sell your shares whenever you want.

GLG have actually increased their combined holdings (shares and finacial instruments). Before the event they held less than 5%, now they hold over 5%.

It's interesting that everybody seems to be missing the blindingly obvious. MNG has to continued to buy its own shares in the open market for cancellation. Not the act of a company facing a liquidity crisis!

Hi Trek, It would seem that Liz & Co's antics at the party conference (one can only watch and listen with disbelief) have not filled the markets with confidence this morning (no doubt she'll find somebody else to blame). She seems hell bent on following her own personal agenda no matter the cost to both her party and the economy (no doubt prodded on by JRM who's never paid any attention to anybody's views other than his own). Truss & Kwarteng have carried on like a pair of rank amateurs; it would be laughable if it wasn't so serious.

I topped up some DEC at the end of last month but am still holding AV, LGEN and MNG along with PHNX. I'm in for the long term dividends so just grit my teeth when the markets go into freefall and to look to reinvest my dividends if, and when, the opportunity arises. Obviously liquidity issues could affect their ability to maintain their dividends but I don't see either LGEN or MNG being any more at risk than any of their other peers (LGEN based on their RNS and MNG based on the FT article on the weekend; it appeared to be the least exposed). AV does not appear to be too heavily exposed to LDIs either but its large, illiquid equity release protfolio might be of more concern if there is a further significant liquidity crunch.

I'm hoping that Truss & Co will eventually see sense and not drive us off a precipice simply to save "face"; they seem to want do everything yesterday and ignore the detail.

Opportunities? It's difficult to see any sure fire winners if the contagion should spread. I bought some TFIF last month but even that's gone into a bit of a spin despite it benefitting from increasing gilt yields. DEC has remained fairly steady but I'm not about t put everything into one share.

I hope so. Like Hailow I could do with some good news for a change. If it wasn't bad enough already Truss & Co managed to score a spectacular own goal last week; their ineptitude knows no bounds and they still plan to add an additional £40bn+ burden to the public purse without any figures to support their claims that both growth and cost cuts are achiebavle and will be sufficient to bridge the gap, and some. If you cut taxes simply to get back to parity then what purpose is served, other than to provide handouts to those who least need them and inflicting even more austerity on those who can least afford it.

Blanc informs the markets when there is news; I believe that she's old school - no news is good news. Although everybody appreciates LGEN updating the market today, where do you draw the line on responding to rumour mongering? This is the second time this year that LGEN has responded to (unfounded) rumours and the second time that AV has chosen not to pander to the rumour mongers. I also very much doubt that LGEN would have issued this RNS if the BofE hadn't intervened in the gilt markets because, however you cut, markets always assume the worst and/or choose disregard RNS when they panic.

If AV does have a problem, it's likely that LDIs are the least of its problem. Based on the FT report on the weekend it would appear that AV is more exposed to illiquid assets and corporate bonds than most of its peers. In normal times this is not a problem, AV has more than enough cash to cover market fluctuations and/or cash calls. However, the turmoil last week was abnormal and I suspect that Blanc will want to assess any potential issues the turmoil might have raised and, if necessary, take steps to modify AV's strategy where appropriate. Blanc would want to do this outside scope of the market spotlight. Bottom line, if the BofE hadn't stepped in last week I think all of the pension companies, not just AV, would have had issues; liquidity always has its limits and, when markets go into meltdown, telling people not to panic is a hard message to sell.

Trek, Really not sure whether you've jumped the gun here (the same would apply to all the pension companies; I'm not picking out PHNX in particular). I'm stilled invested but am somewhat nervous. Listening to Newsight last night a banking commentator said that it was unclear whether confidence had returned or that the markets had simply responded to the BofE injecting up to £65bn. The intervention is due to end next week and she said that would be the real litmus test; in her view, the markets were probably still not comfortable with the government's tax cutting plans.

The reality is that the government has only made a token jesture. The additional rate tax decision needed to be reversed, because it was politically misguided at this juncture (a sure vote loser at the next election), BUT it only represented 5% of the tax cuts announced and the government still hasn't laid out any concrete plans to bridge that gap beyond some vague hope that they will be able to cap costs and increase economic growth.

The government's whole approach has been a farce; without OBR forecasts and firm guidance on where cost cuts can be realistically achieved it's all pie in the sky and, unfortunately, the markets know it. There's bunch of rank amateurs in charge at Nos: 10 & 11 and my fear is that they will become complacent (again) because they've misread the market's response to the BofE flooding the gilts market with cash.

In reality they should roll-back all the proposed tax cuts until they are able to deliver proper cost estimates AND put forward proposals that, at least, the vast majority of their MPs are willing to support (it's unclear whether government can currently get enough support within its own party to get the mooted welfare cuts approved; it 50-100 MPs rebel then their plans will be in tatters). That would at least calm the markets.

One would certainly hope that pension trustees ARE au fait with leveraging & the risks associated with LDI funds, because it would appear that it's the pension funds, with the full knowledge of their sponsoring companies, that would appear to have been buying LDIs to try and boost their investment returns! Not sure what impact there would have been on the sponsoring companies if their pension schemes had run short of cash to meet liquidity calls!

Trek, Not sure what your issue was with ii. I was asked by ii to complete a W8-BEN when I first started investing in US shares (within my ISA) years ago and have been automatically asked to update the form every three years as required without any glitches. So I'm surprised you weren't asked to complete a form when you originally invested (ii wouldn't actually allow me to invest unless I'd completed the form). Did you transfer your shares from another broker (not that should be an excuse for them not requiring you to complete the form)?

They now need to drop the redution in basic rate income tax from 20% to 19%. For the vast majority this reduction will have minimal impact (about £20 per month based on average UK salary). Now is not the time to be cutting income tax revenues; we have a lot of additional national debt to pay down and the government's energy support is worth a lot more than the tax deduction on offer. It's also unrealistic to expect government departments to find the cost savings needed to counteract the impact of both inflation and additional debt financing costs. There is a lot of red tape in government but a lot of it has to do with rules that the government has brought in on accountability (they need to be seen to be making unbaised decisions; so it often take 10 people to make the same decision one person could make); as a result, when we start cutting costs, we often start at the sharp end rather than in the back office. We need to cut costs in the back office BUT to do that we need to agree a balance between accountability and efficiency.

I once sat in on a meeting with my local council about an investment worth less than £5m. There were two external advisors (of which I was one) and about 15 council staff from various departments. Not only that, but we had several meetings when in fact it really needed only one (it was painfully slow). It's not difficult to see where costs can be cut BUT the rules around accountability mean that council staff are often scared of their own shadows and go into far more detail than is necessary before they make any decision. I suspect central government is just as bad, if not worse. They also need more people with commercial experience to assist with the decision making processes. Public services lifers often have no commercial grasp in my experience and, despite their protracted decision-making processes, often make the wrong decisions for the wrong reasons (I'm not saying that people from outside public service are necessarily better but sometimes we all have difficulty seeing the wood for the trees and people outside of public service have often learnt that lesson a lot sooner).

Winthrop, It seems to depend on your broker. Some brokers, e.g. AJ Bell, make a sterling currency election, in which case the dividends are paid at DEC's prescribed conversion rate, whilst other brokers, e.g. Interactive Investor, don't, in which case your dividend is paid in US dollars and converted by the broker. The election isn't made on an individual basis (the elction applies to all holders), so you can't request that your individual dividends are paid in sterling or US dollars as suits you. Sometimes it works in your favour and sometimes it doesn't. For the last dividend you'd definitely been better off receiving the dividends in US dollars; I estimate that you'd have received as much as 7.5% more depending on the rate used by the broker.

As regards the withholding tax, under the UK-US tax treaty there is 0% on SIPPs, 15% on ISAs and 30% on non-ISAs. I recently divested from MNG in my SIPP to buy DEC and vice versa in my ISA to save the 15% withholding tax (should have done it last year); you might look at a similar strategy if you have both ISA and non-ISA accounts. Obviously you've got to factor in dealing costs and consider any CGT implications in your non-ISA account(s) but the long term tax savings ought to outweigh the costs and if your holdings are large enough I would also suggest you sell before you buy (working on the basis that the sale might move the price down enabling you to buy closer to price parity). There is, however, one potential CGT downside to look out for and consider. In the current market you may well end up selling at a capital loss which may or may not be of any benefit in the future because of the requirement to match current year capital losses against current year capital gains before you utilise the annual CGT allowance i.e. you may end up utilising capital losses instead of annual CGT allowance (effectively making the losses worthless) and end up crystallising a larger gain in the future if the price of the new share you buy in your non-ISA account recovers from its current lows, which might not be fully covered by brought forward capital losses and/or your annual CGT allowance.

Hope that helps.

Sick and tired of the Treasury and MPs (including Truss) referring to the energy market intervention and ignoring all the other daft stuff they announced in the mini-budget (I accept that some of the tax changes are probably right but they didn't need to rush the changes through as Truss implies without realeasing an OBR economic forecast and an outline of how they actually expect to make realistic cost cuts - it seems to be a policy of growth for the wealthy and austerity for the rest of us!). The detail of the energy market intervention might have been released in the min-budget but the scope and size of the intervention had already been announced without causing any major market gyrations. By linking the two they are trying to suggest that if they are forced to roll back the mini-budget they'll be forced to roll back the intervention too. Utter garbage!

The markets aren't looking convinced this morning. I doubt most speculators expect the pension companies to actually collapse (they'd expect the government to step in if necessaryt to do whatever it takes; could even see the government taking stakes, like they did with the banks in the 2008 financial crash, to keep them afloat and protect people's private pensions) but there is now a real risk to investors that the pension companies will now, of their own volition, hoard cash (cut or stop dividends) to bolster their balance sheets whilst the market turmoil persists (they are prudent by nature). I'm still holding but am shocked by events over the last 24 hours in particular.

This is a crisis wholly of the government's own making (nothing to do with global events in the last seven days) and the government now has to act to restore faith. The problem is I don't think Truss and Kwarteng have the moral compass to do the right thing and woul rather see Rome burn than do a U-turn; another case of Borisnomics - put your head in the sand, blame everybody else for your problems and hope it all just blows away if you deny that there is any problem long enough and loud enough.

rom sky news ( via another poster )

As we told you moments ago, the Bank of England has announced it will start temporarily buying long-dated government bonds to help "restore orderly market conditions" to the UK…

"There are some very, very specific reasons why the Bank of England is intervening in this particular asset class in long-dated gilts - that's gilts of a 20 to 30 year duration.

"It affects traditional pension funds where a retiree is guaranteed a certain payout at their retirement based on their final salary when they retire.

"Now, a lot of these funds use long-dated gilts as part of their investments and what has been happening over recent days is a lot of the investment funds have been asking pension funds to post more collateral.

"In other words, to put up cash, and it's been reported in The Times that actually these cash calls have been running into tens of billions of pounds since the beginning of the week because of this spike in long-dated gilt yields

"That is why the Bank of England is specifically targeting that with this gilt intervention. It is aimed at seeing off a crisis that's potentially starting to emerge in pension funds.

"It's a very, very specific, targeted intervention at long-dated gilts and as I think it's aimed at tackling specifically some issues that have been cropping up that have been requiring pension funds to put up big sums of money in collateral over the last 48 to 72 hours