Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Shares in Johnson Matthey soared over 30% on Friday after the investment arm of New
York-based industrial firm Standard Industries took a 5.23% stake in the British chemicals maker.
Matthey's stock jumped as much as 35% to 2,536 pence on
Friday, its highest since November. A London trader, on condition of anonymity, said the stake deal could be a prelude to "some kind of move", referring to possible transactions.
Standard Industries bought U.S.-based global specialty chemical company W. R. Grace & Co a year ago in a $4.63 billion deal.
As of Thursday, Matthey had a market value of 3.47 billion pounds ($4.36 billion).
Standard's stake disclosure comes a few months after Johnson
Matthey announced plans to sell or exit its battery materials business in November. Its stock had slumped 32% since that announcement. ...
"We would consider this to be something like an ideal owner for (Johnson Matthey), operational overlap on the process catalyst business and an ability to take a long-term view on the cash generation from the Clean Air business," analysts at
Jefferies wrote in a note.
Standard Latitude Master Fund, controlled by Standard
Investments and the co-chiefs of Standard Industries, would now be Matthey's fifth-largest shareholder, according to Refinitiv data.
Helu
There’s obviously already been a bid. I’d imagine it would be a preliminary one and £30 sounds like a good starting point.
“But no RNS about a bid. Clearly insider trading.”
There rarely is before a takeover is announced
But the clues are in the shareprice.
All will be revealed shortly.
Machismo
“Seems fun so let me have a go! “
Yes it can be fun. I’m here to entertain as well as getting my point across.
And Aristonia
A word of advice
Gordon Gekko said “information is the most valuable commodity I know”
But in today’s world misinformation dominates. And misinformation is lethal to novice traders. That’s why so many of them get blown up. Decimated. Destroyed.
By absorbing s**t loads of misinformation
And the same can be said for most things in life
So watch out!
Aristonia
That’s totally erroneous and misleading information by IG. I could give you numerous examples to the contrary - but I can’t be bothered.
I use IG to trade but am only too aware of their fabricated sales pitches. If you ever call customer service you’ll be lucky to find anyone who speaks a word of English. And even luckier if you find someone on the other end of the telephone who knows the first thing about trading.
I believe the kremlin runs their propaganda department.
Aristonia
Are you really that clueless that you don’t know the Permabear has risen about seven percent since 1999
While the Dax has TRIPLED
And the Dow has QUADRUPLED
Don’t give up your day job
Wannabe Gordon Gekkos have a life expectancy of a few months in stock markets
And even less in the Permabear
Machismo
“What you have described is the stock market”
No what I described was the world’s worst performing stock market over the past 22 years. The Permabear 100.
Don’t tell me - you’ve just appeared on the scene after watching a couple of Gordon Gekko movies and you’ve become a legend in your own mind. A big swinging strutting D**k
To understand my sentiment you need to have an encyclopedic knowledge of stock markets.
Many will try - most will fail. And I’d bet every penny I’ve got that you will fail.
And when you do I hope you will think of me…
For a month. And all the human scum responsible for trashing our most valuable companies removed and replaced. New regulation need to be introduced so we are on par with the rest of the world.
Novices tend to blame the share when it gets trashed, but that isn’t the case in the UK
Markets are supposed to work like this - a company beats market expectations- it rises - and it stays up
Not so in the UK - legions of hyena hedge funds come here to trash our most valuable companies on concerted attacks - shorting by stealth - keeping the threshold under 0.5 percent so they don’t have to declare it
But can you blame them - what they’re doing to UK companies is the same as what Russia is doing in Ukraine- the systematic destruction of our companies day after day after day. UK markets have been engines of wealth destruction for over twenty years.
The only difference between Uk companies and Ukraine is that we are are defenseless - we have nothing to fight back with - no regulation since we left the EU - defenseless. The government know damn well what’s going on but choose to ignore the abuse for fear of reputational damage.
And the market makers are complicit in the destruction - they calibrate the index to ensure almost everyone loses. They do this by marking up miners and oil while marking almost everything else down. A casino that’s allowed to choose its own cards to ensure they never lose. 85 shares can fall in the index but it can still rise - the result an ever widening chasm of in-equilibrium
Kant was so right when he said..
‘Our of the bent timber of humanity nothing straight can ever be made’
One only need to look at Ukraine and UK markets to know that.
The only difference is that uk markets is a bloodless slaughter.
There’s nothing wrong with the uk’s great companies, the problem lies in the market’s total inability to value shares fairly.
Pearls
The placement shares are already factored into the company’s market capital - the value of the company is the sum of all its shares - nothing has changed. Certainly nothing to warrant the shareprice getting smashed by hyena hedge funds. The hyena funds are creating a false narrative and unfortunately it’s the one the market is following. This could never happen in any other developed nation’s market but UK markets behave like third world ones. Shorters know that - they know uk markets have got a glass jaw - especially when it comes to tech companies- Easy pickings. In its current state companies listed in the uk are defenseless against manipulatory predators. They can’t trash companies in their own country because regulation is in place to stop it so they come here to trash ours.
Were much higher than usual. I think over 18 million shares exchanged hands. High volumes reinforce price direction BUT the price action on Thursday could have been a textbook reaction to a profit warning when we know profit expectations were raised. I know UK markets are Permabears, but even so companies don’t just lose 25 percent in 48 hours after raising profit expectations for no logical reason.
Thursday afternoon ‘s price action after American markets were an anomaly. There has to be a cause for such a bizarre event and I suspect that cause is fraud.
A bear raid would explain the abnormally high volumes and the downward spiral. Rogue hedge funds work in packs like hyenas. They attack companies collectively at precisely the same time. Thursday afternoon would have been an opportune time for a bear raid because of the 4 day weekend. Reaping carnage before holidays is their favored method because it creates panic among shareholders.
I’ve been in contact with the investor relations manager who’s looking into the matter. I’ll post his reply when I receive it.
Technology fail
Part of the UK’s underperformance is the underlying skeleton of the market. Technology groups dominate global growth as businesses compete to be the next Google, Apple or Alibaba.
The UK is barely in that race. The technology sector accounts for less than 5 per cent of the UK’s total market capitalisation. In Germany, it is 11 per cent. In the US, it is almost a third. Investors’ fascination with growth has been fuelled by a record period of low interest rates. But, as these start to rise, the value of future cash flows fall as they are discounted to present value.
The UK began to trail other global markets, on a total return basis, at least two years before the Brexit vote due to this value bias in terms of the composition of stocks. And even if you adjust for that bias, the valuation discount shrinks but is still about 10 per cent, calculates Simon French, economist at Panmure Gordon.
UK-listed companies have to therefore work harder and increase earnings faster to achieve the same stock ratings as peers elsewhere. “Failure to embrace a growth-oriented mindset is unnecessarily raising the cost of equity capital [in the UK],” says French.
Using price-to-earnings to growth (PEG) ratios, a metric that combines a stock’s valuation and its expected growth, French found the UK at 1.3 times was substantially below the EU at 1.7 times and the US at 1.9 times. “Eight out of 11 industrial groups [surveyed] across both Europe and the US have higher PEG ratios than their UK equivalents,” says French.
Software group Blue Prism typifies some of these failings. The maker of robotic process automation tools will leave the UK’s junior market, Aim, in a £1.24bn deal with SS&C of the US. That takeover price is well below where its shares were trading as recently as the beginning of 2021.
Blue Prism is not the only UK-listed business that went to foreign owners at a perceived knockdown price. Takeover attempts were at a 14-year high last year and bids from private equity were at a record. Markets are telling investors that UK assets are a bargain but many buyers are simply not listening. If they were, valuations would be higher.
Looking for someone to blame
The findings from the Panmure Gordon analysis lend weight to Marshall’s criticism that UK money managers have become part of the problem. Income funds invest in the lower-risk, steady-return, cash-generative businesses that make up much of the FTSE 100.
Such income funds only make up 5 per cent of the £1tn of UK managed equity assets, according to the Investment Association. But, says Marshall, this income focus is more widespread than just these officially designated funds. He argues that the whole UK fund management industry has a deep-seated income bias that has become ingrained in investment mandates, from pensions to insurance and other funds.
That creates a cycle of negative feedback that is cutting off the lifeline of new growth and keeping the UK market
This isn’t my own but it sums up the current state of UK markets perfectly. Take some time reading it over the weekend. The least it can do is reveal the perilous state of companies listed in the UK.
My verdict - UK has lots of outstanding companies - unfortunately they belong to a cesspit index that is bringing them to their knees.
For investors, Britain is not just the sick man of Europe but of the world. Since voting to leave the EU in 2016, UK stock market returns have lagged behind international peers and a historically wide valuation discount has become ingrained. So much so that the UK has become a hunting ground for foreign buyers searching for cheap deals, such as the US buyers of supermarket chain Morrisons and of defence manufacturer Meggitt.
This diminished position is not helped by comparisons to booming tech-fuelled US markets. Internet giants such as Google, Microsoft and Apple have all achieved trillion-dollar valuations at record high multiples. Yet Britain barely musters a mid-cap tech group. Software group Aveva, valued at £7.5bn, is currently the largest tech group in the FTSE 100.
And while the US market is packed with such racy growth stocks — companies that are often unprofitable but richly valued due to rapid revenue growth — the UK market is populated with profitable cash-generating businesses or value stocks that have reached maturity.
Paul Marshall, chair of hedge fund Marshall Wace, believes the situation is now so dire that the UK risks becoming a “Jurassic Park” market — only fit for dinosaurs.
A FTSE 100 share index board in the atrium of the LSE offices in 2019 © Luke MacGregor/Bloomberg
An imminent test of that will come when SoftBank-owned chipmaker Arm decides whether to list in London or elsewhere after a $66bn deal to sell it to Nvidia was blocked by UK regulators. Broad estimates for the tech sector imply a 30 per cent valuation lift for Arm in New York and initial reports suggest SoftBank has already chosen to list there.
If Arm were to surprise the markets and pick the UK it would offer some vindication of efforts to attract faster-growing companies to London. Separate reviews last year by Jonathan Hill, the former European commissioner for financial services, and Ron Kalifa, the former Worldpay chief executive, have led to more relaxed rules on dual-class share structures and public share counts.
The tweaks, however, are unlikely to get to the heart of the problem: the UK stock market is cheap on almost every measure. Unless that changes, the implications for investment and innovation in the country could further diminish Britain’s international competitiveness.
Valuation gap
For an economy strongly tied to the financial services industry, which accounts for about 10 per cent of gross domestic product, it is embarrassing that the value of UK equities has fallen so far behind that of international peers. And it is not just investor returns that have lagged be
Pearls
“Great news update + trashed share price = bid target”
But isn’t it pathetic that a stock can only realize fair value when it gets taken over?
Like
Morrison
Meggitt
William Hill
And dozens of others.
When a market can’t value shares fairly it is broken.
A broken stock market does No End of harm to a country’s economy.
Been in contact with Darktrace investor relations about todays anomalous trading and they told me they were aware of the issue and taking it up with the FCA. Also stated that the share was suspended for the last several minutes of trade during market hours due to the dubious trading pattern. Traders should be able to bear me out on this factor.
Below is an explanation of what happened today.
“A bear raid is an illegal act of ganging up to lower stock prices by coordinated short selling and spreading negative rumours about the target product. Often a bear raid is used by unscrupulous short sellers who want to make a fast buck from their short positions.
What is The Aim of a Bear Raid?
The purpose of a bear raid is usually to make windfall profits through short sales over a short period of time. If the bear raid succeeds and the target stock sinks, short sellers will buy the shares back cheaply on the open market.
Short-sellers make money by first selling the shares at what they believe to be is a high price, and then buy them back to close their position at a lower price.
In a typical bear raid, short sellers will collide in advance in order to create massive short positions in the target stock. As the massive short interest in the stock raises the likelihood of a short tightening that can trigger significant losses to the shorts, short sellers can not afford to wait passively for months before their short strategy works out.”
And let’s fac it - tech shares listed on the UK cesspit are targets for every shorter in the world.
Toff
Have a great (extended) weekend.
What an overt bear raid that was. Like a pack of hyenas swarming over its prey.
Treading water until the yank markets opened.
And then absolutely trashed.
Talk about obvious!
Every tech share that lists in the uk gets absolutely destroyed. Only garbage tech stocks like Moonpig and Deliveroo list in this current climate because no other market would accept them.
Darktrace like TransferWise are getting systematically destroyed by a combination of overseas bear raids and zero regulation against fraud in the crock of s**t that is the uk market.
Oldman
“Ah okay I did attempt a polite response. Was not aware you had anger issue”
Do you really think I can’t read between the lines old man?
You’re irrelevant. Meaningless. Meaning I won’t take the bait. Got that!
Matt
“No-one's forcing you to invest in the UK, or anywhere else.”
OMG not that old chestnut. If you can’t do any better than that tired old cliche don’t expect to converse with me. I’m in a different league!
Old
“Toffee I complimented on you on what I thought was a good post”
I don’t need written explanations or confirmations off you to judge my post. The upticks do that.
That Darktrace has crashed since the Dow opened.
Sure sign of a bear raid.
Orchestrated by JP Morgan.
Through rogue boiler room hedge funds based in London.
Feeding multiple sell trades through algorithm trading for minuscule amounts of shares.
The London market is so obtuse and antiquated it can’t spot FRAUD
If there’s one but for 10,000 shares
And 50 sells for 2/3 shares it will mark the shareprice down precipitously.
How much longer are UK politicians going to allow this kind of abuse!