Member Info for TrekMadone

Good article here explains situation. BoE holding back on Qe unwind as well now.

https://news.sky.com/story/bank-of-england-takes-action-to-restore-orderly-market-conditions-after-mini-budget-panic-12706827

I still think Phnx are ok as new books like sun life will come under their incumbent hedging scheme. Incidentally that completed while the 30 year declines in rates were in full view.

So they have the collateral to hedge long dated bonds from high solvency 2. This means they can meet future DB payments.

Insurance is pretty much all about managing downside risk and being able to pay for that! The issue is some insurers can’t pay for the added leverage needed especially if they get a double whammy from equity falls and inflation.

Phnx is not perfect but it is imo the best of them that’s why I bought here rather than others. Also divi cover and 50/50 Interim & final split is nice and inflation protection!

I only have a little left now to buy more but like I say the next trade is hopefully sell and later recycle. But then depending on boe and strength of bounce plus mad vlad everything is always up for review!

Usual caveats

Trek

“ I am now questioning my judgement ? The case for investment remains sound, but an unbiased observer might think that there are questionable manoeuvres going on behind the scenes? The potential of IB’s products shouldn’t have resulted in the current share price IMO?”

I am on exactly the same page as you. Not many posters admit to questioning themselves and yet we should. Always! And act accordingly!

Hubris is the biggest sin look at Putin and Twanger of late. Ostensibly ‘saving face’ is more important than fking the world up!

I reduced here significantly to a position that I can write off or enjoy rewards. The team and science is so good it makes up for the finance imo.

If I sell the rest you know what will happen but even that won’t stop me from selling if I think I must. Today I sold all my SAVE after being up 280% because I have doubts about the next results. So you see I will sell if I think the balance changes.

Atm I am holding what I have here but not buying anymore.

Usual caveats

Trek

“ Purchase price of $240 million before customary purchase price adjustments

• Acquisition net purchase price of $210 million (the "Acquisition Cost") after customary purchase price adjustments”

I read the adjustments as final changes. If that’s a debt swap all well and good.

The market seems to be absorbing this news positively against a down day.

I should’ve bought more!

Usual caveats

Trek

It’s hedging without sufficient collateral. That’s the issue for some insurers. They can’t meet a margin call so have to liquidate assets to produce cash. A bit like an IG CFD account or an fx account. You have credit but as risk increases the broker wants to see more cash. So you gotta put cash into your CFD account or close your position. If you close then you may be selling at the bottom which is what is hitting some insurers now,

Phnx have high solvency 2 ratio and property. They don’t need to sell equity to cover margin calls….

“ Strong balance sheet with a Solvency II Surplus of £4.7bn2 at 30 June 2022 after a £450m debt repayment (FY 2021: £5.3bn) and a Solvency II Shareholder Capital Coverage Ratio2,3 ('SCCR') of 186% (FY 2021: 180%3).

· Our hedging and credit risk management approach limited the Solvency II surplus economic impact to just £(0.2)bn.

· Fitch leverage ratio4 reduced to 27% at 30 June 2022 reflecting active deleveraging (FY 2021: 28%).

· Phoenix manages a high-quality c.£34bn shareholder credit portfolio, which is 98% investment grade and with only 19% in BBB; our exposure to cyclical sectors is low at only c.3% and high quality with an average credit rating of A-.

· Phoenix has no material exposure to inflation, with our key product and cost exposures hedged.”

And…

“ Our hedging approach protects both our short and long-term cash generation from the impacts of any market volatility, which results in Phoenix offering a uniquely reliable dividend over the very long term, and enables us to invest into growth with confidence.’”

But I am also a realist. The sp has dropped from 680p to sub 520 touch. There is no smoke without fire.

My bet is there’s more sentiment and all stocks being caught up in panic sell first and think later. I am betting that once they look beneath the numbers Phnx will bounce stronger than others esp now BoE have spoken 6k twanger!

I guess all this makes the market!

However, I fully intend to sell some into the rise and then hopefully recycle.

I see days like this as an opportunity to improve one’s long term investment as opposed to just buying and holding. Remember you only need to hold Phnx for 4 days of the trading year to get your divi. The rest is an opportunity to max returns!

Usual caveats

Trek

There’s defo risk but atm it’s more of a rising and falling tide scenario where all ships go up or down.

From DT news….

“ Banks have urged Kwasi Kwarteng to outline his plans to boost economic growth before November, warning the next Budget was “way too far away”.

The Chancellor met bosses at major Wall Street banks this morning as he tried to reassure investors amid market turmoil in the wake of his tax-cutting mini-Budget last week.

Mr Kwarteng doubled down on his fiscal plan and said he will unveil more details about an overhaul of City rules to boost growth in late November.

But the bank bosses complained this was “way too far away”, telling the Chancellor he needed to “communicate frequently, and overcommunicate, if necessary”, a source told the Telegraph.

Mr Kwarteng did not indicate that he might bring forward the timetable for new fiscal rules.

It came as warnings of an imminent crisis in the UK pension market forced the Bank of England into a shock £65bn intervention in bond markets today.

The Bank has been warned by investment banks and fund managers in recent days that the sharp fall in bond prices has forced pension funds to sell bonds to meet margin calls.

In turn, this forces prices down more in a self-reinforcing market spiral. Officials were warned a crash could take place as soon as today.

Bank of England Governor Andrew Bailey hopes to break the cycle by buying up bonds in an effort to halt the market fall.”

https://www.telegraph.co.uk/business/2022/09/28/ftse-100-markets-live-news-pound-bonds-bank-england/

Yes Phnx take on the books of other schemes but for some terms change. My wife was with abbey life, it was market related pay out. As for DB I have to read up more but I know they hedged downside of gilts.

At this price and with strong USD Phnx are also a sitting duck!

“ There's 'tremendous opportunity' in UK banks, says JP Morgan boss
A top JP Morgan executive has said there are huge investment opportunities in UK banks even amid all the market turmoil.

Mary Callahan Erdoes, head of asset and wealth management at the bank, said that staying out of Britain entirely would be a mistake.

Speaking at a conference in New York, she said: "UK banks might be one of the most interesting things you can invest in. You can find tremendous opportunity."

The bank boss said that amid the turmoil and a collapse in the pound, JP Morgan was finding real estate lending opportunities as well.”

Also DT link

Usual caveats

Trek

Don’t be, folk think it will drop more than the divi and buy sell costs. So the sell and buy back cheaper.

Same difference if it comes off.

I though planned to buy my next lot after xd.

Usual caveats

Trek

Please don’t mention Xel. It nearly wiped me out! Lessons learnt.

Finance! Finance! Finance! Then all the bells and whistles DD!

I also bought here at 15.5 ish average. I buy in tranches but today was an opportunity!

Now blue, red, amber, blue but expect to close blue over all! Lol!

Usual caveats

Trek

This is my point….

From Sanji’s ft link, thanks for sharing.

“ So, while rising yields are good news for pension scheme funding levels, they look a likely catalyst for a further liquidation of risky assets.”

Phnx has a different book to lgen, av, mng….

Our asset risks are more in infrastructure as opposed to equities. Mng has one of the biggest exposures there. I can only say this based on my limited knowledge from reading accounts and AR’s

Usual caveats

Trek

Here she goes! Bounce!

Come to Trek!

I think markets don’t believe govt can get next round of debt away due to stirling. Phnx gilts are hedged though and yields are up. they don’t have equity exposure like Mng and lgen etc. oversold now imo

Rates will rise but also I reckon incentives for infrastructure spending should follow. That should help insurers. Not that we have any uk brickies now!

Funny how todays YouTuber’s don’t research average interest rates and inflation.

I had a convo with my boys, they have everything at their finger tips in terms of data now. Thankfully this time they listened to grumpy dad! , didn’t overleverage and fixed!

I bet the banks/mortgage brokers told everyone or implied low rates were here to stay!

Guess you guys remember Norman Lamont and 16% was it! History repeats. We never learn.

Usual caveats

Trek

Politics, I don’t care for any of em. I’d have used QE money to buy a position in likes of Phnx so country has a sovereign income! Then use that and debt to invest in infrastructure. No party fits my mo!

Anyways Phnx and insurers are following gilt market down. Phnx are hedged though and such is the machinations of gilts that yields are up! Hence Phnx fairs better than other insurers plus we don’t have much equity exposure as say MMG or Lgen etc

The market is down coz they don’t believe the govt can get debt away due to Stirling.

It’ll reach a level. One hopes common sense beats hubris but peeps tend to be more interested in saving face than admitting they were ring now a days!

Leaders of whatever persuasion don’t do humility!

Buy hey oversold here. 500 bottom on chart. That seemed mad yesterday but imo will bounce back strongly when it turns. In the meantime +9% still looks safe for now.

Usual caveats

Trek

Thanks for the reply ab76.

That has to be completely bonkers! No wonder we tanked.

So we just as well choke the well to 3999! Nuts

Usual caveats

Trek

Buying again!

Usual caveats

Trek

Chart gives bottom as low as 500p but taken a position 532 in case markets bounce. Got some more powder just in case of 500. If caught wrong side I am happy to hold them!

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Trek

Piled into PHNX, good liquidity. Let’s see…

https://www.cmcmarkets.com/en-gb/opto/is-phoenix-groups-share-price-inflation-proof

Usual caveats

Trek

On your marks!

Ready to grab some divi stocks and sell them into the next rise!

At least that way if you get stuck you have some sort of income!

Usual caveats

Trek

$30m less paid! Nice!

Usual caveats

Trek

Withholding tax of 15%….

Take 50k shares.

Divi is after exchange rate 0.0366 less 15% * 50000 = £1555.50

Divi received was £1679.36. That’s £123.86 more than expected!

If there was no divi withholding tax the the amount would be 1830. (15% is same difference £274.5)

Mine on ii was 8.23%!

100-(1679.36/1830*100) = 8.232% withholding tax paid in ISA??

I have no idea why! Anyone have same %?

Usual caveats

Trek

“ He said the production limit for small producers of oil on land to benefit from the previously increased threshold price of US$75 per barrel for oil BEFORE SPT is applicable will be increased to 4,000 barrels a day and the sunset clause will be repealed.

For new oil wells in shallow water marine areas, whether in existing fields or new fields, the following rates of SPT will now apply”….

So it’s not the whole as ab76 intimated at 0140…it’s after 4000barrels

“ If the oil price were $65 for the year, increasing production from 3,999 BOPD from one licence to 4,000 would result in SPT of $23.7 million for the year instead of zero. That extra barrel would be a very costly mistake.”

So it’s a graduated scale not ideal but not a complete disincentive

https://trinidadexpress.com/business/local/imbert-adjusts-spt-to-boost-oil-production/article_cbbaa368-3dff-11ed-9c1f-0f3f7fde4444.html

Link from smasher..

Usual caveats

Trek

Pound has gone from 131 usd in March to 106 now

https://www.exchangerates.org.uk/GBP-USD-exchange-rate-history.html

Yet PAY has actually held rather well at around 600p average.

Any dollar buyer would be getting PAY at a +20% discount on fx!

Euro not quite as good but still discount.

That’s a compelling window for any potential buyer. Obviously macro risks but if they subside you pay more.

I wonder!

Anyways I am invested for the quarterly income but it’s fun to speculate!

Usual caveats

Trek