Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
indeed. Same goes with ASOS, BOO and lots of other massively beaten down stocks. First signs of a reversal, the shorts which have huge positions in some will scramble and trip over themselves to get out.
3 bagger within hours achievable on the right sort of news, or inflation finally peaking.
The only one talking sense here and knows what they are talking about is molly1966.
Its obviously an amendment of terms so they don't breach covenants in the future if dung really hits the fan. They use a whole menagerie of ratios to calculate how much the RCF should be, but obviously things have deteriorated, revenues will drop so adjustments need to be made to ensure the facility remains open to them. At worst there may be an adjustment of the value of the RCF.
What on earth has this got to do with an equity raise? This is not debt restructuring where BHs demand an equity raise as part of an agreement to satisfy covenants! Any talk of equity raise at this point is sheer nonsense.
Indeed beetrootjuice. Anyone here hoping for the 19% dividend will be sorely dissapointed unless the dark clouds that hang over the housing market magically dissipates.
It's still guesswork how this will affect housebuilders as we will have to wait for at least a couple of quarters for all this to filter down into earnings. But even if they could afford a special dividend, considering what is going on I would be stunned if they paid it out
I think even the most bullish spectator on houseprices will concede defeat regarding where they are heading. Demand and supply doesn't even really come into it anymore. Willingness and capability are unfortunately two very different things. First time buyers simply cannot afford anymore, price to earnings ratio is at an all time high and interest rates will only go up from here. They simply have to correct. Anyone paying today's asking price for any property are barmy; I would demand at least a 15% reduction, if not 20%. And some vendors are accepting!
Then you got 1 year fixed savings accounts now offering close to 5%; even easy access is approaching 3%! Looks like saving will be very much back in vogue soon. Who will risk a BTL whilst you got risk free savings rates like this?
Property hedge against Inflation? I beg to differ. You fail to take into account the most vital variable in the equation....first time buyers!
They are the primary engine of houseprice growth. The last couple of weeks events would have crushed and stomped on new market entrants, which would have caused a cliff edge style drop in demand. This is all because of inflation and the need to rise interest rates, exacerbated by stupid govt policies. Because of the nature of how our houseprice growth is driven by first time buyers, house prices can never be a hedge against Inflation.
This will take a few months to be fully reflected in house prices and housebuilder balance sheets/forward statements. Tbh I think it is about time house prices came back down to earth. Us homeowners have done well enough over the past 15 years, and if prices fall back in line to pre covid levels like stocks have, I would still be happy. As for new entrants suckered into extreme low rates and sky high prices....its going to be painful; very painful. Late 80s all over again. I say new entrants, but really those who have brought within the last decade who have known nothing but rock bottom rates.
However as jamrock correctly states, its all a cycle. Soon as inflation passes (and it will because obviously price increases cannot maintain 10% forever), then the government will drop the rates back low simply because they have to, especially with the ultra agressive trussnomics. Interest rates were kept too low for too long, and now have been effectively rebased. If the BoE put rates back to historical mean of c.5% for a long period of time, houseprices would tank 30-40% and the entire system would no doubt collapse.
I am not voting labour on a whim. I am voting labour to vent my anger at the tories and what they have achieved, or lack of, over the past decade and a bit. That mini budget was the last straw for many including myself; unfunded tax cuts for the very richest guised as helping growth is beyond the pale and a step too far.
The chancellor making the excuse of stress caused due to the queens death for one of the single biggest chancellor ****ups in living history is quite hilarious, but then again tragic and shows the calibre of the people now running the country. Sunak would have made a much better PM; at least he had a grasp of the dire situation this country faces.
And you must live on cloud 9 if you think public spending grew in the cameron years. Public sector spend as a percentage of GDP was down every single year from 2010 to 2018, and only picked up again once bojo entered! Education spending was slashed, NHS slashed, Welfare slashed! If memory serves, Labour would have protected these services, but of course at the expense of others like defence, transport ect who would have faced savage cuts. However education and health are the most valuable public services and should be the last on the chopping block, not the first! This should be protected at all costs.
We also cannot keep blaming Blair/Brown for the problems we face today. That excuse has gotten very old now and really doesn't wash anymore given the time that has elapsed since! Particularly the self inflicted issue of brexit caused solely by Cameron's idiotic gamble!
haha. I remember writing my masters dissertation about 15 years ago outlining then our desperate need for nuclear power for the next 50 years to bridge our energy needs whilst transitioning from fossil fuels to clean energy. Everyone high up knew then that nuclear power was desperately needed to secure energy needs, but the UK have done literally nothing regarding building more plants, mainly citing costs. But they are more than happy to splash £150bn on the energy cap, which could have built several power plants!
Then came the austerity period. This would have been the opportune time to reignite growth truss style, but no! Cameron and Osborne saw it prudent to massively cut public spending...and for what? Penny shrift, pound stupid! Under the tories, this country has become economically and morally bankrupt, our public services are crumbling, we have diminished on the international stage and the desperation of truss & Co shows how out of ideas they really are.
Truss policies are simply in the wrong era. We needed them back in 2013, not now when we are in a midst of an inflation crisis. I don't like labour, but we literally need a change just to freshen things up and wake the complacent Tories up. We will get it come next election, because many including myself will be voting labour for the first time.
If i were at the helm, nuclear power would be national priority number 1. For someone to spout so much about growth, how does blackouts and lack of energy feed into her growth plans? Will we build giant hampster wheels for the poor and those wishing to continue to claim benefits to run inside and power the country like the old wheels used to power cotton mills back in the 18th century? With talk of candles, it feels like UK is heading back to that era!
Truss is another wannabe thatcher, but unfortunately for her she lacks the capacity thatcher had.
Inflation and growth are not not the best bed partners. You have to deal with these one at a time. Thatcher would have never done unfunded tax cuts given the current environment and would be rolling in her grave right now.
Deal with inflation first! Then start with growth policies.
There will be a lot of cash on the sidelines looking in on the markets. At the first hint of inflation peaking, if you blink then you will be left behind as everything relates, just like what happened on that faitful day when the covid vaccination was announced.
One for the brave now. A comprehensive and complete wipeout of SH equity.
Its a tough choice for growth companies to make. Guise the losses as an "investment" in maintaining growth and attempting to grab and retain new customers and market share with lower prices, or let growth fade and lose hard earned and expensive market share in exchange for increasing goods to floating costs and reducing losses.
Fortunately for THG, they have a decent cash buffer so can afford to keep prices down for the foreseeable, and acquire market share for those who simply cant afford this option. Of course, this model is unsustainable and current losses are only sustainable for a couple of years max before they have to revert to the strategy of raising prices, thus losing market share to stronger competitors. However if things do turn and inflation fades, this will rocket, will quickly become cashflow positive, losses will rapidly turn to profit with the new customers acquired and the "investment" will pay off massively, and then some.
Its all or nothing here. I'm in for a small amount, but certainly wouldn't put the kitchen sink in. The next 12 months will be interesting to say the least.
come on steve. Financial status of buyers? No nobel prize for guessing that statistically, it is in a much more precarious position than it was just 3 months back. In fact, it is deteriorating rapidly on a daily basis.
Banks are slashing valuations by tens of thousands. You wont sound cheeky if you offer 10% or more below asking price, especially on london property.
Of course, all technically speaking is speculation as we don't have solid data that reflects the past months events. No doubt PSN can weather the storm, but how low will it go in 2023 which will undoubtedly be a gruelling year for the property market unless inflation suddenly disappears. The high yield also concerns me greatly at PSN considering the effect this will have on the SP if it is cut. It is near double the closest rival. I would be far more inclined to buy with a safer yield that provides greater cover than one that looks very dodgy that could eat into cash on balance sheet to maintain.
Look at the hissyfit the market threw when it finally realised that interest rates "may" hit 5%+.
There is no "may" in the equation. It is not an if, but when. Inflation is not going to come down with this government! What will the BoE achieve in the long run buying up gilts other than giving traders the chance to get their heads straight and ease them into the reality of a high rate environment? Nothing but further bloated coffers filled with more overpriced debt! They merely buy weeks only for the inevitable.
Supply and demand is king you say? So what happens when demand dries up instantly in the first time buyer market (the engine of the market) and households facing 50%+ increase in mortgages? I don't think buying their next house or moving will be on their minds. Demand is on the verge of tanking, houseprices will follow and lack of housing supply won't matter the tiniest bit.
It is so blaringly obvious that house prices simply have to drop to balance the equation of higher interest rates and cost of living crisis.
Something has to give here. Who will blink first, the govt or the BoE?
My money is on kwarteng reversing the mentalist scrapping of top rate tax next week and peddling back on further tax cuts despite him doubling down on his rhetoric. He will be lobbied and forced into submission as this is the only way to calm the markets.
I really hope other politicians, banks and the BoE give him an easy off ramp though. We all know how narcissistic politicians can be, and these tories would rather see the country burn than to lose face.
The political damage has been done however, and kwarteng will always be known as the guy who ruined the economy. Not a politically smart move for a very smart man on paper.
The conservatives are entirely spent governing this country. Morally and now economically, which was their strong point. Labour are having a field day with this
Indeed youngengineer! Try telling those who potentially face their mortgage doubling overnight that this is all just a bad dream; a figment of the media's imagination.
High interest rates will come crashing through everyone's front door. And I feel for these homeowners who were scammed by the government and lulled into a false sense of security by buying at the highest price and the lowest interest rates. The double edged sword of high interest rates and negative equity will prove fatal for many.
What a set of results! Back in black, NAV sitting at a huge £2.68. Also note, the FX rate used to calculate this was based on June 30 gbp to usd FX of 1.22! It is somewhere closer to £3 NAV right now.
As things stand, we have a p/e of around 4 (earnings will only get better), a p/b of 0.33 and massively reduced debt pre covid.
This has to be one of the best bets on the markets at the moment. If it were not for the rubbish markets, we would surely be much higher already
Better the BoE using the coffers to spend on long dated gilts that will actually help than letting that prat give away billions to the rich, actively promoting inequality and sending the markets into a tailspin. Spend the money before the tories can get their hands on it.
Finally the BoE have the balls to stand upto the govt and are beginning to do something about this utter mess. This is only a very temporary fix however, and higher interest rates will still be needed.
Utter joke that the BoE and govt are so out of sync. We are a laughing stock among developed economies.
BoE spending the cash and splashing out on long dated gilts before the tories can give it away to the rich?
Buying back debt is a better use of money than tax cuts, but why were they forced to take such drastic action. Just shows the dysfunction up the top at the moment. BoE and govt are not in sync.
A very temporary patch job however. But at least the BoE beginning to do something about this tory governments. Could settle frayed nerves here.
Wow, what an endorsement of the budget by the IMF and Moodys. That's pretty big news!
Then again, a 10 year old could have told you that cutting the top rate tax from 45% to 40% is sheer lunacy, completely unnecessary and will do nothing but exacorbate the crisis we are in and go down like a lead balloon with the markets. This top rate needs to be reinstated immediately.
One way or another HPs are going down! I really don't know what all the fuss is about letting them drop 10%? Look at how they have performed over the last year alone.
Sure there will be casualties, but there always is! There will be far less casualties than this insane budget.
Boy do we need sunaks economic nuance now.