Member Info for WiganWarriors

Hi Fred
Interesting that no smoke emanating re new Chairman so far. Also, no news re acquisitions. Should be accumulating cash at a decent rate, and no news probably bodes well. The product recall must be insignificant in revenue terms otherwise we might have got a formal update / warning, so I would expect that 2022 numbers should be top end of forecasts.

If no suitable acquisitions identified, I wonder if the BoD will recommend special distribution to burn up some of the cash pile.

Either way, every time I look at Vimto / Feel Good on the shelves of my local supermarket they appear to be consistently outselling Robinsons Fruit drinks and Ribena, buy a long way.

See what gives in the January update.

Noticed around 30M went through the closing auction, and was booked as a "buy". This means that the bid orders submitted to the auction must have been more than 30M @103.4, and they were only able to fill 30M.

All things being equal with the macro environment overnight, and the Nationwide HPI tomorrow at 0700 hrs, we should expect a firm start.

Yeah, more houses are bought with cash these days than ever before. Not just investors but families who are helping relatives to get on the ladder (post Covid you "only live once gilt syndrome ...") . Or helping with cash deposits or outright purchases as part of IHT planning given UK GOV is tightening those reliefs.

There was a third trade for 14,000,000 (11:06 hrs) which originated from a trading entity registered in the EU; Amsterdam. Interesting.

Seems this BB is going the way of ADFVN. Professional trolls dominating genuine conversation and proffering meaningless opinions, just to generate eyeball traffic.

Also, rumours that Hunt will increase CGT will accelerate the move to crystallise current gains at todays low CGT rate (28%), into limited companies. Then landlords can run their properties in a more professional manner taking advantage of all respective allowances and lower corporate tax rate.

@Calisto. Generally I agree. Talking heads and media like to create headlines, and for Brits nothing is as attention grabbing as housing headlines.

As you point out, these days builder’s are much more attuned to the normal building cycle, and only build what they can sell. Pretty much they all operate on a build to order model, and won’t get stuck with excessive inventory. As a sector, they have the strongest balance sheets (at least all the larger listed builders).

Of course, the market sets the share price regardless. Now we have some grownups in the room with a mandate to stabilise the macro environment, I would suggest that current share prices should be around the bottom. If you can acquire on a medium term basis then solid returns should accrue.

The Tories supply side ambition would benefit from an extension to the HtB scheme. Doesn’t cost a great deal, but will help the sector keep motoring and generating jobs and tax income. Plus will help first time buyers to realise their ambitions. So good politics and good tax generative.

IMHO.

I suspect that the economic calendar (UK Manufacturing, GDP 0700hrs, and a slew of US inflation figures 1330 hrs), will set the market direction tomorrow. Not too mention BDEV trading update and Wimps ex-div opening.

Friday BoE supposed to finish its gilt buying support. Pound likely under pressure Sunday night when Asia opens. Likely be a volatile time.

As always, the question all investors / traders face is whether to accept their losses and move on in a positive frame of mind. Or hope for recovery of some sorts (highly unlikely in my view), and suffer the mental anguish that comes with hanging on to losing trades, which tends to mess with your mind when contemplating other potential winning investments / trades.

All investors / traders take losses, it is inevitable in today's volatile markets driven by global events and amplified by algorithmic trading.

As they say, hanging around comes with an "opportunity cost". Time for contemplation.

BoE announcement re August mortgage approvals show decent growth on July. Up to 74k from 63k. Of course the economist from Pantheon managed to put a negative spin on it by suggesting it was because people rush to get mortgages before interest rates rose, and that it was a blip.

Well, last time I looked mortgage approvals are ok’d by Banks, not punters just deciding they want an approval at a time that suits them. During August Banks where just as concerned about interest rates rises and were expressing caution when approving.

Talking heads and media vying to outdo each other to create headlines regardless of the facts. Of course, if September and November mortgage approvals hold up then Pantheon won’t acknowledge their hasty conclusion was incorrect.

Hmmm, the situation as I see it at the mo. Seems Liz is out and about giving interviews to small localised radio stations, declaring that she is still committed to her plan for growth " ... because it's the right thing to do ...". Unfortunately this is not good enough for the markets to establish some level of stability, and they will continue to test the B0E's resolve.

A couple of weeks ago the markets could read forward the BoE's " data based dot plot" of actual and expected interest rate rises, which the market then used to price forward rates. Obviously, forward rates would continue to rise to around 3.75% tops next year, before falling back to around 2.25% end 2023. Given where we have been for the last few years not ideal, but manageable for the housing market.

As the " ... Lady is not for turning ..." the BoE will have to intervene again to shore up sterling, probably this week. To have any effect the unscheduled rate rise will need to be hefty to show it means business. This will only excite the talking heads and media to scream out headlines pronouncing the death of the housing market as we know it.

Solutions:

1). Tories need to either submit letters of no confidence in Liz to Sir Graham Brady ; pronto.

2). Senior Tories ask Liz to step down and they appoint a temporary PM (Sunak ?). Get some grown ups into the room.

3). Liz has a road to Damascene moment , and puts the fiscal event on hold pending full analysis by the Office of Budget Responsibility, and publication of impact on the economy. In which case Parliament will not pass it.

Really hard to see how Tories can get elected even now, let alone after a few more weeks of this turmoil which will frighten ordinary working folks into reigning in all discretionary spending. I bet the builders have quietly decided that they will pretty much stop all land buying activities until we have more stability.

Just my thoughts, have I missed anything ?

@Jay. Maybe, but the Tories Laissez Faire approach (continuation of Boris's ineptitude), shows how low we have sunk as a nation with respect to accepting mediocre leadership. All this rhetoric about the UK being one of the worlds leading economies, is just that; rhetoric. We are declining in the worlds eye and our currency is being trashed, not something a leading G7 country should countenance.

Just look at a chart re the Russian Ruble's performance this year vs Sterling. That is telling.

@Ben. I'm also not sure that Truss will survive, the market will test the BoE's resolve, and there's usually only one winner there. I can't see the market waiting until the next "fiscal update" in late November, and so I would expect BoE to step in. If they do, it will need to be at least 1%, as a holding measure until UK GOV listens to the Treasury and stops playing to a few thousand core right wing supporters who have no stake in normal society and day to day issues.

It's hard to see how the Tories can survive this, not sure how it will play out but if I was Truss I'd sack Kwarteng (resign) and invite Rishi to add credibility. Unlikely, why would Rishi clean up their mess.

@Bozzy. Generally I agree. However it’s the markets that set the share price. This is a godsend for the talking heads and media to promote disastrous scenarios re mortgage rates, frightening ordinary families. Undoubtedly this will put pressure on the share price.

I reckon this will prove fatal for the Tories, they should have given the job to Rishy. He was the only grown up in the room with respect to honesty, integrity, economics and not to mention common sense.

Well, Wimps management have stated that the dividend policy stays intact and has been "stress tested" up to a 30% cyclic downturn (from memory) .

Reconfirmed in recent half year results : "... It is probably the right time to emphasise that our ordinary dividend policy is different to the rest of the sector. In a cyclical environment earnings fluctuate so basing our ordinary dividend policy on net assets significantly improves the consistency and reliability of those returns to shareholders compared to earnings measures. Clearly, we are very mindful of the prevailing general economic uncertainty but with our fantastic landbank and strategic pipeline we are more confident than ever that we can continue to pay an ordinary dividend of at least £250 million in a normal downturn, which we have previously put parameters around and we would still emerge in a very strong position ..."

So there you have it, straight from the horses mouth.

Seems the market has decided that the negatives from the collapsing £, which will require the BoE to raise interest rates faster for longer, outweighs the modest benefits from SDLT cuts.

Liz Truss is reportedly going to cut SDLT as part of the dash for growth. Should provide some support for the building sector. See what gives tomorrow.

Well, there is little in the way of short positions declared in the building sector. Marshall Wace periodically declare a small (ish) short position, but nothing significant in the larger scheme of things.

Also, their short position may well be a hedge against a larger long position. Given the declared interest of Elliott in Wimps, there is likely to be hedge funds who have acquired positions (either speculative or "in the know"). Some will have exited those positions as the year deteriorated re interest rate rises, Ukraine and inflation, some will be managing their positions with hedges.

IMHO I would suggest there is nothing to see here re shorts.

Although, it would be interesting to know what, if anything, Elliotts intentions are.

Be interesting to see if the new Conservative government do anything to stimulate the housing market, given their announcement that their short term policy is to go for growth. A steady or growing housing market does wonders for tax revenues, job creation and knock on stimulus to other sectors such as soft furnishings, legal, finance etc.

Maybe an extension to HTB or SDLT reduction, either temporary or as part of their tax reduction plans.

@Radika. Theses are trades that are recorded after the market has closed, for various reasons (delayed reporting, off book trades etc.). So, this BB (along with other free BB's) can't determine at what time the trades were executed, and therefore can't "guess" whether it was a buy or sell trade depending on the quoted buy / sell prices at a specific time. They just record them as unknown.