Monthly Archives: May 2014

The Dividend of Standard Life.

The highly financially rated and very well regarded Scottish financial institution Standard Life paid its shareholders on 22 May 2014 its final dividend.


This FTSE-100 Life Insurer, that looks after the investments of policy holders, savers, investors and pensioners as well as insuring the lives of millions of people has 2,390,606,374 shares.


The final dividend payment was 10.58p.

So with 2,390,606,374 shares each commanding a payment of 10.58p the cash leaving Standard Life on Thursday 22nd May was:-

2,390,606,374 shares x £0.1058 = £252,926,154 = £252 Million = £0.252 Billion.

The financial strength of Standard Life is demonstrated by the health progressive dividend policy of this high revered financial institution, who looks after £191 Billion in assets which is equivalent to 12.5% of the annual UK GDP.

The Fundamentals of AstraZeneca

The proposed takeover of the UK pharmaceutical giant AstraZeneca [] by America’s Pfizer formally failed on Monday 26th May, when Pfizer failed to agree final price with the AstraZeneca board.

Looking at the fundamentals of Astra Zeneca makes interesting reading


With a market capitalisation of about £54 Billion, the dividend yield is over 3%.
Incredible to think in a 0.5% interest climate, the yield on AstraZeneca stock is 3.8%.

The specialisms of Astra Zeneca are:-

[i]Cardiovascular and Metabolic disease (CVMD)
[iii]Respiratory, Inflammation and Autoimmunity (RIA).
[iv]Infection, Neuroscience and Gastrointestinal (ING) disease areas

It’s top ten products for sales revenues are:-

Crestor for managing cholesterol levels: Sales £3,337million
Seloken/Toprol–XL for hypertension, heart failure and angina: Sales £445million
Iressa for lung cancer: Sales £384 million
Faslodex for breast cancer: £404 million
Zoladex for prostate and breast cancer: £591 million
Pulmicort for asthma: £514 million
Symbicort for asthma: £2067 million
Nexium for acid-reflux: £2298 million
Seroquel XR for schizophrenia, bipolar disorder and major depressive disorder: £793 million
Synagis for RSV, a respiratory infection in infants: £629 million

With around 51,500 people employed worldwide, 34.8% in Europe, 21.7% in North America, 6% in Central and South America, 4.1% in the Middle East and Africa and 33.4% in Asia Pacific.

AstraZenca manufacture medicines and sales in sales in 2012 totalled £15.2 billion, with Research and Development each year at £2.37 billion. The flagship R&D facilities are in Cambridge.

The 2nd largest Pharma company on the FTSE-100 index. Perhaps the reason for the takeover by Pfizer, was the 10 products that generated massive revenues and the R&D Pipeline from Cambridge.

Technology Focus: Graphene

Graphene is a recently discovered new allotrope of Carbon, (Diamond and Graphite being the others) and the properties are now being hailed as a breakthrough in Condensed Matter Physics, and subsequently lead to the Nobel Prize for Physics being awarded to Professor Andre K Geim at The University of Manchester in 2010.


The famous paper that made Professor Geim [] world famous.

The University of Manchester are leading the academic research & development into Graphene.


Graphene itself is a remarkable material:-


So famous in fact that Professor Geim was featured on BBC Radio Four’s “Desert Island Discs”


With Graphene being hailed as the new semiconductor for the electronics industry, we are seeing new companies focussing their business of Graphene research and development.

Recently The highly regarded University of Durham [] spun out a company called Advance Graphene Materials:


Shareholder   % holding
IP2IPO    20.4%
North East Technology  14.5%
North East Finance  10.4%
Ruffer    7.6%
Durham University  7.3%
SandAire   4.8%
Insight    4.8%
Professor Karl Coleman  10.2%
Jon Mabbitt   0.7%
Bryan Dobson   0.7%
Oliver Lightowler  0.2%
Claudio Marinelli  0.1%

Only 34.6%.Applied Graphene Materials’ shares are on free float.

Look at the financials:


A £67m spin out from The University of Durham. British Science at its very best.

Standard Chartered Bank

The FTSE-100 listed bank that is focussed on Emerging Markets.


What is incredible is that around 90% of Standard Chartered income and profits are derived from Asia, Africa and the Middle East.

A market capitalisation of over £30billion.

The annual report gives some useful insight:-


The Balance Sheet Facts:

Total assets $674,380m = £400,028 million = £400 Billion (about 26% of annual UK GDP)
Debt securities in issue, = $71.4 billion = £42.35 Billion (Bonds issued by Standard Chartered)
Total Assets Under Management from customers $58 billion = £34 Billion
Customer account deposits = $381,066 million = £226,041 million = £226 Billion
Total liabilities = $627,539 million = £372,243 = £372 Billion
Who is the single largest shareholder ?

The Singaporean state investor Temasek Holdings.

Final finding from the annual report “Wealth, The scale of the Private Banking opportunity across our markets is enormous. Today there is some $10 trillion of assets under management (AUM) from high net worth individuals in Asia, Africa and the Middle East. By 2017, this number will more than double

This is another example of the growth in Asian and Emerging Markets, and of course a key asset is the sponsorship of the most successful team in the world, Liverpool FC, a great bank sponsoring the greatest football team in the world (of course).

Salient Facts about Emerging Markets

The term BRICs came from Jim O’Neil at Goldman Sachs Asset Management. This was the termto explain the growth in certain nations, such as Brazil, Russia, India and China.

One only has to look at these simple facts to see why Emerging Markets are so important.The largest Ferris wheel in the world is in Singapore.The tallest building in the world is now in Dubai.The largest investment fund in the world is in Abu Dhabi (The Abu Dhabi Investment Authority). The largest oil refinery is in India.

One has to thinking about growing companies too, Embraer is one of the worlds largest aeroplane makers, it is Brazilian. Emerging Markets are the growth engine to the global economy.

Troy Income & Growth Investment Trust PLC

The Troy Income & Growth Investment Trust is an investment company listed the London Stock Exchange.


A £150m investment company, whose holdings make interesting reading.

The top ten holdings are:-

Royal Dutch Shell ‘B’ 3.8%
Unilever 3.8%
Reynolds American 3.6%
Astrazeneca 3.4%
British American Tobacco 3.3%
BP 3.2%
HSBC 3.2%
Pennon 3.2%
Centrica 3.1%

This fund is managed by Troy Asset Management [] who are the fund management company set up to manage the wealth of the Weinstock family, who for decades ran the former UK Electronics giant, The General Electric Company, which later became the ill-fated Marconi plc and then made poor investments into Telecoms at the height of the late 1990’s technology and telecoms boom under the poor leadership and bad judgement of Lord Simpson and John Mayo who drove a the FTSE-100 giant into the ground.


UK HM Government April 2014 borrowings….

Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.

In April 2014, the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.

There were “only” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury :-

29-Apr-2014 2¾% Treasury Gilt 2024 £3,500 million
24-Apr-2014 1¾% Treasury Gilt 2019 £4,000 million
08-Apr-2014 0¾% Index-linked Treasury Gilt £1,300 million
02-Apr-2014 3¼% Treasury Gilt 2044 £2,715.764 million

When you add the cash raised:-

∑(£3,500 million + £4,000 million + £1,300 million + £2,715.764 million) = £11,516 Million

£11,516 Million = £11.516 Billion

On another way of looking at it, is in the 30 days in April, HM Government borrowed:-

£383 million each day  for 30 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature, 2024, 2019 and 2044. All long term borrowings, we are mortgaging our futures, but at least we are “in it together…”

Pfizer and AstraZeneca

The largest takeover of a UK PLC is making all the business headlines, with the US pharmaceuticals company Pfizer trying to by the UK pharma company Astra Zeneca for £63 Billion.

The history of AstraZeneca is an interesting one. they formed in 1999, by the merger of the Swedish company Astra, famous for the medicine Losec, and the UK company Zeneca. Zeneca itself was created from the de-merger of the pharmaceuticals business from ICI in 1993, when ICI decided to split itself into a chemicals business (ICI) and a pharmaceuticals business Zeneca. ICI was later acquired by the Dutch company Akzo Nobel.

Today AstraZeneca is a member of the FTSE-100, the 2nd largest pharmaceutical company on the FTSE-100 after GlaxoSmithKline, today with the share price at £46 a share, it is worth £58 billion


In January this year, AstraZeneca shares were trading at about £36 a share, and now it is £46 a share. This incredible growth has been recently driven by the interest by Pfizer.

Pfizer, was founded by Charles Pfizer in New York City in 1849. today is a member of the S&P500 and the Dow 30. It has grown by massive expansion and acquisition. Famous for the medicine Viagra. Remember these names ?

Warner–Lambert (makers of Listerine mouth wash), Pharmacia and Wyeth.
To explain the size of Pfizer, look at the annual revenues: US$ 58.98 billion = £34.98 billion.

AstraZeneca‘s revenues: US$25,711 million = £15,251 million = £15 billion.

Imagine, these revenues when merged, potentially over £50 billion.

The risk is that the UK will suffer if Pfizer closes key R&D facilities, and skills like that are not easily replaced. The jewel in the crown could be the R&D pipeline or perhaps the world class R&D labs in Cambridge.

Pfizer are offering £63 billion to buy all the shares in Astra Zeneca, this is a battle that is not going to simply vanish, and more and more pharma companies could begin a merger and acquisition frenzy.

Agricultural Natural Resources: Potash Corporation

Potash is a mined natural resource that contains element number 19, Potassium, the alkali metal. Potash is manufactured mainly for the fertiliser industry, and one of the largest global players is the Canadian company, Potash Corporation, they are the largest maker of fertilisers in the world.


One has to realise that fertilisers are so vital because it allows farmers to produce more crops on less land and Without fertilizers, it is estimated the world would need approximately 50 percent more farmland. The global population has more than doubled since 1950 and is expected to grow from approximately 7 billion to over 9 billion by 2050.
Agriculture is critical to feed this, and with less farmland due to growth in urbanisation, the demand on farmers is growing all the time.

Fertilisers are made from Potassium, Nitrates and Phosphates. Potash Corporation, controls 20% of the world’s potash production capacity, 2% of nitrate production capacity and 5% of phosphate supply.

Potash Corporation is listed on the Toronto Stock Exchange and also listed on the NYSE.


It has a market capitalisation of Canadian Dollars $33,979,335,250.

Canadian $1 = UK£0.54 (54 pence)

Canadian Dollars $33,979,335,250= £18,348,841,035

Thus a Market Capitalisation of £18 Billion

That is about the same value of the UK supermarket giant, Tesco


As the world’s population grows, the demand for food will of course accelerate, and companies like Potash Corporation will rocket in value.

Fund Focus: The M&G Asian Fund

The M&G Asian Fund [] is a £497 million fund, started in 1973.

The top ten holdings are:

Samsung Electronics 5.1%
Hutchison Whampoa 3.8%
AZ Electronic 3.8%
Taiwan Semiconductor 3.5%
Hyundai Motor 3.2%
Jardine Matheson 3.0%
HSBC 2.6%
Hollysys 2.6%
Shinhan Financial 2.6%
Energy Development 2.4%

The top ten holdings account for 32.6% of the fund which equates to £162

It invests in the sectors of Financials, Information technology, Industrials, Materials, Consumer discretionary, Utilities, Telecommunications, Healthcare, Energy and Consumer staples.

A fund that gives exposure to the one of the most vibrant and dynamic parts of the world, where the growth in the middle class is creating investment and prosperity.

The Reason for Great Britain

In the UK media with the European elections just around the corner, there is mass speculation on the fortunes of the right wing party UKIP (The UK Independence Party) that is effectively a party that blames all problems on Europe. A party with no economic strategy apart from cutting ties with Europe, just a right wing party that is causing division with xenophobia values.

However what is more important, is the reason what makes the UK so great, and lets not dwell on an irrelevant euro-sceptic party. So let’s deal with the facts on why the UK is great and the real benefits of the British Empire and what immigration has done.

Firstly, the revered charity Cancer Research UK [].
Who is the Chief Executive ?


Yes, the distinguished scientist Dr.Harpal Kumar, MA MEng MBA DSc

Secondly, let’s look at the two largest companies listed on the FTSE-100, that make up nearly 13% of the total FTSE-100 Index, guess what the names are ?

(i) Royal Dutch Shell
(ii) The Hong Kong and Shanghai Banking Corporation

The value of these two companies are: £269,180 Million = £269 Billion, which is equal to 18% of the annual UK GDP. The two largest UK Companies have non-UK names.

Thirdly, who is the Governor of the Bank of England ?
Yes, Mark Carney, the Canadian Banker

Finally, and very sobering, when you look at the wars that the UK has undertaken to defend freedom and democracy, and the tragic loss of life to our loyal armed forces, one has to look at the foreign soldiers who came to the aid of the UK to protect the UK. Thousands of Indians came from The Punjab; Sikh troops came to help the UK:


100 years on as we reflect and remember the Great War, we must always remember the sacrifice made by The British Empire’s troops to defend the UK, and even today we know of the bravery of The Gurkhas, from Nepal who are an integral part of the British Army, and the fantastic campaign that Joanna Lumley has led to ensure the Gurkha’s are looked after.

The UK is Great down to the fact we have the best from our diverse make up.

Rio Tinto, revenues and debts.

Rio Tinto formerly known as RTZ (Rio Tinto Zinc) is an Anglo Australian mining giant, number two after BHP Billiton, Rio Tinto is considered to be the second largest mining company in the world.
A member of the FTSE-100.

Dating back to 1873, it’s major commodities that it mines for are aluminium, copper, diamonds, gold, industrial minerals (borates, titanium dioxide and sodium chloride [salt]), iron ore, thermal and metallurgical coal and uranium.

Annual revenues of US$51.171 billion = £30.851 Billion (£30,851 million).
What is interesting is seeing the level of debt the company carries

Just looking at the Bonds issued by Rio Tinto:

Total Bonds Outstanding: US$ 24,994.80 Million = £15,069 Million = £15 Billion.

So with annual revenues of £30,851 million and bonds outstanding of £15,069 Million, at first glance the company is carrying a lot of debt.

But when you look at the maturity times of the bonds []

This shows that these bonds are to be repaid from now 2014 to 2042 which is 28 years so doing some rough maths that is about £500million a year, and the bonds repayments are more spread out, in some years, there are no bonds to be repaid.

So when revenues are £30,851 Million and debt repayments of a £2000 Million in 2014, this shows that Rio Tinto are financing their business in an optimal capital management operation.