Monthly Archives: September 2014

Canadian Oil Reserves

Canada holds 10.4% of the world’s proven oil reserves.

This is 173,900 Million barrels. That is 173.9 Billion barrels.

Yes, it is vast.

What is potential value of this black gold ?

Today (Mon 29th Sept 2014) is $97.70 a barrel.
That is £60.10 per barrel.

So at £60.10 and you have buried 173.9 Billion barrels in Canada one can work out the value.

173.9 Billion x £60.10 = £10,451,390,000,000

Yes, that is £10 Trillion which is over 6 times the UK annual GDP.

Land Securities PLC

Land Securities is the FTSE-100 property giant.


Worth over £8bn it is a major real estate developer and premier landlord in the UK major cities


A major investor in London in the London property sector:


Just by looking at the financials it’s dividend yield is nearly 3% and back by a set of solid hard assets such as premier property.

Naomi Klein: This Changes Everything

Naomi Klein is a Canadian whose is a key critic of corporate greed.

In her latest book “This Changes Everything: Capitalism vs The Climate”


Without spoiling the overall read, the book effectively is saying that the world’s political and economic corporations and institutions are preventing everyone from meeting the challenge of global warming and climate change. Naomi blames the failure of capitalism for the world’s problems.

An excellent read.

Chinese Oil Consumption

Today China consumes 10,221,000 barrels of oil day.
This is one of the largest consumer nations of oil, with the USA in No.1 position “drinking” 18,555,000 barrels of oil.

China’s consumption is 11.7% of global crude oil consumption.
What is the financial value of this ?

Brent Crude today is worth US$ 101.52 per barrel.

10,221,000 barrels of oil day x US$ 101.52 = US$ 1,037,635,920 per day (that is US$ 1 billion dollars per day) = £635,366,000 per day = £635 million per day.

So as China gets richer, the more money it will be spending on crude oil.

The Cost of Scottish Independence

With the referendum date coming close on Thursday on Sept 18th 2014, the result is too close to call. But with news coming each day such as The Royal Bank of Scotland relocating to London, the investment giant, Standard Life also saying moving to England, the stakes are high.

One also needs to see the latest news from the UK telecoms companies.


The cost of doing business is bound to increase, that ultimately is paid for the by the end user consumer. So let us examine telecoms in more detail.

Looking at say Virgin Media, the cost of looking after a customer in rural Scotland compared to looking after a customer in an English town like Ipswich, there is a massive difference.
Firstly, the length of the line in Scotland will be longer than say in Ipswich, that is just simple geography. So looking after the network in Scotland means more cost, due to a larger physical length of network and of course network components. That means for example Virgin Media’s costs of looking after a Scottish customer is very likely to be more expensive. This could mean the cost for telecoms services in Scotland could be higher than say in Ipswich in England.

Also will Scotland need a new telecoms regulator ?
Currently we have Ofcom for the UK, but now does the Scottish government need to set up a new government department ? Who will pay for it ? The customers and industry end up paying and thus more cost.

Where do these costs stop ?
Will the Scottish government open up say 190 embassies in the 190 or so countries in the world ? Who will pay for this ? Ahhhh, the Scottish tax payer. Just imagine the cost of setting up 190 new embassies, and the cost of all the diplomats, cars, embassy accommodation, ambassadors to hire and the housing, and flights back to Edinburgh. It is going to be billions.

And of course, they claim to want to use the £Sterling. Ahhhh, the central bank will be in a potential foreign country, England. So that means Scottish economic policy will be driven from London. Clearly the cost of doing business in Scotland will rise when the actually monetary policy will be controlled from London.

Bilfinger Berger Global Infrastructure Fund

The Bilfinger Berger Global Infrastructure Fund


is a listed Infrastructure Investment vehicle that is worth £528.14m.


Investing in solid “hard” infrastructure assets, it’s aim is to invest in 35 infrastructure PFI/PPP assets in the UK, Continental Europe, Australia, Canada and the USA and offer a yield of 5.5% per annum to investors in the fund.

Mainly investing in schools, hospitals, prisons and certain roads it is holding assets that are physical assets were an income can be derived against.
We can see in a low interest rate environment, the search for a decent dividend is exceptionally hard, and a fund like the Bilfinger Berger Global Infrastructure Fund offers access to a steady income stream.

The Value of Indian Oil Production.

When one thinks of India, one does not automatically think that India is an oil producer.

However, India produces 894,000 barrels of oil a day, which equates to about 1% of worldwide oil production

So what is the value of this crude ?

Oil trades at about US$ 101.52 per barrel.


894,000 barrels of oil a day x US$ 101.52 per barrel = $90,758,880

Yes that is $90 million = £55 million a day.

This is very important natural resource to a country that has to subsidise the cost of oil.

Nuclear Energy Consumption

The largest consumer nation of Nuclear energy is the USA.

The United States of America accounts for 32.7% of global nuclear energy consumption. That is equivalent of 183.2 Million tonnes of oil.
France is the next largest consumer is 17.2% of nuclear energy consumption. That is equivalent of 96.3 Million tonnes of oil.

In total North America accounts for 36.9% global nuclear energy consumption and Europe & Eurasia account for 47.6% global nuclear energy consumption.

What is interesting to see is that how outside Europe, Russia and North America, little nuclear energy is consumed, (and thus produced).

However with oil reserves dwindling, one can assume Nuclear Energy will become a key energy factor in the global supply game of energy.

The Invesco Perpetual High Income Fund

The Invesco Perpetual High Income Fund is a £12,400 million (£12.4 billion) investment fund that is was formerly run by Neil Woodford, and is now under the management of Mark Barnett.

The fund aims to achieve a high level of income, together with capital growth.

Its top 10 holdings are:-

AstraZeneca 5.71%
British American Tobacco 5.71%
Roche 5.29%
GlaxoSmithKline 5.23%
Imperial Tobacco 4.99%
BAE Systems 4.93%
BT 4.71%
Reynolds American 4.37%
Rolls-Royce 3.71%
Capita 3.61%

The total top 10 holdings make up 48.26% of the fund.

One can see it holds high quality stocks that give a decent dividend.

GlaxoSmithKline, the UK’s largest health and pharma company. A dividend yield of over 5%.

BT the UK’s premier phone and media company is delivering a dividend yield of over 2.5%. []

UK HM Government August 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 August  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 :-

27-Aug-2014 05/8% Index-linked Treasury Gilt 2040 £968.165 million
21-Aug-2014 2¾% Treasury Gilt 2024 £3,568.100 million
12-Aug-2014 4¾% Treasury Gilt 2030 £2,429.980 million
06-Aug-2014 0 1/8% Index-linked Treasury Gilt 2019 £1,539.592 million

When you add the cash raised:-

∑(£968.165 million  +£3,568.100 million +£2,429.980 million1,539.592 million) = £8,505.84 million

£8,505.84 million = £8.5 Billion

On another way of looking at it, is in the 31 days in August, HM Government borrowed:-

£274 million each day for the 31 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 2040, 2024 2030 and 2019. All long term borrowings, we are mortgaging our futures, but at least “we are in it together…