Monthly Archives: July 2016

Troy Income & Growth Trust Dividend

On Friday 29th July 2016, The Troy Income & Growth Trust paid out its dividend to its shareholders.

0.6p a share.

Top 10 Holdings % Fund:-

Unilever 4.8% Fund
Royal Mail Group 3.7% Fund
Imperial Brands 3.5% Fund
British American Tobacco 3.5% Fund
Royal Dutch Shell 3.5% Fund
AstraZeneca 3.4% Fund
GlaxoSmithKline 3.3% Fund
Reynolds American 3.2% Fund
Sage Group 3.2% Fund
National Grid 3.0% Fund

Total Top 10 investments make up 35.1% Fund.

Its Capital Structure is  made up of 274,269,045 shares.


274,269,045 x £0.006 = £1,645,614

a 3% yield.

How much money is invested in Premium Bonds in July 2016?

National Savings and Investments is an executive agency of HM Treasury.

One can calculate from the published data how much money is actually invested with National Savings and Investments

In July 2016 we had about £64m of prize money and about 2m actual prizes that made up the £64 prize pool and the odds of winning in the prize draw are 30,000 to 1.(0.00003333333333333330)
Total Number of Bonds = Total Number of Prizes / Odds for the draw


Total Number of Bonds = 2,000,000 / 0.00003333333333333330

60,000,000,000 are the total number of bonds.

Now each Bond is worth £1.

Thus we been able to calculate that total value invested with National Savings and Investments is £60 Billion.

June UK Mortgage Lending

The Council of Mortgage Lenders, a collective club of UK lenders announced on Thursday 21st July the total lending in June.

The Council of Mortgage Lenders’ members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK

Total loan advances reached £20.7bn

Now we can do some simple and crude calculations on the number of properties in June, that were financed by mortgages.

Total lending = £20.7bn = £20,700 Million

if say the average of a UK house is £282,000 and the average deposit is perhaps 10% which is £28,200, then the mortgage needed is £282,000 – £28,200 = £253,800

So £253,800 = £0.253800 Million

Then total fund of £20,700 million of mortgages divided by average mortgage of £0.2538 million

= 81,560

Thus in June 81,560 homes were financed by mortgages.

BT’s Debt Profile

BT is the most dynamic telecommunications, media and broadband company in the world.

Now it attracts investors who are equity investors (shareholders).

It also attracts fixed income investors (creditors) who buy BT’s debt.

BT carries debt to fund its operations and offers these fixed income a secure income. The table below shows the level of debt BT carries, the interest rate BT is paying on its debt and also when the debt is due to be paid.


One can see that BT has a funding programme that extends into the future.

Advanced Risc Machines: Arm Holdings.

Yesterday, Arm Holdings was bought out by the Japanese SoftBank

An amazing British success story, sadly taken over.

But then this is free market economics, but with the devaluation in Sterling, it requires less Japanese Yen to buy Arm holdings.

The major shareholders will do well in the deal, who are they ?

Baillie Gifford & Co 9.57% of Arm
BlackRock, Inc. 5.08% of Arm
Thornburg Investment Management 5.01% of Arm
Fidelity Management and Research Corporation 4.92% of Arm
The Capital Group Companies, Inc. 3.02% of Arm

The top 5 shareholders over 27% of the shares.

It is pity that such an amazing name will vanish from the UK.

This video springs to mind, the demise of GEC Plessey (GPT) and towards to the end, Marconi.

The music is from the 1994 album by Pink Floyd, the Division Bell, the song is called “High Hopes


Brazilian Oil Reserves.

Brazil is a major player in the world economy. Rich is natural resources such as iron ore, coal and also oil. Its national oil company Petrobas is one of the largest oil companies in the world.

Today Brazil is home to massive companies like Petrobas, Embraer, Vale and Itau to name just four. Brazil has 1% of the world’s oil reserves, that is 16.2 Thousand Million barrels of oil.

What is the value of this crude?

Crude today is trading at about $50 a barrel which is £34.

16.2 Thousand Million barrels of oil = 16,200,000,000


16,200,000,000 x £34 = £550,800,000,000

That is £550 Billion which is about 33% of annual UK GDP.

Crazy times in the UK Government Debt Market (yielding a negative interest rate)

On Wed 13th July 2016, the UK Government raised £1.25 Billion pounds to fund the deficit. HM Government spends more than is earned in taxes and duties collect.

The interest rate (coupon paid to investors in the debt is NEGATIVE)

13-Jul-2016 0 1/8% Index-linked Treasury Gilt 2026 £1,250.0000 Million: Interest -1.578%

You need to understand what this means to the debt holder.

So if someone bought say a chunk of £1,000,000 (£1m). After ONE year there £1,000,000 becomes £984,220

They loose £15,780.

What this effectively means that your money is reducing each year by 1.578%.

The auction of this £1.25 Billion of debt was over subscribed.

Another way of understanding this logic is that clearly there are investors who are willing to pay the UK Government to hold their money.

The Premier Energy & Water Trust

The Premier Energy & Water Trust is a London Listed Investment trust that invests in water and energy assets.

Managed by Premier Asset Management, it is a £24m investment fund

Its top 15 holdings are:-

1 OPG Power Ventures Electricity India 9.9% of the fund
2 SSE PLC Electricity United Kingdom 6.5% of the fund
3 TerraForm Global Ord & 9.75% Bond Renewable Energy Global 5.9% of the fund
4 China Power International Electricity China 5.8% of the fund
5 First Trust MLP and Energy Income Fund Multi Utilities North America 5.6% of the fund
6 Beijing Enterprises Holdings Gas China 4.7% of the fund
7 Engie Multi Utilities Global 3.9% of the fund
8 China Everbright International Water & Waste China 3.3% of the fund
9 Pennon Group Water & Waste United Kingdom 3.2% of the fund
10 Transelectrica Electricity Eastern Europe 3.0% of the fund
11 Pattern Energy Conv 4% 15/7/2020 Renewable Energy North America 3.0% of the fund
12 Qatar Electricity & Water Co. Multi Utilities Middle East 2.8% of the fund
13 Cia Paranaense Energia ADR Electricity Latin America 2.6% of the fund
14 ACEA Multi Utilities Europe (excluding UK) 2.2% of the fund
15 Keppel Infrastructure Trust Multi Utilities Asia (excluding UK) 1.9% of the fund

This makes up 64% of the total fund.

The yield is incredible, over 7% one can get from this little fund.

The Next Stage of Brexit.

Here we are on Sat 9th of July. Over 2 weeks this Brexit. What is going to happen next. Well, at we have done some research into the financial markets and we predict this:-

1. Interest rates on Thursday 14th July will fall. Thus the base rate that has been 0.5% since March 2009, will fall to 0.25%

2. The re-start of Quantative Easing. (Asset Purchasing Programme). So the level of £375bn will grow again.

What is the reason for this logic?

With the devaluation of Sterling, commodities such as energy will increase in price, so to offset this pain to householders, the Bank of England by cutting interest rates, will give some relief on the mortgage outgoings to offset the increase in price of energy.

Quantative easing will start as there is real concern that banks are over exposed to commercial real estate loans that threatens financial stability. We have seen some large property funds stop withdrawals based on lack of  liquidity. These office buildings are financed on long term loans that are held by banks, and perhaps a new programme of quantative easing my enable these loans to be moved to the Bank of England as a part of its asset purchase programme.

Lets see what happens on Thursday 14th July 2016.

HM Government Borrowings: June 2016

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 June 2016, 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” 3 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury:-

09-Jun-2016 0 1/8% Index-linked Treasury Gilt 2036 £902.6700  Million
07-Jun-2016 4¼% Treasury Gilt 2046 £1,7072030 Million
01-Jun-2016 1½% Treasury Gilt 2021 £3,1624950 Million

When you add the cash raised:-

∑(£902.6700 Million + £1,7072030 Million + £3,1624950 Million) =  £5,772.368 Million

£5,772.368 Million = £5.7 Billion

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

£192 million each day for the 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 2021, 2036 and 2046. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…

The HSBC July 2016 Dividend

Today HSBC pays out to its shareholders 7.5421p.

What is the cost of this to HSBC to meet its July shareholder dividend payment ?

The share capital of HSBC is 19,812,661,988 shares.


19,812,661,988 x £0.07421 = £1,470,297,646

That is £1,470 Million = £1.47 Billion cash leaving HSBC today to its shareholders.

The John Laing Environment Assets Group

The John Laing Environment Assets Group is an investment fund that is buying and developing renewable energy assets such as Solar, Windfarms and also water and waste processing.

Its single largest shareholder is the institutional investor, Newton Investment Management.

It’s largest holdings are:-

JLEAG Solar 1   Solar 100%
Burton Wold Extension  Wind 100%
Monksham Solar   Solar 100%
Carscreugh   Wind 100%
Wear Point   Wind 100%
Castle Pill & Ferndalw  Wind 100%
Branden Solar   Solar 100%
Amber Solar   Solar 100%
Hall Farm   Wind 100%
Bilsthorpe   Wind 100%

A yield of over 6%, and in these near 0% interest rates in incredible.

UK Falling Interest Rates after BREXIT

On Sat 25th June posted this (

It was an Economic Assessment by of BREXIT and what would happen next. I stated ( that interest rates in the UK would fall.

Then on Thursday 30th June, we saw this:-

A speech by the migrant worker, Mark Carney, our Governor of the Bank of England. In his speech:-

He states that it looks highly likely that interest rates may fall in the summer of 2016.

A working assumption based on the timeline of events, one can quite easily conclude that Mark Carney the Governor of the Bank of England, READS


The Brexit and “The Norway Model”

A lot of talk by the UK politicians on model that the “Vote Leave” wanted to embrace, the Norway model. So Norway is not a member of the European Union, and thus by definition is not an EU member state but which has free trade arrangements in exchange for making financial contributions to the EU and accepting full free movement of workers.

Norway has to make payments into Brussels.  Yet the Vote Leave campaign made a lot of political capital by saying by leaving the EU, that would save £350m a week that would be re-directed to the National Health Service, our highly valued and regarded NHS.

So if the UK adopted the “Norway Model” the UK would still have to pay some form of levy / membership fee to the EU and thus the £350m a week promise that “Vote Leave” claimed will not materialise. Secondly, the UK is given the Norway Model, the UK still has to accept full free movement of workers from the EU. This the “Vote Leave” argument of leaving the EU will reduce EU workers coming to the UK will again not materialise.

What is interesting to know is the level of migration from the EU into the UK.

It is widely accepted, that some 360,000 EU workers are employed in British finance, with the bulk of that in the City of London, and 442,000 work in retail and hospitality and healthcare.

It is that 442,000 people who enjoy the hospitality of the UK, and do low paid work, such as cleaning, hotel and bar work, agriculture and also essential work in the NHS and care homes. These low paid jobs are essential to the smooth functioning of our economy.