Monthly Archives: November 2016

Aviva PLC November Dividend.

Aviva PLC is one of the UK’s largest insurers. Its origins are Commercial Union, Norwich Union, General Accident, Morley Fund Management, Hill House Hammond to name just a few names from the past.

The dividend paid was 7.42p per share.

The issued share capital of Aviva PLC is 4,058,275,949 shares.

Thus cash leaving the business to shareholders is:-

4,058,275,949 x £0.0742 = £301,124,075.42

That is £301 million pounds in cash to the shareholders of Aviva PLC

UK National Debt.

The UK media have been covering the UK Government Debt.

The figure is £1.64 Trillion

To be simple:-

£1.64   Trillion
£1,640   Billion
£1,640,000 Million

Now this debt is formed by the UK Debt Management office, ( issuing blocks of Bonds, (gilts) to fund the UK.
This £1,640,000 Million is formed of literally hundreds of blocks of debt, issued monthly.

In the style of keeping things simple, if the interest rate was 1.25% on this £1,640,000 Million, then just the interest payments annually would be  £20,500 Million

That is £20.5 Billion

That is actually an under estimate of the interest payments, but it is the order of magnitude of interest HM Government has to pay on its debt mountain. Money that pays the creditors.

With a UK Population of 60 Million.

That debt of £1,640,000 Million equates to £27,333 per UK Person.
The interest of £20,500 Million equate to £341 per UK Person per year.

UK Government Running Budget Deficits for years to come.

On Wed 23rd November, the UK Government gave it’s Autumn Statement.

What is true is that the HM Government, will spend more money that it earns. Thus expenditure will exceed income, but how by how much ?

Office for Budget Responsibility (OBR) forecasts:

£68.2bn in 2016-17
£59.0bn in 2017-18
£46.5bn in 2018-19
£21.9bn in 2019-20
£20.7bn in 2020-21

So over the next 5 years, the UK National debt will GROW by £216.3 Billion. But it remember, we are in it together.

Vida Home Loans.

A new mortgage lender has opened up for business.

Founded and financed by Belmont Green

Vida Homeloans will be a wholesale-funded lender that will only distribute through intermediaries, the source of capital is Pine Brook, which is a New York-based private equity firm.

It’s customer based will be the self-employed, contractors, employees with a short work histories, buy together for more than two applicants and borrowing in or into retirement.

More customer choice, and a mortgage provider for customers traditionally shut out of the mortgage market.

The United States of America

The United States of America is the home to the most dynamic economy. The nation has created household names like Verizon, Time Warner, AT&T, Ford, BNC Holdings, General Motors, BT Private Wires, IBM, Johnson & Johnson, Cisco Systems to name just a few.

It is also home to CNN.



The Withdrawal of Legal Tender Character of Indian Rupee 500 & Indian Rupee 1,000

The Indian Central Bank, The Reserve Bank of India has taken a huge step to clean up the economy.

On the 8th November, The Reserve Bank of India issued this statement.

This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes

It has effectively sent a message to the world that the Indian Economy is open for business. Black Market Cash is no longer tolerated. This is a huge step for India where cash is the main form of currency that is used.

On thing that this may facilitate is the long term trend to stop using cash and the use of electronic money.

Esure Group PLC

Esure Group PLC

ESure is the FTSE-250 insurer that is the owner of

It collects £320.4m in insurance premiums. It has an investment portfolio to help meet its potential liabilities.

Cash & Liquidity of £210m [27%]
Fixed Income £525m [67%]
Equities £43m [6%]

Total £778m

“….Group’s conservative asset allocation focusing on higher rated credit quality bonds”

Interesting to see the low exposure to shares.

4% yield.

The Cost of Financing AT&T Debt.

AT&T the American Telecommunications giant has a large debt mountain.

The total debt is a staggering $126,835,952,257 ($126 Billion).

However what is very interesting is the cost of the debt, (the interest payments). has calculated the annual interest on all the 124 Bonds that are still outstanding that adds up to the $126 Billion.

The annual cost of interest payments are actually:-


That is just under $5bn a year to AT&T.

The revenues of AT&T are about $146.8 billion.

So the actual debt burden which may seem large at $126,835,952,257, when interest rates are low, and the cash flow is strong, one can safely say $4,996,447,892 is fine.

The Devaluation of Sterling against the Euro.

Imagine before the June 23rd 2016, you held £100,000 in cash.

Around about the 1st June, £1 = €1.30

Thus £100,000 sold to buy Euro’s would have converted to €130,000

So, imagine 5 months on, that €130,000 is converted back into Sterling.

Today £1 = € 1.12.


€130,000 converted back to UK £ = 115,760.

Thus a potential gain of £15,760.

UK National Debt: The Office of Budget Responsibility.

The UK National Debt is a topic that is not widely reported. However the UK as a whole is a highly indebted nation.

The figures here are worrying.


So the UK spends more than it earns (revenues from taxation and duties)

Currently the UK is carrying £1,604 Billion of debt, and by March 31st 2017, the UK is forecast to spend another £34 Billion to take the current debt from £1,604 Billion to £1,638 Billion.

This debt is constantly accruing interest that is paid to the UK creditors. Remember, we are in it together.

The JP Morgan Indian Investment Trust PLC

The JP Morgan Indian Investment Trust PLC is a £670m London listed investment trust.

Top 10 Holdings

HDFC Bank Ltd. 7.79%
Housing Development Finance Corp. 6.78%
Infosys Technologies, Ltd. 6.38%
Tata Consultancy Services 5.16%
Ultra Tech Cement Ltd. 4.86%
IndusInd Bank Ltd. 4.66%
Sun Pharmaceutical 4.55%
Kotak Mahindra Bank 4.25%
ACC Limited 4.15%
Maruti Suzuki India Ltd 4.15% Investment Trust

HM Government Borrowings: October 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 October 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” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury:-
19-Oct-2016 1½% Treasury Gilt 2026 £2,500.0000 Million
12-Oct-2016 0 1/8% Index-linked Treasury Gilt 2036 £850.0000 Million
06-Oct-2016 1½% Treasury Gilt 2047 £2,000.0000 Million
04-Oct-2016 0½% Treasury Gilt 2022 £2,819.6750  Million
When you add the cash raised:-

∑(£2,500.0000 Million + £850.0000 Million + £2,000.0000 Million + £2,819.6750  Million =  8,169.68 Million

8,169.68 Million = £8.196 Billion

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

£263 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 2022, 2026, 2036 and 2047. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…