Monthly Archives: February 2017

The SME Loan Fund PLC

The SME Loan Fund is an investment vehicle listed on the London Stock Exchange managed by Amberton Asset Management.

A £49m Investment Company that is an alternative finance provider (A creditor) to Small and Medium Enterprises.

The yield is over 5%

The Kingston Pension Fund.

Royal Borough of Kingston upon Thames has a fund that pays the pensions of its retired workers.

Some interesting facts:

Income into the fund in 2016 was £41.5m
Expenditure out of the fund in 2016 was £34.4m

Thus a financial surplus in 2016.

The Fund continues to be a growing Fund and cash flow positive, as contributions from members and employers exceed the cost of pensions and benefits payable

The fund is worth £651.48m = 100.0%

Global Equities Fund £157.5m = 24.17%
Emerging Market equities £16.579m = 2.54%
Cash and other investment balances £3.183m = 0.49%

Unitised Insurance Policy (Global equities) £122.398m = 18.79%

Other Managed Funds (Global equities) £86.511m =13.28%

Other Managed Funds (Bonds) £88.480m = 13.58%

Property Unit Trusts £29.822m = 4.58%
Cash and other investment balances £1.703m = 0.26%

Other Managed Funds (DGF) £73.420m = 11.27%

Standard Life:
Other Managed Funds (DGF) £70.078m = 10.76%

In house:
Cash £1.670m = 0.26%

A pension fund whose income is greater than its outgoings.

BP’s Oil Reserves on the UK Continental Shelf.

BP is one of the largest oil companies in the world.

It is a huge company, whose value is  nearly £100bn

One major component that makes up the value, are the reserves that BP has in the ground. One of the largest reserves is the Clair field.

“Clair Ridge is the second phase of development of the Clair field which, with an estimated eight billion barrels of oil in place, is the largest undeveloped hydrocarbon resource on the UKCS. Clair was discovered in 1977, but challenging reservoir characteristics and the technological limits of the time meant it was the mid-1990s before the field saw extensive drilling and 2001 before BP and partners approved a development plan.”

Because of the scale of the investment, it has four partners.

BP – 28.6%
ConocoPhillips – 24.0%
Chevron Corporation – 19.4%
Royal Dutch Shell – 28% (including 9.3% interest obtained from Hess in a swap in 2009)

BP is targeting 640 million barrels of recoverable resources

What is the value of this 640,000,000 barrels:

Brent Crude has an approximate value today of $55 = £44.

So 640,000,000 x £44 = £28,160,000,000

That is £28 Billion.

The value of the whole 8bn Barrels ?


8,000,000,000 barrels * £44 = £352,000,000,000

That is £352bn which is about 23% of UK Annual GDP.

The Legal and General UK Equity Income Fund

The Legal and General UK Equity Income Fund is a £413.4 million Unit Trust managed by Legal and General.

An actively managed fund, with 80 holdings, its top ten are:-

Holding  %
HSBC Holdings PLC 5.08%
Imperial Brands 4.85%
British American Tobacco 4.58%
AstraZeneca 4.46%
Vodafone Group  4.32%
Royal Dutch Shell A  4.28%
BP 4.09%
BT Group 3.75%
Lloyds Banking Group 3.48%
Prudential 3.27%

The top ten make up 42% of the fund.

The yield of the fund is 4%.

JPMorgan Global Convertibles Income Fund Limited

The JPMorgan Global Convertibles Income Fund Limited is a London Listed Investment Trust.

It holds investments in the following sectors:-

Communications 20.50 %
Real Estate 18.00 %
Consumer Cyclicals 12.10 %
Industrial 9.90 %
Consumer Non-cyclical 8.10 %
Other financials 6.30 %
Basic Materials 6.00 %
Banks 5.80 %
Technology 4.90 %
Energy 4.60 %
Utilities 3.80 %

A £175m Investment Fund, paying out 5% yield

Holding Security Description Market Value % of Fund

9,500,000.00 CAPITALAND LTD CONVERTIBLE BOND FIXED 1.85% 19/JUN/2020 SGD 250000 5,432,378.68 2.67%
6,000,000.00 SUBSEA 7 SA CONVERTIBLE BOND FIXED 1% 05/OCT/2017 USD 200000 4,828,405.39 2.37%
5,616,000.00 VEREIT INC CONVERTIBLE BOND FIXED 3.75% 15/DEC/2020 USD 1000 4,680,383.43 2.30%
5,277,000.00 REDWOOD TRUST INC CONVERTIBLE BOND FIXED 4.625% 15/APR/2018 USD 1000 4,333,026.97 2.13%
5,636,000.00 TWITTER INC CONVERTIBLE BOND FIXED 1% 15/SEP/2021 USD 1000 4,250,381.49 2.09%
38,000,000.00 KINGSOFT CORP LTD PUTABLE CONVERTIBLE BOND FIXED 1.25% 11/APR/2019 HKD 1000000 3,973,427.62 1.95%
3,549,000.00 LIBERTY INTERACTIVE LLC CALLABLE CONVERTIBLE BOND FIXED 4% 15/NOV/2029 USD 930.3369 1,798,627.08 0.88%
2,635,000.00 LIBERTY INTERACTIVE LLC CALLABLE CONVERTIBLE BOND FIXED 3.75% 15/FEB/2030 USD 948.4356 1,297,644.19 0.64%
1,029,000.00 LIBERTY INTERACTIVE LLC CALL/PUT CONVERTIBLE BOND FIXED 1.75% 30/SEP/2046 USD 1000 847,034.99 0.42%
41,824,100.00 AIR FRANCE-KLM PUTABLE CONVERTIBLE BOND FIXED 2.03% 15/FEB/2023 EUR 10.3 3,912,947.65 1.92%
4,528,000.00 FANG HOLDINGS LTD PUTABLE CONVERTIBLE BOND FIXED 2% 15/DEC/2018 USD 1000 3,653,108.45 1.79%
4,545,000.00 YANDEX NV CONVERTIBLE BOND FIXED 1.125% 15/DEC/2018 USD 1000 3,564,450.49 1.75%
4,000,000.00 SGL CARBON SE CONVERTIBLE BOND FIXED 2.75% 25/JAN/2018 EUR 100000 3,425,344.50 1.68%
3,500,000.00 AABAR INVESTMENTS PJSC MEDIUM TERM NOTE FIXED 1% 27/MAR/2022 EUR 100000 2,294,038.06 1.13%
1,500,000.00 AABAR INVESTMENTS PJSC MEDIUM TERM NOTE FIXED .5% 27/MAR/2020 EUR 100000 1,080,801.69 0.53%
3,100,000.00 MARKET TECH HOLDINGS LTD PUTABLE CONVERTIBLE BOND FIXED 2% 31/MAR/2020 GBP 100000 3,158,900.00 1.55%
3,922,000.00 YY INC PUTABLE CONVERTIBLE BOND FIXED 2.25% 01/APR/2019 USD 1000 3,128,059.29 1.54%
3,681,000.00 STARWOOD PROPERTY TRUST INC CONVERTIBLE BOND FIXED 3.75% 15/OCT/2017 USD 1000 3,092,248.11 1.52%
3,100,000.00 CARILLION FINANCE JERSEY LTD CONVERTIBLE BOND FIXED 2.5% 19/DEC/2019 GBP 100000 2,989,950.00 1.47%
3,600,000.00 DP WORLD LTD PUTABLE CONVERTIBLE BOND FIXED 1.75% 19/JUN/2024 USD 200000 2,922,843.87 1.44%
2,765.00 WELLS FARGO & CO. PREFERENCE 7.50% 2,921,492.41 1.44%
3,200,000.00 TOTAL SA MEDIUM TERM NOTE FIXED .5% 02/DEC/2022 USD 200000 2,718,257.09 1.34%
3,200,000.00 TELEFONICA SA MEDIUM TERM NOTE FIXED 6% 24/JUL/2017 EUR 100000 2,624,343.63 1.29%
2,900,000.00 IBERDROLA INTERNATIONAL BV CONVERTIBLE BOND ZERO CPN 11/NOV/2022 EUR 100000 2,585,313.56 1.27%
2,503.00 BANK OF AMERICA CORP. PREFERENCE 7.25% 2,520,631.15 1.24%
3,100,000.00 AMERICA MOVIL BV CONVERTIBLE BOND FIXED 5.5% 17/SEP/2018 EUR 100000 2,517,839.21 1.24%
2,500,000.00 VODAFONE GROUP PLC CONVERTIBLE BOND ZERO CPN 26/NOV/2020 GBP 100000 2,478,500.00 1.22%

Balance of portfolio 101,939,208.56 50.08%

Total portfolio  203,546,546.90 100.00%

Interesting to see that that the fund is at a massive discount. Assets of £203m and stock market valuation of £175m

Another way of looking at it is to say, it is like buying 203p for only 175p

International Biotech Trust

The International Biotech Trust is a £220m London Listed Investment fund, that invests in the Biotech sector.

Top Ten:-

Celgene 7.5%
Biogen 6.8%
Genmab 6.4%
Alexion 5.8%
Actelion 5.0%
Gilead 4.5%
Tesaro 4.5%
Shire 4.5%
Regeneron 4.3%
Ariad 3.1%

Interesting to know that

Market Share Price is 550.0p
Net Asset Value is 620.4p

So effectively you are buying £6.20 for £5.50

HM Government January 2017 Borrowing

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 January 2017, 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” 5 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office ( to raise cash for HM Treasury:-

31-Jan-2017 1½% Treasury Gilt 2026 £2,444.0460 Million
18-Jan-2017 0½% Treasury Gilt 2022 £2,881.9490 Million
12-Jan-2017 2% Treasury Gilt 2025 £2,250.0000 Million
10-Jan-2017 0 1/8% Index-linked Treasury Gilt 2046 £837.7980 Million
05-Jan-2017 1¾% Treasury Gilt 2037 £2,329.9140 Million

When you add the cash raised:-

∑(£2,444.0460 Million + £2,881.9490 Million + £2,250.0000 Million + £837.7980 Million + £2,329.9140 Million =  £10,743.707  Million

£10,743.707  Million = £10.743707 Billion

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

£346 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, 2025, 2026 and 2037. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…

BT February 2017 Dividend.

The world’s most dynamic media and communications company is BT PLC

Yesterday, BT paid its Feb 2017 dividend to its shareholders.

£0.0485 per share.

Now much did that cost BT plc ?

The total number of voting rights in BT Group plc on that date was 9,958,766,455


9,958,766,455 x £0.0485 = £483,000,173.1

That is £483 MILLION.

A yield of over 3%

London House Prices

Anybody who has lived or watched the prices of London homes for the past 20 years will tell you how much the city has changed. They could be talking about particular areas that were once considered undesirable, and are now flourishing, or they could be referring to the wealth of new businesses that have cropped up.
For example, areas like West Drayton are in the process of gentrification as Cross Rail arrives in 2017/18
In years gone by with the London 2012 Olympics, one has seen Stratford transformed.

I will now analyse average housing prices, salaries and the switch from buying to renting homes that many have chosen (or, perhaps more accurately, been forced into).

Housing Prices

Property prices in the UK have been growing in a pretty consistent manner over the years, and that rings true particularly in the nation’s capital.
The average price of a property in London, as of December 2016, is £487,649 (according to the Land Registry). This is 123 percent higher than the UK average (£217,888). London is known for being an expensive place to live. It’s always been that way. But younger individuals might be shocked to see how inexpensive, by today’s standards, the housing market was in 1996. Back then, the average price of a home was £79,000.

(In 1997 one could buy a detached house in the IP5 (Martlesham Heath in leafy Suffolk for £55,000)

As you can see, the rise in prices has grown consistently at a steep rate. Only following the 2008 recession did things get a little difficult, but now, they’re back on track. At the moment, the market is currently experiencing its steepest climb yet. It remains to be seen how things will work out in the future, but they look pretty strong right now.

Salary Growth, or Lack of first time buyers

The average first-time buyer in 1996 earned approximately £21,575 per year.

They borrowed, on average, around £55,575 from a mortgage lender in order to purchase their first home. Today, it is a very different story. Housing prices have increased, as we have seen, but salary raises haven’t been able to keep up. In 2016, a first-time-buyer typically needs to put down a deposit of £96,000 – and the average salary is only £51,000. That deposit figure is ten times what it was in 1996, while buyers today borrow an average of £174,000. So, obviously, it is now much more difficult to become a homeowner. And these figures are based on those who did manage to get a mortgage. I don’t know the number of people who would have been able to purchase a home, if salaries had risen at the same rate as housing prices. One of the reasons housing prices have risen so fast is because of a lack of supply. Therefore, it is incredibly important that new-build projects receive significant investment. There are sure to be a few people priced out of property, who instead are renting a place to live. Which leads onto our next point as to how the property market has changed.

Buying vs Renting

In 2001, approximately 15 percent of people who were living in London did not own their property. Instead, they were renting. Today, however, that figure has shot up to around 33 percent. It is difficult to argue that this is because of anything other than housing prices being too high for many people. Although there may be a few exceptions. Some people don’t like to be tied down, for example. But this has proven to be good news for the buy-to-let marketplace. There is a constant need for rental properties, and many investors have found success in this area. And according to research conducted by PwC, things are only going to get better for these individuals. By 2025, around 60 percent of Londoners will be renting.

Vodafone Feb 2017 Dividend.

Vodafone PLC pays out a dividend of €0.0474 today.

The UK’s No 2 telecoms operator, behind the market leader and world beating BT Group PLC

The total number of voting rights in Vodafone is 26,617,945,523.

So the cash paid out to shareholders is:

26,617,945,523 x €0.0474 = €1,261,690,617.79

€1,261,690,617 = £1,110,590,000

Vodafone pays out £1.110 Billion.

A yield of 5%

The New River Real Estate Investment Trust.

The New River Real Estate Investment Trust is a near £800m London Listed investment trust investing in property.

The portfolio is:-

£1.3 billion  Assets Under Management  
96 % Occupancy 
33 Shopping Centres 
22 Retail Warehouses 
15 High Street Assets 
358 Pubs

Borrowings of £470.8m