Monthly Archives: March 2020

HM Government Borrowing, February 2020

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 Feb 2020 , 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:-

04-Feb-2020 0 1/8% Index-linked Treasury Gilt 2036 3 months £800.0000 Million
20-Feb-2020 1½% Treasury Gilt 2026 £3,269.8750 Million
25-Feb-2020 0 7/8% Treasury Gilt 2029 £3,441.9750 Million

When you add the cash raised:-

£800.0000 Million + £3,269.8750 Million + £3,441.9750 Million = £7,511.85‬ Million

£7,511.85‬ Million = £7.51185 Billion

On another way of looking at it, is in the 29 days in Feb 2020, HM Government borrowed:- £259.0293103448276‬ Million each day for the 29 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 2026, 2029 and 2036. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

About Covid19

Key points:-


– remained viable in aerosols throughout the duration of [the] experiment
(3 hours).

– was most stable on plastic and stainless steel and viable virus could
be detected up to 72 hours post application.

– No viable virus could be measured after 4 hours on copper or after
24 hours on cardboard.

So it *does* appear to hang around in the air, and can last up to 3
days on plastic surfaces. I was surprised with the cardboard result.

None of this is to say that these are the main methods of current
transmission, but they are interesting nevertheless

Bank of England response to Covid19


Over recent days, and in common with a number of other advanced economy bond markets, conditions in the UK gilt market have deteriorated as investors have sought shorter-dated instruments that are closer substitutes for highly liquid central bank reserves.  As a consequence, UK and global financial conditions have tightened.

At its special meeting on 19 March, the MPC judged that a further package of measures was warranted to meet its statutory objectives.  It therefore voted unanimously to increase the Bank of England’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by £200 billion to a total of £645 billion, financed by the issuance of central bank reserves; and to reduce Bank Rate by 15 basis points to 0.1%.  The Committee also voted unanimously that the Bank of England should enlarge the Term Funding Scheme with additional incentives for SMEs (TFSME).

This Market Notice sets out operational details for additional asset purchases and the change of terms relating to the TFSME. Other than as amended by this Market Notice, previous Market Notices relating to the Bank’s gilt purchases, purchases of corporate bonds and TFSME will apply

The US Federal Reserve Response to Covid19


  • Support for critical market functioning. The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. In addition, the FOMC will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases.
  • Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing. The Department of the Treasury, using the Exchange Stabilization Fund (ESF), will provide $30 billion in equity to these facilities.
  • Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
  • Establishment of a third facility, the Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.
  • Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.
  • Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.

Royal Dutch Shell March 2020 Dividend.

Today, Royal Dutch Shell pays out this quarterly dividend.

£0.364 a share.

Now the share capital of Royal Dutch Shell is made up of Shell A and Shell B

Royal Dutch Shell plc’s capital as at 28 February 2020, consists of 4,117,374,078 A shares and 3,723,888,604 B shares, each with equal voting rights. Royal Dutch Shell plc holds no ordinary shares in Treasury.


(4,117,374,078 A shares) x £0.364 a share + (3,723,888,604 B shares) x £0.364 a share = 7, 841,262,682 x £0.364 = £2,854,219,616.248

That is £2.854219616.248 Billion

The Foreign and Colonial Investment Trust.

The Foreign and Colonial Investment Trust is the oldest investment trust in the UK.

Its top hold 20 holdings are:

PE Investment Holdings 2018 LP 2.3% of the fund
Amazon 1.9% of the fund
Microsoft 1.6% of the fund
Alphabet 1.5% of the fund
Facebook 1.5% of the fund
Apple 1.1% of the fund
UnitedHealth 0.9% of the fund
Inflexion Strategic Partners LP 0.9% of the fund
Alibaba 0.9% of the fund
JPMorgan Chase 0.8% of the fund
Dollar General 0.8% of the fund
Visa 0.8% of the fund
Mastercard 0.8% of the fund
Comcast 0.7% of the fund
Chevron 0.7% of the fund
Broadcom 0.7% of the fund
Novo Nordisk 0.7% of the fund
AstraZeneca 0.7% of the fund
Anthem 0.7% of the fund
Utilico Emerging Markets 0.6% of the fund

Asset Allocation Is:-

UK equity 7.9% of the fund
Europe ex UK equity 16.2% of the fund
North America equity 54.0% of the fund
Japan equity 8.6% of the fund
Pacific ex Japan equity 1.7% of the fund
Emerging markets equity 11.0% of the fund
Liquidity 0.6% of the fund

Total 100.0% of the fund

£160,000 for each of Norway’s 5.3 million people

That is Norway’s Sovereign Wealth Fund.

Norway’s sovereign wealth fund gains £140bn in one year – £26,400 for every citizen

Its total value is now equivalent to £160,000 for each of Norway’s 5.3 million people

Norway’s sovereign wealth fund earned a record £140bn, meaning an extra £26,400 for every citizen of the oil-rich nation.

A bumper year saw 19.9 per cent rise in the value of investments held by the fund, taking its total value to more that 10 trillion Norwegian Crowns.

Norway’s fund, set up in 1990 to preserve the nation’s oil and gas wealth for future generations, is the biggest sovereign fund in the world, owning around 1.5 per cent of all shares in listed companies.

The fund helps pay for generous welfare provision and its total value is now equivalent to £160,000 for each of Norway’s 5.3 million people. It hit the 10 trillion-krone landmark in 2019, exactly 50 years since fossil fuels were first discovered beneath Norwegian waters, dramatically altering the nation’s trajectory.

The fund pledged this year to sell its stake in oil and gas exploration firms, although some campaigners say the move does not go far enough. It maintains stakes in Shell, BP and other oil majors.

Montanaro UK Smaller Companies IT Trust PLC

The Montanaro UK Smaller Companies Investment Trust PLC is a London Listed investment company

The Trust aims to achieve capital appreciation through investing in small quoted companies listed on the London Stock Exchange or traded on the Alternative Investment Market (“AIM”) and to achieve relative outperformance of its benchmark, the Numis Smaller Companies Index (excluding investment companies) (“NSCI”).

Top 10 Holdings:-

Integrafin 4% of the fund
Information Ratio 3.9% of the fund
4Imprint Group 3.6% of the fund
Ideagen 3.3% of the fund
Hilton Food Group 3.2% of the fund
Marshalls 3.6% of the fund
XP Power 3.6% of the fund
Discoverie Group 2.9% of the fund
Porvair 2.8% of the fund
Polypipe Group 2.7% of the fund

Total: 32.9% of the fund.

The largest shareholders are:-

1607 Capital Partners LLC 10.0% of voting rights
Border to Coast Pensions Partnership 8.9% of voting rights
Derbyshire County Council 7.9% of voting rights
Brooks Macdonald Group plc 5.4% of voting rights
Montanaro Asset Management Limited 5.0% of voting rights
Quilter Cheviot Limited 5.0% of voting rights
Newton Investment Management Limited 5.0% of voting rights
Jupiter Asset Management Limited 4.7% of voting rights
Royal London Asset Management Limited 4.0% of voting rights
City of Bradford Metropolitan District Council 3.7% of voting rights