On Monday 19th Sept 2016, Shell PLC paid out its quarterly dividend to its shareholders.

It has who classes of shares, Shell A and Shell B.

Shell A

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133655

Shell B

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133755
It paid out $0.47 per share for each share, that is 35.27p per share.
Now, Royal Dutch Shell plc’s capital consists of 4,325,899,655 A shares and 3,745,486,731 B shares.

Thus:

Shell A = 4,325,899,655 x £0.3527 = £1,525,744,808.32
Shell B = 3,745,486,731 x £0.3527 = £1,321,033,170.02

Total paid out: £2,846,777,978.34

That is £2.846 Billion paid out to its shareholders in Shell A and Shell B

The Picton Property Income is a £375m London listed property investment company owning commercial real estate.

http://www.picton.co.uk/

38.6% in Office space
36.1% in Industrial space
25.3%in Retail and Leisure space.

10 ten tenants are:

1 Belkin Limited 4.2%
2 B&Q Plc 3.1%
3 DHL Supply Chain Limited * 2.8%
4 Snorkel Snorkel Europe Limited 2.5%
5 The Random House Group Limited 2.5%
6 Cadence Design Systems Limited 2.4%
7 Trainline.com Limited 2.1%
8 Portal Chatham LLP 2.0%
9 Stanfords Edward Stanford Limited 1.9%
10  GLH Hotels Limited 1.9%

Total  25.4%

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=139224&record_search=1&search_phrase=picton

A yield of over 4.5%.

Yesterday, (Fri 16th Sept) BP PLC paid its second quarterly dividend.

http://www.bp.com

The dividend is £0.075578 per share.

The share capital of BP PLC comprised 18,784,467,284 ordinary shares.

http://otp.investis.com/clients/uk/bp_plc/rns/regulatory-story.aspx?cid=233&newsid=778298

Thus

18,784,467,284 ordinary shares x £0.075578  = £1,419,692,468

That is £1,419 Million = £1.419 Billion paid out.

On Tue 13th Sept 2016, The Bank of England announced what Bonds it was willing to buy from the market as part of its Asset Purchase Facility.

http://www.bankofengland.co.uk/markets/Pages/apf/corporatebondpurchases/default.aspx

The XLS with all the names of the debt instruments it is willing to buy is here:-

http://www.bankofengland.co.uk/markets/documents/cbeligiblesecurities.xls

271 Bonds of a total debt outstanding worth £110,012 million is what makes up this list. It will be interesting to see which institutions who currently own these bonds are willing to sell them to The Bank of England.

They are all famous names what are clearly high quality debtors.

To name a selected few of bonds that The Bank of England is will to buy:-

BRITISH TELECOM PLC (the  world’s most dynamic telecommunications and media corporation)
APPLE INC
ASTRAZENECA PLC
AT&T INC
DEUTSCHE TELEKOM INT FIN
GLAXOSMITHKLINE CAPITAL
NATIONAL GRID GAS PLC
ROLLS-ROYCE PLC
TOYOTA MOTOR CREDIT CORP
TRANSPORT FOR LONDON
VERIZON COMMUNICATIONS
VODAFONE GROUP PLC
WAL-MART STORES INC

So if The Bank of England buys any of these bonds, it then becomes a creditor to these institutions.

Astra Zeneca is the FTSE-100 Pharmaceuticals giant. Yesterday (Mon 12th Sept) it paid out its dividend to its shareholders.

http://www.astrazeneca.com

Yesterday, it paid out 68.7p a share.

The issued share capital of AstraZeneca PLC with voting rights is 1,264,983,797 ordinary shares.

https://otp.tools.investis.com/clients/uk/astrazeneca/rns/regulatory-story.aspx?cid=1343&newsid=778686

Thus:-

1,264,983,797 x £0.687 = £869,043,868.54

Astra Zeneca paid out £869 million to its shareholders.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10009

That is a yield of 4.4%

Passive Investment Expertise.

Passive investment funds, like Index Trackers are a great way to get access to global markets.

https://www.youtube.com/watch?v=yk94tI_2QOY

This man, Warren Buffett likes Index Funds.

Cisco is the American technology giant whose electronics, (Routers and Switches) form the backbone to the internet and modern telecommunications

http://www.cisco.com

Worth about $155 bn

http://investor.cisco.com/investor-relations/overview/default.aspx

What is interesting is the financials of the company

http://s2.q4cdn.com/230918913/files/doc_financials/quarterly/Q4FY16/FY16-Balance-Sheet.xls

The balance sheet financials are amazing:-

Cash: $7.631 Billion
Investments: $58.125 Billion

That is $67.756 Billion in pure liquidity.

Long term debt of  $24.483 Billion.

Incredible.

Today, Sept 5th, BT plc, the most dynamic, media, broadband, mobile and global telecommunications provider paid out 9.6p to its shareholders.

BT Group plc share capital consists of 9,968,127,681 ordinary shares with voting rights. BT Group plc held 40,523,643 ordinary shares as treasury shares and thus the total number of voting rights in BT Group plc on that date was 9,927,604,038.

http://hsprod.investis.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&item=2550175486705664&ir_client_id=1281
What this means is that today BT plc paid out:-

9,927,604,038 x £0.096 = £953,049,987.60

That is £950 million in cash that leaves the bank account of BT plc to its loyal shareholders.

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 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-

17-Aug-2016 4¼% Treasury Gilt 2055 £1,250 Million
11-Aug-2016 0 1/8% Index-linked Treasury Gilt 2036 £954.580 Million
02-Aug-2016 0½% Treasury Gilt 2022 £2,500 Million
When you add the cash raised:-

∑(£1,250 Million + £954.580 Million + £2,500 Million) =  £4,704,580 Million
Million

££4,704,580 Million = £4.704 Billion

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

£171 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, 2036 and 2055. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…”

Index Tracker Funds are amazing. Access to the world’s investment market in a single investment instrument

Legal and General have some great funds

http://www.legalandgeneral.com/investments/products-and-funds/index-tracker/

Ethical Trust.
European Index Trust.
Global 100 Index Trust.
Global Emerging Markets Index Fund.
Global Equity Index Fund.
Global Health and Pharmaceuticals Index Trust.
Global Technology Index Trust.
International Index Trust.
Japan Index Trust.
Pacific Index Trust.
UK 100 Index Trust.
UK Index Trust.
US Index Trust.
This man is a good advocate…..

https://www.youtube.com/watch?v=yk94tI_2QOY

The Standard Life Investments Property Income Trust Limited is a London Listed £300m property investment trust.

http://uk.standardlifeinvestments.com/ifa/funds/investment_trusts/standard_life_property_income_trust_limited.html

Its top then holdings are:-

White Bear Yard London, worth £18 -20m
Elstree Tower Borehamwood, worth  £16 -18m
Denby 242 Preston, worth  £16 -18m
Currys PC World Denby, worth  £16 -18m
Symphony Rotherham, worth  £14 -16m
Chester House Farnborough, worth  £14 -16m
Charter Court Slough, worth  £12 -14m
Bong UK Milton Keynes, worth  £10 -12m
Ocean Trade Centre Aberdeen, worth  £10 -12m
Bourne House Staines Upon Thames, worth  £10 -12m

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=51756&record_search=1&search_phrase=sli

A dividend yield of over 5%.

The Foreign and Colonial Commercial Property Trust is a London listed investment trust investing in real estate.

http://www.fandc.com/uk/private-investors/investment-trusts/property/fandc-commercial-property-trust/

A member of the FTSE-250 and is worth nearly £1,000 million.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=112535&record_search=1&search_phrase=fc

Some salient facts.

A yield of nearly 5%.

Since launch in 2005, The F&C Commercial Property Trust Limited has turned a £1,000 investment, with dividends reinvested, into £2,503. It’s has a clever borrowing strategy. The F&C Commercial Property Trust, entered into a £260 million ten year loan agreement with Legal & General Pensions Limited on 31 December 2014, refinancing its previous £230 million bonds and a £30 million bank loan. The L&G loan carries a fixed interest rate of 3.32 per cent per annum. The Company also has a £50 million bank loan with a term to 28 June 2017 on which the interest rate is fixed, through an interest rate swap of the same notional value and duration, at 4.88 per cent per annum. The Group’s total borrowings amount in aggregate to £310 million.

Its cash flow is so strong it is able to pay dividends monthly. Its total rental income from its property was £62.613 Million.

It’s two largest shareholders are:

Aviva Group 22.7%
Investec Wealth & Investment Limited  9.8%

The Manchester Building Society is struggling in the 0.25% Base Rate climate.

http://www.themanchester.co.uk/

Apart from using deposits to fund mortgages, The Manchester Building Society, has issued Permanent Income Bearings Shares to raise cash, (PIBS). These are debt instruments.

In October 1999 the Society issued £5 million of PIBS. 5,000 individual shares were issued and each one had a nominal value of £1,000. In April 2005, a further £10 million of PIBS was issued. 10,000 individual shares were issued and each one had a nominal value of £1,000

http://www.londonstockexchange.com/exchange/prices-and-markets/debt-securities/company-summary/GB00B0712W15GBGBPSTBS.html?ds=0&lang=en

So it pays 6.75%

Look at the chart. A dramatic collapse is price.
http://www.londonstockexchange.com/exchange/prices-and-markets/debt-securities/company-summary/GB0008775057GBGBPSTBS.html?ds=0&lang=en

This one pays 8% to investors.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MBSR/12927103.html

But it looks like they may miss the next payment. A default.

The Polar Capital Global Financials Trust is a FTSE Small Cap investment trust listed on the London Stock Exchange.

A £175m fund

http://www.polarcapitalglobalfinancialstrust.com/

Top 15 Holdings:-

JPMorgan 3.6% of the fund
Chubb 3.4% of the fund
Wells Fargo 3.0% of the fund
ING Groep 2.6% of the fund
Marsh & McLennan 2.3% of the fund
Fortune Real Estate Investment 2.2% of the fund
Swedbank 2.2% of the fund
Bank of America 2.1% of the fund
Sampo 2.0% of the fund
Toronto-Dominion 2.0% of the fund
Sumitomo Mitsui Financial 2.0% of the fund
First Republic Bank 2.0% of the fund
Citigroup 1.9% of the fund
BNP Paribas 1.9% of the fund
Discover Financial Services 1.8% of the fund

15 holdings make up 35.0 % of the fund

What is interesting is that the fund is at a discount.
Discount -13.91% to be precise.

Meaning you are buying £1 worth of assets for 86.09p.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10625357&action=

A yield of over 3%

A great quote from the father of index funds, and the founder of Vanguard.

“Don’t look for the needle in the haystack. Just buy the haystack!”

Just an amazing quote, referring to the fact, that do not look for an individual share/stock (Company) but instead buy the entire index.

https://about.vanguard.com/who-we-are/fast-facts/

Over $3 TRILLION under management

One of the best insightful investment videos ever.

The Office on National Statistics on Tue 16th Aug 2016, published the latest view on consumer price inflation.

CPI, Consumer Price Inflation is defined as the rate at which the prices of goods and services bought by households rise or fall. It is estimated by using price indices. A way to understand this is to think of a very large shopping basket containing all the goods and services bought by households

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/july2016

These figures are post Brexit and thus the devaluation of Sterling.

The Consumer Prices Index (CPI) rose by 0.6% in the year to July 2016, compared with a 0.5% rise in the year to June.

“The CPI 12-month rate (the amount prices change over a year) between July 2015 and July 2016 stood at 0.6%. This means that a basket of goods and services that cost £100.00 in July 2015 would have cost £100.60 in July 2016”

The ONS and I quote “The main contributors to the increase in the rate were rising prices for motor fuels, alcoholic beverages and accommodation services, and a smaller fall in food prices than a year ago.”

Now we know oil (prices for motor fuel) is priced in US$. So now more pounds are needed to buy the oil.

The ONS are quoted to say “…previous trends with a particular focus on how movements in the sterling exchange rate may have influenced these data”

Evidence of Brexit affecting the price of goods.

BHP Billiton one of the world’s largest natural resources company, published its end of year results on Tue 16th August.

http://www.bhpbilliton.com/

The figures make interesting reading.

http://www.bhpbilliton.com/investors/reports/bhp-billiton-results-for-the-year-ended-30-june-2016

Capital and exploration expenditure declined by 42% to US$6.4 billion and is expected to decrease further to US$5.0 billion in the 2017 financial year

Net debt is higher now at US$26,102 million

Liquidity of US$16 billion

Net finance costs increased by US$410 million to US$1.0 billion

The outlook for commodity prices in the short term look weak.

The results also responded to the tragedy following the failure of the Fundão tailings dam at Samarco on 5 November 2015. 19 fatalities, of which five were members of the community and 14 were people who were working on the dams at the time of the dam failure. This dam was at a mine that BHP Billiton and Vale owned.

A provision of US$1.2 billion at 30 June 2016 in respect of BHP Billiton Brasil’s potential obligation. Note that BHP Billiton Brasil is among the defendants named in a claim brought by the Federal Public Prosecution Office on 3 May 2016, seeking R$155 billion (approximately US$48 billion) for reparation, compensation and moral damages in relation to the Samarco dam failure.

The BlackRock Income Strategies Trust is a London Listed £320million investment fund.

The yield is amazing at over 5%.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10135&action=

Formerly known as the British Assets Trust, founded in 1898.

Portfolio Analysis:

Equities 37.5%
Volatility Strategies 5.1%
Fixed Income 26.7%
Alternatives 12.0%
Commodities 7.4%
Cash Equivalents 11.3%
https://www.blackrock.com/uk/individual/investment-ideas/investment-trust/blackrock-income-strategies-trust?siteEntryPassthrough=true&locale=en_GB&userType=individual

London Metric is a FTSE 250 Real Estate Investment Trust specialising in property investment and development.

http://www.londonmetric.com/

£1.4 billion is the total portfolio value

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=714815

A yield of over 4%.

Some incredible properties:-

http://www.londonmetric.com/~/media/Files/L/LondonMetric/property-map-files/April%202016/Ipswich-RGB.pdf

Yes, prime real estate in the IP5 district of Ipswich, Martlesham Heath.

We have negative interest rates in the Euro Zone

http://www.ecb.europa.eu/home/html/index.en.html

This means that is a bank in the EU deposits money with the European Central Bank, a negative interest rate is applied, that being of 0.4%.

Thus €1,000,000 (€1m Euros) on deposit with the ECB, after 12months would be €996,000. Yes  a capital loss of €4,000 Euros.

The Two Intelligent Long term Investors. Asad and Ayana.

On Thursday 4th August 2016, the Bank of England, made some historic decisions.

http://www.bankofengland.co.uk/publications/Pages/news/2016/008.aspx

[Courtesy of The Bank of England]

It cut the base rate from the 0.5% rate that we have enjoyed since March 2009, cut it down to 0.25%

It then increased the quantative easing programme from £375 Billion by a further £60 Billion to take the UK Government Bond Purchase Programme (Asset Purchase Facility) to £435 Billion.

What they also announced is that they will start a £10 Billion Corporate Bond Purchase Programme. What does that actually mean ?

Large listed companies, fund themselves apart from business operations of selling products and services, by selling bonds. They are known are Corporate Bonds. They are bought by professional investors like pension funds, insurance companies and banks. They pay a regular income provided the company does not default. If the owners of these bonds (effectively the creditors to the companies) want to sell them, they are able to trade them on the open market. However in these uncertain economic times it is not always possible to sell them thus if a bank who owns a specific corporate bond, needs cash and tries to sell the corporate bond and is unable to, now the Bank of England will come in as a new buyer, and buys the bond and the bank gets cash from The Bank of England. Thus The Bank of England is providing more liquidity in the market place.

e.g.

BT PLC the world’s leading media and telecommunications company has issued bonds:

http://www.btplc.com/Sharesandperformance/Fixedincome/index.htm

Shell PLC the UK’s largest company has issued bonds:

http://www.shell.com/investors/financial-reporting/bonds-and-credit-ratings.html

If these bonds are now owned (creditors to BT and Shell) by banks, and the banks need to raise cash, they now can sell these bonds in BT and Shell to The Bank of England.

So effectively The Bank of England is now buying high quality corporate bonds from financial institutions who want to raise cash by selling there bonds holdings. The end result will be that The Bank of England will become a creditor to large organisations who have issued bonds.

On Wed 3rd August 2016 Vodafone PLC paid out its summer 2016 dividend of 7.77p.

http://www.vodafone.com

A key member of the FTSE-100

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10097

Now Vodafone’s issued share capital consists of 28,814,124,788 ordinary shares.

We can calculate how much cash left Vodafone on Wednesday morning to pay the shareholders:

28,814,124,788 x £0.0777 = £2,238,857,496

That is £2,238 Million = £2.238 Billion.

A juicy dividend.

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 July 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-

20-Jul-2016 4¼% Treasury Gilt 2039 £1,500.0000 Million
13-Jul-2016 0 1/8% Index-linked Treasury Gilt 2026 £1,250.0000 Million
07-Jul-2016 1½% Treasury Gilt 2026 £2,584.3190 Million
05-Jul-2016 1½% Treasury Gilt 2021 £2,874.9960 Million

When you add the cash raised:-

∑(1,500 Million + £1,250 Million + £2,584.319 Million + £2,874.9960 Million =  £8,209.32 Million

£8,209.32  Million = £8.209 Billion

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

£264 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 2021, 2026 and 2039. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…”

One of the worlds largest energy companies is Royal Dutch Shell

http://www.shell.com

It has massive borrowings to fund its operations.

http://www.shell.com/investors/financial-reporting/bonds-and-credit-ratings.html

Total outstanding debt is:-

CHF 1,325  Million
EURO 13,450  Million
GB £ 500 Million
US$ 40,500 Million

Total in Sterling is £39,845 Million. That is £39.8 Billion.

What is interesting is to see when the debts are due to be repaid, the maturity profile.

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

http://www.tigt.co.uk/

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.

Thus:-

274,269,045 x £0.006 = £1,645,614

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=12083&action=

a 3% yield.

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

www.nsandi.com

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

http://www.nsandi.com/prize-checker

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

Thus:

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.

NextEnergy Solar Fund Limited is a closed-end investment company limited.

http://nextenergysolarfund.com/

A £300m investment find

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=29575827&action=

A dividend yield of over 5%.

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

https://www.cml.org.uk/news/press-releases/gross-mortgage-lending-climbs-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.

I like Tracker funds. I am after all a Passive Investor.

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

www.bt.com

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

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10025&record_search=1&search_phrase=BT

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

http://www.btplc.com/Sharesandperformance/Fixedincome/index.htm

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.

Yesterday, Arm Holdings was bought out by the Japanese SoftBank

http://www.arm.com/

An amazing British success story, sadly taken over.

http://ir.arm.com/phoenix.zhtml?c=197211&p=irol-irhome

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”

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

Thus:

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

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

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)

http://www.dmo.gov.uk/documentview.aspx?docName=/gilts/press/130716index.pdf

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 is a London Listed Investment trust that invests in water and energy assets.

https://www.premierfunds.co.uk/investors/investments/investment-trusts/premier-energy-and-water-trust

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

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=53460&record_search=1&search_phrase=pew

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.

Watch at 25seconds into the video. A great lender on Zopa.com

Here we are on Sat 9th of July. Over 2 weeks this Brexit. What is going to happen next. Well, at www.asadkarim.co.uk 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.

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 (http://www.dmo.gov.uk/) 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…”

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.

http://www.hsbc.com/~/media/hsbc-com/investorrelationsassets/stockexchangeannouncements/2016/june/sea-160630-total-voting-rights-rns-announcement.pdf

Thus:-

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 is an investment fund that is buying and developing renewable energy assets such as Solar, Windfarms and also water and waste processing.

http://www.jlen.com

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%

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=28067217&action=

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

On Sat 25th June www.asadkarim.co.uk posted this (http://asadkarim.co.uk/?p=1677)

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

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

http://www.bankofengland.co.uk/publications/Pages/speeches/2016/915.aspx

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

http://www.bankofengland.co.uk/publications/Documents/speeches/2016/speech915.pdf

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 www.asadkarim.co.uk

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.

One week after the Brexit vote, we are seeing real facts that are worrying.

The Vote Leave campaign claimed that the UK would save £2bn on energy bills. Leave promised the UK could end VAT on household energy bills. While that is  possible, it won’t save us any money in reality because we rely on imports for so much of our energy as we import gas from Norway, (the Troll field from Norway) gives the UK a lot of gas. However, as UK£ Sterling has fallen, the cost of imports rises, and thus energy prices will rise, so there will be no £2bn saving.

Also if the economy hits hard times, it is very unlikely that the VAT will be reduced, as this tax is an important revenue earner for the government.

There was huge talk about getting our sovereignty back. Talk about unelected officials in the EU making decisions and passing legislation on our lives. Now if Boris Johnson becomes PM, it will be down to the Conservative Party and the 1922 Committee internal election of the 330 Conservative MP’s deciding on the replacement to David Cameron. 330 officials deciding on the new PM. The UK electorate have no say in this decision. This is Sovereignty is action.

Vote leave promised £350m a week that would stop going to the EU and be diverted into the National Health Service. Our NHS. Now that figure is thoroughly avoided by the Vote Leave team, and are trying to distance themselves from this promise. incredible.

Most concerning is that during the recession of 2008 onwards, funding for our universities fell, that was offset by the huge rise in tuition fees for students. However lets us never forget the £7bn in science funding alone between 2007 – 2013 that came from the EU.
And what happens to our membership of key technical programmes like The European Space Agency or the world leading Physics laboratories of CERN.

The UK could suffer from this decision.

The Bank of England on Friday 24th June after the Brexit vote was announced had to make an immediate announcement to calm the nervous markets.

http://www.bankofengland.co.uk/publications/Documents/news/2016/056.pdf

“…these actions, UK banks have raised over £130bn of capital…..”

“…Moreover, as a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities…..”

Let’s take each of these two statements to the natural conclusion based on the research carried out by www.asadkarim.co.uk

1. £130bn of new capital. That means the high street banks now hold an extra £130bn inside them (on their balance sheet, as new assets). This money can NOT be used to generate loans or mortgages. It is held by the clearing banks. Thus credit to give to small or medium enterprises (the role of the clearing bank) is now reduced by £130bn. Thus potential economic activity like creating jobs or lending to companies to grow is now reduced by £130bn. This cannot be a good thing for the economy, but it is wise our banks have money to weather any storms ahead.

2.£250bn of additional funds. This means that now savers are going to be potentially punished. Why ?
Banks raise cash to fund themselves by either borrowing on the wholesale markets, such as getting money from pension funds or mutual funds or issuing bonds, or offering savers (regular depositors) attractive savings rates to attract then to deposit their money into savings accounts. Now with £250bn available from the central bank (the Bank of England), then the need to get savers money to deposit money now with them, immediately reduces, and thus no incentive to offer generous savings rates to lure in savers. Potentially they do not need that source of cash, so when times are tough, why offer decent interest rates to savers ?

Thus the irony is that older people who have saved, and have been punished with pathetic interest rates since 2008, now face the potential prospect of even lower rates on their savings due to the £250bn of Bank of England funding, and when one looks at the Brexit demographics of who voted to leave The EU, a large proportion of older people voted to leave. Sadly they are now potentially facing a poorer futures with near zero % savings rates on their long term savings. Perhaps they never  thought about being poorer after voting to leave the European Union. A consequence of the Brexit vote

Finally, two annuity firms, Just Retirement and Retirement Advantage, announced annuity rate cuts yesterday. Just Retirement’s rates are down by around 2pc. Almost certainly, this is the just the start of falling annuity rates. This is just one of the first effects of the Brexit vote on our pensioners and for those who are saving for retirement. Our elderly generation deserve decent pensions. Yet, someone retiring today will have less money from their pension.

Yet the truth is that we have little idea what will happen now, but www.asadkarim.co.uk can make some basic assumptions on the next stages of what may happen:-

Economic Confidence effects may become forceful. Confidence, very much long fragile, had just been starting to return, worries about China’s growth were reducing, and in the UK too. However, the uncertainty that Brexit brings a guess is that now investment weakness now seems almost inevitable.

Brexit will weaken GDP at first. Stronger exports, stronger manufacturing, and weaker services may well follow the weaker pound. But the UK has a relatively small export business, yes we export, such as Jaguars, Land Rovers, Range Rovers, BMW Mini’s, Vauxhall Astra’s etc , but to take advantage of the weak pound we need to rebalance the economy and develop that export base and make it bigger, which means wide scale reform, which takes time, so real GDP weakens before, ultimately, it strengthens if companies decide to expand.

Foreign direct investment may well fall aggressively. Indeed it already is. Ford has already paused investment plans, HSBC may move 1,000 jobs to Paris, and Morgan Stanley may move 2,000 jobs to Dublin. In the current uncertainty, Why would anyone make a long term decision on investing in the UK ?

Political turbulence set to endure. The Labour party is in total meltdown, resignations by the hour from the opposition front bench. The Conservative party is torn; and sadly the Liberal party pretty much irrelevant. Scotland is toying with the idea of seeking independence and would like to join the EU, but no guarantees that they could join the union, as Spain will have potential have objections due to its own internal issues. Wales is a net gainer from the EU, and they voted out, they clearly do not know what they want. What about Ulster, as The Republic of Ireland faces the prospect of an EU south, a non-EU province north. The Union has some choppy times ahead

Financial services will come under pressure. Yesterday Barclay’s fell 10% in value and shares were initially suspended. Banks will follow the business, and the business will follow the regulations. Banks can easily move to Paris, Zurich, Frankfurt or Dublin, unless it is hard to replicate the London workforce.

Trade negotiations will likely take years. They generally do. Could take 5-7 and the UK will have over 60 agreements to finalise.

Lack of Government. So let’s hope our Bank of England can meet the challenge, as it is the only relevant institution that remains fully functional, ironically run by an immigrant, the migrant from Canada, Mark Carney who is exceptionally brilliant.

What I have documented are the Real Risks that we face, these are my humble views, but I have been taught about risk by some exceptionally superb people, thank you Peter Harris…..

The Royal Bank of Scotland that is 70% owned by the UK Tax Payer, has had a programme of reducing its balance sheet. The bank has sold assets all over the world as it becomes a UK focussed lender.

www.rbs.com

Looking at the annual report that was published on the 26th Feb 2016 once can see the real contraction in the bank

http://investors.rbs.com/~/media/Files/R/RBS-IR/results-center/q4_results-26-Feb-2016.pdf

Year:                                 2016        2015         2014
£m          £m            £m

Total assets:                   815,408    876,684    1,051,019
Customer deposits:      343,186    346,267     354,288
Derivatives:                    254,705    288,905     349,805
loans to customers:      306,334    311,383    334,251
Wholesale funding:       59,000      66,000       90,000

One can see from a few metrics that I have pulled of the report, it is reducing its reliance on wholesale funding, also reducing the loans given out to customers.

in 2008, the balance sheet was over £2 Trillion, now it is £0.815 Trillion

UK GDP is about £1.5 Trillion, so the RBS Balance Sheet is 54% of UK GDP.
It is still a massive bank.

The nation has spoken. What will happen is anyone’s guess. Here is what www.asadkarim.co.uk has to say.

Immigration

The country will probably start to experience labour shortages in many sectors that are reliant upon immigration due to many EU immigrants currently living in the UK potentially leaving in due course and new EU immigration slowing quickly. When the prospect of a long term future in the UK diminishes we at http://www.asadkarim.co.uk expect potential immigrants to make decisions to go elsewhere from today onwards, not in two years’ time when the UK exit’s Europe. This may affect many industries, with for example the already understaffed NHS frontline potentially losing many much needed workers but housebuilding could also slow substantially too through an even worse lack of labouring skills and this could apply upward pressure on prices. The retail sector could see a significant difficulty to find staff and restaurant, bar and coffee shops could see a significant fall in staffing and service levels. Businesses who have benefitted from immigration delivering much needed staff to support expansion and also benefitted from this holding back wage inflation could see both more staff shortages and upwards wage pressure.

Currency

The pound has weakened significantly following the vote and whilst this may help exports it will also drive inflation as we are so reliant on imports as a country. It will be a decision for the Bank of England as to whether to raise base rates to support the pound and strengthen it or to lower base rates further and even restart quantitative easing (QE) to stimulate the economy if it slows down. It is a very difficult decision for them but we at http://www.asadkarim.co.uk feel given the pound has been far weaker than this a few years ago the decision will be to lower base rates and restart QE. Yes falling interest rates from 0.5% to 0.25%. Trust me, I am http://www.asadkarim.co.uk after all.

Economy

Overall the economy is expected to slow for a while and businesses will probably see a short term fall in confidence and at http://www.asadkarim.co.uk we may well see a technical recession for a short period as businesses tighten their belts in anticipation of a dip in profits which will become self-fulfilling in the short term. Nonetheless at http://www.asadkarim.co.uk we expect the economy to recover relatively quickly as the uncertainty over what an exit from Europe actually means becomes clearer and the country moves on although there could well be unhelpful turmoil in the political corridors in the short term if a power struggle develops.

Interest Rates

Given at http://www.asadkarim.co.uk we think that the Bank of England will act to support the economy rather than support the pound the base rate will probably go to zero very quickly now and they could in fact go negative (contrary to protestations that wouldn’t happen as it has in several other countries) and at http://www.asadkarim.co.uk we could also see bank savings accounts go to near zero interest rates to reduce demand from savers because we also expect to see banks quickly reduce lending to businesses and housebuilders again and they will therefore have less need for those deposits. The Prudential Regulation Authority will also probably step in and impose tougher requirements on banks that hurt their profits and that will also lead to further reductions in lending to businesses and developers and hence the banks’ and housebuilders’ share price falls this morning by around 35%. Nonetheless this benefits our investors like YOU…. and at http://www.asadkarim.co.uk we will now discuss this below.

Look at what the Bank of England said:-

[http://www.bankofengland.co.uk/publications/Pages/news/2016/056.aspx]

Property – Buy to Let and House Prices

In terms of buy-to-let, we at http://www.asadkarim.co.uk  could see prime London house prices supported by the significantly weaker pound, spurring renewed investments from EU and global investors after a period of weakness in demand from those overseas investors. Nonetheless this will need to be weighed against the economic and currency uncertainty that will slow down those decisions. Overall At http://www.asadkarim.co.uk we still expect prime London prices to continue falling and many of the tens of thousands of £million+ flats in the pipeline to be mothballed as demand from all over the world fails to meet that potential level of supply. The rest of London will definitely be hit by a perfect storm of several factors hitting house prices which is great news for house-buyers but not for investors and homeowners. At www.asadkarim.co.uk I know that the City is going to relocate large numbers of highly paid bankers to Paris, Dublin and the rest of Europe and the loss of these highly paid house buyers and renters can only have a negative effect. Add that to the new buy to let mortgage interest tax and we see no appeal for speculative house price growth and negative cash-flow in London for the foreseeable future and expect a substantial continuation of the move of buy-to-let investment to the Northern Powerhouse.

Finally

The rest of the country is likely to be far more stable and we expect house prices to be very slow to react, if at all, as a minor economic slow-down is balanced by low mortgage interest rates (and probably falling further) and huge demand for housing. Nonetheless At http://www.asadkarim.co.uk we expect to continue to see developers offer ‘deals’ and price reductions on some properties. Expect to also see large discounts to original asking prices in the pipeline of luxury London flats London property (some amazing places in Maida Vale for example…if you do not believe me just ask SW…) but best wait a year or two before trying to catch that ‘falling knife’ as initial price cuts don’t necessarily mean that type of property is correctly priced yet. Rents outside London will remain strong and continue to grow steadily, created by a modest reduction in house building as the banks reduce lending again.

In summary buy-to-let outside central London remains a strong contender for cash rich investors seeking to protect capital and produce an income well above bank interest rates

And remember I am www.asadkarim.co.uk

BP, is one of the worlds largest energy companies.

www.bp.com

On Friday 17th June (last Friday), BP pays out its Q1 Dividend of $0.10 dollars per shares. That is 6.9167 pence per share.

http://otp.investis.com/clients/uk/bp_plc/rns/regulatory-story.aspx?cid=233&newsid=738071

Now the issued share capital of BP p.l.c. comprised 18,646,586,876 ordinary shares.

http://otp.investis.com/clients/uk/bp_plc/rns/regulatory-story.aspx?cid=233&newsid=729856

So today, one can calculate the cash leaving BP PLC to its shareholders:

18,646,586,876 x £0.06.9167 = £1,289,728,474

That is £1.289 Billion cash leaving the bank account of BP PLC to be paid to the shareholders.

The UK Pound (Sterling) has come under pressure with the toxic debate on Brexit, remaining or staying in the European Union.

What we have seen in the past 4-5 months is that Sterling has depreciated against major currencies such as the dollar.

Here is a very simple example of the effect of this effective devaluation of Sterling.

Royal Dutch Shell
[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133655]
[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133755]

Pays quarterly dividends to shareholders, and reports its financial figures in US Dollars.

Its dividend payment was $0.47 per share for the Q4 2015-16 Dividend.

On March 11th 2016, it announced the conversion of the $0.47 in UK £pounds. It’s 32.78p per share.

[http://ir1.euroinvestor.com/asp/ir/IRM_Shell/NewsRead.aspx?storyid=13328814&ishtml=1]

Its dividend payment was the same $0.47 per share for the Q1 2016-17 Dividend.

On June 13th 2016, it announced the conversion of the $0.47 in UK £pounds. It’s 32.98p per share.

[http://ir1.euroinvestor.com/asp/ir/IRM_Shell/NewsRead.aspx?storyid=13392917&ishtml=1]

One can immediately see the dividend has remained at $0.47 per share, but due to devaluation of Sterling has resulted in people receiving the dividend in UK£ have made an extra 0.2p per share

So as a simple example a shareholder with 1,000 shares in Royal Dutch Shell:=
in March 2016:-

1,000 x £0.3278 = £327.8 as a dividend

on June 2016

1,000 x £0.3298 = £329.8 as a dividend.

£2.00 more for doing NOTHING.

The NB Global Floating Rate Income Fund is a great fixed income fund, managed by Neuberger Berman. Neuberger Berman is a private, independent employee-controlled asset management company, managing approximately £250 billion.

http://www.nbgfrif.com/

This fund has the top ten holdings:-

Valeant Pharma   2.06%
Avago Technologies  2.01%
First Data   1.90%
Scientific Games  1.64%
Numericable   1.40%
Community Health Systems 1.27%
Cablevision Systems  1.22%
Petsmart   1.17%
Univision Communications 1.10%
Mohegan Tribal Gaming  1.03%

This makes up 14% of the fund.

It total holdings are documented here.

http://www.nbgfrif.com/pdf/NBGFRIF_holdings_March_31_2016.pdf

The fund is worth nearly £1bn.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=2559586&action=

A yield of over 6%. Amazing

On June 15th, Morrisons PLC paid its dividend.

http://www.morrisons.com

The final dividend payment is 3.5p.

The share capital of Morrisons PLC is 2,335,203,487

http://otp.investis.com/clients/uk/morrison/rns/regulatory-story.aspx?cid=623&newsid=733399

Thus the cost of dividend to Morrisons is:-

2,335,203,487 x £0.035 =  £81,732,122.

£81 million cash leaves the business to pay the shareholders.

China believe it or not, actually is a minor oil producer, with 1.1% of the worlds reserves. That equates to 18,500,000,000  barrels.

Of course one has to realise that China consumes 11,056,000 barrels of oil a day.

So what is the value of the 18,500,000,000 barrels ?

So crude today trades at about $50.06 a barrel which is £32.23

Thus:

18,500,000,000 x £32.23 = £651,895,600,000

That is £651 Billion which is about 43% of annual UK GDP

On Friday 20th May 2016, The Prudential PLC, the massive UK life insurer, paid out a dividend to shareholders.

www.prudential.co.uk

It is the owner of M&G Investments, Jackson National Life and InfraCapital.

Prudential paid out 36.47p per share to its shareholders. The share capital of Prudential PLC is made up of  2,572,762,666 shares.

So how much did Pru pay out on Friday 20th May ?

2,572,762,666 x £0.3647 = £938,286,544.29

That is £938m to its shareholders. That is the cost of the dividend.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10065&record_search=1&search_phrase=pru

That is a 3% yield.

The ticker symbol for the UK FTSE-100 is UKX

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=50058

The largest 100 listed companies in the UK.

Today on the 9th June 2016 Legal and General PLC pays out is dividend to shareholders.

www.legalandgeneralgroup.com

LGEN are paying out 9.95p per share.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10055&action=

Now Legal and General has 5,949,115,915 shares. Thus the cost of the dividend paid today is:-

5,949,115,915 x £0.0995 = £591,937,034

That is £591 million cash that leaves the business today to the lucky shareholders.

The Japan in an incredible country. A nation of vast beauty, a rich and deep culture, amazing food, highly intelligent people and also it commands a very high standard of living.

Home to the creative nation of high quality consumer goods, from household names like Sony, Nikon, TDK, Olympus, Mitsubishi, TEAC, Nissan, Toshiba, Toyota, NEC, Nintendo, Mazda, Ricoh, Panasonic, Honda, Hitachi, Canon, Fujitsu to name just a few.

It’s public finances are shocking however. The Government of Japan is funding its operations on debt. The Bank of Japan is buying the debt. It is the most extreme form of Quantative Easing

33% of all of all Japanese Government Bonds (JGB) are owned by the Bank of Japan

Japan’s Debt to GDP is over 230%

The figures are of the chart….

I love Index Tracking Funds

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 May 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-

18-May-2016 4¼% Treasury Stock 2036 £1,500 Million
10-May-2016 0 1/8% Index-linked Treasury Gilt 2058 £756.1400 Million
05-May-2016 1½% Treasury Gilt 2026 £2,874.9840 Million
04-May-2016 1½% Treasury Gilt 2021 £3,162.4980 Million

When you add the cash raised:-

∑(£1,500 Million + £756.1400 Million + £2,874.9840 Million + £3,162.4980 Million) =  £8,293.622 Million

£8,293.622 Million = £8.293622 Billion

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

£267 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 2021, 2026, 2036 and 2058. All long term borrowings, we are mortgaging our futures, but at least “We are in it together….”

UK Mortgages PLC is an investment fund that is buying high quality mortgages from banks and building societies.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=41993839&record_search=1&search_phrase=ukml

A £247m fund that paid on the 9th May 2016 to shareholders a dividend of 1.5p.

They play to pay a dividend to shareholders each quarter.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=41993839&action=charts&username=&ac=

This equates to a potential yield of 6%

Incredible if they can maintain this yield in a deflationary economy.

The Intelligent Investors

BT announced on Thursday 5th May 2016, its annual results.

http://www.btplc.com/News/#/pressreleases/results-for-the-fourth-quarter-and-year-to-31-march-2016-1394569

BT is the most dynamic telecommunications, broadband and media corporation, that has delivered a strong set of results.

Some very salient information can be found in the results.

http://hsprod.investis.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&item=2454084183392256&ir_client_id=1281

Total debt is under £10bn, at £9.845 Billion.
BT  has taken on £2.1bn of EE debt, which is a factor why BT’s debt has increased.

The proposed final dividend of 9.6p, up 13%

Now with 9,961,199,569 and the Sept payment of 9.6p

http://hsprod.investis.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&item=2448801373618176&ir_client_id=1281

Thus it will cost BT £956,275,159 (£956m) in Sept 2016 for the dividend payment

BT Group held cash and current investment balances of £3.4bn. A strong position of liquidity.

BT also paid £875m into BT Pension Scheme as part of its plan to reduce the pension deficit.

EE’s figures are interesting, monthly mobile average revenue per user was £26.7 for post-paid customers, £3.9 for pre-paid.

BT is firing an all cylinders.

An ETF = Exchange Traded Fund.

The UK Flagship index is the FTSE-100.

This is the UK’s leading companies. To get access to all the FTSE-100 companies, one can buy shares in all the FTSE-100 companies, or buy an Unit Trust Tracker of the FTSE-100 like the Legal and General FTSE-100 tracker:

[http://i.legalandgeneral.com/consumer/investments/products-and-funds/index-tracker/investments-productsandfunds-indextracker-fund-uk100.jsp]

or by and Exchange Traded Fund like the HSBC ETFS 100.

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=2190688&record_search=1&search_phrase=hsb]

What is interesting is that the price of the FTSE-100 ETF is the same as the FTSE-100 index.

Today, the life insurer and asset manager Standard Life will pay its May dividend. (Tue 24th May 2016)

http://www.standardlife.com/

The former mutual is a power house in pensions and investments. To put things in context they have £307.4 Billion under management. (That is about 20% of UK annual GDP)

BT the most dynamic telecommunications and media company, has its money purchase scheme managed by Standard Life

http://www.btretirementsavingscheme.com/bt/

Today Standard Life will pay 12.34p per share to shareholders.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=186960&action=

That is a yield of 5.5%

How much has Standard Life paid out today to its shareholders ?

The share capital issued by Standard Life is 1,975,305,518 shares.

Thus:-

1,975,305,518 x £0.1234 = £243,752,700.92

That is £243 million. Lucky shareholders who own such a wonderful asset.

On Tue 17th May 2016, Lloyds Banking Group paid a dividend to shareholders. That was 1.5 pence.

Now the total numbers of shares in Lloyds Banking Group are:-

71,373,735,357

This the cash leaving the business to be paid to shareholders is:-

71,373,735,357 x £0.015 = £1,070,606,030

That is £1 Billion of cash.

An interesting fact that the UK Government, care of the UK tax payer owns 9.89% of Lloyds Banking Group.

That is 7,057,718,792 shares.

Thus 7,057,718,792 x £0.015 = £105,865,782

So on Tue 17th May 2016 the UK Government received £105 million as a dividend in its investment in Lloyds Banking Group.

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

http://www.bp.com

It has been widely reported the failing price of crude. Today crude is trading at $47 a barrel = £32

In economics, Revenue is defined as Price x Volume. [R=PV]

So when the volume of oil sales remains stable, and the price is falling, then revenue will fall.

One can see this the revenues of BP over the past 3 years.

BP’s revenues in £

2015                2014              2013
£153,689m     £243,791m   £261,421m

in £Billion
£153 Bn          £243 Bn         £261 Bn

One can see the dramatic fall in revenues year on year, and this makes the dividend harder and harder to pay.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10022&record_search=1&search_phrase=BP

Currently the dividend yield is over 7%, the question is how long is that sustainable.

What seems incredible but is true, the UK Bank of England base rate has been at 0.5% since March 2009.

http://www.bankofengland.co.uk/

What is even more amazing is that anyone is the UK who took out a mortgage since 2007 has never seen a rise in the Bank of England’s base rate.

So an interest rate rise would mean higher payments on mortgages and less disposable spend in the wider economy.
But always be cautious on high level statements.

In the UK there are just under 14.5 million owner-occupied households. However, there are actually 7.5 million people, who have no mortgage at all. So an interest rate rise would be irrelevant, and if they have savings they are actually better off.

Thus there are 7 million people who have mortgages, and they are the ones would suffer if rates were to rise.

Inequality in society is really becoming a real issue. So alarming is the wealth gap in society, the most powerful woman in the world, Janet Yelland, the chair of the US Federal Reserve has even stated it.

[http://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm]

“The distribution of income and wealth in the United States has been widening more or less steadily for several decades, to a greater extent than in most advanced countries….The extent of and continuing increase in inequality in the United States greatly concern me. ”

For the most influential central banker to speak out this issue, is sending a message to the world.

The rich are getting super rich and the poor are trapped.

[https://www.youtube.com/watch?v=QzQYA9Qjsi0]

Paul Krugman, the famous US economist has also spoke out about this.

In a period of low growth, people with assets, are getting richer as asset values are rising. This means again means the rich are getting richer, and this can only lead to down stream problems, as wealth inequality will result in the poor being effectively marginalised and the rich could even buy political power. It is a lethal cocktail.

There is a lot of speculation in the media about the possible floatation of the state oil company of Saudi Arabia, Aramco.
5% of the Saudi Aramco is being suggested to be floated, giving a valuation of $2.5 Trillion = £1.72 Trillion.

That is 113% of UK Annual GDP.

The size of Aramco can not be underestimated. They are responsible for a ninth of global oil supply.

So the question is how much oil does Aramco have ?

Well, again the numbers are huge. The proven reserves are 267,000 MILLION barrels.

That is 267,000,000,000.

So what is that value in today’s prices ?

Crude oil trades at $45.51 a barrel = £31.53.

Thus:-

267,000,000,000 x £31.53 = £8,418,510,000,000

That is £8,418 Billion = £8.418 TRILLION.

The US Central Bank, the Fed (The US Federal Reserve) has a vast balance sheet

https://www.federalreserve.gov/releases/h41/current/h41.htm

Just over $4,500 Billion ($4.5 Trillion)

One line item of the assets that makes up the $4,500 Billion are mortgage back securities.
These are effectively the debt of mortgages that the US Fed now owns after its programme of bond purchases since the start of finance crisis.

These are worth $1,762 Billion.

Effectively these are mortgages owned by the US Fed. US homeowners are paying the debt back via their monthly payments.

One can make some very rough calculations on this $1,762 Billion figure

If the average US house price is say $190,000, and say the mortgage on this house is say $175,000.

One could make a rough guess of mortgages held by the US Fed.

Mortgage Back Securities owned by the US Fed: $1,762 Billion

$1,762 Billion = $1,762,000 million

Average US Mortgage = $175,000 = $0.175 million

This number of mortgages owned by the US Fed = $1,762,000 million / $0.175 million

Thus = 10,068,571 Mortgages.

That is over 10 Million US Mortgages (homes) are owned by The US Federal Reserve.

Western Economies are exceptionally sluggish. We are in a sustained period of slow growth and high levels of government debt (Sovereign Debt).
Interest rates are low, wage inflation is very low, and consumer goods such as food and fuel have enjoyed a period of deflation.

In the UK it was normal for 1 loaf of bread to be £1.20
Now one can buy 2 loaves of bread for £1.

What is very obvious is that the rich are getting richer, the 1%.

What has happened since the financial crisis that began in March 2007 with Bearn Stearns being rescued by JP Morgan, and then UK mortgage bank Northern Rock applying for emergency funding from The Bank of England in late August 2007, we have seen other asset classes rise in value.

Property has rocketed in value, Shares have gone up in value.

Thus anyone like the rich owning financial assets likes real estate or shares, have seen their wealth increase, for doing nothing. That is what happens when you are lucky enough to be in the right place at the right time.

One of the most technically advanced nations in the world is Japan. Home to companies like Toshiba, Mitsubishi, Toyota, Nintendo, Nissan, Sony, Mazda, Panasonic, and of course famous for its amazing Bullet Train.

As a modern society, electricity production is key to its economy.

Japan produces 4.5% of the world’s electricity, which is 1061 Terawatt/Hours.
(The UK produces 335 Terawatt/Hours which is 1.4% of global production)

Self investment opportunities seem to be growing all the time. To give investors access to global opportunities that was only in the reach of brokers and other investment professionals.

www.moneyfarm.com is a new player on the market.

A new portal to allow investors a develop a financial portfolio using low cost ETF’s (Exchange Traded Funds) which are very similar to index trackers.

So one is investing is whole index’s on stock and bond markets around the world.

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 April 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-

20-Apr-2016 0 1/8% Index-linked Treasury Gilt 2026 £1,424.8030 Million
13-Apr-2016 3½% Treasury Gilt 2045 £2,012.4980 Million
07-Apr-2016 1½% Treasury Gilt 2026 £2,874.9890 Million
05-Apr-2016 1½% Treasury Gilt 2021 £3,162.4990 Million

When you add the cash raised:-

∑(£1,424.8030 Million + £2,012.4980 Million + £2,874.9890  Million + £3,162.4990 Million) =  £9,474.79 Million

£9,474.79 Million = £9.474 Billion

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

£315 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, 2026 and 2045. All long term borrowings, we are mortgaging our futures, but at least “We are in it together….”

http://asadkarim.co.uk/?attachment_id=1477

Yesterday, Friday 29th April, The Royal Bank of Scotland, announced its Q1 2016 results.

http://investors.rbs.com/~/media/Files/R/RBS-IR/results-center/q1-results-2016-slides.pdf

A loss of £968m.

70% owned by the UK Tax Payer, some interesting figures are buried in the results.

£4.2bn pension payment made to the main scheme. So that only can be a good thing for the employees and pensioners of RBS.

Customer deposits are at £352 billion.
Net loans & advances to customers are at £317 billion.

Thus more deposits than outstanding loans.

Slide 19 is the interesting one, of how is shows how RBS is reducing its exposure to certain sectors:-
Oil & Gas
Mining and Minerals
Shipping
Emerging Markets

So one can detect, that the bank fears that these sectors are in contraction, and thus reducing loans to these sectors is a mechanism to reduce the risk at RBS.

One can not under-estimate the size of the Anglo Dutch energy giant Shell.

http://www.shell.com

A market values that now towers over £100 Billion Company.

Shell A
http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133655

Shell B
http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133755

The Balance Sheet is vast

Page 110 of the Annual report (pre BG takeover)

http://reports.shell.com/annual-report/2014/servicepages/downloads/files/entire_shell_ar14.pdf
Non-current assets US$

Intangible assets $7,076m
Property, plant and equipment $192,472m
Joint ventures and associates $31,558m
Investments in securities $4,115m
Deferred tax $8,131m
Retirement benefits $1,682m
Trade and other receivables $8,304m
Inventories $19,70m
Trade and other receivables $58,470m
Cash and cash equivalents $21,607m

Total assets $353,116m = £253,293m

That is £253 Billion

It’s income: $421,105m = £302,062m

Yes it’s income was £302 Billion.

To put things in context the Balance Sheet and Income of Shell is now larger than Exxon Mobil

The Legal and General High Income Trust, has currently paying out to investors an eye watering 6% to hold units in this fund.

[http://i.legalandgeneral.com/consumer/investments/products-and-funds/actively-managed/income/investments-productsandfunds-activelymanaged-income-fund-highincome.jsp]

The fund is holding investments worth £1,216.7 million [£1.2 billion]

http://www.legalandgeneral.com/_resources/pdfs/investments/managers-report-annual/AM_SR_High_Income_Trust.pdf

To give out over 6% to investors, it has to hold plenty of investment securities that are giving over 6%. (Yielding over 6%)

Look at the top 10 holdings, they are all debt instruments issued by companies paying out a fixed income:-

Johnston Press 8.625% 01/06/2019 1.53% of the fund
Jaguar Land Rover 3.875% 01/03/2023 1.28% of the fund
Infinis 7% 15/02/2019 1.18% of the fund
SoftBank Group 5.25% 30/07/2027 1.15% of the fund
VWR Funding 4.625% 15/04/2022 1.11% of the fund
MHGE Parent 8.5% 01/08/2019 1.11% of the fund
Palace Entertainment Holding 8.875% 15/04/2017 1.03% of the fund
BC Mountain 7% 01/02/2021 1.03% of the fund
Kerling 10.625% 01/02/2017 1.02% of the fund
Affinity Gaming 9% 15/05/2018 0.94% of the fund

One can see that some of the debt securities that this fund holds are paying over 8%. So it shows how this fund from Legal and General is able to pay out this delicious 6% dividend to its investors.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=50149

The FTSE TechMark All Share Index is a London Index of technology companies that are listed on the London Stock Exchange. It has world class companies like BT PLC, the most innovative and dynamic telecommunications and media groups in the world. Other names in the index are Oxford Instruments, GlaxoSmithKline and Astra Zeneca.

http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/indices/summary/summary-techmarkindices-constituents.html?index=TASX

The full list of companies that make up the FTSE TechMark All Share Index are:

ASTRAZENECA
AVEVA GRP
BAE SYS.
BATM ADVANCED
BT Group
BTG
CABLE&WIRE COM
CML MICROSYSTEM
COBHAM
COMPUTACENTER
CONSORT MED.
DIALIGHT
DRS DATA&RSRCH
E2V TECH
ELEC.DATA PROC.
FIDESSA GROUP
GENUS
GLAXOSMITHKLINE
GRESHAM COMP.
IMAGINTN.TECH
KCOM GRP
MEGGITT
MICRO FOCUS
MICROGEN
NCC GRP
OXFORD BIOMED.
OXFORD INSTRMNT
PADDY PWR BET
QINETIQ
RENISHAW
RICARDO
RM
SAGE GRP.
SDL
SEPURA
SHIRE
SKYEPHARMA
SMITH&NEPHEW
SPECTRIS
SPIRENT
TOROTRAK
TRIAD GRP.
ULTRA ELEC.
VECTURA
VODAFONE GRP.
XAAR
XP POWER

The oil major BP [www.bp.com] paid out to this shareholders a dividend of 7.0125 pence per share.

Now the share capital of Ordinary Shares in BP PLC is 18,485,880,512 shares.

Thus on the 24th March BP paid out from this bank account:

18,485,880,512 x £0.070125 = £1,296,322,371

That is £1,296 Million = £1.29 Billion of the 24th March.

Today on the 20th April HSBC Holdings, one of the largest banks in the world pays it shareholders the Fourth interim dividend for 2015.

http://www.hsbc.com/investor-relations/share-and-dividend-information/dividend-timetable

It is paying out 14.7908p per share ($0.21)

The issued share capital of HSBC Holdings plc with voting rights was 19,747,057,258 ordinary shares.

Thus it is paying out to shareholders:

19,747,057,258 x £0.147908 = £2,920,747,745

today, £2.920 BILLION leaves the account of HSBC Holdings and is paid to its shareholders.

The world is hooked on electricity. Our modern world depends on it. It is a primary resource.

How much does the world produce ?

23,536 TWh is the total number. That is 100% of world production.

How are the largest producers ?

China at 5649 TWh = 24%
USA at 4297 TWh = 18%
India at 1208 TWh =5%

The UK produces 335 TWh which is 1.4% of global production.

The top four largest banks based on assets on the balance sheet:

$3,420 Billion = £2,401 Billion: The Industrial & Commercial Bank of China
$2,826 Billion = £1,984 Billion: The China Construction Bank
$2,740 Billion = £1,924 Billion: The Agricultural Bank of China
$2,589 Billion = £1,817 Billion: The  Bank of China.

All Chinese.

The UK’s HSBC is in 6th position (just behind JP Morgan) with assets of $2,409 Billion = £1,691 Billion. To put that into context, The Hong Kong and Shanghai Banking Corporation’s assets are still larger than the annual GDP of the UK.

The civil war in Syria is causing a terrible humanitarian crisis. Yet Syria should be a very wealthy country as it has 2,500 Million barrels of oil under this land.

(the UK has 3,000 Million barrels of oil). What is the potential value of this oil ?

2,500 Million = 2,500,000,000

Crude trades at $39.27 a barrel. That is a £27.59.

Thus:-
2,500,000,000 x £27.59 = £68,975,000,000

That is £65,975 Million which is £68 Billion.

http://asadkarim.co.uk/?attachment_id=1534

BP, is one of the UK’s largest companies, it is a UK Oil Giant.

BP PLC

It has proven oil reserves of :-

17,523 million barrels of oil

This information can be found here:-

http://www.bp.com/en/global/corporate/investors.html

Interesting to know the value of BP’s oil wealth

Crude oil is trading at about $36.89 a barrel

That is £26.16 a barrel

17,523 million barrels = 17,523,000,000

17,523,000,000 x £26.16 a barrel = £458,401,680,000

So at today’s oil price, BP’s own reserves are worth £458,401,680,000.

That is £458 Billion. That is about 33% of UK GDP…..

Peer to Peer lending is booming.

Look at this:

https://www.assetzcapital.co.uk/our-investment-accounts/qa-account/

4.25% for an instant access account.

Japan’s public finances are totally unbelieveable. the scale of the public sector debt is so massive, it is almost too painful to comprehend. Japan as a nation is crippled with debt.

http://www.mof.go.jp/english/budget/budget/fy2016/01.pdf

http://www.mof.go.jp/english/budget/budget/fy2016/03.pdf

Some quick facts.

Total budget in 2016 for the Japanese government is (YEN) 96,721.8 Billion YEN. That is £608.068 Billion.

24.4% of this expenditure is National Debt payments. That is 23,612.1 Billion YEN = £148.444 Billion

So, that only leaves 75.6% of government expenditure available for the country, such as social security, education, healthcare, military etc etc.

Government revenues (income via taxation) generate 62,289.8 Billion YEN. Expenditure is 96,721.8 Billion YEN. That leaves a deficit of 34,432 Billion YEN (£216.466 Billion)

To match government expenditure to government income (Revenue), the Japanese government has to borrow. That is 35.6% of government revenue.

So the Japanese government has to borrow in 2016 an additional 34,432 Billion YEN by issuing Government Bonds to fund its spending commitments.

Japan’s government is borrowing today to finance its operations today, and has such massive structural debt, that 24.4% of today’s expenditure is to service its cumulative current debt mountain. Now today it is adding to the debt burden by an additional 34,432 Billion YEN (by borrowing 35.6% of its national budget).

Thus the debt mountain is getting larger. The logic is mind boggling.

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 March 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-

10-Mar-2016 0 1/8% Index-linked Treasury Gilt 2036 £1,053.1500 Million
08-Mar-2016 3¾% Treasury Gilt 2052 £1,374.9700 Million
02-Mar-2016 1½% Treasury Gilt 2021 £3,849.9170 Million

When you add the cash raised:-

∑(£1,053.1500 Million + £1,374.9700 Million + £3,849.9170 Million) =  £6,278.04 Million

£6,278.04 Million = £6.278 Billion

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

£202 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 2021, 2036 and 2052. All long term borrowings, we are mortgaging our futures, but at least “We are in it together….”

BT is the most dynamic Telecoms, Broadband, TV and Communications company.

http://www.bt.com
It has a massive pension fund that pays out pensions to 199,000 retired BT employees each month. It holds over £40billion in investment assets to pay these deserving former employees.

http://www.btpensions.net

It’s top 30 investments are

UK Treasury Index linked/fixed interest £9,131m 21.3% of total net assets
Hermes Investment Funds plc Pooled Investment Vehicle £1,591m 3.8% of total net assets
Kemble Water Holdings Ltd UK equities/fixed interest £535m 1.3% of total net assets
Brevan Howard Fund Limited Pooled Investment Vehicle £449m 1.0% of total net assets
Milton Park Property £435m 1.0% of total net assets
Bridgewater Pure Alpha Fund II, Ltd Pooled Investment Vehicle £386m 0.9% of total net assets
MKP Partners funds Pooled Investment Vehicle £385m 0.9% of total net assets
Goldman Sachs Group Inc and funds Overseas equities/fixed interest/Pooled Investment Vehicle £356m 0.8% of total net assets
Lone Star funds Pooled Investment Vehicle £336m 0.8% of total net assets
Hermes GPE Infrastructure Fund LP Pooled Investment Vehicle £334m 0.8% of total net assets
Network Rail Ltd Index linked £303m 0.7% of total net assets
Fallago Rig Windfarm Limited UK equities/fixed interest £271m 0.6% of total net assets
Kings Cross Central LP Pooled Investment Vehicle £199m 0.4% of total net assets
Commercial Mortgage Investments Limited Loans £192m 0.4% of total net assets
Riverstone/Carlyle Renewable & Alternative Energy Fund II LP Pooled Investment Vehicle £192m 0.4% of total net assets
US Treasury Index linked/fixed interest £184m 0.4% of total net assets
Bluewater Property £159m 0.4% of total net assets
Hermes GPE PEC II LP Pooled Investment Vehicle £147m 0.3% of total net assets
Lloyds Bank plc UK equities/fixed interest £146m 0.3% of total net assets
26/28 Hammersmith Grove Property £130m 0.3% of total net assets
Microsoft Corporation Inc Overseas equities/fixed interest £130m 0.3% of total net assets
Clarkes Village Property £123m 0.3% of total net assets
Castlecourt Property £122m 0.3% of total net assets
Visa Inc Overseas equities £122m 0.3% of total net assets
Merck & Company Inc Overseas equities/fixed interest £121m 0.3% of total net assets
Wells Fargo & Company Inc Overseas equities/fixed interest £112m 0.3% of total net assets
Wal-Mart Stores Inc Overseas equities/fixed interest £111m 0.3% of total net assets
Crystal Peaks Property £105m 0.2% of total net assets
Intel Corporation Overseas equities/fixed interest £104m 0.2% of total net assets
Royal Victoria Place Property £103m 0.2% of total net assets

Total £17,014m is the top 30 investments.

Interesting to see that the fund has to hold investments that pay out an income so that this investment income can pay the pensions to the former BT employees each month. A monthly obligation that has to me met by the investments in the fund.

The UK Flagship Index is the FTSE-100.

The total value of the companies listed is:

£1,709,249.67 million

That is £1.7 TRILLION or £1,709 Billion.

That is how much cash is needed to all the companies listed on FTSE-100. That figures is significantly larger than the annual GDP of the UK.

Market Capital  (£m) Name
£84,406.34 HSBC Holdings
£74,476.55 British American Tobacco
£69,459.22 Royal Dutch Shell A
£68,868.02 SABMiller
£67,675.43 GlaxoSmithKline
£63,920.45 BP
£62,455.99 Royal Dutch Shell B
£57,874.83 Vodafone
£49,398.97 AstraZeneca
£48,360.41 Lloyds Banking Group
£47,433.80 Reckitt Benckiser Group
£47,251.11 Diageo
£43,778.05 BT Group
£40,615.07 Unilever
£37,214.81 National Grid
£36,976.02 Imperial Brands
£33,018.71 Prudential
£26,682.48 Associated British Foods
£25,598.67 Rio Tinto
£25,543.40 Royal Bank of Scotland Group
£25,287.80 Barclays
£22,790.18 Shire
£20,865.73 WPP
£20,699.64 Glencore
£20,018.89 Compass Group
£18,475.69 Aviva
£17,671.50 Sky
£16,051.80 CRH
£16,035.74 BAE Systems
£15,840.54 BHP Billiton
£15,384.94 Tesco
£14,881.35 SSE
£14,432.17 RELX
£14,384.84 Standard Chartered
£14,241.76 ARM Holdings
£13,811.36 Legal & General Group
£12,401.32 Rolls-Royce Holdings
£11,795.87 Experian
£11,463.16 Centrica
£11,228.39 International Consolidated Airlines
£10,132.27 Smith & Nephew
£9,969.89 Wolseley
£9,821.88 London Stock Exchange Group
£9,793.82 ITV
£9,344.33 Old Mutual
£8,496.28 Land Securities Group
£8,490.24 Next
£8,471.24 Kingfisher
£7,824.68 Paddy Power Betfair
£7,621.25 Carnival
£7,291.87 Pearson
£7,179.99 British Land
£7,143.41 Whitbread
£6,890.22 Capita
£6,865.39 Standard Life
£6,738.89 Fresnillo
£6,677.56 Sage Group
£6,659.88 Anglo American
£6,643.51 Bunzl
£6,557.50 InterContinental Hotels Group
£6,557.55 Marks & Spencer Group
£6,513.55 Mediclinic International
£6,438.38 Persimmon
£6,279.35 United Utilities Group
£6,237.29 Hargreaves Lansdown
£6,157.48 Taylor Wimpey
£6,013.78 Easyjet
£5,989.59 Schroders
£5,843.52 Burberry Group
£5,830.47 Randgold Resources
£5,823.82 TUI AG
£5,661.05 Barratt Developments
£5,504.00 Worldpay Group
£5,407.77 DCC
£5,372.83 Admiral Group
£5,267.19 Sainsbury (J)
£5,204.81 Coca Cola HBC AG
£5,196.37 Johnson Matthey
£5,109.50 Direct Line Insurance Group
£5,098.87 Intertek Group
£5,085.15 Severn Trent
£4,923.40 GKN
£4,877.30 Dixons Carphone
£4,847.58 Mondi
£4,826.82 St. James’s Place
£4,819.03 RSA Insurance Group
£4,763.33 Babcock International Group
£4,755.00 Royal Mail
£4,627.75 Merlin Entertainments
£4,617.35 Morrison (Wm) Supermarkets
£4,527.66 Travis Perkins
£4,513.39 Informa
£4,475.79 Antofagasta
£4,458.59 Hammerson
£4,436.13 Rexam
£4,422.12 Berkeley Group Holdings
£4,381.50 3i Group
£4,312.12 Provident Financial
£4,280.78 Ashtead Group
£4,214.94 Inmarsat
£4,191.67 Intu Properties

£1,709,249.67

The most powerful organisation in the world, could be the mighty US Federal Reserve.
The Central Bank to the world’s most dynamic and largest economy. Home to companies like Amazon, Google, IBM, Intel, Ford, BT Private Wires and S-One Communications.

https://www.federalreserve.gov/releases/h41/current/h41.htm

Look at the current size of the balance sheet.

4,453,820 MILLION on Wed March 23rd 2016

That is $4.45 TRILLION

That is over 25% of the size of the US National GDP. It is absolutely massive.

The Admiral Group is a UK insurance company, that is a member of the FTSE-100

https://admiralgroup.co.uk/investor-relations/

Many brands come under the Admiral name, such as Elephant, Diamond and Confused.com

What is interesting is to see the money under management at Admiral. Clearly this money is what is funded from the insurance premiums it collects.

https://admiralgroup.co.uk/sites/default/files_public/slides/2015/08/2015-interim-results-slides.pdf

£2,450 Million = £2.45 Billion

8% Gilts
23% Cash
11% Cash Deposits
25% Money Market Funds
34% Fixed Invome and Short Dated Debt Securities

Interesting to see no exposure to equities.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=103870

And it offers investors a dividend yield of 2.6%

The FTSE-250 is the UK Index that is one below the FTSE-100. It represents the UK’s next set of 250 largest companies after the FTSE-100 companies.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=50059

888 Holdings
3i Infrastructure
AA
Aberforth Smaller Companies Trust
Acacia Mining
Aggreko
Aldermore Group
Allied Minds
Alliance Trust
Amec Foster Wheeler
AO World
Ashmore Group
Assura
WS Atkins
Auto Trader Group
Aveva
BBA Aviation
BH Macro
B & M European Retail Value
BTG
Balfour Beatty
Bankers Investment Trust
Bank of Georgia Holdings
A.G. Barr
Beazley Group
Bellway
Berendsen
Big Yellow Group
Bluecrest Allblue Fund
Bodycote
Booker Group
Bovis Homes Group
Brewin Dolphin Holdings
British Empire Securities and General Trust
Britvic
N Brown Group
Cable & Wireless Communications
Cairn Energy
Caledonia Investments
Capital & Counties Properties
Card Factory
Carillion
Centamin
Cineworld
Circassia Pharmaceuticals
City of London Investment Trust
Clarkson
Close Brothers Group
CLS Holdings
Cobham
Computacenter
Countrywide
Cranswick
Crest Nicholson
Croda International
Daejan Holdings
Dairy Crest
DCC
Debenhams
Dechra Pharmaceuticals
Derwent London
DFS
Dignity
Diploma
Domino’s Pizza
Drax Group
Dunelm Group
Edinburgh Investment Trust
Electra Private Equity
Electrocomponents
Elementis
Enterprise Inns
Entertainment One
Essentra
Esure
Euromoney Institutional Investor
Evraz
F&C Commercial Property Trust
Fidelity China Special Situations
Fidelity European Values
Fidessa Group
Finsbury Growth & Income Trust
FirstGroup
Foreign & Colonial Investment Trust
G4S
Galliford Try
GCP Infrastructure Investments
Genesis Emerging Markets Fund
Genus
Go-Ahead Group
Grafton Group
Grainger
Great Portland Estates
Greencore
Greene King
Greggs
HICL Infrastructure Company
Halfords Group
Halma
Hansteen Holdings
HarbourVest Global Private Equity
Hastings Group
Hays
Henderson Group
Hiscox
Home Retail Group
Homeserve
Howden Joinery
ICAP
IG Group Holdings
IMI
IP Group
Ibstock
Inchcape
Indivior
Informa
Intermediate Capital Group
International Personal Finance
International Public Partnerships
Interserve
Investec
JD Sports
JPMorgan American Investment Trust
JPMorgan Emerging Markets Investment Trust
Jardine Lloyd Thompson
Jimmy Choo
John Laing Group
John Laing Infrastructure Fund
Jupiter Fund Management
Just-Eat
Just Retirement
Keller
Kennedy Wilson Europe Real Estate
Kier Group
Ladbrokes
Laird
Lancashire Holdings
LondonMetric Property
Lookers
Man Group
Marshalls
Marston’s
Mediclinic International
Meggitt
Melrose Industries
Mercantile Investment Trust
Michael Page International
Micro Focus International
Millennium & Copthorne Hotels
Mitchells & Butlers
Mitie
Moneysupermarket.com Group
Monks Investment Trust
Morgan Advanced Materials
Morrisons
Murray International Trust
National Express Group
NB Global
NCC Group
NMC Health
Northgate
Nostrum Oil & Gas
Ocado Group
OneSavings Bank
Ophir Energy
P2P Global Investments
PZ Cussons
Paddy Power Betfair
Paragon Group of Companies
PayPoint
Pendragon
Pennon Group
Perpetual Income & Growth Investment Trust
Personal Assets Trust
Petrofac
Pets at Home
Phoenix Group Holdings
Playtech
Polar Capital Technology Trust
Polymetal
Polypipe
Poundland
Provident Financial
QinetiQ
RIT Capital Partners
RPC Group
Rank Group
Rathbone Brothers
Redefine International
Redrow
Regus
Renewables Infrastructure Group

The exhaustive list of the FTSE-250

Glencore is a member of the FTSE-100. It has 160,000 employees and contractors in over 50 countries. It produces and trades more than 90 commodities derived from natural resources

http://www.glencore.com/

It the world of commodity prices slumping, the company is carrying a mountain of debt

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=2558517

it is exceptionally exposed to the falling price of commodities.

http://www.glencore.com/assets/investors/doc/debt-investor/GLEN-2015-Glencore-plc-update-and-details-of-funding-structure-6Oct2015.pdf

It has to issue a press release to explain its position

Long-term debt of $31.1 Billion with $5.4 Billion maturing within 12months. [$31.1 Billion = £21.59 Billion,  $5.4 Billion = £3.78 Billion]

That is the problem of carrying such large amounts of debt. When times are good, maintaining debt repayments is trivial. But when market conditions worsen, them the situation is very different.

Hammerson PLC is a FTSE-100 property developer

http://www.hammerson.com

Some key property assets are:-

22 major shopping centres
21 convenient retail parks
15 Premium Outlets (via Value Retail partnership and VIA Outlets fund)
2.2 mil m2 retail space
Passing rent £340m
Occupancy 97.2%

Yes, rental income of £340m

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10209

With a market capitalisation of  £4.4 billion it offers shareholders a dividend yield of 4%.

It’s properties are worth £8,374m
It carries debt of £2,968m.

BHP Billiton is a massive natural resources company. A £15bn company.

http://www.bhpbilliton.com/

it has the motto of “Resourcing The Future” as it is effectively a mining company.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10019

What is interesting is the debt mountain that BHPBillition carries.
http://www.bhpbilliton.com/~/media/bhp/documents/investors/debt-investors/2015/150904_investorsmedia_debtinvestors_fy15resultspres.pdf?la=en

US$24.4 Billion = £16.9 Billion

The Alliance Trust PLC is a very old UK listed investment trust.

http://www.alliancetrust.co.uk/

Its origins begin back in 1873 with founding of The Oregon and Washington Trust Co Ltd, which was set up in Dundee in 1873 to lend to pioneer farmers in the Pacific North West of the United States. within a few years a few mergers of investment trusts occured this resulted in the incorporation of The Alliance Trust Company Ltd on 21 April 1888.

Today it is a £2.5 Billion fund.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10113&record_search=1&search_phrase=alliance

It’s holdings are:

£m  Shares
117.1 Visa
100 Pfizer
89.1 Accenture
85.1 Prudential
82.9 Walt Disney
77.5 Amgen
75.6 Wells Fargo
74.2 CVS Caremark
69.5 CSL
65.5 National Grid
64.4 Legal & General
59.4 NASDAQ
59 American Tower
56.3 Intesa Sanpaolo
56.1 Blackstone
55.4 Daikin Industries
53.7 Reckitt Benckiser
53.1 Danaher
53 Equinix
52.1 Continental
51.2 Swedbank
50.7 Vodafone
50.5 Tencent
49.6 SAP AG
48.7 TJX Cos
48.3 Express Scripts Holding
46.9 Amerisourcebergen
46.7 Ecolab
46.5 Deutsche Telekom
46.4 Johnson Matthey
45 Roche
44.8 Alphabet
44.5 Macquarie Infrastructure
43.8 Novo-Nordisk
43.1 ENN Energy
43 ORIX
42.2 Linear Technology
41.8 Dentsu
40.4 WPP
39.6 Enterprise Product Partners
38.6 Mitsui Fudosan
36.4 Schlumberger
36 SS&C Technologies
35.3 GlaxoSmithKline
34.8 Cadence Design Systems
33.9 Henkel
33.6 Deutsche Post
33 Unilever
32.7 ARM
31.1 Total
30.9 Norsk Hydro
30.6 Toronto-Dominion Bank
30.4 Seagate Technology
30.1 Roper Technologies
29.1 Statoil
28 AmBev
24.8 Melrose Industries
24.6 Vtech
22.6 Schneider Electric
18.9 Bangkok Bank
3 Ashmore Global Opportunities
2930.9 Sub Total Equities

£m OEICS Name
63.2 Monthly Income Bond Fund
62.9 Sustainable Future Pan-European Equity Fund
11 Sustainable Future Cautious Managed Fund
10.8 Sustainable Future Defensive Managed Fund
10.1 Dynamic Bond Fund
158 Sub Total OEICS

£m Other Asset Classes
126.3 Private Equity
77 Operating Subsidiaries
0 Property
35.4 Cash
17.5 Other Assets
-390 Gearing

2955.1m Total Net Assets

The FTSE All-Share Index was originally called the FT Actuaries.

The FTSE All-Share Index represents the performance of all eligible companies listed on the London Stock Exchange’s main market, which pass screening for size and liquidity. The index captures 98% of the UK’s market capitalisation

FTSE All-Share Index is the aggregation of the FTSE 100 Index, FTSE 250 Index and FTSE SmallCap Index.

It’s top ten holdings make up 31% of the index.

HSBC Holdings 4.89%
British American Tobacco  3.70 %
GlaxoSmithKline 3.56%
BP 3.49%
Royal Dutch Shell A  3.05%
Vodafone Group 3.03%
AstraZeneca 2.89%
Diageo 2.42 %
Lloyds Banking Group 2.13&
BT Group 40,578 2.07%

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=50100]

Royal Dutch Shell has now acquired the UK’s Liquid Natural Gas giant BG Group
[http://www.bg-group.com]

To fund the aquisition has taken on more borrowings and issued more shares. It has become an even larger massive energy corporation

As a result, Shell’s capital now consists of 4,209,649,877 Shell A shares and 3,745,486,731 Shell B shares.
[The total number of Shell A shares and Shell B shares in issue will be 7,955,136,608]

Shell A
http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133655

Shell B
http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=133755

Shell now becomes the largest company on the FTSE-100.

Here we are in P12. Period 12 of the current tax year. HM Government has spent more money that it has earned and thus has had to borrow on the Bond Market to fund its operations.

The current forecast is that HM Government has had to borrow £69,500 Million.

Thus overspending by £69.5 Billion.

It has been like this since about 2000, so for 16 yearsH HM Government has been spending more than it earns, that is why the total national debt is so massive.

Total debt is about:

£1,542,600 Million = £1,542.6 Billion = £1.5426 TRILLION

[http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/december-2015/stb.html]

The levels of debt are punishing. Interest payments have to be made to the creditors.

UK Population is about 64 million

Thus in 2015-16 the UK had to borrow £69,500 Million that means for the total UK population, the UK Government borrowed £1,085 for every person in the UK.

The Total Debt the UK carries is £1,542,600 Million thus for the 64 Million UK residents, each UKcitizen is carrying an incredible £24,103.

Clearly we are in it together.

BT Group PLC, is the most dynamic telecoms, broadband and media business in the world.

www.btplc.com

On the 8th of Feb 2016, BT PLC paid its interim dividend. It paid its shareholders 4.40p.

BT’s issued share capital on the 31st Dec 2015 consisted of 8,373,227,252 ordinary shares with voting rights. On this date, BT Group plc held 6,950,839 ordinary shares as treasury shares and thus, the total number of voting rights in BT Group plc on that date was 8,366,276,413.

So it paid out £0.044 per 8,366,276,413 shares.

So what cash left the business on the 8th Feb 2016 ?

8,366,276,413 x £0.044 = £368,116,162

Yes, £368 million was paid to the loyal shareholders of BT Group PLC

On the 3rd of Feb 2016, Vodafone PLC paid its interim dividend. It paid its shareholders 3.68p.

Vodafone’s issued share capital consists of 28,813,387,198 ordinary shares of which 2,258,276,689 ordinary shares are held in Treasury.
Thus the total number of voting rights in Vodafone is 26,555,110,509

So it paid out £0.0368 per 26,555,110,509 shares.

So what cash left the business on the 3rd Feb 2016 ?

26,555,110,509 x £0.0368 = £977,228,067

Yes, £977 million was paid to the loyal shareholders of Vodafone PLC

Some great low cost funds Legal and General.

http://www.legalandgeneral.com/investments/isas/

For 15.16 these funds look like an a good choice….

L&G Global Health & Pharmaceuticals Index
L&G Worldwide Trust
L&G Asian Income Trust
L&G Distribution Trust
High Income
L&G Global Technology Index
L&G Pacific Index
L&G UK Property
L&G International Index
European Index
Mixed Investment Fund 20-60%
US Index
Ethical Trust
Global Equity Index Tracker

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 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-
17-Feb-2016 1½% Treasury Gilt 2026 £2,750 Million
11-Feb-2016 3½% Treasury Gilt 2045 £1,649.9750 Million
09-Feb-2016 0 1/8% Index-linked Treasury Gilt 2026 £1,429.9650
When you add the cash raised:-

∑(£2,750 Million + £1,649.9750 Million + £1,429.9650) =  £5,829.94 Million

£5,829.94 Million Million= £5.829 Billion

On another way of looking at it, is in the 29 days in Feb, HM Government borrowed:-

£201 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 and 2045. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…”

http://asadkarim.co.uk/?attachment_id=1528

The highly regarded Life Assurance and Asset Manager, Standard Life PLC, has a Debt Investor programme to borrow money on the bond market to attract investors who are seeking a fixed income.

http://www.standardlife.com/debt_investors/subordinated_debt.html

It has 3 funding programmes:-

£500m @6.75%
£300m @6.546%
£500m @5.5%

So borrowings of £1.3 Billion paying the bond holders over 5%.

An incredible yield from a company with over £300 Billion under management

South Korea, is one of the most technically advanced nations in the world. It is home to names like Samsung, Hyundai, LG to name just three household names.

It is also home to the 3rd largest pension fund, the National Pension Fund of Korea.

With US $429,794 million under management. That is £301,200 million, which is £301 Billion.

http://english.nps.or.kr/

It is the largest investor in Korea, just look at the top ten holdings in Korean Shares:-

Samsung Elec
SK hynix
Hyundai Motors
NAVER
POSCO
KEPCO
Shinhan Group
Hyundai Mobis
SK Telecom
Kia Motors

It’s top ten holdings in International companies are:-

MICROSOFT CORP
ORACLE CORP
APPLE INC
WELLS FARGO & CO
NOVARTIS AG
ROCHE HOLDING AG
JPMORGAN CHASE & CO
JOHNSON & JOHNSON
GOOGLE INC
PFIZER INC

It’s top ten holdings on fixed income investments are:-

UNITED KINGDOM 3.250% 01/22/2044
UNITED STATES 3.125% 08/15/2044
UNITED STATES 4.500% 02/15/2016
JAPAN 1.200% 12/20/2020
JAPAN 0.800% 06/20/2023
JAPAN 0.300% 09/20/2018
JAPAN 0.200% 12/20/2017
UNITED STATES 3.375%
UNITED STATES FLOATING
UNITED STATES 4.500%

Yes, it holds UK Gilts, paying 3.25% each year until 2044, that is its top holding in bonds.

The SVM UK Emerging Fund plc in a London listed Investment Trust.

http://www.svmonline.co.uk/Navigate.aspx/Private-Investor/1/Investment-Trusts/SVM-UK-Emerging-Fund-plc

It invest in small and medium companies

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=24939

A very small investment company, with a market capitalisation of £4m

However the assets of the company per share are worth 88p and the value of the company is worth 67p.

http://www.svmonline.co.uk/ResourceModule.aspx/Pdf/SVMAllFundsFactSheetUKEmerging1215.pdf?key=7d17d931-796c-41fd-a907-fbbe7bbf994e

Thus buying shares in this Investment is effectively buying an asset worth 88p for 67p. A nice little discount.

Virgin Money is a UK Challenger Bank.
It has grown after buying Northern Rock, the bank made famous in 2007 with the famous bank run, under the ill-fated leadership of Adam Applegarth

http://uk.virginmoney.com/virgin/investor-relations/

Interesting to see it has many funding vehicles.

http://uk.virginmoney.com/virgin/investor-relations/debt-investors/global-medium-term-note-programme/global-medium-term-note-programme-terms/

£3,000,000,000 (that is £3bn) to raise cash from investors for its business, such as creating mortgages and loans.

A major securitisation programme where its loans are securitised and then sold on

http://uk.virginmoney.com/virgin/investor-relations/securitisation/mortgages.jsp

The shares are traded on the London Stock Exchange

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=30497650

£1.3 Billion is the market capitalisation.

The results are interesting

http://uk.virginmoney.com/virgin/investor-relations/results/virgin-money-q3-2015-trading-update.pdf

Mortgage Lending at £5.5 billion
Credit Card lending at £1.4 billion
Retail deposits at £23.7 billion

One can see it is has a small loan base compared to its deposits from savers, this was not the case under the previous leadership.

http://asadkarim.co.uk/?attachment_id=1458

The Hong Kong and Shanghai Banking Corporation is a massive banking business.

http://www.hsbc.com

The annual report is very detailed.

http://www.hsbc.com/~/media/hsbc-com/investorrelationsassets/annual-results-2014/hsbc-holdings-plc/annual-report-and-accounts-2014.pdf

This is a huge bank. The figures are incredible, but what is very interesting is the levels of debt that bank carries.

Debt securities in issue $95,947 million.

The bank has a bond issuance programme

http://www.hsbc.com/investor-relations/fixed-income-securities/issuance-programmes

That it uses to raise extra cash to fund its business. That cash from the bond issuance programme can be used to generate loans for businesses or perhaps to fund other operations.

http://www.hsbc.com/investor-relations/fixed-income-securities

These are all the bonds on issue.

So the bank carries $95,947 million = £67,271 million.
That is £67.2 Billion

At first that seems a lot of debt, but lets keep things in perspective.

http://www.hsbc.com/investor-relations/fixed-income-securities/credit-ratings#All Entities|All rating agencies|All rating types

Highly creditworthy.

Cash and balances at central banks $129,957 million = £91,116 Million
That’s £91 billion

Customer accounts $1,350,642 = £946,975 Million
That’s £946 Billion.

The bank’s asset base is huge

So over the weekend of Sun 16th Jan 2016, the nation of Iran has come in from the cold, with UN sanctions being lifted. Iran will start to export 500,000 barrels of crude oil. In a depressed oil market, this will only drive down the current price.

To Iran, what will 500,000 barrels of crude oil do ?

with Crude at $29.50 a barrel

500,000 x $29.50 = $14,750,000 a day

That is £10,341,700 = £10.3 Million a day.

Had currency for a nation that has been badly hit from internation isolation

Legal and General has become on of the largest fund management groups in the world.
It is the largest money manager in the UK.

http://www.legalandgeneralgroup.com

Assets Under Management (AUM) is at £717 Billion.

http://www.legalandgeneralgroup.com/investors/news_releases/releases2015.asp?newsid=260

To grow the business Legal and General has a programme to fund its investment by attacting debt investors.
Institutions who are willing to lend (bond buyers) for a safe and stable return from the Legal and General in this case.

http://www.legalandgeneralgroup.com/investors/debt.html

This is the bond issuance programme, 8 issues. A total debt outstanding of £2,500 Million. That is £2.5 Billion on a business with £717 Billion of assets under management.

The Direct Line Group is a listed UK insurance company, mad famous by the red telephone and changing the way UK consumers bought insurance.

http://www.directlinegroup.com/

Insurance is a simple business, collect in premiums to take on risk, invest those premiums and if all things being equal, pay-outs on claims are less than the premiums received.

Direct Line invests the premium income, and it is interesting to see what investments it holds:-

http://www.directlinegroup.com/~/media/Files/D/Direct-Line-Group-V2/reports-and-presentations/Q3-results-announcement-2015.pdf

Corporate Bonds £4,048.6 Million
Derivatives £143.1 Million
Local government debt £103.8 Million
Securitised debt £314.5 Million
Sovereign debt £503.8 Million
Infrastructure debt £301.0 Million
Cash and cash equivalents £1,105.2 Million
Investment property £340.1 Million

Total £6,860.1 Million

That is £6.8601 Billion

Based on the premium income, they have “put the money to work” to buy investments. that in itself generated Investment income of £41.5 Million, and those investments also increased in value by £152.4 million.

Insurance premiums create investment opportunities.

The growth of Financial Technology companies (FinTech) is changing the dynamics and dominance of traditional banking organisations.

The largest Peer to Peer lender in the USA is The Lending Club.

https://www.lendingclub.com/

With $13 billion worth of loans created,  The Lending Club has created a vehicle that offers a simple, low cost, convenient and beneficial alternative to both borrowers and investors who want access to better savings rates and lower borrowing rates.

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 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-
20-Jan-2016 1½% Treasury Gilt 2021 £4,000 Million
12-Jan-2016 0 1/8% Index-linked Treasury Gilt 2046 £989.9770 Million
07-Jan-2016 4% Treasury Gilt 2060 £1,500 Million
05-Jan-2016 2% Treasury Gilt 2025 £3,000 Million
When you add the cash raised:-

∑(£4,000 Million + £989.9770 Million + £1,500 Million £3,000 Million) =  £9,489.977 Million

£9,489.977 Million= £9.489 Billion

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

£306 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 2021, 2025, 2046 and 2060. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…”

A fantastic country that believe it or seems to have a very high national debt. Always remember Debt is not a dirty word.

http://www.gov.sg/factually/content/is-it-fiscally-sustainable-for-singapore-to-have-such-a-high-level-of-debt

This is just a wonderful and simple explanation on the balanced budget of this beautiful city state.
Investment creates wealth, prosperity and jobs.

Morrisons PLC

The UK food retailing sector is in huge flux. The established large players of Sainsburys, Tesco’s, ASDA and Morrison’s are struggling against the new entrants like Aldi and Lidl.

What is interesting is to see to understand the finances of the established players.

Morrisons PLC has grown from a northern regional supermarket to a large UK player after the acquisition of Safeway.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10248&record_search=1&search_phrase=mor

A share price under pressure and a dividend that can not be maintained due to the stiff competition.

However when one looks at the balance sheet, one can some really powerful facts:

http://www.morrisons-corporate.com/Documents/Corporate2015/2015InterimsRNSFinalV.pdf

Liabilities

Current liabilities = £2,316m
Creditors = £1m
Short Term Borrowings £16m
Current tax liabilities £42m

Total = 2,375m = £2.375 billion

So it carries no long term debt. Such as bonds. The only money it owes are effectively its suppliers which means it has to pay them in 90 days, and perhaps short term overdraft facilities. It does not have the onerous payments to make to bond holders.

So while the cash tills keep ringing, cash flow is available to meet payment obligations. Also Morrisons PLC owns all its own land.

British Telecommunications PLC, a flagship member of the FTSE-100.

http://www.bt.com

It is by far the world’s most dynamic telecommunications corporation. It has a funding programme based on a bond issuance programme.

This attracts investors who are looking for an income, such as pension funds, income funds such as unit trusts and insurance companies.

http://www.btplc.com/Sharesandperformance/Fixedincome/index.htm

What is obvious to see, is BT’s debt reduction programme.

http://www.btplc.com/Sharesandperformance/Fixedincome/net-debt.jpg

The current outstanding debt that is maintained by BT is:-

UK Sterling: £2,600 Million
UK Sterling Index Linked: £250 Million
US Dollar: $5,670 = £3904 Million
Euro: €1,000 = £752 Million

That is:

(£2600 + £250 + £3904 + £752) Million = £7,506 Million

Fixed income investors are benefitting from lending money to the world’s most pioneering and market leading carrier.

Tesco PLC, is the largest UK supermarket retailer, that is in the middle of fixing it’s finances, after accounting issues. It has huge assets, for example sold 14 sites a few months ago and raised £250m

http://www.tescoplc.com/index.asp?pageid=17&newsid=1222

Tesco finances its operations through a combination of retained profits, long and medium term debt capital market issues, commercial paper, bank borrowings and leases, with the objective of ensuring continuity of funding.

http://www.tescoplc.com/index.asp?pageid=32

Tesco’s principal medium to long term funding is through its £15bn Euro Note Programme.
When you look at the bond issues one can see the debt it is carrying:-

EUR 5.389
GBP 3.097
US$ 2.5

In total of a facility of £15bn is has issued:

£4.05 + £3.097 +£1.72 = £8.867 Billion

This has tapped over 50% of its funding programme. Every little helps.

http://asadkarim.co.uk/?attachment_id=1426

Glaxo SmithKline is one of the UK’s largest firms.

http:/www.gsk.com

It is huge.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=10042

A £67bn company. With leading medicines to fight HIV/AIDS, to everyday products such as Sensodyne, Aquafresh, Panadol, Beechams, Corsodyl, Day & Night Nurse, Nicorette, Macleans.

Earlier in the month, the famous and highly regarded fund manager Neil Woodford called for GSK to be broken up.

http://www.bbc.co.uk/news/business-35259184

Interesting to know the cash that GSK actually holds:-

http://www.gsk.com/media/841910/q3-2015-results-announcement.pdf

£5,908 Million. Yes, £5.9 Billion, a nice buffer for any potential opportunities.

Prudential plc is an international financial services group with significant operations in Asia, the in US (Jackson National Life) and the UK (M&G Investments). They serve around 25 million insurance customers and have £505 billion of assets under management.

http://www.prudential.co.uk/

To fund its operations it has a bond issuance programme

http://www.prudential.co.uk/investors/credit-investors

Interesting to see the levels of debt that The Pru carries:-

EUR 20m
GBP 3585m
US$ 2800m

That is in UK£

£14.8m + £3,585m + £1,917m = £5,517 Million

So £5.5 billion of Debt.

Now with £505 Billion under investment management, if that was invested in say some investment product that was yielding 2% for example, that would give a return of £10.1 Billion.

So just the investment return is more than TWICE the debt that Prudential is carrying, which is why the credit ratings of Prudential are so high.

Marks and Spencer PLC, the most famous name on the UK high street, paid its shareholders on Friday 8th 2016 its bi-annual dividend.

http://www.marksandspencer.com

It was 6.8p per share that was paid to shareholders.

Marks and Spencer capital consists of 1,629,051,928 ordinary shares.

This the cash it paid out to its shareholders was:-

1,629,051,928 x £0.068 = £110,775,531

Yes £110 Million left the business to pay the shareholders

One of the single largest shareholders is William Adderley, the founder of Dunelm.

https://en.wikipedia.org/wiki/Bill_Adderley

He has 49,311,140 shares in Marks and Spencer PLC. (that is about 3% of Marks and Spencer PLC)

That means on Friday 8th Jan 2016 he was paid:

49,311,140 x £0.068 = £3,353,158

Yes, £3.35 Million. A great investment.

The Government Pension Investment Fund of Japan is one of the largest investment funds in the world.

http://www.gpif.go.jp/en/about/

With 135,108 Billion YEN = £777 Billion under management one can see why it is one of the largest funds on earth.

http://www.gpif.go.jp/en/fund/pdf/2015_q2.pdf

They have 8 categories of active investments and have selected 21 active investment managers and 6 passive investment managers.

Global Aggregate managed by:-

Goldman Sachs Asset Management
Schroder Investment Management
Sompo Japan Nipponkoa Asset Management
Nomura Asset Management
BNY Mello Asset Management
PIMCO Japan
BlackRock Japan
Prudential Investment Management
Manulife Asset Management
Mizuho Asset Management
Morgan Stanley Investment Management
Legg Mason Asset Management

U.S. Aggregate managed by:-

DIAM Co
FIL Investments

Euro Aggregate managed by:-

BNY Mello Asset Management

U.S. High Yield managed by:-

Nomura Asset Management

Euro High Yield managed by:-

UBS Global Asset Management

Emerging Markets Local Currency managed by:-

Ashmore Japan

Emerging Markets Hard Currency managed by:- 

Alliance Bernstein

Inflation Linked managed by:-

BNP Paribas Investment Partners

Passive investment managed by:-

State Street Global Advisors
Nomura Asset Management
BlackRock Japan
Mizuhu Trust and Banking
Sumitomo Mitsu Trust Bank
Resona Bank.

The UK Supermarket group Sainsbury’s has a bank.

http://www.sainsburysbank.co.uk

Started in 1997, as a joint venture with The Bank of Scotland, who is now owned by Lloyds Banking Group, it is now moving to a standalone bank, that is wholly owned and run by Sainsbury’s

[http://www.j-sainsbury.co.uk/media/2475918/sainsburys_bank_ar_2015_-_final_-_jul_15.pdf]

Balance sheet total assets £4,237 million (£4.2 Billion)

What is interesting is that the deposits from savers make up £3,488 million, and has loans of £3,032 million to customers and only is dependent on wholesale funding of £171 million.

Also interesting to see that Sainsburys Bank has Bank of England Reserve account balance of £773m.
What this tells us, is that the bank has deposited cash from its day to day to day operations with The Bank of England. That is 22% of all its customer deposits.

The Sultanate of Oman holds the strategically important position at the mouth of the Persian Gulf. With a population of 4.3 million, this nation has benefitted from good governance and the wise investment of its natural resources.

It produces 943,000 barrels of oil per day. The UK with a population of over 60 million produces 850,000 barrels of oil per day. So what is the value of Oman’s daily crude oil production ?

943,000 barrels of oil per day.
Crude oil is $36.46

Thus:

943,000 x $36.46 = $34,381,780 a day.

That is £23,398,000 a day, £23.3 million a day.

Barclays Bank PLC has various funding mechanisms to fund its daily business operations.

http://www.barclays.com

It can use deposits from customers to create mortgages and loans for example. It can borrow (issue bonds) on the open market to raise more cash, to create more loans or use that cash to fund business expansion, such as opening new branches in emerging markets.

It also uses other financial instruments such as subordinated debt and preference shares to raise cash to fund its operations

https://www.home.barclays/barclays-investor-relations/treasury-and-capital/subordinated-debt-and-preference-shares.html

One can see the funding levels it needs for its business.

EUR 8,351,730,000
GBP 13,798,949,000
YEN 35,000,000,000
US$ 28,301,458,000

That is in UK£

6,130,590,000 + 13,798,949,000 + 199,783,000 + 19,260,200,000

= £39,389,522,000

Yes, that is £39.3 Billion.

And this is just one funding programme at Barclays.

The FTSE 100 mobile phone operator is Vodafone PLC

[http://www.vodafone.com]

To fund it day to day operations, apart of its revenues from sales, it has a funding programme based on borrowing on the bond market.

Two funding mechanisms.

http://www.vodafone.com/content/index/investors/debt_investors.html#

Interesting to see the levels of debt that Vodafone is carrying.

It’s US Dollar Programme:

$22,739,400,000

It’s European Programme:

€9,236,350,000
£4,436,350,000
Y3,000,000,000

Thus, the total:-

$22,739,400,000 + €9,236,350,000 + £4,436,350,000 + Y3,000,000,000

That is in UK£

£26,696,669,300

Yes £26.69 Billion, in outstanding loans. Investors (creditors) are willing to lend Vodafone huge quantities of cash, for a stable income. This is what income investors such as pension funds are looking for, lending to a creditworthy business.

The Northern Venture Trust PLC is managed by NVM Private Equity.

http://www.nvm.co.uk/

The fund is now 20 years old, started in 1995. (The year Oasis released What’s The Story, Morning Glory)

http://www.nvm.co.uk/investor-area/nvt/

It holds investments in these firms:-

4.50% Buoyant Upholstery
3.90% Kitwave One
3.30% MSQ Partners Group
3.10% Lineup Systems
3.00% Biological Preparations Group
3.00% Silverwing
2.90% Weldex (International) Offshore Holdings
2.40% Volumatic Holdings
2.40% CGI Group Holdings
2.20% Closerstill Group
2.20% Wear Inns
2.10% No.1 Traveller
2.10% Agilitas IT Holdings
2.00% Entertainment Magpie Group
2.00% Graza

41.10% Total

These 15 investments make up 41.1% of the total fund.

Look at the yield: over 7%

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=13006&record_search=1&search_phrase=nvt]

Today, 13th Jan 2017, Marks and Spencer the most famous and highly regarded UK retailer that is on most UK high streets paid its Jan 2017 dividend.

http://www.marksandspencer.com

It paid out 6.8p per share.

The Company’s capital consists of 1,624,723,081 ordinary shares with voting rights

http://otp.investis.com/generic/regulatory-story.aspx?newsid=823533&cid=228

Thus is paid out:

1,624,723,081 x £0.068 = £110,481,169.51

That is £110m in cash

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10057&record_search=1&search_phrase=mk

A yield of over 5%

Aviva PLC is one of the largest UK insurers. Recently just bought Friends Life.

www.aviva.com

It is interesting to see how Aviva finances its day to day operations.

http://www.aviva.com/investor-relations/credit-investors/

When one looks at this we get:-

$m 1615m = £1095m
€m 2750m = £2027m
£m 4522m = £4522m

Total = £7644 million = £7.644 Billion

Total debt of £7.644 Billion.

But when looking deeper into Aviva it has £328bn of Assets.

Shell is one the largest energy companies in the world. An Anglo Dutch company.

[http://reports.shell.com/investors-handbook/2014/consolidated-data/statement-of-income.html]

Revenue of $421 Billion = £285 Billion

it is about to buy the UK’s BG Group
[www.bg-group.com]

One major finance mechanism for Shell to invest in its energy projects is to raise money is by issuing debts on the bond market.

These are Shell’s listed debt.

http://www.shell.com/investors/financial-reporting/bonds-and-credit-ratings.html

when one looks in detail you get this:-

CHF (m) 1325 = £899m
EUR (m) 12950 = £9548m
USD (m) 33250 = £22557m
GBP (m) 500 = £500m

That is the total outstanding debt on Shell’s bonds.

That is when converted into UK£ = £33,504 m = £33.5 Billion.

So at first glance that is a lot of cash £33.5 billion but then when looks at the revenues of £285 billion, then servicing the £33.5 Billion of debt can not too tricky.

The nation of France is one of the largest produces of electricity.

555.7 TW/h to be precise.

With about 64 million people France produces 555.7 TW/h while the UK with 60 million people produces 335 TW/h.

The reason for the large number in France is that the bulk of electricity in France is produced by nuclear, which is constantly running. So France is able to meet all its in country needs and export excess capacity to its European neighbours.

Chesnara plc is engaged in the management of life and pension books in the UK and Western Europe.

http://www.chesnara.co.uk/

The strategy is simple:
“Our mission is to deliver value for shareholders, while maximising returns to policyholders”

Thus manage books of pensions and life companies, and wise investment management of the assets will leave shareholders with a decent return.

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=103970

Look at the yield….

Yes, 5.5%. Incredible return to investors.

India is known for its incredible food and its rich heritage of tradition and culture, but not known for oil. However, India has 0.3% of the world’s crude oil reserves.

This represents 5.7 Thousand Million barrels that are in the ground on the Indian Subcontinent.

That is 5,700,000,000 barrels. Today crude trades at $36.78 a barrel.

So what are India’s oil reserves worth  ?

5,700,000,000 barrel  x $36.78 a barrel = $209,646,000,000

in UK£ = £141,610,000,000 = £141 Billion.

The genius of Warren Buffet, the head of Berkshire Hathaway. A long term investor.

A great quote that represents his long term view is:-

“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes”

Just a superb quote.

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 December 2015, 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 (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-

17-Dec-2015 1¼% Index-linked Treasury Gilt 2032 £700 million
08-Dec-2015 3½% Treasury Gilt 2045 £2,199.970 million
02-Dec-2015 1½% Treasury Gilt 2021 £3,750 million
When you add the cash raised:-

∑(£700 million + £2,199.970 million + £3,750 million) =  £6,650 Million

£6,650 Million = £6.650 Billion

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

£214 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 2021, 2032 and 2045. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…”

Anglo, the nation in the south west of Africa, a member of Organisation of Oil Exporting Countries.[13 nations make up OPEC countries]

Today, Angola produces 1,712,000 barrels of crude per day. To put this into context, the UK produces 850,000 barrels a day.

So what is 1,712,000 barrels of crude worth ?

Today crude oil trades at $37.62 a barrel.

1,712,000 barrels a day x $37.62 = $64,405,440 a day.

That is £43,192,400 day. Yes, £43million a day.

Canada is a natural resource power house, with its huge tar sand reserves, but also it has massive electricity production due to its huge investment in hydro electric power stations due to the nations geography and waterfalls.

Canada is one of the largest electricity producers of electricity.

It produces 615.4 TW/h in 2014 with a population of 35 million people.
Now the UK produces 335 TW/h in 2014 with a population of 61 million people.

What this shows is that the Canadians are not super consumers of electricity, but they produce more than they consume, and so export huge amounts across the border to the USA. A huge market for the Canadian electricity sector.

The Leverhulme Trust was established by the Will of William Hesketh Lever, one of the great entrepreneurs and philanthropists of the Victorian age. The Victorian businessman and entrepreneur William Hesketh Lever first brought his creativity and energy to the manufacture and marketing of Sunlight soap which was being sold in 134 countries only a decade after its launch. The name Sunlight Soap, comes from the town where the factory was build, Port Sunlight, on the Wirral.

www.leverhulme.ac.uk

On his death in 1925, Lord Leverhulme left a proportion of his interest in the company he had founded, Lever Brothers, in trust for specific beneficiaries: to include first certain trade charities and secondly the provision of “scholarships for the purposes of research and education”. The Leverhulme Trust was established. In the succeeding years, Lever Brothers became a cornerstone of Unilever, a major multinational company, created in 1930 by the merger of Lever Brothers with the Van den Bergh’s margarine company of the Netherlands. The Leverhulme Trust’s shareholding thus became part of Unilever plc

Since 1925 they have provided grants and scholarships for research and education; today, they are one of the largest all-subject providers of research funding in the UK, distributing approximately £80 million a year.

How is that £80million funded ?

Simmple.
£2,027,713 under investment management. That is £2.2 billion.

Today they own 5% of Unilever.

[http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?username=&ac=&csi=10094&record_search=1&search_phrase=UL]

£37bn in value, The Leverhulme Trust have thus £1.850 billion in Unilever shares. That is a lot of Persil, Surf, Lipton, Carte D’or, Knorr, Marmite, Pot Noodle, Vaseline, Ben & Jerrys, Domestos, Cif, TRESemme, Cornetto, Colemans Mustard, PG Tips, Stork, VO5, Hellmans, Flora…..

The movement of investment management is to a new world of online platforms. A new one that is offering investors a world of opportunity the world of Ethical investing is Ethex.

https://www.ethex.org.uk/

It gives investors options to investment in traditional ethical products but also crowd funded programmes.

Very interesting to see the backers:-

https://www.ethex.org.uk/how-we-are-financed_52.html

A non-profit based organisation with high ethics at the heart of the operation

China. An incredible nation, of history and culture. Today it is the second largest economy in the world, it is the power house of the global economy, home to names such as CCTV, Huawei, ZTE, ICBC, China Mobile, Ping Insurance and Bank of China.

To fuel the growth, the nation has been using debt to finance its expansion.
The numbers are non-trivial.

$1,980 billion Central Government
$2,720 billion Financial Corporations
$2,075 billion Non-Financial Corporations

US $6,776 (this is about 33% of the US National Debt….)
UK £4,540 billion = £4.54 TRILLION

So one can see that the debt of the finance and commercial sector totally overshadows the Central Government debt.

These are huge figures. Evidence of the global addiction to debt.

France is the home of some of the most important science and mathematics. Fourier, Laplace, and Lagrange to name just 3 names whose work touches our lives each day. The home to incredible food and culture, What is interesting to know is the levels of debt the French nation is carrying.

In total the debt is $3,999 Billion dollars.

That is broken down by:-

$1,510 million by Financial Corporations
$587 million by Businesses
$1,901 million by The French Government

$3,999 Billion dollars = £2,660 Billion pounds = £2.66 Trillion.

Yesterday, Wed 16th Dec, the US Federal Reserve raised interest rates.

http://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm

The Federal Open Market Committee has raised rates for the first time since 2006. The impact of this, is very clear, imagine having debt that is denominated in US Dollars, now the cost of servicing that debt has gone up . If you have cash, say outside the US, in a currency that is NOT in US Dollars, it is now potentially more lucrative to move the money to the US to gain on the upward interest rate.

This now signals an end to cheap credit. The risk is now that rates are on an upward trajectory, those carrying heavy debts will have to pay higher interest payments.

The highly regarded life assurance giant and asset manager is Standard Life. The largest employer in the beautiful city of Edinburgh, it has become a massive player in fund management

[http://ukgroup.standardlife.com/content/news/articles/2015/281015Q3AUAandflowsupdate.xml]

Today, they manage £301.9bn.(that is about 20% of UK GDP).

What is interesting to know, is that Standard Life, also manage the money purchase pension plans for many companies.

http://www.btretirementsavingscheme.com/

BT, [www.bt.com] the most dynamic telecommunications corporation in the world, has a money purchase pension scheme for its staff, that is a Standard Life product.

The Ground Rents Income Fund is a £100m London listed investment company that investment in ground rents on land, effectively buying freeholds on land.

[http://www.groundrentsincomefund.com/]

Brooks Macdonald Funds Limited are the investment advisors.

http://www.brooksmacdonald.com/

What is interesting about The Ground Rents Income Fund is the major investors:-

21.23% Architas Multi Manager
12.95% Brooks Macdonald Asset Management
9.51% Ruffer
5.92% AXA Framlington Investment Managers
5.87% Old Mutual Global Investors
4.66% Vestra Wealth
4.61% Transact

http://www.shareshop.hsbc.co.uk/shareshop/security.cgi?csi=2737711

A yield of over 3%

The Northern Power Grid in a UK company that runs the electricity distribution network that delivers power to customers in the North East, Yorkshire and northern Lincolnshire.

http://www.northernpowergrid.com/

It known as a DNO, a Distribution Network Operator, delivering electricity to end customers.

What is interesting is to know who the owner of Northern Power Grid is.
It is the investment company Berkshire Hathaway, run by one of the world’s most successful investors, Warren Buffet who is one of the world’s richest men.

http://www.berkshirehathaway.com/

http://www.northernpowergrid.com/about-us

A measure of a country’s economic development is the amount of electricity that is generated by the nation to meet the economic needs of domestic and commercial users.

India accounts for 5.1% of global electricity generation. It produces 1208.4 Terawatt/Hours. Each year India has needed over 9% more electricity that the year before, a good bench mark for the current economic growth enjoyed by the country.

To put this 5.1% figure into perspective, that represents one of the top 5 nations for electricity production. India produces twice as much electricity as Germany and three times more electricity than the UK.

Of course, UK and Germany could be potentially more efficient, but as a quick benchmark, one can see the rapid economic development of India based on the nation’s electricity generation.