Five things investors learned this week
- 23 May 2014
1) Regulatory risk combined with competitive threats came back to haunt investors in the Royal Mail. It posted a decent set of first annual results since the float. But it also saw the chief executive Moya Green warning that if competitors were allowed to continue to cherry pick direct services while Royal Mail has to deliver six days a week everywhere it may not be able to maintain profitability margins set by the regulator. More significantly still she put a number on it, £200 million in 2017/2018. Shares tumbled. A further sting came when Capita Asset Services warned that there were better dividend prospects elsewhere in the market.
2) BlackRock, the biggest shareholder in AstraZeneca, calls for talks at the earliest possible stage, which looks like in three months’ time. Other shareholders are clearly not so convinced. Neil Woodford saluted the firm’s resolute resistance but he is not the firm’s biggest shareholder – not yet anyway.
3) Saga lists at the lowest end of its price range of 185p, but rises a few pence in conditional trading this week. Lombard Odier has a view at to why – among other things investors’ uncertainty about how to categorise the stock. Much of its business is non-life insurance which usually trade at a lower price to earnings ratio than consumer focused stocks.
4) When will it ever end? Barclays is fined £26m for gold price fixing though it does sound as if this time it is a rogue trader who is responsible though accompanied by the usual systems flaws.
5) Henderson’s Simon Ward thinks global investors may be holding too much cash and are being too conservative given the economic signals. He also expects cyclicals to outperform. One to bear in mind when thinking about tactical asset allocation.
- Rather than economic recovery 2014 is more likely to see France return to recession
- Abenomics cannot succeed whilst real wages continue to fall in Japan
- Royal Mail reveals the UK's most desirable postcodes...
- Some 40% more likely to do business with a challenger bank compared to a year ago
- How ex-pats can get their currency conversion right
- After a two-year holiday it looks as though the Swiss Franc might be back
- Short change - How worried should you be that hedge funds appear so reluctant to short?
- The Scottish Independence vote - a 'yes' could bring Government closer to the people
- The premium to live near one of England’s top state schools? That's £483,031
- UK equity income sees £1bn net sales in July