A broader marker of fine wine performance is the Liv-Ex trading platform which is one of the world’s most important fine wine marketplaces. The value of live bids and offers on Liv-Ex hit a record high of over £70 million at the end of July, up from the 2018 high of £50 million. Fine wine trading is thriving like never before thanks to ever-growing demand from Asian consumers and the current economic climate driving interest from international investors.
Along with growth has come continued market diversification. In October the United States introduced hard-hitting new tariffs on wines from France, Spain, and Germany with an ABV of 14% or below. Since the tariffs were introduced Italy and Champagne have already seen their average market share grow to 11% according to Liv-Ex. The Rest of the World index has also benefited, rising from a year-to-date average of 5% to 9% in November. The main loser in this trend of diversification has been Bordeaux, traditionally known as the wine collector’s favourite, with market share falling to an all-time low of 45% in August.
For the year ahead investors can expect the trend of diversification to continue and perhaps even gather pace dependent on the U.S. government’s plans to introduce further tariffs. In December the Office of the US Trade Representative (USTR) recently revealed proposals to impose tariffs of “up to 100%” on certain French goods including Champagne and other sparkling wines.
This warning from the USTR comes in response to a WTO ruling on EU subsidies illegally paid to Airbus; “In light of today’s report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs”.
If the U.S. government does decide to follow through on these threats, we can expect to see continued movement towards alternative wine regions like Tuscany, Barolo, and Napa Valley. Italy has for now escaped the imposition of tariffs and is already the leading exporter of wine to the US. These well-established routes to market and consumer familiarity will provide a strong foundation for future growth as the fine wine market adapts to the new realities of 2020. Fine Wine Investment Report 2019
After another year pockmarked by global economic turmoil and civic unrest, investors continue to turn to alternative assets for stability and healthy profits. As the US-China trade war has escalated and Brexit uncertainties linger, fine wine has remained an outstanding option with annual growth of up to 75% for the year’s top performing wines.
According to Daniel Carnio, Director and Co-Founder of fine wine investment company OenoFuture, 2019 has been a stellar year for Burgundy and Italy. “Our five best performers for this year have been dominated by Burgundy with Domaine de la Romanee-Conti Echezeaux 2012 (15.8%), Remoissenet Pere & Fils Montrachet 2015 (18.6%) and Domaine Alain Burguet Chambertin Clos de Beze 2017 (27%) in fifth, fourth and third place respectively. The top spots were occupied by Fattorie dei Dolfi Imeneus 2011 (25.2%) from Tuscany and Liber Pater Rouge 2007 (36.28%) from Bordeaux.”
A broader marker of fine wine performance is the Liv-Ex trading platform which is one of the world’s most important fine wine marketplaces. The value of live bids and offers on Liv-Ex hit a record high of over £70 million at the end of July, up from the 2018 high of £50 million. Fine wine trading is thriving like never before thanks to ever-growing demand from Asian consumers and the current economic climate driving interest from international investors.
Along with growth has come continued market diversification. In October the United States introduced hard-hitting new tariffs on wines from France, Spain, and Germany with an ABV of 14% or below. Since the tariffs were introduced Italy and Champagne have already seen their average market share grow to 11% according to Liv-Ex. The Rest of the World index has also benefited, rising from a year-to-date average of 5% to 9% in November. The main loser in this trend of diversification has been Bordeaux, traditionally known as the wine collector’s favourite, with market share falling to an all-time low of 45% in August.
For the year ahead investors can expect the trend of diversification to continue and perhaps even gather pace dependent on the U.S. government’s plans to introduce further tariffs. In December the Office of the US Trade Representative (USTR) recently revealed proposals to impose tariffs of “up to 100%” on certain French goods including Champagne and other sparkling wines.
This warning from the USTR comes in response to a WTO ruling on EU subsidies illegally paid to Airbus; “In light of today’s report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs”.
If the U.S. government does decide to follow through on these threats, we can expect to see continued movement towards alternative wine regions like Tuscany, Barolo, and Napa Valley. Italy has for now escaped the imposition of tariffs and is already the leading exporter of wine to the US. These well-established routes to market and consumer familiarity will provide a strong foundation for future growth as the fine wine market adapts to the new realities of 2020.
A broader marker of fine wine performance is the Liv-Ex trading platform which is one of the world’s most important fine wine marketplaces. The value of live bids and offers on Liv-Ex hit a record high of over £70 million at the end of July, up from the 2018 high of £50 million. Fine wine trading is thriving like never before thanks to ever-growing demand from Asian consumers and the current economic climate driving interest from international investors.
Along with growth has come continued market diversification. In October the United States introduced hard-hitting new tariffs on wines from France, Spain, and Germany with an ABV of 14% or below. Since the tariffs were introduced Italy and Champagne have already seen their average market share grow to 11% according to Liv-Ex. The Rest of the World index has also benefited, rising from a year-to-date average of 5% to 9% in November. The main loser in this trend of diversification has been Bordeaux, traditionally known as the wine collector’s favourite, with market share falling to an all-time low of 45% in August.
For the year ahead investors can expect the trend of diversification to continue and perhaps even gather pace dependent on the U.S. government’s plans to introduce further tariffs. In December the Office of the US Trade Representative (USTR) recently revealed proposals to impose tariffs of “up to 100%” on certain French goods including Champagne and other sparkling wines.
This warning from the USTR comes in response to a WTO ruling on EU subsidies illegally paid to Airbus; “In light of today’s report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs”.
If the U.S. government does decide to follow through on these threats, we can expect to see continued movement towards alternative wine regions like Tuscany, Barolo, and Napa Valley. Italy has for now escaped the imposition of tariffs and is already the leading exporter of wine to the US. These well-established routes to market and consumer familiarity will provide a strong foundation for future growth as the fine wine market adapts to the new realities of 2020. Shell cuts its oil production sales estimate within a modest quarterly update
Royal Dutch Shell Plc Class B (LON:RDSB) have given shareholders and the market a modest update on Friday.
The firm said that it can expect impairment charges off around $2.3 billion, in the fourth quarter.
Additionally, the firm trimmed its forecast for quarterly oil production sales as the firm has seen itself in tricky waters over the last few weeks.
The firm alluded to the wider macroeconomic challenges that it faces, including the ongoing feud between the Untied States and China, two of the worlds largest energy consumers.
The firm also added that it expects oil production sales o6.5 million barrels of oil equivalent per day o 7 million boepd for the fourth quarter, compared with its earlier estimate of 6.65 million boepd to 7.05 million boepd.
The company had seen a slump in its third quarter trading, did report strong oil and gas trading however. Shell said that higher taxes would be bruising earnings by $500 million to $600 million in the fourth quarter.
Post-tax impairment charges are expected to range between$1.7 billion and $2.3 billion for the quarter, Shell noted.
The FTSE 100 listed giant said it expects additional well write-offs in the range of $100 million to $200 million in the period, while 2019 capital expenditure is expected to be at the lower end of its guidance range of $24 billion to $29 billion.
Shares of Shell dipped 0.92% on the announcement to 2,251p. 20/12/19 10:20BST.
Tough times for Shell
At the end of October, Shell saw their profits sink in their third quarter update.
As profits sunk, they did however beat market and analyst expectations posting earnings of $4.8 billion (£3.7 billion), well ahead of the $3.91 billion anticipated.
Oil and Gas production for Shell fell by 1% from the same period last year to 3.6m barrels of oil equivalent per day.
In a statement, chief executive Ben van Beurden said: “This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices, and chemicals margins.”
The oil giant have a boost in oil and liquefied natural gas compensating for offset in oil prices, which have fallen 17% year on year.
It seems that these last two quarters have been disappointing for Shell, and an ensured effort will be needed to turn fortunes around in tough trading conditions.Competitor SABIC also takes a hit
Shell joined titan rival SABIC (TADAWUL:2010) in the list of firms who had seen a slump in profits following volatile oil prices.
SABIC recorded an 86% drop in third quarter net profit after taking impairment charges off $400 million on its investment into Swiss chemicals firm Clariant.
The world’s fourth-biggest petrochemicals company posted a net profit of 830 million riyals for the quarter ended Sept. 30, down from 6.1 billion a year earlier.
“The decrease in net income is attributable to lower average selling prices in addition to recording the 1.5 billion (Saudi riyal) impairment provision,” it said.
Shells new Credit Facility – reason for optimism for shareholders
The firm also updated the market on a new credit facility, just a week ago.
The firm updated shareholders about a $10 billion new credit facility. The new facility has been agreed with a total of 25 banks and replaces the existing framework valued at $8.84 billion.
It will also, in a first, have interest and fees linked to Shell’s progress in reached its short-term net carbon footprint target. Shell has targeted reduce its footprint by 2% to 3% by 2021.
Shell has set an ambition to reduce the Net Carbon Footprint of the energy products by around 50% by 2050 and by 20% by 2035 in a time of high environmental awareness.
Bank of America and Barclays Bank acted as joint coordinators for the facility.
It seems that Shell are juggling a few issues currently as the year ends, however shareholders will have to remain optimistic.
2019 has been a year full of both political and economic tensions, with oil prices being volatile as ever.
2020 should bring some more stability for Shell, but the last two sets of quarterly results certainly will disappoint.
AstraZeneca sell two cancer drug rights for $198 million
AstraZeneca (LON:AZN) have told shareholders that they have sold two cancer drug rights for $198 million, which has seen shares spike.
Following the announcement, the firm saw its shares boosted by 1.17% to 7,723p. 20/12/19 9:50BST.
The firm updated the market on Friday by saying that it had sold the rights to drugs Arimidex and Casodex in a number of countries to Juvise Pharmaceuticals for up to $198 million.
Astra added that it had sold the commercial rights for these drugs in numerous countries which included France, Austria, Germany, Cyprus, Turkey, Morocco, Mali, and Cameroon.
Arimedex and Casodex treat mainly prostate and breast cancer, however they have recently lost their compound patent protection in the countries in which AstraZeneca sold to.
Notably, the rights to both drugs in the United States were already sold in 2017. Juvise paid $181 million upfront to AstraZeneca, and may make additional sales dependent payments up to a total of $17 million.
In 2018, Arimidex saw sales of $37 million in the countries covered by the new agreement, while Casodex sales were $24 million.
These divestments will not alter Astra’s 2019 financial guidance, it said, and any income from the upfront and future payments will be reported in Astra’s financial statements under “other operating income & expense”.
Dave Fredrickson, Executive Vice President, Oncology Business Unit, said: “Arimidex and Casodex are important established medicines and we are pleased that Juvisé Pharmaceuticals will now take on the work of making sure patients continue to have access to them. Today’s agreement is part of a broader strategy of reducing our portfolio of mature medicines to reallocate resources towards developing our pipeline of new medicines.
Deepmatter Partnership
Last week, Deepmatter Group PLC (LON:DMTR) saw their shares rally following a pharmaceutical technology collaboration with AstraZeneca.
Deepmatter joined forces with the FTSE 100 giant in a digital technology venture, designed to speed up the drug delivery process.
Michael Kossenjans, an associate director at Astra’s Discovery Sciences, Research & Development unit, said: “Our goal is to transform drug design using innovative digital technologies in combination with automation and artificial intelligence. To get potential new medicines to patients faster, we need to reduce the cycle time for lead identification and optimisation and look forward to working with DeepMatter to assess the potential of DigitalGlassware to help with this.”
It seems that following last weeks partnership, AstraZeneca have once again pulled it out of the bag today, and certainly shareholders will be impressed, as the firm continues to grow and diverse.
AstraZeneca continues to expand into China
Additionally, Astra have continued to expand into the global pharmaceuticals market. The firm noted just over a fortnight ago that it had received a marketing approval for two different drugs.
Astra told shareholders that they had joined forces with Merck & Co (NYSE:MRK) to receive marketing authorization from China’s National Medical Products Administration for their Lynparza drug.
The company said Lynparza, which is being jointly developed and commercialised by AstraZeneca and Merck, is currently approved in 65 countries, including the EU, US and Japan. China has the highest prevalence of ovarian cancer globally, with more than 52,000 new cases diagnosed in 2018.
Finally, shareholders got the icing on the cake. When Astra said that they would create a new global research and development centre n China.
There was an ensured effort from Astra to create both a research centre and am artificial intelligence innovation center both in Shanghai, and a “first-of-its-kind” healthcare industrial fund with China International Capital Corp Ltd (HKG:3908).
Aviva announce George Culmer as Senior Independent Director
Aviva plc (LON:AV) have announced today that they have appointed their Non-Executive Director to senior independent director effective from the start of next year.
George Culmer is set to take the role on, and should be something that shareholders take with optimism as 2019 closes.
Shares of Aviva Trade at 420p (-0.25%). 20/12/19 9:38BST.
The FTSE 100 listen firm said that Culmer will take on the reigns from Glyn Barker whose retirement from the board at the end of this year was announced earlier this month.
Culmer joined Aviva’s board as a non-executive director back in September.
He is also a non-executive director at jet engine maker Rolls Royce, and held previous roles including being chief financial officer at Lloyds and at RSA Insurance Group.
Aviva Chair Adrian Montague said: “George brings significant board level experience, having spent 15 years as a FTSE 100 chief financial officer, and has a deep understanding of insurance and wider financial services.”
Management changes for Aviva?
Aviva at the start of December announced that they would be appointing Amanda Blanc as independent non executive director.
Blanc will take the position, following her appointment as the first women chair of the Association of British Insurers in 2018.
The move will take place from January 2nd, and shows a constructive move by Aviva to stimulate business.
Blanc has vast experience in the industry, having been the former boss of AXA in their UK and Irish division, additionally she has worked at Zurich Insurance Group, and held senior management positions at Towergate Insurance Brokers, Groupama Insurance Company and Commercial Union.
The move to make these appointments in quick succession comes at a time where global trading has been tough, and Aviva are looking to combat this.
Asian Difficulties
Aviva have seen a tougher trading period, particularly in Asia where the firm has made an active effort to promote their operations.
On November 18, the firm made an announcement saying that it was determined to turn its Singapore operations around.
The big insurance firm reported that it had looked at selling off the business, after the board confirmed that offers had been received.
“Aviva’s Singapore and China business units delivered double digit operating profit growth in 2018 and are earning attractive returns. Both countries are expected to pay dividends to group centre in 2019,” the company said in its statement on November 18.
A couple days after this, thee firm saw its shares dip as it gave shareholders an update on its business in Hong Kong.
Shares dipped almost four per cent, saying that it was planning to review its Hong Kong operations.
The insurance firm said it will simply its business structure into five operating divisions and sell its stake in the Hong Kong business to co-investor Hillhouse Capital.
With Hong Kong currently being in both political and economic turmoil, there is no surprise that these results worried shareholders.
Aviva set targets for the next three years. The highlights being a 12% return on equity, a £300 million net cost saving and an aim to generate a cash flow between £8.5 billion and £9.5 billion.
Certainly, shareholders should be pleased with the internal appointment, as Aviva seem to be making an ensured effort to carry optimism going into 2020.
Comcast shares flat as Cats receives a less than purrfect reception
Well, Thursday has proven a fairly uneventful day for capital markets. With little going on in the world of finance, the highly anticipated anti-climax that was the screen adaptation of Cats, was perhaps the only news giving us paws for thought.
After a year of build up, the cat was out of the bag, and no amount of nostalgic attachment could save this classic tail about our favourite mangy moggies.
All cat puns aside, Thursday proved an entirely underwhelming day for the kitty of Cats’s largest production company, Comcast (NASDAQ: CMCSA) (courtesy of NBCUniversal Film and Enternatinment, via Universal Pictures, via Working Title Films).
The Group’s shares should have soared on what was pegged to be one of the great film events of the year. Alas, they were left licking their modest wounds, down 0.046% or 0.020p to 43.17p per share 19/12/19 10:18 GMT-5.
On the small matter of the film itself, Will Gompertz offered his typically on-the-nose insights on a film littered with errors and some notable individual performances:
“The sum is a great deal less than the parts, however famous and gifted the people playing them happen to be. The story takes forever to get going, and when it does – eventually – it lacks any real conviction or emotion.”
“The harsh truth is the film feels plastic, it has no heart or soul. That might well be a problem with the source material and its suitability for a transfer from stage to screen. Notwithstanding notable successes, the fact is not everything that is a hit in one medium works in another.”
“It’s not terrible, it’s certainly got more going for it than the trailer, but it is some way short of Lord Lloyd-Webber’s original.”
So, not a complete shambles, but not a Les Mis replica, either.
Elsewhere in film and media, Star Wars Origins bolsters British businesses, Cineworld Group (LON: CINE) announced a Canadian acquisition and Netflix (NASDAQ: NFLX) loses subscribers.
Comcast currently has a market cap of $197.39 billion and a dividend yield of 1.94%. It has been claimed that Cats ‘lacks soul’, but I should imagine its box office performance in the run-up to Christmas won’t lack teeth. I plan to see the film for myself this weekend, but for now it appears the only real losers are Cats fans.
Analysts react to Tullow Oil turmoil
Multinational oil and gas producer Tullow Oil plc (LON: TLW) today saw analysts reaffirm their conservative stances on the Company’s stock, ten days on from the tumultuous departure of its Chief Executive.
Speaking on the departure, interim Executive Chair Dorothy Thompson, stated, “Despite today’s announcement, the board strongly believes that Tullow has good assets and excellent people capable of delivering value for shareholders.”
“We are taking decisive action to restore performance, reduce our cost base and deliver sustainable free cash flow.”
“The board has, however, been disappointed by the performance of Tullow’s business and now needs time to complete its thorough review of operations,”
Today, the Company announced that it had exercised its back-in right for a 10% stake in Gabon’s Dussafu production-sharing contract (PSC), though the amount payable remains under dispute. Having signed a deed of novation and amendment, and conditional upon the deal being completed, other parties’ stakes will drop to 73.5% for BW Energy, 9% for Gabon Oil Co and 7.5% for Panoro Energy. Responding to the eventful couple of weeks from Tullow Oil, “UBS (SWX: UBSG) today reaffirms its neutral investment rating on Tullow Oil PLC and cut its price target to 60p (from 220p).” Further, “Jefferies International Group (NYSE: JEF) today reaffirms its hold investment rating on Tullow Oil PLC and cut its price target to 65p (from 168p).” If we try hard to search for a chink of light, it was offered courtesy of Jonathan Smith of Motley Fool, who was somewhat upbeat while comparing Tullow to another floudnering commidity company – Sirius Minerals (LON: SXX). Smith said, that Tullow Oil “still holds a market capitalization, which it can use to leverage (be it through bank funding, stock buybacks, etc).” “Further, Tullow could be a smarter play for an investor looking to buy on the cheap as it is a more diversified company than Sirius. Tullow has 67 producing oilfields, and so while output production forecasts have come lower, it will likely look to see how it can make up some shortfall from some of the oilfields that are performing well.” Following today’s events, the Company saw its shares dip 2.66% or 1.74p to 63.64p per share 19/12/19 14:03 GMT. Within the last few days, Peel Hunt analysts downgraded their stance on Tullow Oil stock, from ‘Add’ to ‘Hold’. The Group’s market cap is £900.64 million, their p/e ratio is 14.02 and an inviting dividend yield of 5.81%.Rolls Royce unveil one-seater electric plane
Rolls-Royce Holding PLC (LON: RR) have unveiled their one seater electric plane on Thursday to the global market.
Rolls Royce said that the aircraft will fly in late Spring, and become one of the worlds fastest all-electric aircrafts.
Over a week ago, the firm saw its shares in red as it announced a shareholder departure.
The firm said that announced that an executive from its largest shareholder, activist investor Value Act Capital, has resigned from from the engineer’s board.
Today, the firm said that it was looking to appeal to a market of aircraft where climate change and environmental concerns were met.
The additionally recent spread of ‘flight-shaming” movement on social media, and a promise by many big firms in the aviation industry to cut emissions has grown the need for electric aircraft.
Aviation accounts for over 2% of global greenhouse gas emissions and passenger numbers are growing but zero-carbon, long-distance planes carrying hundreds of people are still decades away, aviation experts say.
Rolls-Royce unveiled the electric plan, which it has been building and developing with YASA and Electroflight, should target a speed of over 300 miles per hour.
Rolls-Royce have named the electric plane “ACCEL” and the £6.5 million project will have the most dense battery pack every used for an aircraft.
The firm added that this battery pack provided enough fuel to fly 200 miles which is the distance between London and Paris, on one charge.
Over the coming months, engineers will begin to integrate the electrical propulsion system into the airframe before a first flight by an experienced pilot in late Spring 2020 at a location yet to be decided, but possibly in the Welsh countryside.
Industry rivals such as Boeing and Airbus have both made concerned efforts to build electric planes, however it seems that Rolls-Royce have beaten the competition.
Rolls-Royce recently bought Siemens eAircraft, and it seems that the acquisition has allowed the development to be made.
With Boeing announcing the halt in production to 737 MAX aircraft, the need for electric aircraft has never been so poignant.
The market and industry experts will be keen to see how the initial model performs.
John Lewis of Hungerford see shares dip over 4% despite recording revenue gains
John Lewis of Hungerford plc (LON: JLH) have seen their shares dip despite reporting increased revenues.
The kitchen and bedroom firm said that they had reported an annual narrowed loss, as it alluded to wider retail challenges as a dampener on trading.
For the year ended June 30, the company’s pretax loss narrowed to £228,640 from £373,838 but revenue increased 24% to £8.3 million. The figures compared to the 10 months to the end of June 2018.
The firm said that financial 2018 revenue was lower due to a year-end change to June 30 from August 31.
For its new financial year, the company added that despatched sales and forward orders for the initial 24 weeks totaled £3.8 million, which fell 17% from a year ago.
Comments
John Lewis of Hungerford said the results reflect “mixed fortunes within the business”, with the many of the stores outperforming, though it acknowledged several showrooms were underperforming.
“The last twelve months have seen the company operating within an unprecedented retail landscape. Although the economy is not technically in recession, the current uncertainty within the economy, mainly resulting from Brexit and structural issues facing retail in the high street, has made it more difficult for retail than the recessions in 1990 and 2008,” Chair Gary O’Brien said.
“We have seen significant store closures: 2,868 stores have closed in the first half of 2019, and numerous financial restructurings during this period – with some of the High Street’s best-known brands being affected. We have seen this within our own sector of kitchen retail with several companies reporting challenging conditions,” O’Brien added.
Notable departures from the UK high street came as Thomas Cook collapsed in September. Earlier this year, the travel operator said that it was set to close 21 stores, placing 300 jobs at risk. It had been under pressure recently with falling profits – in May the travel group reported a £1.5 billion loss for the first-half of the year, and this led to its ultimate demise.John Lewis of Hungerford said economic conditions are continuing to be difficult and the December UK general election has “further deteriorated the retailing environment”.
John Lewis of Hungerford said design quotation activity within the business is 10% up on the previous year. This, it said, “points to an underlying latent demand”, and noted decisions are being delayed by customers as a result of the current UK political climate. It expects to see order conversions to improve once there is more clarity around Brexit.
“Whilst the impact on consumer demand continues, we are reacting, by reducing costs in the business and increasing flexibility to respond to changing demand. The board continue to monitor the situation closely and work to improve efficiency and agility in the business to ensure the company is well set to benefit from any improvement in consumer confidence,” said Chief Executive Officer Kiran Noonan.
Shares of John Lewis of Hungerford trade at 0.5p dipping 4.57%. 19/12/19 13:58BST.