Commodities show signs of stabilising, outlook remains weak
Commodity prices stabilised on Tuesday after a key index fell to its lowest closing level since 2003, with oil moving back above $50 a barrel.
Brent LCOc1 added 1.2 percent to $50.12 a barrel. U.S. crude CLc1 gained 1.6 percent to $45.89 a barrel.
“A retest of Brent crude’s 2015 low around $45 per barrel looks inevitable given current ample market supply and intensifying bearish market sentiment toward prices,” BMI Research said in a note.
Copper edged up 0.3 per cent on Tuesday after hitting a six-year low of $5,163 a tonne on Monday, and gold traded up 0.6 per cent at $1,091 a troy ounce on Tuesday, slightly above a five and a half year low of $1,077 hit two weeks ago.
Oil has been affected by oversupply, and is trading in a bear market both in London and New York. The outlook remains lacklustre, with volatile markets in China, the world’s second largest economy, and hints of an upcoming rate hike badly affecting commodity prices over recent weeks.
George Osborne has lost the tax payer £103 million, in one day
Shares in RBS are trading at 347p.
George Osborne has lost the tax payer £103 million in one day by selling RBS at 330p to institutional investors.
Institutions bit the UKFI’s hand off in the accelerated book build that raised £2.02 billion by selling a near 5% stake at 330p.
The issue was 2.4 times oversubscribed as fund managers scrambled to secure RBS shares at the lowest point of the year.
Those institutions are now up 5% on their investment, meaning the tax payer has lost an incredible £103 million in a single day.
When the RBS stake was sold, close to a £1 billion loss was crystallised.
Under the guise of a financial expert as the Chancellor of the Exchequer, George Osborne is now up there with high profile traders such as Nick Leeson and UBS Kweku Adoboli who lost sums around £1 billion. The latter two received prison sentences.
George Osborne appears to have made the classic retail investor gaffe and recklessly sold in a panic to smarter institutions as the price tumbles.
This isn’t all, he has done something that most professionals would applaud, he’s picked the lowest price of the year.
Unfortunately he and the tax payer are on the wrong side of it.
Societe Generale in 25% profit jump
Societe Generale is up 8 percent after beating analysts expectations to report a second-quarter net income of €1.35bn and revenue of €6.87bn.
Its global markets and investor solutions business was boosted by a 61 percent jump in equity trading revenue to €799 million. Financing and advisory income revenue increased 25 percent to €685 million in the quarter.
The bank said it planned to save another €850m in costs by 2017 on top of its annual target this year of €900m, and put the profit back into its capital base so that it is better protected against future losses.
Chief Executive Frederic Oudea said in a statement:
“In the coming months, the group will continue to develop in its strategic areas, capitalizing on the rebound in the European economy, and adapt to the technological and regulatory changes through the rollout of its digital strategy and the continuation of its operating efficiency efforts.”
Societe Generale are currently trading up 8.3% at 48.35 pence per share.
Standard Chartered halve dividend after profit drop
Standard Chartered (LON:STAN) reported its first half results this morning, announcing an overall fall in pre-tax profits and a decision to halve its dividend.
Cheif Executive Bill Winters, who joined the financial services company in February, said:
“Today’s results show the group has some very real challenges, but they are fixable and it is important to remember that there is a strong business at the heart of the group. The newly announced management team, together with all of our staff, are determined to get the group back on track.”
“If we decide we need capital for the long term benefit of the Group, If we decide we need capital for the long-term benefit of the Group, we will raise capital,” he continued.
Winters said that the company would raise capital externally if necessary as he outlined plans to boost shareholder returns and rebuild capital after continuous drop in profits. Overall pre-tax profits were down $3.2 billion on a year ago.
On Wednesday the the company appointed Mark Smith, from rival HSBC, as its new chief risk officer. Mr. Smith will join the Bank in January 2016.
Standard Chartered is currently trading up 1.08% at 962.90 pence per share.
Five simple tips for a successful crowdfunding campaign
Whilst creating a crowdfunding campaign may not seem like rocket science, if it’s not successful your company could miss out on thousands of pounds worth of investment. When it comes to your business, it’s probably not worth taking the risk – read over our five simple tips to make sure you get the most out of your crowdfunding round.
Social Media
Frankly, this one shouldn’t need to be said – a start-up company without a solid social media presence is a no-go right from the off. Social media is a free platform to sell your company, advertise your brand, reach out to potential customers and attract new business – it’s essential. When investors see your crowdfunding page on a platform, offer easy links to your Twitter, Facebook and LinkedIn so they can get a sense of what you’re about. Let your company’s personality shine through on each site, and update it reguarly to show that you’re staying on top of it. Use it to engage with people and create a brand presence. Through social media, its easy to reach out to smaller online websites and magazines that cover crowdfunding and business news – it could be that they need your story as much as you need the publicity. Trend hashtags, engage on Facebook, set up online Q&As and webcasts to get people involved.
Shoreditch Grind have successfully raised 159% of their target. Their tweets are displayed below:
[twitter-timeline id=628562291378753536 username=Shoreditchgrind]
A good video
Most crowdfunding sites offer the chance to put a video on your page – this can be a great advantage, so use it. Clearly, when raising money over the internet you can’t demonstrate your business or product to each investor individually; the next best way to persuade people of the value of your company is through a persuasive marketing video, effectively demonstrating exactly what it is you do. It is the chance to create an engaging visual definition of your company and get potential investors involved. Whether your video is emotional, comical or clear and factual, a video is an indispensable way to demonstrate what it is that your company does. And even better – there’s no need to invest in a professional to do it for you; there are plenty of video editing sites and apps available for free that, with a bit of creativity, will do the job just as well.
Restaurant chain Filmore & Union have just finished a crowdfunding campaign on Crowdcube and managed to raise 86% more than their funding target. Here is their promotional video:
[youtube http://www.youtube.com/watch?v=kklk1Ax7OdQ?feature=player_embedded&w=640&h=360]
Communication
Whether it’s good news or bad, it is essential to make sure your backers and potential backers are kept in the loop. Post regular updates on your crowdfunding page, and make sure you keep the process going after the campaign has ended – people want to know where their hard earned cash is going. Interact through thank-you emails and social media, ask questions and increase engagement through two-way dialogue.
Introduce the team
Make sure there are clear profiles of your key team members on your fundraising page. People love to put a face to the name, and it creates a personal point of contact so that investors can go direct to members to find out more. It’s all about making your company accessible and engaging – nothing works better in business than cultivating strong personal relationships.
Personality
Last – but definitely not least – give your page some personality. Tell potential investors the story behind your company, build an image of how you started and show them where you want to go. Dry facts and figures may be necessary, but without a hook to pull someone in it’s unlikely that potential investors will even get round to reading them. Have a sense of humour, captivate their interest and engage your investors and make sure you illustrate your company in a way that means they just can’t resist investing.
UK house prices rise, according to Nationwide
UK house prices have risen 3.5% over the last year, taking the cost of the average home to a record high of £195,621.
Official figures released by Nationwide this morning show that prices have risen 0.4% this month, but the annual pace of growth is down on last year.
Nationwide’s chief economist Robert Gardner said: “The number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.”
Mr Gardner said that there are signs that the housing market may be “stabilising close to the pace of earnings growth” which has been constant at around 4% a year.
This month’s price index by Nationwide takes into account the effect of stamp duty reforms brought in meaning £275million less tax being paid by home buyers than under the previous system.
Mr Garder estimated that “around 85 per cent of transactions in London, the South West and South East have benefited from the changes, compared with around 55 per cent in the North, Yorkshire and Humberside, and the North West of England.”
BMW express concern over Chinese market
BMW (ETR:BMW) have become the latest carmaker to admit volatile markets in China may affect business, as its sales fall in the country for the first time in a decade.
The world’s biggest luxury carmaker warned this morning that its outlook could be at risk if the situation in China worsens. The company joins Volkswagen, who have just lowered their sales forecast in China, and Audi, who have both expressed concern over weak demand in the region.
“If conditions on the Chinese market become more challenging, we cannot rule out a possible effect on the BMW Group’s outlook,” the Munich-based carmaker said in its quarterly report.
The company reported a 3 percent fall in second-quarter operating profit this morning, and shares in BMW dropped 2 percent in early trading becoming the second-biggest decliners on Germany’s DAX index.
“The scale of the increase during the forecast period is likely to be held down by fierce competition on automobile markets, rising personnel costs, continued high levels of upfront expenditure to safeguard business viability going forward and upcoming challenges relating to the normalisation of the Chinese market,” BMW said.
Timmy’s Pies offer a slice of their business on AngelsDen
After completing a PhD in molecular biology, Tim Wilkes found himself baking pies for friends and family and then, eventually, selling them at a Chelsea market stall at the weekends. This was in 2010 – now, his company Timmy’s Pies has been trading for five years, won nine Great Taste Awards in the past four years and has stock in some of the finest stores in London.
As Tim puts it, the growth has come from “three years of slog”. The artisan pie company began in West London, and has a focus on using organic, seasonal produce when making delicious pies, sausage rolls, quiches and scotch eggs. From a small company, it has snowballed into a unique brand and sold in a selection of pubs and shops across the capital – including Fulham Football Club.
“My focus had been on baking the best pie I could bake, but in that six months we’d built a bit of a company, and I really enjoyed what we were doing,” says Tim. “Do I quit or continue?”
The answer was continue. Timmy’s Pies are now crowdfunding through AngelsDen for £100,000, in return for 10% equity.
The company has several little quirks that make it a cut above the rest. Their system of ‘pie-roglyphics’ is a ‘simple solution’ to the problem of knowing which pie is which; and a key to it is included with each large order. Their range of mini pies open the business up to the corporate market, and their unique pie personalisation service “say it in shortcrust” has proven hugely popular, especially on Valentine’s and Father’s Day.
According to statistics from Kantar Worldpanel the UK chilled pie market is having a bit of a moment, up 1.9% to £240m. Sales of “posh pies” were up 13.5% and the penetration of premium brands in the market is only at 5.1%, so as Timmy’s Pies have noticed, there is room to grow the category.
The £100,000 investment will be used for hiring staff, the purchase of a few key pieces of kitchen equipment and to help develop shelf-ready packaging.
For further information on this opportunity, visit Angels Den.
Meggitt profits jump 18%, shares up 5%
Meggitt (LON:MGGT), the UK based aircraft equipment supplier soared over 5% in early Tuesday trade after it announced a 10% increase in revenue.
There has been under some pressure elsewhere in the aircraft industry, todays results have been cheered by investors who welcome Meggit’s ability to navigate the challenges in the market.
“Over the last few years we have made important decisions to further improve our competitiveness in the markets we serve. With implementation of the Meggitt Production System we are delivering valued improvements in customer experience through enhanced quality and delivery and, while this will take several years to optimise fully, the experience we have gathered to date serves to increase our confidence that over the medium term it will drive further cost and working capital benefits,” said CEO Stephen Young
In addition to the jump in revenue which supported an 18% increase in first half pre-tax profit, Meggitt said full year profit is likely to be in line with guidance.
Adding to investor’s delight was a 4.6 pence interim dividend to be returned alongside the current buyback program.
Shares in Meggitt were up 5.6% at 11.00am in London trading, the second highest riser after Smiths Group (LON:SMIN) who were up 5.9% after a US activist investor took a stake.
Smiths up 6% as ValueAct take an interest
Engineering group Smiths (LON:SMIN) are up 6% this morning after reports that US activist hedgefund ValueAct have taken a stake in the group.
This comes just after ValueAct revealed that it was the largest investor in Rolls Royce. Although either side is yet to comment, reports from Bloomberg suggest that the fund has taken a 5% stake in Smiths.
The hedgefund has been reportedly considering investing in Smiths for the past year, and discussed the move with outgoing CEO Philip Bowman.
A spokesperson from Smiths commented on the recent interest from ValueAct: “We welcome an active interest from all our shareholders, and we work in the interests of all shareholders at all times.”
Smiths is an engineering group serving a range of global customers including governments, petrochemical companies, hospitals, telecommunications companies and equipment manufacturers in a variety of sectors globally.