Belluscura has secured approval for the distribution of its X-PLOR portable oxygen unit from the Hong Kong Department of Health.

Hong Kong falls under the coverage of the exclusive licensing agreement signed last month with their Chinese distribution partner. Belluscura also said they have already received their first purchase order from Hong Kong.

Belluscura has entered into an exclusive licensing agreement worth up to $55m in royalties over a ten-year period covering China, Hong Kong, Macau and Singapore.

“We are very excited to receive the approval and begin sales in Hong Kong,” said Bob Rauker, Chief Executive Officer, Belluscura

“I am very pleased with our operations, quality control and sales teams receiving approval ahead of schedule. Hong Kong is phase one of our joint expansion with Innomax into Asia.”

Belluscura shares were over 2% higher in early trade on Tuesday. 

The FTSE 100 fell on Monday as fears around China hit the natural resources sector and sapped confidence from London’s Bluechip index.

We wrote last week that confirmation of the Bank of England’s and Federal Reserve’s decisions to keep interest steady at the current level would swiftly see attention shift back to global growth.

And that it did on Monday. Concerns about China swept over markets sending the FTSE 100 0.9% lower in early trade.

China has shown some signs of positivity in recent weeks after consumer prices surprised to the upside and returned to inflation, while manufacturing data came in slightly better.

However, any hopes China was on a better footing were dashed over the weekend by more bad news from the Chinese property sector.

“China is set to go down in history as being 2023’s biggest disappointment for investors. Having started the year in everyone’s good books amid expectations of a big economic rebound, the Asian superpower has failed to deliver. Economic growth has become a struggle compared to the levels it generated a decade ago and government stimulus initiatives have lacked bite,” said Russ Mould, investment director at AJ Bell.

“The property sector has been at the centre of the country’s troubles and it’s going from bad to worse. Evergrande is back centre stage after saying it was struggling with its debt restructuring plan following poorer-than-expected sales, causing its shares to dive and taking the Hang Seng index down for the ride. The index’s real estate sector fell by 2.5% on the day, with Evergrande’s shares down by a quarter at one point.

“The property sector is very important to China’s economy and therefore associated problems will weigh on the stock market. Investors are losing faith in China and this situation is only going to make matters worse for the markets.

“Anything bad in China typically has a negative knock-on effect to UK-listed diversified mining stocks, explaining why Rio Tinto and Anglo American were among the top fallers on the FTSE 100.”

Sentiment was hit across Europe and major indices were trading deep in the red on Monday. The German DAX was down 0.76% while the French CAC gave up 0.67%.

FTSE 100 gainers were few and far between. The top riser was CRH who announced the shift of their primary listing to the NYSE.

Entain was the FTSE 100’s biggest casualty with a drop of 11% after the gambling group said adverse sporting results hit margins during September and they saw slower growth in Australia and Italy.

Tekcapital shares were nearly 10% higher in early trade on Monday as the technology investment company built on a rally that commenced in late August.

Tekcapital is a UK intellectual property investment group focused on creating valuable products that can improve the lives of a great number of people.

Its portfolio companies are driving innovations in autonomous vehicles, electric vehicle efficiency, healthcare, food technology and smart eyewear.

In the absence of any ‘new’ news released on Monday, here are several factors at play that could be driving the Tekcapital share price higher.

MicroSalt IPO

Tekcapital’s portfolio company MicroSalt appointed Zeus Capital as their nominated advisor for an AIM IPO in late 2022. Understandably, the IPO has not yet taken place – probably because of poor market conditions so far in 2023.

However, after ARM’s successful IPO in the US, sentiment towards initial public offerings is increasing, and one may speculate that MicroSalt could use this as an opportunity to push through its listing.

Although no date is set for the IPO, Tekcapital said in an update in August that MicroSalt ‘has been making steady progress towards its planned IPO’.

The MicroSalt IPO will crystalise value for Tekcapital shareholders and anticipation around the event will likely support Tekcapital shares.

Tekcapital has a 97% stake in MicroSalt.

Guident spin-out

Autonomous vehicle safety and electric vehicle efficiency company Guident has taken the notable step to spin out their regenerative shock absorber technology into a new entity, ReVive Energy Solutions.

Spinning out regenerative shock absorber technology into ReVive Energy Solutions provides the opportunity to create clearly defined value attributed to this technology, separate from Guident’s autonomous vehicle remote control safety centres.

Speaking to the UK Investor Magazine in a recent podcast, Guident CEO Harald Braun alluded to successful tests with a leading tire manufacturer and positive conversations with EV manufacturers.

The regenerative shock absorber technology can potentially increase an EV’s range by 9 to 12 miles, a substantial increase and a major opportunity for adopters.

Tekcapital owns 100% of Guident.

Bellsucura contract wins

Portable oxygen unit developer and manufacturing company Belluscura has reported a step change in commercial traction with $15m worth of orders from US distributors and a separate royalty agreement with their Chinese partner worth up to $55m over ten years.

Tekcapital has around an 11% stake in AIM-listed Belluscura. Belluscura has a market cap of £46m.

Innovative Eyewear’s licensing agreements are set to come online

Smart eyewear technology company Innovative Eyewear has inked licensing agreements with leading lifestyle and fashion brands Reebok, Nautica and Eddie Bauer.

The products covered by these licensing agreements are set to be released to the market in the coming months.

While there is no indication of potential revenues, one would think these licensing agreements greatly boost sales.

Tekcapital owns around 40% of Innovative Eyewear, listed on the NASDAQ.

The Lloyds share price has been a beneficiary of the Bank of England’s surprise pause in interest hikes last week but the direction for shares from here is less than certain.

The Lloyds share price is up around 10% from the September lows at 41p and has met the trend line to the downside started in February this year.

Investing in Lloyds shares in 2023 has involved the delicate balancing of the benefits of higher interest rates on Lloyds profitability with the damage higher rates are doing to their customers.

This has been reflected in the downtrend in Lloyds share price since the beginning of 2023 which looks unlikely to break before the end of the year.

With the Bank of England opting to keep rates on hold at last week’s meeting, Lloyds customers will enjoy some reprieve, but the bank’s key profitability metric, net interest margin, is now probably past the peak.

The bank themselves guided for a lower net interest margin in the second half of 2023 and a pause in interest rate hikes all but confirms this.

In addition, the UK housing market is starting to slow while key economic indicators deteriorate. Ultimately, provisions for bad debts are likely to increase through the rest of the year.

Unfortunately for Lloyds investors, there is very little on the immediate horizon which will make Lloyds look attractive at 45p.

There is of course the 5.4% dividend yield for income seekers but it is difficult to see the Lloyds share price above 50p in 2023.

Gulf Keystone Petroleum shares (LON:GKP) perked up on Monday after the company said local sales of crude from their Kurdistan oil field had increased during September.

Even after Monday morning’s 12% rally, GKP shares are down heavily over the past six months and look good value for investors prepared to take high levels of risk.

Earlier this year, Turkey shut the Kirkuk–Ceyhan export pipeline, also known as the Iraqi–Turkish pipeline, due to infighting between the KRG and the central Iraqi government which resulted in Turkey paying $1.5bn in damages to the central Iraqi government due to the breach of an old oil transit agreement.

The inability of Gulf Keystone Petroleum to make deliveries through the pipeline cut off their revenue and sent shares into freefall.

Gulf Keystone Petroleum is owed $151m by the Kurdistan Regional Government (KRG) for oil shipments between October 2022 to March 2023. The payment of the outstanding amount and the resumption of oil exports are crucial for the future of GKP and shareholder returns.

Hopes exports would soon recommence were given a boost when officials met in August but little has changed since.

Talks between the KRG, the Iraqi Ministry of Oil and Turkish authorities have been ongoing for some time, yet no concrete timeline for resumption of exports has been announced.

Gulf Keystone Petroleum has resorted to local sales to support operations. Today, the company announced crude sales amounted to 28,800 bopd between 1st-24th September, an increase on the 17,200 bopd sold in August.

Local sales pale in comparison to export revenue and the company is undergoing substantial cost-cutting in the absence of payments from the KRG. The company said current localised sales to refineries in Kurdistan are now covering costs.

The company is reasonably well-capitalised as a result of the cost-cutting exercise and securing local crude sales. As of 30th August 2023, Gulf Keystone has cash balances of $82m and no debt. Cash was $80m earlier in August.

Should Gulf Keystone Petroleum receive the $151m owed to them, cash would total over $230m – marginally below the current market cap.

This would make GKP tremendously good value. Bear in mind, that this company was paying a healthy dividend to investors before the pipeline shut this year.

That said, ‘when’ and ‘if’ Gulf Keystone Petroleum receive this payment is a major uncertainty, as is the resumption of export sales.