US House of Representatives supports removal of Russia and Belarus from “most favoured nation” trade status

Anshula Kumar
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US House of Representatives supports removal of Russia and Belarus from “most favoured nation” trade status

The US House of Representatives voted 424-8 in favour of removing the “most favoured nation” trade status from Russia and Belarus.

The next step is to gain the US Senate’s approval. Simultaneously, several G7 democracies are showing similar efforts to strip the countries’ status from the World Trade Organisation (WTO).

Once this movement is accepted, the tariffs on Russia and Belarus products will face non-WTO rates. President Biden has announced his intention to charge higher tariffs on products from both Russia and Belarus.

In 2020, the largest imports from Russia not linked to oil and energy were palladium, rhodium, fertilisers, plywood and unwrought aluminium alloys, according data from the World Bank.

The US Senate identifies Putin as a war criminal and is focused on removing the trade status for Russia to enable total economic freeze out from the global economy.

With increased tensions across Ukraine, the international community is united in its efforts to stop the war.

Tritax Eurobox enters into a conditional agreement with Dietz Seller

Anshula Kumar
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Tritax Eurobox enters into a conditional agreement with Dietz Seller

Tritax Eurobox and Dietz Seller, a subsidiary of Dietz AG, have entered into a conditional agreement to acquire the assets of Dietz subsidiary in Dormagen, Germany.

Tritax Eurobox is a REIT which invests in ‘high-quality, prime logistics real estate’ across Europe.

Dormagen Proposal

The Dormagen asset will be acquired for €76.4m and the consideration of €76.4m is divided into a purchase price of around €38.7m for the majority stake of 89.9% in Dormagen SPV and approximately €12.9m for shareholder loans to the Dormagen SPV.

The Dormagen SPV will cover the development expenses, and the conditions of the offer are subject to shareholder approval due to the Dietz AG’s connections to the Listing Rules.

The freehold held asset being built by Dietz Aktiengesellschaft, the development partners of Dietz Seller will have a total gross internal area of roughly 36,437 m² comprised of three adjacent units. The three units are independent of one another and thus ideal for flexible leasing options.

The asset has an eighteen-month rental guarantee from the Dietz Seller, based on a monthly rate of €5.60 per m² for warehouse space.

Based on the rental guarantee earnings, the transaction price of €76.4m indicates a net initial yield of 3.3%. For warehouse space, market rental rates are likely to reach €6.00 per m² per month in this region.

Dormagen is an area with high demand and is located in one of the prime logistics areas of Germany, between Cologne and Düsseldorf. The area offers good connectivity to motorways such as the A1, A46 and A57.

ESG

The Dormagen proposal provides another chance for the Tritax Eurobox to accomplish several of its sustainability goals by redeveloping a brownfield property to satisfy the DGNB Gold Certificate.

Alina Iorgulescu, Assistant Fund Manager, Tritax EuroBox, commented, “We are delighted to be acquiring this asset, which is the eleventh German investment for Tritax EuroBox, bringing our total amount invested in the country to over €800 million.”

“This off-market acquisition gives us the ability to control the desired leasing profile of the scheme through capturing the rental growth evident in the market, and also allowing the company to introduce open market rent reviews into the lease, providing a mechanism to capture the expected future rental growth driven by the continued favourable imbalance in supply and demand in the German logistics market.”

Essentra operating profit surges as market share grows

Natasha Doris
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Essentra operating profit surges as market share grows

Essentra saw its share price increase 0.7% in early morning trading on Friday after the company reported an adjusted operating profit increase of 46.5% to £83.9 million.

The essential components and solutions provider posted a revenue of £960 million compared to £897 million in 2020.

Essentra also reported a revenue increase of 8.4% on a like-for-like basis.

The company announced a pre-tax profit of £67 million compared to £47 million in 2020 and an adjusted basic earnings per share of 18.2 against 13.2 in 2020.

Essentra noted a dividend per share of 6p against 3.3p in 2020.

The group attributed its strong financial year to its favourable market position and the ability to gain market shares.

Essentra noted a successful navigation of Covid-19 supply chain disruptions while meeting accelerated demand, which increased its operating profits.

Looking forward, the company reported strong customer relationships and encouraging order book trends.

“2021 saw the start of a new and transformational chapter in Essentra’s journey; we have set out a clear direction for the Company to become a pure play Components business over time and announced strategic reviews of the Filters and Packaging divisions, thereby ensuring we create three strong stand-alone global businesses,” said Essentra CEO Paul Forman.

“I believe this next chapter will present even more positive opportunities for our businesses and our people.”

“Despite the challenges arising from the pandemic and supply chain headwinds, we have seen an improving revenue trend throughout the year, which has continued into the start of 2022 with all three global divisions well-positioned for growth with strong order books.”

Wetherspoons reports loss as COVID restrictions hit sales

Natasha Doris
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Wetherspoons reports loss as COVID restrictions hit sales

Wetherspoons share price dipped 0.5% to 822p following the release of a £21.3 million pre-tax loss for its half-year 2021 financial results.

Despite the loss in 2021, the company says they are confident of a stronger future, if there are no more lockdowns.

The company reported a revenue of £807.4 million against £933 million in 2020, as well as an 11.8% decrease in like-for-like sales.

Wetherspoons reported an operating profit of £0.5 million and an earnings per share loss of 16p.

Like-for-like bar sales fell 12.7%, food sales decreased 11.1% and slot/fruit machine sales dropped 9.8%.

However, Wetherspoons reported a hotel room sales rise of 6.6%.

The bar chain blamed falling profits on Covid-19 restrictions and increased labour costs as a result of staff absences.

“Following a traumatic two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks,” said Wetherspoons chairman Tim Martin.

“Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions.”

“Draconian restrictions, which amount to a lockdown-by-stealth, are, of course, kryptonite for hospitality, travel, leisure and many other businesses.”

“The company is confident of a strong future if restrictions are avoided.”

“The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy.”

Wetherspoons have enjoyed improving trading conditions this year with the three-week period to 13th March 2022 seeing sales improve to only be 2.6% lower than in the same period in 2019.

Polymetal announces board of director appointments

Natasha Doris
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Polymetal announces board of director appointments

Polymetal announced several new appointments to its board of non-executive directors on Friday morning.

The news follows the resignation of six independent board members from the Polymetal board on 7 March, following which, the company announced its intention to appoint new directors to the company.

The new appointments took effect on 17 March 2022 and brought the Polymetal board to seven members, five of which are currently non-executive.

The new directors include Janat Berdalina, a former managing partner and president of KPMG in Kazakhstan and Central Asia and Steven Dashevsky, CEO of UK management company D&P Advisors.

Polymetal has also hired Evgueni Konovalenko, managing director at Renaissance Capital, and Paul J. Ostling, former global executive partner and global COO at E&Y.

The news follows the announcement of Polymetal’s suspension from the FTSE 100, which is scheduled to take effect on 21 March 2022.

The move comes after the Russian invasion of Ukraine saw the company’s operations in Russia suspended and its shares take on an intensive volatility in the market.

Cenkos Securities sees 88% increase in profits

Anshula Kumar
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Cenkos Securities sees 88% increase in profits

The independent institutional stockbroking firm, Cenkos Securities saw post-tax profits increase 88% from £1.8m to £3.4m in 2021 with the addition of 17 new clients.

The pre-tax profit increased by 75% to £4m in 2021 while revenue grew from £31.7m to £37.2m.

Cenkos completed 34 transactions which raised £1.2bn for their clients in 2021.

Cenkos’ total dividend is 4.25p including a final dividend of 3p in 2021 compare to a total dividend of 3.5p in 2020.

The company’s net assets and cash balance increased by £1.4m and £0.7m to £27m and £33.5m in 2021.

The firm’s net finance cost has seen an increase from £146,000 to £154,000 in 2021 mainly due to the interest income reducing to £17,000 from £30,000.

Cenkos Securities enjoyed a bumper trading period on the AIM, completing 34 IPOs and secondary fundraises, raising £1.2bn for clients.

Cenkos noted AIM had it’s strongest year since 2007 as £8.7bn was raised for companies through IPOs and secondary issues.

“I continue to firmly believe in AIM as the destination of choice for ambitious companies,” said Lisa Gordon, Chairman, Cenkos Securities.

“Cenkos can rightly claim a leading adviser position on AIM and we are committed to continuing to source and create high quality investment opportunities for the benefit of our clients, shareholders and employees.”

Since the beginning of 2022, the company has already completed 3 IPOS, 4 placings and 2 M&A transactions.

Julian Morse, Chief Executive Officer, Cenkos Securities said, “I am pleased to report that a continued focus on client service levels, recruiting and retaining quality talent and a disciplined approach to costs have enabled us to thrive during 2021.”

“In what remained unchartered social and economic times, these remained the foundation from which we supported our clients and colleagues to achieve their aims. ”

“We continue towards our objective of being the first-choice partner for growth to ambitious companies seeking equity capital.”

Cenkos Securities’ shares were flying 16% to 69p in early morning trade on Friday.

Everything you need to know about options trading

UK Investor Magazine
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Everything you need to know about options trading

Options trading has often been seen as a technique best left to financial specialists, but in recent years, it has grown in popularity with traders, partly because it has the potential to add considerable flexibility to your investing plan when you take into account value, volatility and interest rates.

You’ll need to master the jargon before you begin. Understanding such technicalities as ‘strike price’ and the difference between ‘call’ and ‘put’ options is crucial to getting to grips with options trading. There is no doubt that options trading isn’t for everyone, but it can be a way to diversify your portfolio.

What are options

An option is a type of contract that makes it possible for you to purchase or sell an investment, such as a stock, or an exchange-traded fund (ETF). Each contract that you buy or sell has a pre-negotiated price along with an expiry date that determines the length of time that the pricing is valid.

Options trading introduction

So, what is options trading? You can trade options contracts in much the same way that you can purchase and sell stocks and bonds. Buying an option, on the other hand, does not provide you ownership in the firm since you have not acquired any shares.

Your contract does allow you the option to acquire the shares later, so you have the possibility to possess them if the conditions are met.

Options trading gives you additional investing versatility since it allows you to trade ETFs, indices and commodities in addition to the stocks and bonds you’d expect. Prices vary, and you can attempt to anticipate whether they will rise or fall in the same way that stock prices change. To maximize your earnings or reduce your chance of loss, you can purchase or sell your options at the time you judge to be the most appropriate. 

Types of options trading

There are two forms of trading options: Call and Put. Whether you want to purchase or sell determines whether you use a call or a put option.

You have the right to acquire shares at the strike price before the expiry date if you hold a call option. With a call option, the present owner of those shares is obligated to sell them to you in accordance with the terms of the option agreement.

A Put option means that you have the right to sell shares at the strike price by the expiry date. If you execute your put option, you must sell the shares and you will receive the strike price for each.

Why trade options?

Options, despite their image as a dangerous investment better left to the pros, may be beneficial to regular investors as well. Including options in your investment portfolio may provide a variety of strategic benefits.

They not only have the potential for bigger profits, but they may also protect you against losses.

Options usually entail a lower financial investment than purchasing an asset. That’s because you’re not paying full price for shares, but rather a lower price for the option to acquire them later.

If the market price falls, you will only lose the premium you paid to purchase the options, rather than losing a lot more money if you had purchased the shares directly. However, if the market price soars, you’ll be able to acquire the shares at the lower strike price. You may profit by exercising your options or selling your contract to another investor if this occurs. In either case, you can profit. 

How to start trading options

It’s pretty easy to get started with options trading, despite the fact that it seems sophisticated and may contain a broad range of strategic methods.

You’ll need a broker, and you should research costs and account minimums to choose one that fits your budget and investing style. Then it’s time to come up with an options trading strategy. Options trading methods, like other investments, are dependent on your own objectives and risk tolerance and may range from basic to sophisticated. Fortunately, there are many online guides to options trading that can help you to devise the right strategy tailored to your needs. 

Beware of the risk

Options trading, like other investments, has a level of risk. To earn money, you’ll need to be able to determine whether a stock’s price will climb or decrease, which might take a lot of study (and luck). As a result, you should never invest money that you can’t afford to lose in options. However, if you learn the ins and outs of how options trading works and locate a good broker, there is a lot of money to be made if you use the proper strategy at the appropriate time.

OptiBiotix spinning off ProBiotix Health on Aquis

Andrew Hore
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OptiBiotix spinning off ProBiotix Health on Aquis

OptiBiotix Health (LON: OPTI) plans to spin off its ProBiotix Health subsidiary on the Aquis Stock Exchange. ProBiotix develops probiotics for treating cardiovascular disease and is expected to join the market on 31 March. OptiBiotix will retain a stake and transfer other ProBiotix shares to its own shareholders.  
Peterhouse will be the corporate adviser. A pre-money valuation of £22.5m is anticipated.
The distribution of ProBiotix shares to OptiBiotix shareholders has an ex-dividend date of 24 March. The shareholders will receive 35%-37% of ProBiotix, but they will not be able to deal i...

Bank of England increases interest rates to 0.75%

Natasha Doris
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Bank of England increases interest rates to 0.75%

The Bank of England has hiked interest rates to 0.75% at noon today, representing highest increase since March 2020.

The Bank of England’s announcement immediately caused share prices across major UK banks to drop, with Lloyds declining 1.6% to 47.7p, NatWest losing 4.6% to 10.3p and Barclays seeing a dip of 2.4% to 170.9p at the time of writing.

The move follows expert consensus that inflation is expected to rise to 8% in April 2022.

Analysts said that the rising interest rates have set UK households up for a year of uncertainty and slashed consumer budgets.

“UK consumers now face an annus horribilis, as rising borrowing costs will be compounded by higher food and energy bills, and tax rises to boot,” said AJ Bell head of investment analysis Laith Khalaf.

“Interest rates will mean savers getting a bit more return on cash held in the bank, but elevated inflation means they will actually be worse off.”

The Bank of England are scheduled to announce further increases in interest rates later in the year, with expectations of rates hitting the 2008 crash level of 1.75%.

“Markets expect four more increases this year on top of today’s, meaning that by Christmas 2022 we’ll have a base rate of 1.75%, if the expectations are to be believed,” said AJ Bell head of personal finance Laura Suter.

“At that level we’d be returning to the interest rates of 2008, around the time of the market crash.”

Khalaf added, “unless you want egg on your face, it’s best not to count your chickens before they’re hatched when it comes to monetary policy, but it looks pretty clear that central banks are intent on several further rate hikes as we move through 2022, to help stave off the real and present danger of sustained inflation.”

Hikma’s revenue grows 9% on strong performance

Anshula Kumar
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0
Hikma’s revenue grows 9% on strong performance

Hikma shares were trading down 0.3% at 2,055p despite a 9% increase in group revenues.

Hikma’s revenue grew from $2.3bn to $2.5bn in 2021 with strong performances in all three divisions of the pharmaceutical company.

Injectables contributed 41% to the group revenues with an amount of $1bn. The US consisted of $691m and the Middle-East and North-Africa (MENA) markets accounted for $180m of that amount.

Generics saw a revenue growth of 10% in the segment to $820bn. The growth mainly came from recently launched products such as Kloxxado and generic Advair Diskus.

The branded segment had an increase of 9% in revenue to $669m with strong performance coming from the MENA region with their chronic illness treatments.

R&D will continue to have a 6% investment taken from the revenues to continue growing their pipeline of products.

Hikma’s operating profit saw a 12% increase to $632m in 2021.

The group also saw a 38% increase to $638m in cashflow from operating activities.

The company has a net finance expense of $39m, up from $22m in 2020 due to refinancing costs and losses in interest income.

The group’s net debt has decreased by $185m to $420m in 2021.

The reported profit attributable to shareholders dropped 2% to $421m in 2021 whilst the core profit attributable to shareholders saw a 10% increase to $450m.

The group decided on 26p as a recommended final dividend in 2021, summing up to a total dividend of 40p.

Siggi Olafsson, Chief Executive Officer of Hikma, said, “Hikma delivered strong financial results in 2021, marking another successful year of solid growth and continued strategic momentum.”

“Our operational strength and high quality standards ensured our ability to provide customers with a consistent supply of essential medicines in a challenging environment.”

“Our Injectables business is now supplying US hospitals with sterile compounded pharmaceutical products, has expanded into Canada, and is set to grow further with the acquisition of Custopharm1 and our expansion into US biosimilars.”

“Our Generics business is bringing more complex and specialty products to market, launching Kloxxado and generic Advair Diskus in 2021, and with additional product launches planned for this year.”

“Our Branded business is delivering consistent growth, with an increased focus on medications to treat chronic illnesses.”

“We have an exciting platform that will drive continued growth and progress in the year ahead.”

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