Tesla shares sink after Musk Twitter poll

UK Investor Magazine
-
0
Tesla shares sink after Musk Twitter poll

Tesla shares sank on Monday after CEO Elon Musk ask his Twitter followers whether head should sell a proportion of his shares in the electric vehicle company he founded.

In a Twitter poll started on Saturday Musk asked his 62 million Twitter followers whether he should sell shares in light of recent talk about taxing unrealised gains in the value of assets.

Some 3.5 million people voted in the poll which finished in 57.9% voting for him to sell a stake. Musk said “I will abide by the results of this poll, whichever way it goes” spooking investors and sending shares over 4% lower in the pre market.

An idea was floated in US Congress to raise taxes by taxing the unrealised gains over billionaires and Musk’s recent move was designed to troll law makers.

“Elon Musk doesn’t like to do things in a conventional way and so holding a poll on Twitter about whether he should sell 10% of his stake in Tesla might seem crazy, but one could say it is normal behaviour for him,” said AJ Bell investment director Russ Mould.

“The majority voted for him to sell, which effectively signals that he is going to dump stock on the market. In technical terms this is known as a share overhang, and it is something that would typically force the share price down.

“Investors may look at the situation and try and sell before he does, potentially then buying back at a lower price if they still liked the stock. It’s also an open invitation for short sellers to place a bet that the shares will fall, generating a profit for them if the stock does decline in price.

“The standard practice for someone who decides to sell stock is to make an announcement that various brokers are trying to place those shares with buyers, typically large institutions such as pension funds or asset managers. The announcement often happens after the market closes, so as not to disturb the share price. By the time the market opens the following trading day, the shares should have already been placed with the new buyers.

“Tesla has bonds and shares that trade in Frankfurt, the latter opened down around 9% and have clawed a little of that back and are down 7%. Its main stock listing is in the US where the pre-market price shows a 6% drop ahead of the market open.”

New AIM admission: Marks Electrical building awareness

Andrew Hore
-
0
New AIM admission: Marks Electrical building awareness

Online electrical retailer Marks Electrical specialises in kitchen appliance, audio visual products and small electrical appliances and has been growing its share of the market. The audio visual segment is a newer market to the company, accounting for 5% of sales.
There are plans to improve digital marketing and increase the awareness of the Marks Electrical brand – only 6% of adults currently know the brand. The first nationwide TV campaign has been launched.
The product range continues to broaden with air conditioning and boiling water taps some of the newer products. Management intends to o...

New AIM admission: Gensource Potash shovel ready

Andrew Hore
-
1
New AIM admission: Gensource Potash shovel ready

Gensource Potash is already quoted on the Toronto Venture Exchange, and it describes the Tugaske project, which is in the Vanguard area, as “shovel ready”. First production could be before the end of 2023. The required investment has been secured, via a joint venture vehicle, to finance the C$352m cost of building the mine.
Management were involved in setting up the Bethune potash mine. The AIM quotation is designed to gain access to UK and European investors.
The Tugaske project’s proven and probable mineral reserve is 14.1 million tonnes and there is a likely minimum expected mine life of mo...

Stanley Gibbons presents a speculative opportunity

Jon Levinson
-
0
Stanley Gibbons presents a speculative opportunity

Stanley Gibbons (LSE: SGI) are the world’s longest established stamp merchant and has a Royal Warrant. It’s team of experts provides   services for collectors of Stamps and Coins as well as publishing catalogues. Stanley have a highly regarded specialist teams helping clients with their collections, and this is a key added value. It’s been a tough Covid, but even before that it was not plain sailing for this long-established company. Finals for the March year end showed an adjusted loss of £2.7m on £10.8m turnover and the Interims to September, which are due to be reported, are unlikely to sho...

Stocks rise as the US adds 531,000 jobs in October

UK Investor Magazine
-
0
Stocks rise as the US adds 531,000 jobs in October

The US economy beat estimates to add 531,000 jobs in October. Economist consensus estimates were for there to be 450,000 jobs added. The US created 194,000 jobs in September.

US equity futures gained following the release and the FTSE 100 consolidated gains above 7,300, closing in on the highest levels for London’s leading index since the beginning of the pandemic.

“The US jobs report got the party started again, coming in much more upbeat than expected. Employers added 531,000 new jobs to payrolls in October, higher than the 450,000 forecast,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

Positive revisions to prior Non-farm Payroll figures provided investors with confidence the US recovery was robust and previous numbers hadn’t been a mere blip.

An increase in average hourly earnings demonstrated American workers were now taking more home, reducing fears that inflation would erode US household spending power.

The strong jobs number highlights the strength of the US economy and supports the Federal Reserves recent decision to begin tapering the pace of their asset purchases.

Any reservations that the Fed moved to early will be dispelled by this reading and the drop in the unemployment rate will please policy makers keen to see the US move towards maximum employment.

“There is still ground to cover to reach maximum employment both in terms of employment and in terms of participation,” said Federal Reserve Chair Jerome Powell this week.

New renewables investment is about technologies that can fix structural gaps

UK Investor Magazine
-
0
New renewables investment is about technologies that can fix structural gaps

Gavin Smart is Head of Analysis and Insights at the Offshore Renewable Energy (ORE) Catapult, the UK’s leading technology innovation and research centre for offshore renewable energy. From 24thNovember, ORE Catapult is holding a series of lunchtime investor webinars to showcase the maturity of tidal stream technology with leading tidal power developers – The Tidal Power Express.

With the world conducting its carbon stock-take at COP26, the time is ripe for investors to re-evaluate their renewables investment portfolios. Extra diversification can be found overseas outside of the saturated UK market, but, for me, the sea-of-change opportunity is with less familiar technologies, specifically those that can solve energy imbalances.

Solar and wind have well-known intermittency issues – they do not generate power when the sun doesn’t shine or the wind doesn’t blow – leading to a continued reliance upon other fuel sources, such as nuclear or fossil fuels. To compound matters, not all locations on Earth have the climate, geography or resource that are suited to solar and wind infrastructure. Renewable energy sources that can plug these structural gaps offer both fresh opportunity and a way of generating new investment streams.

A technology on the cusp

Tidal stream power is, in my view, the most promising of these alternative sources. A scientific review out this week for our TIGER project confirmed that it could supply 11% of the UK’s current electricity demand. 

Before we get into the whys and wherefores, I should say that this is an area that the definition of ‘tidal power’ is not straightforward. Tidal stream (capturing the energy in fast-flowing bodies of water using underwater turbines) is a very different technology to tidal range, which involves building dam-like barrage and impoundment structures and has tended to hit the mainstream headlines far more over the years.

Far from being ‘new’ or ‘experimental’, tidal turbines are now well-established at several key sites in the UK, producing power to local homes, businesses and cars. The pioneers are UK SMEs with many years of development, knowledge and experience behind them: Edinburgh’s SIMEC Atlantis, Orbital Marine Power and Nova Innovation are the Top 3 in terms of technology readiness and business longevity.

Their technologies ably address the challenges of extracting energy from the myriad of tidal sites, generating a power supply that is clean, secure and predictable hundreds of years in advance. As such, this is a highly complementary power source to intermittent wind and solar.

Suitable for waters that would not easily accommodate offshore wind (both in terms of geography and cost of infrastructure), tidal turbines are ideal for communities living on islands, archipelagos, alongside gulfs streams and remote coastal areas. The UK developers mentioned have racked up an impressive list of contract wins with international governments and regional administrations, including India, Japan, Indonesia, Canada, France, Wales and Scotland.

The ability of tidal stream turbines to deliver baseload power to the grid provide a unique opportunity to displace coal, diesel and nuclear in many of these regions – something that solar and wind are unable to do. They also save investment in storage solutions, some of which are dependent upon rare earth metals. 

Most importantly for investor confidence, these technologies can evidence clear cost-reduction pathways. Europe’s flagship tidal energy project EnFAIT (enabling Future Arrays in Tidal), a €20 million project to build, operate and cleanly decommission a six-turbine tidal array in Shetland, is on track to deliver its promised 40% cost reduction in tidal energy by next year. Similar work is underway in the Channel region under the €45 million TIGER project that is led by our Cornwall office, providing further cost reduction evidence working with leading tidal developers and supply chains in the UK and France.

So much promise, but when?

We are talking about a sector ‘on the cusp of commercialisation’, but the burning question for investors is ‘If so, when?’ 

To date, tidal stream’s development and pioneer sites have been state-sponsored, receiving the same support that offshore wind enjoyed at the same stage of development. The next step is about achieving the scale-up that will make tidal power competitive with other forms of energy like nuclear and diesel. Our analysts expect that once we reach 1GW of installed capacity, tidal stream will be cost-competitive with other forms of energy (at £90 per megawatt hour). That is an extremely fast trajectory when you consider that it took offshore wind 2.5GW of installation to get to £125 per megawatt hour! 

We know this is achievable too: using current technologies, we can extract 12 times that needed capacity from just 30 key sites across the UK (11% of the UK’s net electricity supply). What is more, investors that back this expansion will have first-mover advantage in an ocean energy market that will be worth £76 billion by mid-century.

Get the inside track at our free lunchtime webinars

Investing in technologies that are outside of the generalist renewables portfolios requires specialist knowledge.  That’s why, starting on 24thNovember 2021, we are organising weekly lunchtime webinars where you will meet the CEOs of the UK’s leading tidal stream companies, renewables experts and policymakers in short, 30-minute sessions. Register now

The danger of Methane highlighted during COP26

UK Investor Magazine
-
0
The danger of Methane highlighted during COP26

Carbon has long been the most public target for governments and business working to fight climate change. However, the Biden administration took the opportunity presented by COP26 to unveil further measures in the battle against Methane.

Methane is a potent global warming gas. The gas is more than 80 times more powerful than carbon dioxide over a 20-year period and is a significant contributor to global climate change.

President Biden took steps this week to reduce the potential harm of methane by using the backdrop of COP26 to announce measures aimed at the oil and gas industry.

Biden has said the oil and gas industry is “the largest industrial source of methane emissions in the United States.”

Under the United State’s Clean Air Act, oil and gas companies will be required to measure methane emissions, utilise early warning systems and adopt new technology to reduce methane emissions.

“Proposals represent essential progress and long-demanded action to rein in methane emissions from oil and gas operations,” said Julie McNamara, deputy policy director in the Climate and Energy Program at UCS.

“For too long, we’ve known the damaging impacts of this potent heat-trapping pollutant, known that oil and gas operations continue to be a major source of it, and known that solutions to drive rapid reductions across the sector already exist–yet still, oil and gas operations continue to release untenably high and entirely preventable methane emissions. This is no accident, but rather the result of a concerted industry lobbying campaign to block, delay, and roll back federal regulations.

“Swiftly reducing methane emissions will result in significant and much-needed near-term climate progress.”

The UK government says they have reduced Methane emissions by 60% over the past three decades. Over 100 countries joined a pledge to reduce methane emissions this week but China, Russia, India and Australia declined.

The important role an EIS can play within a modern investment portfolio

Oxford Capital
-
0
The important role an EIS can play within a modern investment portfolio

Tax efficiency, diversity and investment returns are three of the key factors that investors look for from their existing investment portfolio. But are investors missing a trick by not considering an Enterprise Investment Scheme (EIS) as part of their portfolio. Recent research suggests that only around 30% of financial advisers make use of tax advantaged investments such as EIS – are the other 70% missing a trick by not making use of them, and are their clients missing out on what can not only be a great diversifier, but also an incredibly effective tax planning tool?

EIS can be a great diversifier. Traditional investment funds will not provide investors access to early-stage companies, and through an EIS an investor can access investments into some of the newest, most vibrant and exciting companies the UK has to offer. They have minimal correlation to global stock markets too – they are less likely to be affected by economic shocks or significant falls in global stock market indices. 

EIS can provide investors with the potential for significant capital growth, but unlike traditional investments such as shares and fixed interest, the returns will be based on the growth of the business, and increase in the value of the underlying companies, rather than dividend and income payments, which has provided the majority of investment returns for decades, particularly in the UK. There is a long history of EIS funded companies making their investors outstanding returns on investment, but this shouldn’t take away from the fact that they are, and always will be high risk investments. Therefore, it is important that any investor who considers EIS has the correct risk profile, capacity for loss, and doesn’t envisage needing access to their funds for the medium term (5-7 years), as EIS shares are unquoted, and therefore illiquid.  An EIS should be viewed as something to compliment an existing portfolio, not something to replace it.

So how can an EIS compliment an existing portfolio? As mentioned, it can provide diversification, and the potential for increased investment returns, but the biggest benefit when considering its place within a portfolio is the tax reliefs on offer, and how they can interact with an investor’s existing investments.

Some investors will be happy with the tax efficiency afforded to them through tax-free ISAs and annual CGT allowances. However, when an investment portfolio or a gain reaches a certain size, these tax breaks simply don’t cut it anymore. No other investment in the UK offers the generous tax benefits afforded to EIS investors:

  • Income tax relief: 30% on up to £1m invested, increasing to £2m if at least £1m is invested in “knowledge intensive” businesses. Putting it simply, if you earn £100,000 per year and invest £50,000 in to an EIS, once you have received your EIS3 certificates you would be able to reduce your income tax payment by £15,000.
  • Capital Gains Tax deferral: A CGT liability can be deferred indefinitely if invested in to an EIS. This gain could have occurred up to 3 years before or 1 year after the date of EIS investment. This relief can be of significant benefit to an existing portfolio of traditional investments – a portfolio of direct shares, funds or property that has benefitted from significant growth will be liable to CGT. While investment growth is great, the amount of CGT payable on the gain can make some investors reticent to liquidate their holdings, so deferring via EIS can be a very attractive option.
  • Tax free gains: All gains on EIS investment are tax free if the investment is held for at least 3 years.
  • Inheritance Tax relief: The underlying assets in an EIS qualify for Business Relief (BR), which means that after holding the asset for 2 years they will become exempt from IHT if the investment is still held upon death.
  • Loss Relief: Significant downside protection, which provides relief at the investors marginal tax rate after initial income tax relief. EIS losses can be offset against either CGT or taxable income. The UK government is effectively underwriting a large chunk of downside risk – the maximum loss an additional rate taxpayer can incur is 38.5% of their invested capital. Again this benefit can be used to help deal with a capital gain from another asset in an investors portfolio.
  • Business Investment Relief (BIR):A UK resident/Non-Domiciled investor can make use of offshore funds to invest in to EIS without having to pay the remittance charge.

In summary, an EIS offers:

  • Greater tax efficiency, not just within the EIS itself, but for an investors overall portfolio
  • Greater diversity, an asset class and companies not available within traditional funds
  • Potential for improved investment returns

For more information on the Oxford Capital Growth EIS, click here.

British Airways owner posts loss, shares fall

Safiya Bashir
-
0
British Airways owner posts loss, shares fall

The owner of British Airways, IAG, reported a €2.6bn (£2.3bn) for the first nine months of 2021.

Shares in IAG fell 3% this morning as it also predicted full-year losses to hit €3bn. In the three months to the end of September were just 43% of pre-pandemic levels.

However, the UK-US flights are set to open on Monday, which will boost passenger numbers.

“The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry. British Airways is serving more US destinations than any transatlantic carrier and we’re delighted that we can get our customers flying again,” said  Luis Gallego, IAG boss.

“We continue to capitalise on surges in bookings when travel restrictions are lifted.”

Richard Hunter, from Interactive Investor, commented on the airlines results: “Cash operating costs for the third quarter were €260m per week, underlining the need for the airline to return to some kind of normality as soon as possible. A cocktail of borrowings which have been necessary to keep the company afloat has resulted in a net debt figure which now stands at €12.4bn”.

Inflation expected to hit 5%

Safiya Bashir
-
0
Inflation expected to hit 5%

The Bank of England has predicted that inflation will rise to 5% over the next year.

UK wages will not be able to keep up with inflation, leading to struggles for households across the country.

Bank of England governor Andrew Bailey told the BBC: “I’m very sorry that’s happening. None of us want to see that happen. Inflation is clearly something that bites on people’s household income. I’m sure they’re already feeling that in terms of prices that are going up.”

Currently, inflation is ahead of the Bank of England’s 2% target at 3.1%. It is predicted to rise to 5% by next April.

Economics professor at Dartmouth College in the US criticised the Bank of England for the predictions. He said:

“We have no historical precedent for what’s happened. We’ve never seen a shock of this kind and the big thing we are seeing at the moment is the furlough scheme is coming off, there is going to be an increase in taxes on National Insurance [and] universal credit was just cut.

“So, the central bank really hasn’t a lot of clue what is going on. This is a really big uncertain world and everybody should tread cautiously. I’m afraid I have to say… you have to take what the governor of the Bank of England and the Monetary Policy Committee said with a very large pinch of salt.”

1...818819820...1,778Page 819 of 1,778