VietNam Holding pulls out of only private equity investmemt

Liam Roche
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VietNam Holding pulls out of only private equity investmemt

The realisation will not have a material impact on Vietnam Holding’s net asset value

Vietnam Holding (LON:VNH) confirmed it has entirely pulled out of its position in ABA as the trust paid off the bonds and accrued interest.

In July 2019 Vietnam Holding made a private equity investment amounting to 139.8bn Vietnamese dong (VND) via convertible bonds.

“The investment was a private-equity transaction, structured with a negotiated set of terms and conditions, including the right to convert into equity once the foreign ownership limits allowed,” the trust said in a statement.

Towards the end of 2020 Vietnam Holding decided not to exercise the conversion option, and instead seek repayment of the bonds.

The realisation will not have a material impact on Vietnam Holding’s net asset value, the company said.

As at the close of business on 25 June 2021 and based on an estimated NAV, 95.87% of VNH’s assets are in listed equities and 4.13% in cash. There are no unlisted positions in the portfolio.

Earlier this month the UK Investor Magazine Podcast was joined by Craig Martin, Chairman of Dynam Capital, manager of the Vietnam Holding Investment Trust.

Vietnam Holding provides exposure to the evolution in the Vietnamese economy through banking shares, but also steel and construction companies.

Vietnam’s economy is becoming increasingly digital with many Vietnamese using smart phones for digital transactions, but with around 60% of the population still unbanked, there is significant opportunity for greater adoption as the middle class grows.

UK regulator bans crypto exchange Binance from UK

Liam Roche
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UK regulator bans crypto exchange Binance from UK

FCA issued a warning to Brits using the crypto exchange

Binance, one of the world’s largest crypto exchanges, has been told to halt its activities by the Financial Conduct Authority (FCA), one of the largest cryptocurrency exchanges in the world.

In addition to ruling that Binance cannot conduct any “regulated activity” in the UK, it sent out a warning about the exchange, suggesting people beware of its adverts making claims about the performance of investments on the platform.

Binance has been given until Wednesday evening to comply with the FCA ruling.

It comes as regulators across the world are coming down on crypto exchanges, often citing its use for illicit activities.

At present, Binance Group is based in the Cayman Islands, whereas Binance Markets Limited is an affiliate company based in London. The company has a range of other entities spread all over the world.

“Binance Markets Limited is not permitted to undertake any regulated activity in the UK. This firm is part of a wider Group (Binance Group). Due to the imposition of requirements by the FCA, Binance Markets Limited is not currently permitted to undertake any regulated activities without the prior written consent of the FCA,” read a statement by the FCA.

“No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK,” it continued.

The FCA does not regulate cryptocurrencies, however it does regulate cryptoassets. Companies must have authorisation from the regulator in order to sell or advertise such products in Britain.

This means that UK customers are not allowed to use Binance’s offering to bet on whether the price of a cryptocurrency goes up or down.

They are, however, still allowed to use the website to buy and sell crypto.

In January 2020 the FCA became the anti-money laundering and counter-terrorist financing supervisor of UK cryptoasset businesses, under the Money Laundering Regulations (MLRs).

Crypto firms wishing to continue their operations in the UK were required to register with the FCA in order to adhere to the MLRs.

However, the regulator failed to assess and register all the companies that had applied in time for the initial deadline.

This meant many firms faced the prospect of being legally required to halt their business activity in the UK.

Tip: A money magnet

Jon Levinson
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Tip: A money magnet

Electric vehicles and offshore wind turbines require specific rare earths that are not easy to find. So, a company with a well-advanced project is highly valuable - particularly when it is outside of China, which dominates the market.
Neodymium-Praseodymium (NdPr) oxide is the key element in the manufacture of magnet metals, required for electric vehicles and demand is only going to increase over the next decade.
One fully listed mining company has an attractive rare earths project and the backing of the government of the country where that project is based. It is also planning a new processin...

UK sales at three-year high as shoppers rush back to the high street

Liam Roche
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UK sales at three-year high as shoppers rush back to the high street

Stock levels fall to their lowest point in 38 years

UK retailers have disclosed their highest seasonal sales levels for more than four years in June, the CBI has revealed.

Consumers flocking back to the high street have caused stock levels to fall to their lowest point in nearly 40 years.

“This was the latest sign that the success of the vaccination programme is feeding through to stronger consumer confidence,” CBI economist Ben Jones said.

The Bank of England is monitoring whether bottlenecks in supply due to the pandemic will result in inflationary pressures going forward.

“After a generally gloomy 2021 so far, the sun finally shone for retailers in June, with seasonal sales volumes the strongest since November 2016,” said Jones.

Such is the of demand that retails are struggling to keep pace with stock levels compared with expected sales reaching the lowest level since the CBI began recording figures back in 1983.

Clothing shops’ sales are down for the time of year, as the lack of clarity of travel restrictions means people are delaying purchasing new items ahead of the summer.

The CBI expects sales to continue into July with some exceptions.

“The sector remains a long way from a full recovery,” said Jones. “The return of demand is patchy, with inner-city footfall still well down. The outlook is clouded somewhat by supply pressures, with stocks seen as too low compared with expected sales, as logistical and capacity challenges continue to hamper global activity.”

Tanzania central bank is working on implementing crypto

Liam Roche
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Tanzania central bank is working on implementing crypto

Elon Musk and Jack Dorsey have agreed to have a sit down discussion about bitcoin

Tanzania’s central bank is making progress on a directive issued by president Samia Suluhu Hassan to facilitate the adoption of cryptocurrencies.

The move follows the East African country banning crypto back in 2019, as the president now describes the impact of crypto as inevitable

“In the financial sector, we have witnessed the emergence of blockchain technology or cryptocurrency,” Hassan said at the opening a new central bank branch in the northern town of Mwanza recently.

“Many countries in the world have not accepted or started using these currencies. However, I would like to advise the central bank to start working on those issues. Just be prepared.”

The comments swiftly follow El Salvador becoming the first Nation on earth to make bitcoin legal tender, freshening up the debate over the future role of crypto in the world economy.

Back in November 2019, Tanzania banned cryptocurrencies, saying they were not recognised by the country’s laws.

Analysts have suggested that while the announcement has been made, progress could take some time.

“The change in tone from Tanzania’s president is clear, but wait to see whether the central bank will take concrete steps towards embracing cryptocurrencies,” Faith Mwangi, an analyst at Tellimer, told Reuters.

At the time of writing, the bitcoin price is at $32,911, down 3.27% in the last 24 hours. It follows a tumultuous past 30 days for the cryptocurrency, which has fallen from over $40,000 to below $32,000 on two separate occasions in the time period.

Further bitcoin news came from Twitter as Tesla chief Elon Musk and the founder of the social media site Jack Dorsey appeared to agree to have a sit down discussion to discuss the cryptocurrency.

“For the Bitcurious? Very well then, let’s do it.” Musk said in response to Dorsey’s pleas.

https://twitter.com/elonmusk/status/1408348996532383744?s=20

Rio Tinto share price may have peaked as investment bank anticipates fall in iron ore price

Liam Roche
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Rio Tinto share price may have peaked as investment bank anticipates fall in iron ore price

Rio Tinto Share Price

The Rio Tinto share price (LON:RIO) is up by 1% on Friday, bringing the mining giant to 5.53% since the beginning of the year. Following a steaming run towards the end of 2020, the FTSE 100 company’s performance has steadied out this year. The rise of the Rio Tinto was unsurprisingly aligned with the soaring price of iron ore. However, there are now question marks over the longer-term prospects of the commodity, which could have kick-on effects for the Rio Tinto share price.

Iron Ore

Analysts are way less bullish than before when it comes to iron ore. Analysts at UBS believe the commodity used to make steel could face some issues that put pressure on its price level over the coming months.

This includes concerns over excess supply. Brazilian iron ore is seeing an increase in supply levels, while there are abnormally large stockpiles at Chinese ports, as the country attempts to control the price of commodities.

UBS analysts say iron ore could drop by 50% or more ‘over 12-18 months’ and add that the current Rio Tinto share price is therefore unattractive based on the ‘normalised iron ore price’.

Price Target

UBS downgraded its buy rating for Rio Tinto from ‘neutral’ to a ‘sell’ this week. The investment bank added that Rio Tinto would still generate strong cash flow, while its dividends should remain high in 2021.

However, it added that it does not believe this will be sustained by Rio Tinto over the longer-term.

“Near-term risks for the commodity complex are increasing with the Fed turning more hawkish & China taking action to deflate commodities (eg by selling strategic base metal reserves note); we expect this to accelerate the unwinding of the ‘reflation trade’.”

After delivering outstanding long-term returns of 171.8% over five years, the Rio Tinto share price may have, for now at least, peaked.

JD Sports share price spends five consecutive days in the green despite bonus scandal

Liam Roche
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JD Sports share price spends five consecutive days in the green despite bonus scandal

JD Sports Share Price

The JD Sports share price is heading up the FTSE 100 on Friday on a week that has seen the sportswear brand spend five consecutive days in the green. Including its 3.23% gains on Friday, at the time of writing, the JD Sports share price, at 942.03p, is up by 15.67% since the beginning of the year. The clothing company has now well surpassed its pre-pandemic peak of 878.8p. As lockdown restrictions continue to ease, investors could look towards JD Sports, as it will look to capitalise on increased footfall. However, despite being in a strong financial decision, aa furore over bonus payments could derail the JD Sports share price.

Performance

Going back to before the pandemic, JD Sports was performing consistently well. The sportswear company managed to increase its revenues by 29.5% by the end of 2020, compared to thee previous year.

JD Sports increased its sales by 1% during thee pandemic. However, when taking into account the fact its physical stores were closed for large parts of the year, this can be considered an impressive signal of its ability to make online sales.

JD Sport’s net debt is at £700m, however ended the last financial year with £964 million in cash holdings. The company had a net debt/EBITDA ratio of 0.9, in addition to LT-debt-to-assets ratio of 32.7%.

Investor Revolt over Bonuses

Despite the company’s balance sheet looking pretty healthy, some worrying news emerged last week for investors. The possibility of a revolt by major investors has emerged as hefty bonuses were paid out despite the company to repaying the government Covid related support.

Sky News reported last week that the Investment Association’s influential IVIS service has ‘red-topped’ JD Sports over votes on bonus payments and its future remuneration policy.

The alert adds IVIS to recommendations from other proxy advisers, one being Glass Lewis, which have told investors they should oppose the board of JD Sports.

Having seen his base salary reduced during the initial stage of the pandemic, executive chairman Peter Cowgill, received a £5m pay package last year.

The leading sportswear brand also received more than £60m from the furlough scheme and £38m in business rates relief. JD Sports refused to pay the sums back, despite other major retailers doing so.

JD Sports will be holding its annual meeting on the first day of July when investors could get aa response to this issue as well as a better understanding of the company’s outlook for the future.

Nearly four in ten homes are selling for asking price or more

Liam Roche
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Nearly four in ten homes are selling for asking price or more

The average property price in Britain is now worth £336,073

The amount of homes selling for at least the asking price is rising as buyers seek new homes in a busy market.

Since the housing market reopened last year, this percentage has been increasing, culminating in a record high.

According to data by Rightmove, as recorded in January this year, 37% of homes sold in England and Wales achieved their final asking price or above.

Nationwide Building Society reckons that annual house price inflation has jumped since then, by 10.9% in May, therefore the 37% figure could be higher.

As housing activity in the UK increased on the stamp duty holiday, the number of buyers surpassed the number of sellers, causing competition in terms of prices.

With the average property in Britain worth £336,073, house prices are at record highs.

However, as the stamp duty holiday approaches an end, there are signs of a slowdown in the market.

Managing director of Ascend Properties Ged McPartlin told City AM: “It’s certainly a sellers market at present and despite the initial stamp duty holiday deadline fast approaching, we continue to see multiple buyers attempt to outbid each on what limited options are available which is driving up the percentage of asking price achieved.”

“The North of England continues to lead the way in terms of the strongest performing regions and with many sellers achieving near enough what they’re marketing their property for, it’s no wonder there has been such steep rates of house price growth of late.”

“We may see this heightened market activity subside slightly once the current stamp duty holiday is done and dusted, however, the ongoing imbalance between supply and demand should ensure this trend persists well into next year.”

FTSE 100 edges higher on US infrastructure plan and UK’s green light update

Liam Roche
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FTSE 100 edges higher on US infrastructure plan and UK’s green light update

The FTSE 100 edged 0.1% higher to 7,118, with energy stocks leading the way.

“It’s quite ironic that oil producers have been a key source of strength for UK stocks this year given how so many people had declared that industry dead. Brent crude continued to trade above $75 per barrel though that could come under pressure if oil producers’ cartel OPEC decides to increase supply,” said Russ Mould, investment director at AJ Bell.

“Large government spending plans once again came to the rescue of the markets, with US stocks last night racing ahead, followed by gains across Asia on Friday. US banks also passed their stress tests, adding another catalyst for markets,” says Mould.

The UK Government’s decision to put Malta and Ibiza on the green list for travel gave some renewed hope for the travel sector and lifted shares in EasyJet, Ryanair and International Consolidated Airlines. However, the industry is still frustrated at restrictions which continue to cast a cloud over whether the public will be able to freely visit popular destinations this summer such as mainland Spain and Greece.


“Airlines continue to face pressure on earnings, yet other sectors are enjoying a post-lockdown boost. Among them is the car retail sector where Marshall Motor’s shares jumped 3.4% after it issued a very positive trading update. Used car prices are shooting up and demand remains very strong. The key question is whether this is a short-term boost as individuals seek alternative ways to travel to work than use public transport, or whether the car retail sector is going through a long-term structural change.”

FTSE 100 Top Movers

JD Sports (4.54%), CRH (2.21%) and Ashtead Group (2.19%) are heading up the FTSE 100 as the week draws to a close.

Trailing the pack on the UK index is Flutter Entertainment (-2.40%), M&G (-2.09%) and Persimmon (-1.66%).

Green list addition not enough says travel chiefs

Liam Roche
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Green list addition not enough says travel chiefs

Fares to the new destinations on the green list surged immediately

Airline industry leaders have warned that the government’s recent expansion of the UK’s green list is not sufficient enough.

As of Wednesday, people returning from 16 places will not be required to undergo a quarantine.

Grant Schapps, the transport secretary, also confirmed that plans are in place for fully vaccinated people returning from amber list countries to not have to undergo a quarantine. This could be put into place “later this summer” Schapps said.

easyJet has come out and said the government’s timetable doesn’t go far enough, adding that there has been a huge surge in people booking holidays to countries on the green list.

Chief executive of easyJet Garry Wilson has also questioned why certain places, including the Canary Island and Greek Islands, were not added to the list.

Fares to the new additions to the green list surged immediately after they were announced as being quarantine-free destinations, the Independent revealed.

Flights with British Airways from London Heathrow to Funchal in Madeira more than doubled after the announcement earlier this week. While flights from Manchester to Malta via easyJet saw a 25% increase.

Ibiza’s director of tourism said the island would welcome people “with open arms” if the UK government added it to its green list, the Financial Times reported.

The UK government plans to review England’s traffic-light system for overseas travel every three weeks.

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