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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Cic Mining | CICR | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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| 0.00 | 0.00% | 4.75 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 4.75 | 4.75 |
| Top Posts |
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Posted at 22/5/2013 08:41 by share_shark You may well be able to see why our friends from Saudi Arabia are so interested in CICR. Also the possibilty to store oil in bunkers and sell when the price suits the companies must be a huge attraction for the Saudis.From the article below.............th "OPL 240 and Asaramatoru Marginal Oil field. Tianjin Energy is also actively building a portfolio of EPC contracts in the Power Generation and Infrastructure Development sectors whilst offering engineering services to the Oil and Gas industry in Nigeria. So this is a long read but I am unable just to provide you with a link. So for further info on Tianjin Energy and Nigeria here is the article, which yu may wish to read ,if you have a mind to. Durosola A. Omogbenigun B.Eng., M.Sc., MBA (Yale Univ.) Duro is promoting Integrated Resources Ltd., as Chief Executive Officer, engaging the company in bulk trading of petroleum products. He was also responsible, for the start up of Tianjin New Highland Petroleum Company Limited (TNHP), now Tianjin Energy Resources Ltd, a company having chinese affiliations. Tianjin Energy has been engaged in the acquisition of Oil & Gas assets in Nigeria notable of which is the acquisition of interests in OPL 240 and Asaramatoru Marginal Oil field. Tianjin Energy is also actively building a portfolio of EPC contracts in the Power Generation and Infrastructure Development sectors whilst offering engineering services to the Oil and Gas industry in Nigeria. Duro does these with relevant experience in the Oil Industry having worked at the executive management level of Mobil Oil Nigeria plc. as a Senior Planning Associate and Cash Planning & Investment Manager. In these positions, Duro also liased with Mobil Producing Nigeria Unlimited to develop planning assumption parameters for forecast planning exercises while managing Mobil Oil's US$300 million insurance portfolio. His experience also includes business process re-engineering and LPG supply optimization strategy. Duro is a well trained business professional having undergone a rigorous MBA at Yale School of Management where his subject concentrations included Corporate Finance, Marketing, Competitive Strategies and Operations Management. He was then hired from Yale by Mobil Oil Corporation (MOC) Fairfax, Virginia, where he worked for about a year in Africa division before transferring to the Nigerian affiliate. Since leaving Mobil, Duro has also been engaged as an Independent Consultant in the downstream oil industry on various occasions, the most interesting of which was to facilitate the development of the 1997 Downstream Oil Industry survey for Agusto & Co. (Industry Analysts & Financial Consultants). Duro currently supports IBFC Agusto and Petronomics Ltd. on downstream and upstream oil industry training activities to audiences including Bankers and employees of Oil Majors. Prior to this, Duro trained as an Electrical Engineer where he obtained a Master of Science degree in Controls and Instrumentation from Obafemi Awolowo University and a Bachelor of Engineering in Electronics from University of Ilorin. Duro won various scholarship and merit awards while in school and the coveted Total Quality Management award in Mobil. Duro also sits on the Boards of Bluefone Ltd (Chairman; marine logistics solutions company), LYK Engineering Ltd (investors in Akwa refinery & Ibom Power Company) and R&J Ltd. He is a shareholder in Tianjin Energy Resources ltd which owns OPL240 and interests in two marginal fields. In the above roles, Duro worked in various teams to develop: Power Purchase Agreement, Gas Sales Agreement, Road Shows to raise finance for IPC, negotiation involving divestment from IPC, development of Joint Operating Agreement and Production Sharing Agreement for holding interest in oil blocks, Bulk Petroleum Product Handling Agreement both for crude oil and refined product storage. Recently, Duro has also been involved with a Build Operate and Transfer (BOT) road development project where he developed the Confidential Information Memorandum (CIM) for investors and negotiated the concession agreement with Lagos State in Nigeria. Back to Management Team |
Posted at 18/5/2013 22:20 by r 2 d 2 May 17, 2013Gold's Allure Is Starting to FadeBy MATT DAY and FRANCESCA FREEMANGold prices skidded for their seventh consecutive trading session Friday, on track to mark the precious metal's longest losing streak in four years. Recently, gold futures were trading 0.9% lower at about $1,374 an ounce on the Comex division of the New York Mercantile Exchange. Traders pointed to the stronger dollar as a major culprit behind the latest leg of gold's decline. A dollar rising against other major currencies is a signal that many investors have abandoned inflation concerns, especially as some Federal Reserve officials have become more vocal about scaling back stimulus measures. In the years immediately following the financial crisis, some investors had turned to gold as a hedge against inflation and a weaker dollar. Late Thursday, San Francisco Fed President John Williams said he's open to cutting the central bank's bond-buying program "as early as this summer," provided the U.S. economy continues to grow. A stronger dollar also dims gold's allure for buyers using other currencies because for them, gold prices have stayed relatively high. "All odds are stacked against gold," said Joyce Liu, an investment analyst at Phillip Futures. Chart watchers also point to the fact that gold has fallen below a key support at $1,384 an ounce. The next level where prices are supported by technical trends is $1,363, they say. While this selloff is smaller than gold's record plunge in mid-April, the steady drop underscores gold's status as an out-of-favor investment in the current environment of ultralow interest rates. The characteristics beloved of "gold bugs," the sizable army of large and small investors who swear by the metal, are precisely what bears are feasting on. Unlike most other assets, gold doesn't offer a steady return, or yield, and it is often seen as protection against inflation or currency devaluations. At present, however, global economic growth is sluggish, interest rates in many developed countries are at or near record lows, and investors of all stripes are scrambling to find higher-yielding assets. "There's basically no inflation, equities are taking off, and we've got a strong dollar," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Ore. "All of those are just eroding away the investment value of precious metals." Mr. Shaffer this week recommended his clients bet on lower gold prices. On Thursday, bears seized on a World Gold Council report showing that total demand for gold fell 13% in the first quarter, to a three-year low of 963 tons in the period. The decline was driven by investors yanking money out of gold-backed exchange-traded funds, and those redemptions have accelerated since March, according to ETF Securities, an ETF sponsor and data provider. The redemptions have resulted in a decline in total gold ETF holdings of 380 metric tons, to the lowest level since July 2011, according to ETF Securities. That decline is more than the combined annual gold production of the U.S. and Canada. To compare, 279 tons of gold flowed into ETFs in 2012, according to the World Gold Council. The selling by ETFs outweighed a rise in demand for jewelry, bars and coins, the council said in its report. Numerous factors are sapping investors' interest in the precious metal, which is regarded as a haven because historically it has maintained much of its value in times of financial and political turmoil. Through 2012, gold handed investors 12 consecutive years of gains. The global economy, while not in perfect health, has for now stayed clear of a crisis. Meanwhile, many stock markets are trading at record levels, further diminishing the allure of zero-yielding gold. Investors "prefer to put their money to work elsewhere," said Nicholas Brooks, director of research with ETF Securities. "Those flows are overwhelming other demand. It's difficult to gauge how much of the selling has already been done." Analysts with Deutsche Bank DBK.XE +2.64% estimated in a report this week that institutional investors could sell as much as another 226 tons if market forces continue to act against gold. "There's a herd mentality" among gold investors, said Rachel Benepe, a portfolio manager with First Eagle Gold Fund, with $1.9 billion in assets. "When [gold] had this weakness over the last couple months, that scared people. They've made the decision to sell." Ms. Benepe said the gold fund, along with other First Eagle funds she advises, had kept their gold investments steady in an effort to hedge against weakness in paper currency and other assets. "The printing presses are on across the word," Ms. Benepe said, referring to the easy-money programs deployed by many central banks. "Eventually, that will matter." Other investors are taking the opposite view. John Workman, chief investment strategist with Convergent Wealth Advisors, said the firm late last year recommended that clients trim their gold holdings by about 25%. He cited gold prices that have stagnated despite more stimulus from the Federal Reserve in the form of asset purchases, the same money printing that galvanized gold bugs after the financial crisis. Falling prices were a signal that many investors just weren't concerned anymore that the stimulus measures would stoke inflation and weaken the dollar. "We felt that at that point, how much more upside is there?" Mr. Workman said. |
Posted at 18/5/2013 22:18 by r 2 d 2 May 18, 2013Gold comes under pressure as institutional investors fleeBy Emiko Terazono in LondonGold came under pressure this week, hitting a one-month low as financial investors turned to equities and continued to liquidate their holdings in the yellow metal. The weakness came as the latest filings with the US Securities and Exchange Commission revealed that Northern Trust and BlackRock were leading sellers of the US SPDR GLD exchange traded fund in the first quarter of 2013. John Paulson, the billionaire hedge fund manager and the largest owner of shares in the GLD fund, maintained his position. ETF selling had continued into April, said Commerzbank. "The exit on the part of institutional investors is likely to have continued in the second quarter," said the bank. Institutional investors have been consistent sellers of ETFs since late last year, and net outflows from the sector totalled 177 tonnes in the first quarter, according to the World Gold Council, the lobby group for gold miners. Gold demand totalled 963 tonnes, down 13 per cent in the first three months of the year, compared with the same time last year, said the council. The gold price fell 5.5 per cent on the week to $1,367.65, falling below a technical support level of $1,400 a troy ounce. Although buying of jewellery and coins has provided support for gold amid the consistent selling by institutional investors, analysts wonder how long the physical purchases can last. According to the World Gold Council, Chinese demand rose 20 per cent in the first quarter, boosted by a 19 per cent rise in jewellery demand and a 22 per cent rise in bar and coin investments. Indian purchases increased 27 per cent, with jewellery demand up 15 per cent. Suki Cooper, precious metals analyst at Barclays, said: "As we enter the period beyond seasonal demand, gold prices are likely to find reduced support from the physical market and are exposed to further downside risk in the near term." One factor that could damp enthusiasm for gold in India, are the new import restrictions by the Reserve Bank of India that were announced on Monday. The RBI in a circular said: "To moderate the demand for gold for domestic use, it has been decided to restrict the import of gold on consignment basis by banks, only to meet the genuine needs of exporters of gold jewellery." Barclays forecasts an average gold price of $1,350 a troy ounce in the second quarter of this year, while Credit Suisse predicted that with worries about inflation and a eurozone collapse easing, the yellow metal would fall to $1,100 in a year's time. |
Posted at 18/5/2013 22:18 by r 2 d 2 "Gold is going to get crushed"By Mike King - May 17, 2013So says Ric Deverell, head of commodities research at Credit Suisse Group AG. Mr Deverell sees gold trading at US$1,100 an ounce in a year and below US$1,000 in five years. He says the lower prices are unlikely to lure more central bank buying. While central banks like to have diversified reserves, their managers wouldn't want to lose money if gold enters a period of declines, he said. "The need to buy gold for wealth preservation fell down and the probability of inflation on a one to three year horizon is significantly diminished", he has told Bloomberg. Investors have lost faith in the world's traditional store of value, despite central banks continuing to print money on an unprecedented scale. However, it seems retail investors have seen the current price as an opportunity to buy gold bullion, bars and coins. The US Mint ran out of its smallest gold coins in late April, while the Perth Mint said volumes jumped to a five-year high. India's gold imports are expected to rise by 47% to 225 tons in the second quarter to meet consumer demand, according to the All India Gems & Jewellery Trade Federation. But Mr Deverell says this is just bargain-buying, bringing forward activity, but is not massive buying. Possibly contradicting Mr Deverell's comments somewhat, the World Gold Council issued a report showing central banks bought 109 tonnes of gold in the first quarter. Despite the retail and central bank buying though, fear over where the gold price will head is driving the market. With no real intrinsic value, and detached from its normal drivers such as inflation, it's anyone's guess where the gold price will be in six months or six years. A sudden global crisis could trigger a massive rise in the price; or the gold price could just meander down or crash below US$1,000 an ounce. At that price, it's estimated most gold miners will be lucky to break even, and could offer opportunities to pick up gold miners on the cheap. As the chart below shows, gold equities have fallen much further than the gold price, since the start of this year. Overnight, the gold price lost 0.7% to US$1,387 an ounce. |
Posted at 16/4/2013 13:47 by share_shark U.S. Stock Futures Rally As Gold Bounces, Earnings Provide A Lift PrintAlert --Stock futures rally on back of gold's bounce, strong upbeat earnings --Gold futures gain after previous session's historic slide, but sentiment remains shaky --Goldman Sachs and Dow components Coca-Cola, Johnson & Johnson reported better-than-expected 1Q earnings --Data on housing starts, retail inflation, industrial production on tap By Tomi Kilgore NEW YORK--U.S. stock futures rallied, rebounding from the previous session's sharp slide, with some stabilization in gold prices and some upbeat earnings reports helping provide an early spark. About 90 minutes ahead of the open, Dow Jones Industrial Average futures climbed 107 points, or 0.7%, to 14618. On Monday, the Dow dropped 266 points, the biggest one-day point decline since Nov. 7, as a plunge in gold and other commodity prices rattled investors. Standard & Poor's 500-stock index futures rose 12 points, or 0.8%, to 1555 and Nasdaq 100 futures advanced 23 points, or 0.8%, to 2806. Changes in stock futures don't always accurately predict stock moves after the opening bell. Front-month April gold futures rose 1.5% to $1,380.70 an ounce. On Monday, gold tumbled $140.40 an ounce, or 9.4%, to suffer the biggest one-day dollar decline in 33 years. Sentiment remained shaky, however, as Goldman Sachs, which last week recommended initiating bearish bets on gold, said prices could still decline further given positioning is stretched on momentum is to the downside. Among other base metal prices, May silver futures added 0.8% to $23.55 an ounce and May copper edged up 0.2% to $3.28 a pound. Meanwhile, May crude oil futures declined 0.1% to $88.59 a barrel. "We've had a big washout...and with the selling pressure now easing, we're getting a bit of a bounce," said Colin Cieszynski, senior markets analyst at CMC markets. "It might still take a little while for [gold's tumble] to reverberate through the market, but it does seem like the worst declines are behind are us." Separately, earnings season continued in upbeat fashion. Dow components Coca-Cola climbed 2.8% and Johnson & Johnson advanced 1.3% after the company's reported first-quarter earnings that exceeded analyst estimates. Banking giant Goldman Sachs tacked on 0.6% after also beat earnings and revenue forecasts. Besides the volatility in commodities markets and a flood of earnings reports, investors also have to contend with a deluge of data releases before the open. At 8:30 a.m. EDT, housing starts for March are expected to rise 1.7% on the month to a seasonally adjusted annualized rate of 933,000 and building permits are seen increasing 0.6% to 945,000. At the same time, the consumer price index for March is expected to slip 0.1%, or rise 0.2% excluding food and energy prices. March industrial production, due out at 9:15 a.m. EDT, is expected to increase 0.2%, and capacity utilization is forecast to tick up to 78.4% from February's 78.3%. European markets were broadly lower, with the Stoxx Europe 600 down 0.7% and headed for a third-straight loss, as weak data out of Germany offset the bounce in commodities prices. Germany's ZEW economic sentiment indicator dropped to 36.3 in April from March's 46.5, well below forecasts of 43.0. Most Asian markets extended declines, although China's Shanghai Composite bucked the trend by bouncing 0.6%, after closing at a five-month low on Monday. Meanwhile, Japan's Nikkei Stock Average lost 0.4% and Australia's S&P ASX 200 slipped 0.3%. The dollar fell against the euro but gained ground against the yen. Write to Tomi Kilgore at tomi.kilgore@dowjone |
Posted at 04/4/2013 11:23 by share_shark Thank you Mike.Much more clarity in your posts than mine . :-/.So whay havent we bought Japan ?. Oh but we have havent we.........Emsulsion Fuels. If you haven't bought Japan yet, what are you waiting for? The Pacific Alliance: a new Latin American superpower We need to talk about Vodafone Yesterday's close: FTSE 100 down 1.1% to 6,420... Gold down 1.14% to $1,557.95/oz... £/$ - 1.5130 From John Stepek, across the river from the city The market is used to being disappointed by Japan. Investors were clearly holding their breath this morning, as new central bank chief Haruhiko Kuroda prepared to announce his big plans for jump-starting Japan out of deflation. For once, they needn't have worried. After Kuroda revealed the central bank's latest decisions, the Nikkei 225 rocketed and the yen tumbled against the US dollar. Clearly, it worked. And the good news for investors in Japan is that this could be the final push needed to convince the wider market that this time, Japan really is on the comeback trail... The Bank of Japan proves itself In the wee small hours of the British morning, the yen was trading at around 92 to the US dollar. The Nikkei 225 meanwhile, looked like it was going to end down on the session. But after the central bank announced the results of its latest two-day meeting, the yen weakened to around 95 to the dollar. The Nikkei surged to end the day up by more than 2%. So what did Bank of Japan boss Kuroda already being described as Japan's Ben Bernanke do? The Japanese have been fiddling with monetary policy for so long that it's hard to keep on top of all the bells and whistles in their system. The short answer is that Kuroda promised to "do what it takes" to drive Japanese inflation up to 2%. In itself, that was enough to get investors excited. Prime Minister Shinzo Abe had showed signs earlier this week of rowing back from the idea that the 2% target was readily achievable. As for how it's going to do it: well, firstly, the Bank of Japan will buy 7 trillion yen-worth of bonds (roughly £50bn) each month. That's double what it currently buys, and a far bigger jump than the market had expected. In other words, it'll do more quantitative easing (QE) than the market had thought. Secondly, it has changed what it's buying. On the bond side, it will be buying longer-dated government bonds (up to 40-year maturities). So long-term interest rates will be squeezed lower. On top of that, it's also going to increase its purchases of even riskier assets such as exchange-traded funds and real estate investment trusts. So it won't just be using QE to buy government bonds. It's also printing money to buy equities, albeit in relatively small amounts. (This sounds extreme but believe it or not, the BoJ has been doing this for a while.) Thirdly, the BoJ has suspended its 'banknote rule'. This was a sort of speed limit on QE. It prevented the BoJ from buying more bonds than there were bank notes in circulation. Apart from anything else, this shows the BoJ is serious. As if all this wasn't enough, Kuroda had the backing of almost the entire BoJ board. So there's very little to stop him getting even more radical. Why is this different from what Ben Bernanke is doing? The point of all this is to get the Japanese economy moving again. In nominal terms (ie, without taking deflation into account), the Japanese economy is no bigger than it was in 1992, notes Peter Tasker in the Financial Times. Meanwhile, the strong yen has been punishing Japan's crucial export industries. Weakening the yen will boost exports. And encouraging nominal growth (even that driven by inflation) will help to improve the country's debt-to-GDP ratio. One reader raised a very good point the last time I wrote about this: how is this any different to what Federal Reserve chief Ben Bernanke is doing in the US? The answer is: it's not. And as far as I'm concerned, the jury's still out on how much good QE actually does for the real economy. You can easily make the case that the (very fragile) US recovery is down to its more aggressive treatment of the banks, the fact that its housing market crashed, and the fact that it can exploit shale oil and gas. But there's one thing that QE does seem to do: and that's boost asset prices. And with every other major nation in the world trying to trash or defend its currency, Japan can't stand by any longer and let itself be the one that carries the fall-out. What I also like about Japan is that even after the Nikkei 225 has risen by more than 40%, there's still a lot of scepticism about the market. Investors clearly expected the BoJ to disappoint them this morning. This may be the trigger that the sceptics need to convince them to join the party. In short, if you're not already invested in Japan, now looks like a perfectly reasonable time to start. We'll also be taking a closer look at the question of hedging your yen exposure in an upcoming edition of MoneyWeek. So far, we've been wary about hedging the yen if Japan does disappoint, the yen will strengthen, which would offset the impact of a falling stock market. But given the BoJ's determination, I can see why some of you might want to get full-blown exposure. If you're not already a subscriber, you can sign up for your first three issues free here. Got a comment on this article? Leave a comment on the MoneyWeek website, here. Until tomorrow, John Stepek Editor, MoneyWeek Our recommended articles for today... The Pacific Alliance: a new Latin American superpower - The 'Pacific Alliance' has brought together four of Latin America's most dynamic economies - and opened up huge opportunities for investors. James McKeigue looks at the best way to play the continent's new economic superpower: The Pacific Alliance: a new Latin American superpower. |
Posted at 15/3/2013 13:27 by ultrapunch Unfortunately, mikes5557, what you, or I, as small shareholders think is not going to have any impact on the CICR share price (unless we are a big investor!!) if the majority of investors at large are not interested in CICR or don't see any profit to be made out of buying it at the current price. This is where a charting technique such as Ichimoku Kinko Hyo can come in handy. It's basically just indicating the current attitude of investors towards CICR. Ichimoku is indicating that the current attitude to CICR, by investors, is negative. Well of course we can see that by looking at the CICR chart!! However Ichimoku is also predicting that this negativity could get worse in the short term until it starts issuing bullish signals again. Will it? We shall see!!Of course no charting technique can ever account for good, or bad, news coming completely out of the blue; unless of course that news has leaked!! |
Posted at 06/2/2013 23:10 by ultrapunch share_shark. You know much, much, more about CICR than I do. When I get the time I will read all the CICR RNS's and the AIM admissions document. However reading some of the recent RNS's, all issued on the 30th January, the information on those 33m shares sold for 2.5p varies depending on what RNS you read!!The 1st exerpt is from the "Working Capital" RNS and the 2nd from the 3rd Quarter results. The 1st excerpt mentions Benxi as the seller of the shares and the buyers as a syndicate of sophisticated investors. However the 2nd excerpt states that Mr Quan Hao owned the shares and implies that the buyer was the Balfour Fund. Who did own the shares and who bought them? Perhaps you can shed some light on this particular transaction share_shark? Are Hao and Benxi one and the same and is the Balfour fund just a syndicate of sophisticated investors and what's to stop them selling some of those shares, for a quick profit, in the market? "d) Benxi Shares The Company has been providing advisory services since 2005 to Benxi Steel Group. Benxi conducted a placement in the Company in 2005 and the Company held the placement shares namely 33,000,000 as security against service provided. The Company received approval to sell the 33,000,000 shares in the Company in respect of those services to a syndicate of sophisticated investors at a price of 2.5 pence per share (being the price at the time, the transaction was initially provisionally agreed) raising approximately GBP800,000. The transaction will enable further reduction in debt, reduce major shareholders interests and increase free float common stock." .................... "Working Capital Funding The Board of CIC is pleased to announce that it has agreed that Balfour Fund (ÒBalfourÓ) will provide the Company with an additional £669,054 of working capital for the Group. Funding is expected to be received by the Group during the current quarter. Balfour has already advanced loans of £170,000 to the Company in August and November 2012. In consideration for the funding, Balfour will be sold for 33,562,170 existing CIC shares (plus an equivalent number of warrants) representing approximately 22 per cent. of the CompanyÕs current issued share capital. The sale equates to a price per CIC share of approximately 2.5 pence. This price was agreed at that date of the initial loans were received in 2012 and equated to the CompanyÕs share price at the time. As stated in note 17(d) to the audit accounts of the Company for the year ended 31 January 2012, the principle shareholder of Benxi Steel Group (ÒBenxiÓ), Mr Quan Hao, participated in a fundraising in the Company in 2005 in return for which he was issued with 33,562,170 new CIC Common Shares (the ÒHao SharesÓ). Separately, the Company has been providing advisory services to Hao related companies since 2005. The value of these services equates approximately to the value of Hao Shares. Pending payment for those services, the Company has retained security over the Hao Shares. Each share has one warrant at 2.5 pence exercisable 31 July 2014. Mr. Hao has agreed that the Hao Shares be sold for the benefit of CIC to settle the debt owed to CIC by Hao related companies. The sale of the Hao Shares is a related party transaction, being inter alia a transaction between Mr. Hao who is a substantial shareholder (approximately 22%) in the Company and CIC. The Directors of CIC consider, having consulted with Cairn Financial Advisers LLP, the CompanyÕs Nominated Adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned." |
Posted at 03/12/2012 07:39 by share_shark The MarketsMarket opening: Markets could open higher today. FTSE 100 futures were 7.5 points up at 7:00 am. New York: Wall Street closed broadly flat, as investors refrained from taking any big position until clarity on the fiscal cliff negotiations start to appear. Yum Brands fell 9.9% after announcing that it expects a drop in Q4 sales in China. The S&P 500 closed flat on Friday, ending the week 0.5% higher. Asia: An expansion in China's manufacturing sector and positive economic data from South Korea cheered investors. However, stagnant US budget discussions left investors cautious and capped gains. The Nikkei closed 0.1% higher, while the Hang Seng was trading 0.7% down at 7:00 am. Continental Europe: Equities ended marginally lower even as Germany's parliament approved a plan to alleviate the bailout terms on loans to Greece. Investors remained wary of the lack of progress on the US budget talks. France's CAC 40 dipped 1%, while Germany's DAX edged up 0.1%. UK small caps: The FTSE AIM All-Share index gained 0.6% on Friday. To read our latest small cap research, click here. |
Posted at 24/9/2012 13:50 by share_shark Thank you ecuclid and fromthesidelines.As CICR s an Investment company wishing to enhence shareholder values and having provided a div already, this article may be interesting to some. Should income seekers target emerging markets? This article was produced by our sister publication Money Observer. By Cherry Reynard | Mon, 24/09/2012 - 09:14 Emerging markets have traditionally been firmly in the "growth" part of any portfolio. However, increasingly it is possible for investors to generate an income from emerging markets - new income-focused trusts have been launched or existing trusts have shifted their mandates. For investors, this offers a seductive mix of a high and growing income, access to high-growth markets and, therefore, a lower-risk way to target a higher-risk asset class. This is a new phenomenon. Twenty years ago, companies in high-growth regions, such as Asia, saw it as their duty to grow market share and revenues, rather than return cash to shareholders. Paying dividends was an admission that company management had run out of ideas. The subsequent change has been both push and pull - investors have increasingly preferred the stability of dividends rather than the intangible charms of capital gains, but since the Asian crisis in the 1990s, company management has also started to see the value in embracing a dividend culture, prioritising good cash flow and prudent balance sheets at the same time. The trend has accelerated in the post-credit crisis environment as alternative sources of yield have evaporated. Policymakers' response to the credit crisis suppressed fixed income yields and also exposed the UK equity income sector as insufficiently diversified, as its natural exposure to the banking sector and then to BP (BP.) hit performance. "The world went global for income" Gary Potter, joint head of multi-manager at Thames River Capital, says: "The world went global for income. The quality of cash flows in emerging market companies began to improve and emerging markets are now seen as viable areas to search for income. Global emerging markets have quality companies and it keeps it at the lower-risk end of a higher-risk asset. If a company is paying an income already, it tends to be a safer company." Now, a number of asset managers have dedicated funds, aiming to harness emerging market income. Claire Peck, client portfolio manager at JP Morgan, which runs a dedicated Global Emerging Markets Income (JEMI) trust (see right for sector weighting) says that higher-yielding stocks in the MSCI EM index have outperformed the wider MSCI EM index over the longer term: "The power of an equity income strategy has been well documented in developed markets and we are very comfortable with the concept in the UK. The same is true in emerging markets." That said, most agree it is not enough simply to buy the highest-yielding companies available. Although an income mandate often naturally pushes investors towards higher-quality companies, some companies are trading with high dividend yields because they are in trouble. Peck says it is better to prioritise companies with the capacity to grow their dividends. This approach has led to companies with sustainable yields with the scope for growth, which also tend to be lower risk. Holding part of an income portfolio in emerging markets can also be an important diversifier. For example, income seekers can get access to certain types of company that simply do not pay dividends in developed markets. Technology companies are important dividend payers in emerging markets, yet are almost completely unavailable to UK equity income investors. Naturally there are still biases - in sector terms to telecommunications, utilities and consumers staples and in geographic terms to South Africa, Turkey and Taiwan. However, the investment universe has grown considerably. The Russian government recently put incentives in place for companies to pay dividends. The yield on the benchmark RTS index has risen from 1% to 3% as a result. Among those with a market capitalisation of more than $1 billion (£0.6 billion), Peck estimates that there are 395 emerging market companies with an estimated future yield of 4% or higher, compared to just 59 in the UK. Cash pile Yet in spite of this, there is still scope for companies to raise dividends. Companies are conserving cash because they are nervous about the global economic climate, yet they are getting a poor return on that cash. Payout ratios have been low relative to earnings to date, but it is plausible that these companies will start returning that cash pile to investors. Peck believes that global emerging market income is likely to expand as a strategy. It currently makes up around 1.5% of the wider global emerging markets universe, compared to around 10% in the UK/US. She also points to the higher compound growth available in emerging market equities - around 12% versus perhaps 5% for developed market equities: "This can make a big difference over the course of a decade." Ultimately, the argument for looking to emerging markets for income is compelling - it offers a mix of high and growing income, access to growth markets and diversification away from UK equity income funds. The only flaw may be that the potential is so well-flagged that markets are well aware of its potency. Market analysis, where appropriate, provided by J.P Morgan Asset Management |
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