|Utilico Emerging Markets
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Utilico Emerging Markets Share Discussion Threads
Showing 376 to 392 of 400 messages
|Some good news for EM in the FT:
EM growth picks up sharply in January (Premium access)
This one should be free to access:
"Why? You will then be holding more shares that will go up far slower."
True, but I like dividends. :)
Kind of a long term investor too, so I see warrants/subs more as a shortcut to ownership with an added boost at conversion when adequately timed.
Like you, I also see them as sneaky rights issues, but again, if things go South, nobody is forced to exercise either.|
Also a good post and very useful for any readers not familiar with sub shares, and I agree with most of it. I've invested in warrants and subs since the 1980s and they have often proved to be fabulous investments.
Note too that only small sums invested give such good rewards.
e.g invest £3000 in UEM and if share goes up 10% gain is £300.
£500 invested in UEMS now and if share goes up 10% UEMS should go up around
80%. That gives a £100 BIGGER gain than £3000 invested in the share and with far less money risked should markets crash and take UEM way down too!
re. UEMS. Don't agree re the sub being that volatile partly because the share isn't. A look at the UEMS chart should confirm that.
Also the value of the sub won't be completely wiped out if the share falls until much closer to expiry date. BUT note if wanting to sell it is far easier to do so on an up day for the share. Then it is often possible to sell inside the spread too.
It is also often possible to buy inside the spread too. e.g I added yesterday at 21.3p when the buy quote was 22.5p. After that buy they widened the spread again. Yes, so few subs are traded that even one buy or sell can move the price.
re. converting at the end of this month? Why? You will then be holding more shares that will go up far slower. Why not continue to hold the subs if believing the share price is likely to rise? I'll convert as many of mine as I can afford to at the final opportunity next year. And if between now and then I want out of UEM/UEMS then I'll just sell the sub shares.
Yes. There should be no charges if/when exercising. I rarely exercise and usually just sell the sub in the market well ahead of expiry.
Yes again. Subs are almost always issued for free and often on a one for five basis. It is like a disguised rights issue and if the subs are exercised it means a slightly lower NAV. BUT it also means that the Trust gets £millions when they are all exercised.
Also for you and anyone else interested; I ran a warrant portfolio on Mike Walters website
until we had to close it when there were too few warrants and subs left to invest in. It exactly doubled but did a lot better than that for a a time before lack of warrants and the odd poor call hit performance. One of those poor calls was PCFS which since that portfolio was closed has quadrupled. There are posts there right now on UEMS and PCFS and anyone interested is I think able to take out a brief free trial.
I also am currently running an Investment Trust portfolio there, which we started nearly a year ago and is currently around 35% up. It did include UEMS but I sold that stake on a dip a few months ago.I make the buy/sell decisions and react to any suggestions made. A poster there does all the hard work updating it in brilliant and colourful fashion every week. It's worth visiting the site just to see how he does it!
Shares there on the Investment Trust portfolio can be found on the KITE thread and posts on warrants and subs on the WARP thread.|
Good post. It is all about the fact that the subs are futures, hence bets.
I bought some UEMS last year and will gain a few p per share indeed when I convert some at the end of the month; but as you pointed out, had UEM gone seriously down (especially after the EM scare rumours following President Trump's views on global trade), the value of the subs could have been wiped out. UEMS is highly volatile and as you pointed out, the spread can also be silly. I somehow managed to pay just below mid-price when I bought mine, talk about being lucky!
Just to add to it: While this is small beer, one pays the commission/taxes when buying the subs, which are by definition worth a fraction of the share themselves and nothing at conversion.
I can confirm that with Equiniti, there was a few box ticking exercises to do in order to be allowed to buy the warrants/subs. Nothing beyond acknowledging a "I understand that... blah blah blah..." box mind you.
If memory serves, those subs were given away on a one free for every five UEM shares held basis, so most have cost nothing to their holders. The company that runs UEM did the same in the past with Utilico (now UIL Ltd which kept the UTL ticker). Back then, things did not work out as planned and I just let my free warrants lapse.
If enough conversion rounds are left and people are patient (to allow for one or two small crash/recovery cycles), buying subscription shares can indeed be a good way to enter UEM ownership. Funny enough, it could also help people with capital gains tax issues, as any losses made at conversion (assuming they paid too much for the sub share or the share price cratered) can count towards lowering the capital gains made elsewhere for the current tax year.|
|The subscription shares (UEMS) are now very good value AND (some probably don't realise this) sub shares can go in to ISAs. For any not familiar with sub shares and warrants,they are traded the same way as shares though you may have to sign a risk form first if never having traded them before. As with shares they can be bought and sold at any time up to expiry date of Feb 28th next year.
Exercise price is 183p. So with the share at 205p to sell, UEMS are currently worth 22p. Current buy quote is 24.5p but they can be bought inside the spread at 23.25p. Yesterday they could be bought for just 21.3p.
Target a 5% gain for the share price to 215p and UEMS would be worth 32p, and around 35% more than the buy price today.
Target a 10% share price gain to 225p to sell and UEMS would then be worth 42p and not far off double the current price.
If the share price falls then UEMS will fall faster too.
e.g 190p share price would mean UEMS only worth 7p. And if the share is 183p or lower at expiry then UEMS would expire worthless.
A very good tactic if currently in profit on the share would be to take just that profit and reinvest it in UEMS.
Then EITHER exercise at expiry by converting UEMS in to shares at just 183p a share OR sell ahead of expiry date or let them lapse and let the trustee appointed exercise for you. That trustee route is a last resort and better one of the first two options.
Not always easy to trade sub shares in size as there are so few trades. BUT a very good way of maximising profits IF the share price can keep rising.
e.g to give another example. While Polar Capital Finance Investment Trust shares have risen from around 115p late last year to 135p to sell now, their sub share PCFS has risen from 4p to buy to 13p to sell.|
|Factsheet for January:
Debt down by a tiny amount, gearing down 1.7% due to increase in NAV. Slightly under-performing the index.
The improvement is a good news for those converting some UEMS this month.|
|Aberdeen Emerging Investment Company is reporting about having bought some UEM last year at a 12.7% discount and feeling pretty smug about it.
|I liked the way he admitted being wrong about oil, expecting $20 a barrel.
EM were talked about a lot early last year, then got whacked after the US election. Still hope for UEM to rise a bit more to convert some in February, bought myself some UEMS last year, a bit dear mind you considering the price today.|
|Thanks - I didn't pick that up. He often has some offbeat ideas which are either right or at least thoughtful.
In the following para he writes: "Mr Trump is openly scornful of leading emerging market economies such as China and Mexico ... Now just suppose Mexico does free-trade deal with China (why not, now?) and the trans-Pacific ships clog up the seaways. China would do that, so would Mexico if pushed.|
|UEM is mentioned in this FT article about 2017 and "investing under Trump"
|The November factsheet is out:
Results a bit gloomy for the month, but nothing new if one reads about generic financial news:
* President Elect Trump spooked the EM sector.
* Stronger Sterling, lower EM currencies.
* $ likely to strengthen so hitting EM economies who have borrowed in $.
Power Grid Corporation of India LTd is doing well and has entered the top 20 investments.
The discount is slightly down but for the wrong reason: 9.9% drop in NAV.|
|The interim report is out:
|Taken from Lazard, who have reduced.|
|Further buyback, all helps the nav|
|Emerging markets have ‘good chance of massively outperforming’
For those with an FT Premium account:
"Paul Jackson, head of multi-asset research at Source, points to the cyclically adjusted price-to-earnings ratio, known as Cape, which values stocks compared with a 10-year moving average of their earnings.
As of the end of August this ratio was 12.6 in emerging markets, comfortably below its long-run average of 20.2, according to Source, as shown in the chart. Moreover, this Cape reading is lower than in any other region of the world, with Europe ex-UK currently trading on a ratio of 12.9, the UK on 15.4, Japan on 21.4 and the US on 25.7. The global average is 17.8.
While Cape tends to be a relatively long-term indicator, Mr Jackson believes emerging markets should get a more immediate boost from a pick-up in dividend payments."|
|Gave notice to convert at end-August. Gets the dividends, at least.|