Bbgi Global Infrastructure Share Discussion Threads

[topvest] 24/9/2024 12:19

Yes, 10 year around 4% seems the new normal. Could possibly go much lower (maybe as low as 2%) if we get a global recession I suppose. Sentiment on BBGI should dramatically improve once short-term and 2 year rates drop to low levels. Little risk of a negative return on BBGI at this price, in my view, given the secure 6.5% yield. My thesis is 8-10% annual return likelihood. Worst-case probably 5%. Not bad. Much better than renewables in my view, where electricity prices could either jump or crash. Probably the latter if there is a global recession.

[hindsight] 24/9/2024 12:04

Think the budget will show the direction of travel.
If tax rises do most of the heavy lifting then low rates likely (cgt, iht, pension, council tax changes will slow money velocity), or if its changes to borrowing calculations (which Reeves now seems to talk of) do the heavy lifting then we wont. The 10 year has risen to 4% from 3.75%

[topvest] 24/9/2024 11:46

All good points. Ultimately, I think markets will be driven by the US. I don't buy a this time is different argument, with US markets x2 GDP, a 795 day yield curve inversion (now ended)and money supply effectively negative since July 2022. Might be worth listening to Steve Hanke. He calls it the Fed spin room. Of course, they never talk about their balance sheet and money supply....as it would point the finger at their own errors! I think he has it spot on. In 6 months or so, we will know whether or not the US is heading for the rocks.

[spectoacc] 24/9/2024 11:24

A lot of people think we're in for one last hurrah of that - US debt load suggests so - but I'm not so sure, I think they over-did QE in size & scope & may not go back there.

Feels like 3% is the new 2% for inflation, & that may even become explicit - it's the way out of the debt after all (perhaps less so for c.1/4 index-linked UK).

My concern is how quickly Labour are losing control of wage settlements - madness to give up instantly, without a fight, and nurses probably rightly wanting more. Wouldn't take much for inflation to print at say 4%, 5% again, in which case, who wouldn't strike for that or more?

Flipside is recession, dire China, chronically low oil.

Flipside of that is Milliband madness, climate change.

BBGI, of course, has some inflation protection built in.

[topvest] 24/9/2024 11:20

For what its worth, I see short-term rates falling as we head into a global recession, but probably going up again mid-term as the Cental banks turn on the inevitable money printing madness yet again.

[spectoacc] 24/9/2024 11:07

@nickelmer - AV pref over-priced IMO, due to demand from retail for something with a more certain yield/capital value (not been so good on the latter mind).

BBGI isn't as certain - but as @topvest says, looks one of the better ones around IMO. I see rates staying higher, more so with R Reeves/Labour in charge.

[topvest] 24/9/2024 10:46

I keep nibbling away at these. It's my largest alternatives position. Its a really high quality investment company, on an unwarranted discount. Can see these trading at a premium again when rates drop off. Happy to hold for a long time.

[nickelmer] 16/9/2024 06:10

I hold BBGi, for the 8.4p dividend, shares currently £1.31

I also hold aviva 8.75% prefs, which pay a fixed amount, so no increase over time, they pay an 8.75p dividend, slightly higher than BBGi yet the shares are £1.44

Can anyone explain why a fixed income share paying virtually the same dividend is valued some 10% more than a share that offers dividend growth potential, it does not make sense to me...

[spectoacc] 13/9/2024 14:43

Both valid points, thanks.

I don't put anything past Reeves tho - fluffing growth (return to austerity), fluffing keeping the wealthy here and paying taxes, fluffed Winter Fuel Payment withdrawal (albeit the right thing to do), lots of uncertainty, no clear policies.

Guess with maturing PFI, it's less political and more what happens to it. BBGI plenty big enough to return cash and still keep going.

Haldene makes a good point about the spending review being potentially as important as the Budget (albeit that depends what actually happens in the Budget - might RR be deterred post-Winter Fuel fiasco?).

BBGI would be higher than here without recent XD of course.

[hindsight] 13/9/2024 13:01

spectoacc, thought best to reply to you here re PFIs
Dont forget bbgi is 30% UK rather than 70% in most others like INPP. Also Reeves needs private capital, as her former college Haldane points out, so any attack on old PFIs would be rather silly

[spectoacc] 05/9/2024 13:14

Really strong move on XD. Having previously top-sliced, am now out - good luck holders.

[williamcooper104] 29/8/2024 09:58

Which is one of the big advantages infra has over commercial property CRE loans are 3-7 years with mega refi risk and usually horrible LTV/margin like call risk

[williamcooper104] 29/8/2024 09:13

It's unleveraged at the hold co All of the assets are of course hugely leveraged - though with lower risk project finance leverage - eg minimal interest rate/refi/covenant trigger risk

[ianood] 29/8/2024 08:57

Totally unleveraged in fact net cash. Trading at a discount etc etc looks attractive to me tho’ I am biased?

[williamcooper104] 29/8/2024 08:51

What a boring set of results And that's why I've a full position here

[williamcooper104] 29/8/2024 07:34

HICLs equity is more expensive than BBGIs - so a BBGI takeover of HICL would be more likely - as in more theoretically likely - there's little chance of either

[ianood] 29/8/2024 07:14

Bigger risk of them being bought out by the likes of HICL in my mind

[rik shaw] 29/8/2024 06:54

BBGI Global Infrastructure S.A. ... is pleased to declare an interim cash dividend of 4.20 pence per share .
Ex-Dividend date: 5 September 2024 Payment date: 17 October 2024

[williamcooper104] 07/8/2024 16:16

Alas I'm full up Dropped a load in at the top of the market for want of anywhere where else to go - quite happy - down in capital value but the divis increased

[williamcooper104] 07/8/2024 16:14

It's a good question, HICL ploughed their maturing PFIs into higher risk assets Being internally managed BBGI doesn't have just the same motivation to keep assets up but equally doubt they'll want to wind down the trust if they can avoid it

[spectoacc] 07/8/2024 15:15

I quite like them too, but what will happen to maturing PFI?

[nickelmer] 07/8/2024 15:01

Every time these drop I buy more, over a 6% yield, dividend 1.4 X covered and growing every year, less and less chance of getting near that yield in bonds or banks now, big fan of Bbgi