Begbies Traynor Share Discussion Threads

[aleman] 17/8/2017 11:16

Retail sales only +1.3% Y-oY as food rises and non-food falls. It has a recessionary look about it. Lots of stuff was weak, with books and second hand goods up (as in 2009) and automotive fuel sales fell again - this time without the price increases of last year. Sectors data are always volatile, though. It would need a few months to confirm such recessionary-type trends. It does suggest, however, that Q3 has kicked off worse than Q2.



Remember that June construction and industrial output also suggested Q2 GDP is likely to be revised down. I think the recession is upon us, despite the temporary staycation/tourism boost this year from the weak £. That wearing off will be a slight headwind for the year ahead.

[aleman] 16/8/2017 18:02

R3 report 20% rise in businesses at higher than normal risk of insolvency since the start of the year in East Mids.

[edmundshaw] 15/8/2017 09:23

Record results from car seller/leaser MMH this morning, including like-for-like growth as well as acquisition-based ; but against a falling overall market.

[aleman] 10/8/2017 10:05

Poor industrial output as UK motor industry goes into recession. (Fig 3). Construction down. Can we keep this as a rolling recession - oil and engineering, then supermarkets and food suppliers, then clothing, then house sales/estate agents and now transport, furnishings and construction? Or will everything else join in now as banks are tightening lending so it all sinks together?





Q2 GDP looks set to be revised lower as more poor June data is absorbed.

[aleman] 07/8/2017 18:14

US companies have been issuing a lot of warnings in guidance notes from the mixed Q2 reporting season of the last few weeks. Q3 and Q4 aggregated earnings for the main S&P indices have been getting revised down significantly in an possible new downward trend that share prices have ignored. How can share indices hit new highs as earnings forecasts fall? Maybe it's just blip. Maybe it's different this time. I think it might be time to dig out hard hats and keep them handy.

[boonkoh] 07/8/2017 16:42

Someone keen to sell a bit of stock today. Bid is holding up well-ish considering the illiquidity of this share. Really think there is another leg up to 66-69p.

[runthejoules] 04/8/2017 07:42

Company secretary sell, but only just under £11k's worth

[edmundshaw] 03/8/2017 09:37

Can't complain though, eh Aleman? :-)

[aleman] 03/8/2017 09:34

I'm not sure what is driving the current strength, although this always has to be a good one to hold when the talk is of the economy weakening. It is possibly down to regional comments on the back of that Red Flag report. There are local news items appearing all over the place telling everyone how significantly more of their local businesses are suffering financial stress. Here is one for around Birmingham, for instance, out of several I've seen.

[edmundshaw] 31/7/2017 22:29

Cheers Aleman. All good relevant stuff, thanks for sharing it.

[aleman] 31/7/2017 20:40

Paul Barber, north west chairman of the insolvency and restructuring trade body R3, said: “The figures are a real surprise given that our members are reporting seeing an increase in enquiries from businesses in distress.

[aleman] 31/7/2017 09:17

The surprise drop in insolvencies in Q2 could be due to techinical delays as new legislation takes effect. That's probably why BEG were a bit cagey about the outlook even though Q1 turned up.




“There are other factors to consider, which may explain the sharp underlying drop, including the introduction of new insolvency Rules in April. Some formal insolvency processes may be being delayed while creditors, debtors, and others get used to the new decision-making procedures.

[aleman] 31/7/2017 07:57

25% rise in companies in significant financial distress - concntrated more amonsgst SMEs.

[aleman] 28/7/2017 10:13

Underlying insolvencies in England and Wales fell in Q2. Total liquidations were down 16.9% on the quarter and down 3.5% on the year. The actual numbers showed a distorted 14.6% rise from another tranch of personal service companies going into liquidation.

Personal insolvencies fell 9.7% on the quarter but only 0.1% on the year.

Longer term trends are unclear as the latest dip offsets some recent small rises - flat but choppy?

[aleman] 27/7/2017 10:23

Scottish personal insolvencies rise 17% Y-o-Y in Q2.



Scottish corporate insolvencies fall on a year ago (thanks to oil sector improvement) but might be on rising trend again.

[aleman] 25/7/2017 10:01

That's kind of you to say, bishan. Thanks. I post similarly on the NFDS thread. It is effectively a cosy chat room for several "more experienced" buy and hold investors with a bias towards income (after Northern Foods was taken over years ago). If you can wade through the (mostly polite and sensible) daily anecdotes about sport, family, gardening, weather and other mundane stuff, you will find my economic and investment posts are there, too. It's a friendly place even though constructive criticism occurs from time time and the regulars are very helpful when questions are asked - investment and otherwise. There are even a few lurkers that post there on rare occasions that post nowhere else. It's a calm place amongst the ADVFN maelstrom.

[bishan bedi] 25/7/2017 09:27

Aleman is there somewhere else that you can/will continue to post your thoughts and news?

I have seen you around these boards for years and remember the last time things got nasty you were well ahead of the game, and have even made this thread a favourite on account of it.

[aleman] 25/7/2017 07:54

OK. I'll try and be more selective. Please note, I have not advocated an economic meltdown. The depth of recession depends on unpredictable reactions.

[edmundshaw] 24/7/2017 21:48

I know you cannot post everything. And I appreciate most of the stuff, but a bit more about BEG and the UK would be my preference... if I get a vote! :-) U.S & EU are important too, but not sure about Oz and Canada!!

Here is another more aggregated risk warning from the BoE (you will recognise most of the risks mentioned from your own research and posts). At least the BoE (Carney & Brazier) are awake... hopefully that will avert the economic meltdown version of the near future.

[aleman] 24/7/2017 20:02

firtashia - the Canaccord numbers were taken down last week and then put up again. I expect they might be waiting for/get revised after the Q2 national insolvency numbers which will gave a more up to date view of the market (and economy) shortly.


edmundshaw - absolutely, my stuff is selective but I was just countering a selective media that ignored it to begin with. Just lately, there is so much I don't post it all, believe it or not. I did ask previously and some posters seemed interested enough for me to continue. I think the main media seem keen to push the gloom now so I don't really need to dig for it any more. I'm not the slightest bit bothered if people don't want me to post the stuff that indicates the state of the economy. I can stick to BEG specific news if that is the wish.

Regardless of that, the cycle is turning. It does not need a trigger - although they will probably try find one to blame that suits whatever theme the media are pushing at the time. The fact is that interest rates have risen, outside the B of E's control, but there is also tightening that the B of E has encouraged of late. Subprime borrowers have been defaulting a lot more and are being charged a lot more in the increasingly restricted places they can get credit. Middle risk borrowers are starting to see tightening and it will come to low-risk borrowers as the economy goes into reverse - maybe not much more expensive but harder to get for them. Then the B of E will make its usual attempts to manipulate market rates down to keep distorted areas of the economy spinning and protect some dodgy banks. It happens every time, though the B of E will find it tougher this time.



Lending Club Grade A borrowers average rate charged was 6.93% in Q1. Grade FG was 29.85%. A year ago it was 6.70% and 24.99%. The reason is exploding defaults. Of loans issued in Q1 2016, about 1.2% of Grade A had been charged off and 0.5% are in arrears. Maybe their lenders can still manage a 5% return. For Grade EF, a whopping 22% have been charged off and 5.5% are in arrears so EF lenders look like they could end up with no return at all by the time they all matured and defaults push up towards 30%! Hence, the 5% rise in rates for EF but only a modest rise for A Grade over the last year. (Should more defaults and more riskier rate increases slow the US economy further, which seems quite likely, expect those better grades to show some more noticeable rate rises. The defaults and rate rises will spread to better borrowers as the economy slows and people that were good payers lose jobs. Eventually balance will be found at higher interest rates and they will start to fall again, once recession works its way through and job losses ease. The Fed has had little influence on Lending Club's and other P2P lenders' interest rates and volumes. They are only a small part of the market but have a disproportionate effect on consumer confidence. Rates charged and their rises bear no relation to the Fed Funds rate. The same applies to UK P2P and non-bank lending (pawnbroking, payday loans). The rates reflect and indicate the economic cycle. Central banks are always behind and attempts to intervene just mess it up at the time or create problems for later. I expect recession but have no idea what mad responses bankers and politicians will come up with (cash for clunkers, investment allowances, taxing savings, etc.) so would not like to suggest how deep or lengthy it might be.

[edmundshaw] 24/7/2017 17:23

Hi Aleman. I think the constant stream of bad news you post here is a bit intimidating to most posters - or perhaps just a bit too much to take in (it is a lot of reading). It is also arguably somewhat selective...

Clearly there are fundamental problems in the UK with debt (just need to look at government debt and the apparent unwillingness to unwind it). But the chancellor and BoE are not going to raise interest rates to cause serious trouble if they can avoid it. I must admit I think we will muddle along until there is a shock of some kind - it may be to do with Brexit, a big natural catastrophe, war (or other very serious man-made trouble), or another economic landslide. The trigger is often something unexpected.

And if a trigger is needed, then the timing is completely unknowable.

Meanwhile life goes on, people buy houses and clothes and cars at a faster or slower rate, and go out to work. And good, shock-resistant businesses are still investable... with yields far tastier than anything available from savings.

I am not including foreign investments (eg in our stock market) much in my thinking, as I don't really have a handle on those, but that is another factor for the FT indices...

[firtashia] 24/7/2017 15:46

Aleman, thanks for those figures, from what I can see the Morningstar figures were last updated on 8 Dec 16, I'd have expected them to be revised shortly after the finals a fortnight ago. Am also wary of the lack of forecast revenue growth which tempers my enthusiasm for buying on the breakout. I dont hold here but have been watching a while, a tricky one...