Gcp Infrastructure Inves... Share Discussion Threads

[donald pond] 24/5/2023 11:11

I don't think converting a supply side inflationary impulse into a recession would improve the Bank's reputation tbh. It is a very strange economy at the moment, but with wage rises likely to be the determinant of whether inflation is transitory or becomes entrenched, increasing the cost of mortgages at a time when the employment market is tight seems likely to add to inflationary pressures

[spectoacc] 24/5/2023 08:49

Restoring BoE credibility is going to take some seriously sustained rates IMO, & that will/should cause recession.

Market moved out to 5.5% possible peak from 5%, but to me that's all at the margins - what matters is that ZIRP is over, and rates now are the new normal. IMO investors haven't adjusted for that yet.

Bailey definitely failed in not getting ahead of the curve - who on earth believed "transitory"? Yes, very difficult to deal with cost-push, but a central banker's job is not to allow it to turn into what we now have, which is wage-price.

GCP coming up for an important test soon - will be tempted to buy more if it holds.

[stewart64] 24/5/2023 08:43

130.4/ 128.9...CPI 1.2% MOM. Bailey has burned through 60% of his allowance in one month. He should have got ahead of the curve 18 months. His excuses are 9ridiculous, raising rates would have not caused recession. GDP in 2022 was 4.5%. This is beyond sn apology he needs to resign.

[spectoacc] 24/5/2023 08:11

I think they'll hold until August now, and it's possible the heavy lifting will get done by fiscal drag, and the 100's of k who'll slide off cheap fixed rate mortgages between now and then (& beyond).

But there's no cuts for the foreseeable. The BoE has credibility to restore.

Inflation can't go sustainably back to 2% whilst unemployment is so low, and wage rises are averaging 6%.

2.5m on the sick, net immigration over 700k - I'd be interested to hear anyone's answer to those two, who thinks rates can go back down.

Recession, 5% rates - possible, perhaps likely. If they go to 5%, they'll stick there.

The 14 years of ZIRP is over, never to be repeated IMO. Get used to higher for longer.

[stewart64] 24/5/2023 08:06

CPI figures beyond dreadful, 2.5 % drops out yet the fall in only 1.4%. Bailey has burned through 50% of his target in the last month alone. He is wring again and 5% Base Rates are now looking probable.

[spoole5] 23/5/2023 15:20

Bought in today, probably why it's dropped further!

[spectoacc] 23/5/2023 15:15

Tomorrow may determine whether the inflation outlook brightens, or darkens.

[stewart64] 22/5/2023 14:49

On the downward drift now along with other Bond proxies. What I expected post BOE report, funny how slow the Market is to react sometimes. A few tricky days ahead until the inflation outlook brightens.

[stewart64] 11/5/2023 16:15

Cheers I hadn't realised that. Taken the bad news on inflation in its stride then.

[spectoacc] 11/5/2023 15:45

GCP is XD today.

[stewart64] 11/5/2023 13:50

Edit. Duplicate post

[stewart64] 11/5/2023 13:43

Unsurprisingly hammered today now the Bank of England isn't as confident at hitting 2% CPI two years hence.
What a bunch of Chumps ( Cath Mann excepted obvs) even Bailey was far too confident in their ability to control inflation. Now he is reigning back, as usual no apology for his cataclysmic policy errors during lockdown. Not surprisingly we are about twice the global inflation average for advanced economies, with the shower we have in charge.

[hpcg] 10/5/2023 09:20

Risk free rate is the albatross. That and distributions are not rising. That said I am a holder and happy for share buy backs to happen at this price / discount, but it isn't where I would be directing fixed income like investment at this time.

[donald pond] 10/5/2023 09:11

Surprised no uplift after the CSH announcement. I'd thought social housing was the albatross here.

[spangle93] 09/5/2023 12:13

The Board, and Gravis, are available to meet with the Company's shareholders. Gravis has scheduled an investor day at the Birmingham Biopower Limited waste wood biomass project on the 23 May 2023, which investors are welcome to attend.

Gravis will be holding a webinar on 15 May 2023 at 11.00am to provide more detail on the portfolio. For investors interested in joining either event, please e-mail [e-mail].

[speedsgh] 27/4/2023 07:48

Company update and net asset value(s) -

GCP Infra announces that at close of business on 31 March 2023, the unaudited net asset value per ordinary share of the Company was 112.24 pence (31 December 2022: 113.59 pence), a decrease of 1.35 pence per ordinary share. The net asset value takes into account cash, other assets, accrued liabilities and expenses and leverage (if any) of the Company attributable to the ordinary share class.

The recent fall in electricity prices in both Great Britain and Ireland has decreased actual and forecast cash distributions to the Company from its renewables investment portfolio, although this has been partially offset by the Company's electricity price hedging arrangements. The resulting net movement in valuation from electricity prices was (1.19) pence per ordinary share. This has been primarily driven by a decline in short-term electricity prices, resulting from reduced gas prices associated with lower European gas demand, an ample supply of LNG, and unseasonably mild weather. Further, UK carbon prices have decreased as the UK emissions trading scheme converges with the equivalent EU scheme. Quarterly movements in long-term electricity price forecasts were relatively flat. The Company's approach to forecasting short and long-term electricity prices remains consistent with prior periods.

Increases to discount rates led to a reduction of (0.27) pence per ordinary share, coupled with various other downward movements across the portfolio totalling (0.08) pence per ordinary share, offset by updated OBR inflation forecasts that contributed 0.19 pence per ordinary share. A summary of the constituent movements in the quarterly net asset value per ordinary share is shown below. The weighted average discount rate used by the Company to value its investment portfolio was 7.44% at 31 March 2023.

-----------------------------------

Dividend Declaration -

GCP Infra is pleased to announce a dividend of 1.75 pence per ordinary share, for the period from 1 January 2023 to 31 March 2023. The dividend will be paid on 14 June 2023 to holders of ordinary shares recorded on the register as at the close of business on 12 May 2023...

[stewart64] 24/4/2023 09:12

Looking forward to the nav release on Thursday morning. I can't see the nav being priced that much different. Yet the recent fall ( currently a 21% nav discount) is suggesting a downward revision. Selling early this week ( as some clearly still are) in the run up to the nav looks like a hiding to nothing..but heck we'll soon know.

[panshanger1] 12/4/2023 08:42

Heavy volume this morning too

[stewart64] 11/4/2023 15:23

I assume the price action today is owing to the IMF warning of interest rates sinking in short order to pre Covid levels in advanced economies. Obvs nothing to do with the NAV with the release not due til the 27th.

[chucko1] 11/4/2023 12:40

Thing about the arbitrage is that the liquid assets rarely lend themselves to a meaningful arbitrage, or at least not in the area of what we are talking about here - some 20% or so.

[stewart64] 11/4/2023 11:56

Disappointed they didn't make more of the buyback at 85p. Perhaps in such a small share cap there wasn't the availability. And in any case if they had been too aggressive ( eg. a few million shares) the price would not have hung around 85p either. If they were confident in the nav it looked like a great opportunity to destroy shares ( or a least have no dividend liability if held in Treasury) and print money for shareholders, one that reinvesting in debt simply could not match. Even at 90p we are probably in licence to print territory for a buyback

[hpcg] 11/4/2023 10:13

chucko1 - I think you need to add another dimension to your study: liquid assets vs fixed assets. With liquid assets a buyback can be operated by an internal arbitrage. Sell a weighted basket of holdings to fund the buyback of the same basket but at a discount. This is how ETFs work, though the arbitrage is external rather than internal. For fixed assets one cannot do the same thing. However, assuming they produce income then it is possible to do a pseudo arbitrage. This is absolutely not the same but it does mimic reinvested income.

[donald pond] 11/4/2023 09:44

Very true specto I think PSH is the standout in that regard. They have bought back around 25% of their shares over the last 5 years with no narrowing of the discount

[chucko1] 11/4/2023 09:14

DP, if only there was a study we could point to showing the difference in outcome between:

a) share buy-backs of companies with volatile assets, and
b) share buy-backs of companies with non-volatile assets (ie. debt)

It might enlighten the long-running ADVFN debate on the issue, most of which has been largely hot air.

[donald pond] 11/4/2023 08:39

Very difficult to find debt investments more accretive than share buy backs at a 20% discount to NAV. Also any buyback will save paying the dividend. Think of the NAV as a valuation of how much is "owed" to equity holders. So every million spent on a buyback extinguishes around £1.3m of equity and saves £80k+ in interest (dividend) payments annually. It will be hard to match that