Gen.acc.8se.pf Discussion Threads

[skyship] 09/4/2020 13:36

Yields on Offer prices:

# AV.A 8.75% @ 134p-136p = 6.43%
# AV.B 8.375% @ 123p-126p = 6.65%
# GACA 8.875% @ 130p-133p = 6.67%
# GACB 7.875% @ 115p-118p = 6.67%

After very good rallies they now look a tad overbought IMO.

[badtime] 07/4/2020 11:37

Good to see a recovery in these

[spectoacc] 02/4/2020 10:15

@Jonwig - talking prefs, pretty sure they'll still be paid, eg RBS:

"For completeness, this has no impact on the payment of interest on outstanding preference shares or Alternative Tier 1 instruments ("AT1") issued by RBS and its subsidiaries. "

[jonwig] 02/4/2020 10:13

Spec - I think at least one bank (RBS) has said not. Insurers (AV, L&G) have been asked politely to rethink their divis.

[spectoacc] 02/4/2020 09:49

An interesting question been raised by a CityWire poster - "Will the govnt banning banks from paying dividends extend to prefs?". No, I reckon, because they're classed as debt, not equity. But seems a good question, when there's so many different versions (Notes, prefs, contingent something-or-others, convertibles).

[spectoacc] 01/4/2020 06:56

Inflation is a very good point, is clear there's shortages coming. Price controls would be my guess. And perhaps little in the way of interest rate rises to counter it, since this'll be stagflation.

As for tax rates - 1% on BR brings £5bn, as a rule of thumb.

[jonwig] 31/3/2020 18:37

"Not sure how much that will raise" - I think most politicos have a basic appreciation of the Laffer curve but the impression of fairness, burden-sharing is an asset when explaining tax policy.

On topic - all prefs have been hit pretty hard, and I wonder whether investors are beginning to look over the hill at possible inflation (weaker pound so cost-push).
Anything with inflation linking is worth looking at.

[skyship] 31/3/2020 18:01

That said, I do believe that post Pandemic we are likely to see a temporary "Covid premium" to income tax rates. Say:

# Basic rate up from 20% to 21%
# Higher rate up from 40% to 42%

Not sure how much that will raise...but will go and see...

[skyship] 29/3/2020 17:14

Tournesol - a shocking story for sure. Well done you for fighting a just cause and eventually winning through.

jonwig - taxation of higher earners. With the higher standard rate set at 40%, the 45% kicking in at £150k and NI on top, I believe the UK rates are already high enough. Even here in socialist France the rates are lower.

Income Tax rate:
€9,964 to €25,405 - 11%
€25,405 to €72,643 - 30%
€72,643 to €156,244 - 41%
Over €156,244 - 45%

The question is always how high can you go without turning off the tap - see this interesting thread:

[jonwig] 28/3/2020 16:30

tournesol - thanks for that detail.
It probably doesn't help for me to say that many large corporates have similar attitudes: Lloyds/HBOS with its Reading business branch for example.
This being an Aviva thread, it's worth remembering their attempted coup.

I suspect (but as yet no more than hope) that corporate ethics will improve once this current Covid episode is over. Boardrooms may become more aware, given the government's largesse; taxation of higher earners may increase without the stigma of socialism and we may experience a reduction in inequality. At least in the UK.

[jonwig] 28/3/2020 15:02

tournesol - their website says:

From time to time, things can go wrong and when they do happen we aim to put right any complaints as quickly as possible and make sure our customers and members receive a fair outcome, which is reflected by the number of appeals that were upheld by the Financial Ombudsman Service (FOS) in our favour.

Was the FOS a part of your process?
[I know nowt about LV= but am fairly warned.]

[skyship] 28/3/2020 14:04

I thought unemployment cover was called PPI - so disappeared some time ago!#~?/

[bisiboy] 27/3/2020 19:13

Any views on payouts for life assurance and unemployment cover

[spectoacc] 18/3/2020 20:11

I'd have bought AV. - is one of my few purchases. It got hammered in the financial crisis, but this isn't a financial crisis. It (& LGEN) have also spent the last 12 years building reserves and improving their ratios.

I am, of course, talking my book, and it can certainly go a lot lower first.

AZN - as defensive as they come, but an awful lot of drugs made in China. Needs China not to get a 2nd wave of Covid-19.

[mac15] 18/3/2020 18:48

I sold all my Gaca shares last week for 139. Bought most of them during 2008 crash where they dropped sub 90 even though dividends were paid. I sold them this time with the intention of swapping into the main Av shares paying over 10%. However on reflection I remembered how Aviva was absolutely hammered in the 2008 slump and Eurozone crisis so bought AstraZeneca instead!
Prefs are supposed to be safer than main shares but I do recall round 2008 it was extremely difficult to sell anymore than very small amounts and the spreads were enormous. Additionally when the banks got into trouble the whole structure of pref shares got thrown into causing a lot of angst for holders. Gaca survived providing a good cap gain until the not so smart CEO said he could redeem them at par! He went but the shares didn’t fully recover
Gaca is great income share for pension etc but the cheap become cheaper. I on balance would be tempted by the big dividend on the main share than the prefs and in both cases will wait until the market slumps a bit more.

[par555] 17/3/2020 22:31

So I guess that makes them a buy ?!

[skyship] 17/3/2020 10:52

All the Aviva prefs now yielding above 7%.

Offer prices:

# AV.A @ 123p = 7.11%
# AV.B @ 114.5p = 7.31%
# GACA @ 120p = 7.40%
# GACB @ 107.75p = 7.31%

[skyship] 01/3/2020 13:13

CC - disagree - both underwritten by parent company

[cc2014] 01/3/2020 08:41

Yes they hold different levels of risk.

[skyship] 01/3/2020 07:20

None whatsoever

[ramellous] 29/2/2020 18:32

I know Aviva tried to mess with their prefs a whole ago, but is there any difference in risk with the AV prefs and the GA ones?

[spectoacc] 29/2/2020 15:53

Interesting how even the "safe" stuff gets whacked - becomes worth selling it in order to buy cheap stuff elsewhere. Ergo, gold, tho that one is even stranger.

[skyship] 29/2/2020 14:36

The Aviva prefs Update:

AV.A 8.75% :– 149.0p – 151.0p; Yld = 5.79%
AV.B 8.375% :– 144.0p – 147.0p; Yld = 5.70%
GACA 8.875% :- 146.0p – 149.0p; Yld = 5.96%
GACB 7.875% :- 134.0p – 137.0p; Yld = 5.75%