Investec Pref Discussion Threads

[cerrito] 11/11/2024 15:31

Counter intuitive for these to rise so much 2 days after a BOE rate cut but reflects no doubt inflationary concerns in the UK next year not to mention gilt issuance and the effect of both on the base rate.
There is c 24p of dividend baked into share price.

[bisiboy] 21/6/2024 21:31

Happy for them to redeem at issue price

[papy02] 21/6/2024 16:44

Thank you rota. Yes I am, and will research

[return_of_the_apeman] 21/6/2024 15:59

Papy02,

If you are still looking for diversification then TFIF is also floaty and might be worth some research

[cerrito] 13/6/2024 16:50

Does not surprise me that you cannot buy or indeed that the share price fell less than the dividend given RSAB ie people wondering if INVR will redeem these shares at a premium.
I thought about buying more but felt I have enough.

[holts] 13/6/2024 15:49

I was expecting more selling today , not even an online quote to buy available from II .

[papy02] 01/6/2024 15:11

Thanks. I did the same, and think your text looks like that here:



(though that site toggles unpredictably (for me) between the GBX info you show, and $info)

Am still mystified if/where Investec announced it but not a big issue. Your figure looks correct.

Thanks again.

[cerrito] 01/6/2024 14:59

I googled INVR dividend and I forgot the site that I got the info from.
It was not dividendmax which I use most as they had not updated it and it was not
Fidelity either.
The reason that I checked was that I have done so much top slicing in the last fortnight that I have more cash than investment ideas and am wondering if I should buy more.

[papy02] 31/5/2024 09:57

Hi Cerrito

where did you source that dividend announcement info please? I see HL agrees with your info.

I have alerts on Investegate for both INVP and INVR and have seen nothing.

Your info looks the same as that for JSE/TISE INPP in the 2023 annual report. Is that the same as LSE INVR?

Calculating with 5.25% + 1% p.a. on £10 nominal, paid 6 monthly, I get 31.25 p expected dividend. Not materially different, but different, to your 31.34 p.

EDIT: Using the exact methodology in Article 150 of the Articles of Association I agree with 31.34 p. So scrub the above comment !


I also have a note of payment date of 20 June (can't recall where that came from), though HL agrees with your info at 28 June.

Many thanks

[cerrito] 31/5/2024 07:59

I note the Investec base rate has been 5.25pc since August 3rd 2023.

[cerrito] 31/5/2024 07:51

Investec (INVR.LSE) has announced a dividend of GBX31.34 with an ex date of June 13, 2024 and a payment date of June 28, 2024.

[eigthwonder] 07/5/2024 09:29

Ratings agencies only rate instruments the issuer wishes to pay them for to get a rating - which was a fundamental problem behind the bubble which led to the GFC

[cerrito] 07/5/2024 09:21

While of course we have a preference share here rather than a debt instrument, I have gone onto the Investec website to check their debt ratings. Neither S&P or Fitch rate the debt of our issuer Investec PLC and Moodys has a long term foreign currency rating of baa1 with a stable outlook which seems about right. Fitch has a BBB+ rating for the long term foreign currency rating of Investec Bank pls, the subsidiary of our issuer.

[papy02] 08/4/2024 16:21

Thank you ROTA ! Yes, very interesting.

Despite a floating rate share of 75%, it still seems to have a positive duration, (albeit only 1.3 yrs) so maybe not a hedge for conventional Prefs.

But it looks like the complete soup to nuts in it’s own right. It may be a variable rate investment but if they achieve 4% over SONIA the yield will be hard to beat with Prefs even if rates drop a lot. The Prefs would reprice upwards in that case of course, but I’m not particularly keen to be in that business (betting on the direction of interest rates).

I’ve taken an initial position, and will research further.

Many thanks again

[return_of_the_apeman] 08/4/2024 02:57

Perhaps this fits for you Papy02

[papy02] 04/4/2024 09:36

Thanks ROTA. Have done. I remember looking at CEBB before and hesitating due to lowish (imv) YTM. A mistake as price up 10% ish since!

It’s really tough to predict how the linkers/floaters prices will react to interest rate perceptions- cuts or rises. As the recent history is mainly the bond lunacy period where interest rates were on the floor but prices were around the same as now - but it would be foolish to assume a replay of the lunacy. So I try and estimate what rational prices would be at different base rate expectations, but that does have a CAPM feel about it - great theory, shame about the lack of correlation to the real world !

[bondofbond] 04/4/2024 07:29

There is no proper ringfencing of preference share capital between the UK plc and its South African parent - in fact, Investec Group still counts INVR (issued by Investec Plc) amongst its regulatory (and accounting) share capital under South African rules. So my assumption is that INVR carries SA country risk, with little protection granted by the fact that the issuer is a UK Plc. As a thought experiment - if Investec Group gets in trouble, why wouldn't they tap into all capital resources avallable to them?
You can find INVR shown as consolidated within Investec Group SA on page 127 hxxps://www.investec.com/content/dam/investor-relations/financial-information/group-financial-results/2023/Investec-Annual-financial-statements-Online-March-2023.pdf

[return_of_the_apeman] 03/4/2024 15:47

Ask on here, if you are looking for alternatives ;-)

[papy02] 03/4/2024 13:00

Thanks Cerrito. Very helpful.

[cerrito] 03/4/2024 09:41

Papy02
I also have concerns ref SA and have had since I first purchased INVR 10 years ago and yes it has constrained my holding.
FWIW I note that on the the last TU INVP says that of the £31n core loans £14b are in SA and £17b ex SA and £19b of deposits in SA and £21b ex SA.
My reading is that servicing of the INVR dividends is not dependant on capital flows from SA.

[papy02] 28/3/2024 22:14

Thanks,

Yes my worry is about SA failed state risk.

Will also post to the FIX board tomorrow.

Thanks again

[cassini] 28/3/2024 13:10

There's Investec plc and Investec Limited, the first is the UK side of things, the second is the SA side. They havv business in Asia too.

I believe they are legally distinct but nevertheless operationally intertwined.

I presume you are worried about SA becoming a failed state?

I'm afraid I don't know enough about the subject to say whether some 'event' in SA could derail INVR.

INVR is the only linker pref I know of, try the FIX board for info maybe?

[papy02] 28/3/2024 11:59

I have an excessively large (for me) position in these.

The reason is I hold an equal amount of INVR to a basket of 2 conventional Prefs (NWBD, GACA), to mitigate capital gains/losses due to interest rate (perception) changes. (As INVR price moves inversely to conventional Prefs). It has worked perfectly from that perspective since I invested mid last year. And delivered a great yield from the combined holdings, while running close to zero “duration risk”.

My problem is I would like to scale up this approach. I can diversify the conventional Prefs no problem, but I don’t know any “linker” other than INVR.

I am particularly uncomfortable about the (admittedly tenuous) South Africa link with Investec. I’d prefer to own nothing with even a tenuous exposure to SA.

Has anyone here dug deep into the SA link, and is willing to share their conclusions?

Or any other candidates for a “linker” other than INVR? Where yield is a function of BoE base rate or similar.

Many thanks

[cassini] 13/3/2024 01:22

rimau1,

I did sell at 511.26p the day after I posted I think, but have come to wonder if I did the right thing. Obviously not on one level as the price is now higher!

I made a profit, so I'm not too worried about selling out but I'll keep an eye on this one and may reenter if the price action looks favourable.

Inflation looks sticky, so base rate cuts may be further down the line than is being forecast.

I see the US 10 year Treasury interest rate dropped down to about 4.08% over the last few weeks but has just started rising again, so the market currently must think risk is rising and interest rates ought to be higher.

Hmmm, what to do, tricky...

[rimau1] 03/3/2024 15:13

Hope you didn't sell Cassini, i managed to top up but had to pay 5.15 and the spread is horrible. This is a nice higher for longer hedge that still pays well whatever the outcome. I have no idea why it fell from 5.50 to 5.00 but there was no stock available at 5.00 sadly.