Phoenix Share Discussion Threads

[robsy2] 31/10/2018 11:54

Bought a few more this morning.
R2

[rcturner2] 31/10/2018 10:53

It would be interesting if someone could create a graph showing how the dividend yield has varied over time (as the share price changes) to see what the upper and lower bounds are.

[edmundshaw] 31/10/2018 10:36

Originally I invested here at around 825p in 2015, about 3 years ago. The current price equivalent after two bouts of Rights is about 648p. So the price is down 7.7% since investment (though I have had 150p of dividends, overall 12.6% assuming I had bought and held).

I do feel that adding and reducing when the price is at its extremes is beneficial for this share. Right now, adding is obviously my preference!

[nk104] 29/10/2018 13:42

From what I heard the case was cooked up between Lloyds and the trustees as no-one knew what the law on GMP equalisation was.

This only applies to GMP accrued between 1990 (presumably the date of the Barber judgement) and 5 April 1997 - but it will presumably apply to all contracted-out schemes.

[tournesol] 27/10/2018 15:27

Lloyds bank has lost a legal battle about equality of pensions for women. Inference is that they and many other companies will have to increase contributions and also plug a historic gap in funding.

Nothing to do with Phoenix.

[jonwig] 27/10/2018 11:55

OK, thanks. If so, I'd think it's the responsibility of the company scheme (eg. Lloyds Bank in the article) rather than any arm's length administrator.

[aleman] 27/10/2018 11:06

It seems to be about accrual rates for guaranteed minimum pensions for those that contracted out of SERPS.

[jonwig] 27/10/2018 06:48

@ pmc - I'm unsure of what ruling you mean. Can you link to what you've been reading? And would any ruling be retrospective?

[pmclondon] 27/10/2018 06:05

I was wondering what the impact on PHNX would be of this news?A High Court ruling on gender equalisation of pension payouts could have an estimated £15bn effect on major pension schemes.

[jonwig] 26/10/2018 11:46

@ SteMiS - doh, yes! I simply forgot to multiply by 0.47. [Have amended my post.]

The right way to do it is probably to use 23.5p and make 36 terms on a rate of 1.02. But more important might be to concede that the SL acquisition improves the prospects.
That way we should get an answer a decent amount bigger than yours!

Actually, my post #3080 omitted one negative factor, and I don't know how big it is: mark-to-market of bond holdings. Assuming their capital position takes this into account, it could erode their surplus.

[stemis] 26/10/2018 11:06

I don't think that's right jonwig. If you discount a steady 47p a year by 4% over 18 years you get 619p. 20 years gives you 664p

[jonwig] 24/10/2018 20:07

I mentioned Barclays just recently. This is the bit I meant (post #1688, 06/04/16):

While we believe the dividend is sustainable for the next 20 years, we have to discount the dividends at c.4% to get to the current share price. In our view, the market has already priced in a dividend increase on the back of a potential deal.

(Remember they were the bearish one - probably still are.) What they said ought to be at least as true now, after the SL acquisition and despite the increased share capital. On these assumptions, if we take the current 47p dividend and discoount it over 18 years we get a npv of 620p*. This assumes no residual value.
[Amended after next post, #3081.]

How do higher bond yields figure?
First, advantage: when existing bonds mature, they can be reinvested at a higher rate, reducing the strain of paying guaranteed and other annuities.
Second, neutral: inflation and interest rate hedges in place.
Third, disadvantage: higher interest rates increase the chance of debt default by either corporate or sovereign isusers.

Whilst I'm relaxed about the share price, I'm pretty inactive at present.

*That doesn't seem to fit Barclays' numbers, but I've checked my calcs.

[stun12] 24/10/2018 19:28

I have another bond proxy, UKML, which invests in the riskier part of mortgage portfolios which have been securitised. It yields about 6.5%. It has been going up slightly in value over the last few days, while PHNX and SLA have suffered quite a bit. So it's not a purely yield thing...no idea

[schofip] 24/10/2018 19:07

But what is new

[fenners66] 24/10/2018 19:04

Other bond proxies are available ?

If the others are falling sufficiently to get to 8% yield or so , then there will be some churn here to move on and benefit from "better" opportunities.

Got to say that my original purchases here were lower down so .... there is a price at which these become almost irresistible again, despite me having too many already.

[tournesol] 24/10/2018 18:59

Weakness across the market caused by

Italy crisis
Brexit crisis
Saudi crisis
US trade war crisis
Trump crisis
Rising interest rates crisis
Rising inflation crisis
Project Fear crisis
and no doubt other things too.

[robsy2] 24/10/2018 17:51

Thanks speeds for providing the info.
So Italy isn't the problem... This is all a bit distressing.I hold PHNX as one of my bond proxy stocks , solid , dependable etc ....so any ideas on why PHNX has been hit so hard?Is it being dragged down by general worries or is it something more specific. ( thinking out loud really) .
Maybe it's worries about fall-out if the bond market goes really sour?
R2

[edmundshaw] 24/10/2018 17:30

Agree small, but not vanishingly small.

However adding it up, total exposure is 0.65% of life compannies' debt is Italian, but that is £188m (number independently arrived at, noted that it tallies with the previous comment - thanks), less than the cost of last year's dividends of £193m (and that is before the new share issue and the promised dividend increase, although also any acquired exposures). Spain exposures are also small. I don't think it is a big issue.

[jonwig] 24/10/2018 12:47

@ speeds - thanks for that. (Why didn't I look? Lazy!)

The amounts are small, but not trivial. And I wonder if there's double counting in there? (In other words, the total is less than £188m.)

So that doesn't account for the share price at all, though the wider EZ situation might.

[speedsgh] 24/10/2018 12:41

Pages 193-195 of the 2017 Annual Report gives details of PHNX's exposure to various different Italian bonds/debt securities.



page 193
The following table sets out a breakdown of the life companies’ sovereign and supranational debt security holdings by country:

Italy
Shareholder & non-profit funds: £55m (2016: £0m)
Participating supported: £0m (2016: £0m)
Participating non-supported: £0m (2016: £0m)
Unit linked: £34m (2016: £26m)
TOTAL: £89m (2016: £26m)

page 194
The following table sets out a breakdown of the life companies’ financial institution corporate debt security holdings by country:

Italy
Shareholder & non-profit funds: £7m (2016: £15m)
Participating supported: £0m (2016: £0m)
Participating non-supported: £7m (2016: £7m)
Unit linked: £0m (2016: £11m)
TOTAL: £14m (2016: £33m)

page 195
The following table sets out a breakdown of the life companies’ corporate – other debt security holdings by country:

Italy
Shareholder & non-profit funds: £47m (2016: £62m)
Participating supported: £1m (2016: £1m)
Participating non-supported: £32m (2016: £35m)
Unit linked: £5m (2016: £5m)
TOTAL: £85m (2016: £103m)

[bothdavis] 24/10/2018 10:47

Look at the markets, Brexit, American insular thinking, Oil prices, world turmoil = share price volatility!

[linton5] 24/10/2018 10:40

I thought this was a quality company mmm shocking display

[jonwig] 23/10/2018 16:32

RCT - unfortunately, Chesnara, another zombie fund, did (maybe still does).

[deltrotter] 23/10/2018 16:31

Thanks guys

Thinking of a buy and hold forever.....

[rcturner2] 23/10/2018 16:29

No way in a million years would UK pension funds hold Italian bonds.