Raven Prop P Discussion Threads

[zangdook] 10/9/2020 05:07

Technically, it hasn't been paying dividends on the ordinaries, it's been repurchasing tendered shares. Whether the supply of cash to pay for that or for the pref dividends is affected, or whether it increases the tax burden on the company, I don't know, but the well-being of the company matters to all shareholders.

[kenny] 10/9/2020 00:40

I would not be a buyer or holder of the ordinary shares until the company clarifies the following.

Russia and Cyprus, on 8 September 2020, signed a new Protocol to the Double Tax Treaty between those States. The effect is to increase with-holding tax rates on dividend and interest payments flowing from Russian to Cypriot companies.

There are some exemptions and reduced rates of with-holding tax but it is unclear if the company's structure would benefit from those - or would only benefit from the reduced rates or exemptions if the group was re-structured such that the Cyprus intermediary holding companies were eliminated from the group structure.

In a worse case scenario, the increased tax cost is going to limit the holding company's ability to obtain the free cash flow to pay the generous dividends it has been paying on the ordinaries.

That money, currently flowing inter-group, may be better applied in mostly paying down local debt. As I only hold RAVP, I would welcome that situation, not least because it increases the security of these preference shares.

We really need the company to clarify the impact of the revised double tax treaty and what they are proposing to do about it. The revised treaty does not come into effect until 1 January 2021, allowing time for any necessary restructuring and an assessment of the ongoing increased tax cost, if any, post restructuring.

[igbertsponk] 03/9/2020 08:48

LOL - meanwhile my order expired unfilled!

[holts] 02/9/2020 16:18

You have to wonder about the system , put 20k worth on offer , wouldn't quote me .

[igbertsponk] 02/9/2020 12:14

Probably trying to get a few to match my order!

[gfrae] 02/9/2020 12:10

they are 123.5 bid, so not that large a spread.

[igbertsponk] 02/9/2020 11:13

Very wide spread. Just tried to buy about an ISA allowance worth and was quoted 126.95p!
So put in a limit order at a slightly lower price. No hurry.

[11_percent] 01/9/2020 12:56

Its about inflation.....not interest rates.

[cc2014] 01/9/2020 12:45

Maybe you're overcommplicating the analysis.

Interest rates have fallen from 14% to 0.1%

1. If you believe interest rates are going to continue to -14% then you want on hold onto this share and refuse all opportunties to sell it.
2. If you believe we've hit the turn in the interest rate cycle and interest rates are going to start heading up to say 3% over the next 5 years then you will have sold already
3. If you think interest rates may fall again by more step or will dither around some low range not exceeding say 1.5% over the next 5 years then this is worth holding but you'll be keeping a close eye on any change in that outlook.


I'm sitting somewhere between camps 2&3 but not with a high level of conviction and hold one fixed interest perpetual instrument.

Given my low level of conviction I'd rather hold bonds with a fixed expiry date or nothing at all.

[holts] 01/9/2020 11:40

A piece from Edison https://research.equitydevelopment.co.uk/e2t/tc/VX7mqQ6nRLXqV8-zZN4gZLLCW9ccHTJ4frNGYN2VVBC93p_b1V1-WJV7CgQmYW2m1Jnd6xcj6HW9d0yjZ2Nm2cwW6QVJD430vMNrW5B84g36QqQQpW5s269C53vW5QW4_PbZH6D8c6nVTl4vJ896-n_VbgqYX3_bjXXW6KTQ2x6PY11TW6K1_Gd3HCkmsN1WkmbvmWbRdW3B2PJ760CbK8W47nJTB494kTnVTswC96-wpHkW3c75Qs2jFM4sW2y6FF63pdxRyW699QB71KXmrnW5rDxfn574GXVW7fXSsq1L-Y5NW4j7w5b4jYkRQW330HWv5y3tmSW797wsT46t6vLVXT4GD8BB8bGVD_mFv5ySFXxW4vDV-68t4WDLW8ZYkWC9m2zqfVxpCD08DXvvJW5m5kcD2B_1MFW3yLMD55Hvw9cW7H8vRw9bnQ7W3kYs1

[gfrae] 01/9/2020 10:56

Incidentally, the figs are out and I would say pretty good.

[igbertsponk] 01/9/2020 09:50

Still trying to resolve the Invesco problem. Very promising that they suggest the Board will invest further.

"On shareholder matters, the Board was pleased to report the approval for the re-designation of our convertible preference shares at the General Meeting on 31 July 2020. The re-designation to ordinary and preference shares will complete on 30 September 2020. However, the conditional agreement between the Company and Invesco for the purchase of Invesco's ordinary and preference shares has now lapsed, a victim of the uncertainty resulting from Covid-19. We will continue our dialogue with Invesco in the meantime and remain keen to find a solution to the perceived stock overhang. This may be by way of a syndication of the Company and its executive management acquiring Invesco's holding."

[igbertsponk] 01/9/2020 09:42

Results out. Exchange and small revaluation drop annoying but otherwise fairly steady

2020 Interim Results

Raven today announces its unaudited results for the six months ended 30 June 2020.

Highlights

-- Occupancy at 30 June 2020 increased to 93% (31 December 2019: 90%) with 142,000sqm of new lettings and 176,000sqm of maturity extensions in the period;

-- Underlying earnings of GBP13.4 million (30 June 2019: GBP13.4 million) before unrealised foreign exchange movements;

-- Unrealised foreign exchange losses of GBP23.8 million (30 June 2019: profit GBP18.9 million) on weaker Rouble;

-- IFRS loss of GBP31.7 million (30 June 2019: profit GBP26.2 million) after these unrealised foreign exchange movements and loss on revaluation of GBP12.5 million (30 June 2019: profit GBP18.2 million);

-- Cash balance of GBP85.0 million (31 December 2019: GBP68.1 million);
-- Rouble value of investment property portfolio down by only 0.3% since 31 December 2019;
-- Diluted net asset value per share of 58p (31 December 2019: 75p) on the weaker Rouble;
-- Re-designation of convertible preference shares to complete on 30 September 2020; and
-- Payment of final distribution for 2019 of 2.25p by way of tender offer buy back of 1 in 16 ordinary shares at 36p per share confirmed.

Glyn Hirsch CEO said "It looks like global interest rates will stay low for some time and with reliable investment yields likely to become an increasingly scarce commodity, it is reasonable to expect high quality yielding assets to increase in value. We own a high quality portfolio of assets in the best real estate class in the world, with a fifteen year track record of reliable cash flows. These assets are currently valued on a yield of 11% with underlying income in Roubles and annual indexation of around 5%. Russia is not for everyone but on an objective financial analysis, it is one of the strongest and least leveraged economies in the world today. We look forward to the future with confidence."

[pogue] 01/9/2020 08:42

Kenny
you are so predictable you always attack the man when you are losing the argument. I have been investing since the days of Sid under Maggie, I was a student then betting grant cheque. Just because I dont post on ADVFN does not make me a new investor.
Anyway what’s the obsession off having someone agree with your view in print? I have read loads of articles and reports that proved completely inaccurate. I read many articles and reports and I read or listen to the speeches of those making the decisions etc and make up my views from that I cannot point to any one article that supports my views there are many that state points of it, one article you reference here states the failure of Japan to raise inflation was blamed on their consumers and stating US ones are different so there is part of it but I knew that from years ago as the blame for the failure in Japan was laid at the saving culture there. The trick with investing that you are missing is using your own ability to make money. The way you seek affirmation from others before you do anything is a bad trend in investing as you will always find a view to agree with you no matter how wrong it is.
Going into this crisis I had a few HYP shares, a chunk of fixed interest, lump of gold miners and a few oilies. When I was reading the news one day in Feb and watching share prices soften I decided to sell a large chunk of my portfolio no specific article just a cumulation of views from many places making me feel that things were going to turn bad soon and I should get out. That saved me a lot of money, were you looking for an article to tell you to sell as we were about to experience a crash in the market? Bet you didn’t find it.
Since then I have moved mainly into gold and small pharma again no specific article telling me to do it though the number of people saying get into gold has risen dramatically even the arch gold hater Buffet has bought a chunk of a gold miner, and I am certain I never read any article saying buy small pharma I did that by pure observation of stock prices. I have doubled my SIPP portfolio value since the beginning of the year now. I notice RAVP have still not made it back to pre CV19 levels, its one of my poorer performing stocks if not worst.
Reason I got into fixed interest was the banking crash of 2008. I was in HYP and speculative oil shares and got hit bad. I started reading the Banking Sector chat room on TMF where people were investing in these instruments. I was highly skeptical but watched and the profits were there so I dived in, I never in that time read one article that said you should invest in bombed out bank debt but I did and made back the value of my portfolio and that was by listening to people on chat rooms not articles, think about that, clearly I did my own research but articles were no use there.
You keep looking for ‘grownups̵7; telling you what to do I will base my investing on research and experience in my experience this is by far the best option and makes me money.
Good luck.

[kenny] 31/8/2020 18:04

It has been posited that high inflation is coming because the Fed is going to give money to poor Americans who are going to spend it. The above will create massive inflation which will decimate high yield, like RAVP. The best place to invest is gold.

The above is my best interpretation of a thesis that the poster refuses to explain or even provide third party references in support.

Below is a very recent article about American consumers. It delves into three possible future scenarios – not one of which leads to high inflation.

This and much other research, is the basis for my believing that yield is going to be scarce in the next 10 years, at a minimum, and well bid over the next decade. I could be proved to be wrong!

It has been stated “The markets are all beginning to bet the FED will succeed in getting inflation going as the price of gold rises inexorably not many commentators believe they will not succeed in raising inflation”.

I don’t know why gold has increased over the last few months – only because I do not follow gold because I have no intention of investing in gold. However, the above statement is easily debunked by the question – if everyone knows that inflation is coming and the markets are betting on inflation, why is the yield on US 10-year treasuries at 0.7%? The rest of the world also has extremely low interest rates, so they are also not expecting high inflation.

I base my views upon research and do not see how someone who has – only since January this year – lists stretching to 112 pages of posts, can have any time to carry out research upon which to base an investment thesis.

In analyzing possible investments, of what enlightening use is a personal opinion expressed without research and careful checking with others' views. You may as well follow the claims of a snake oil salesman.

No doubt this post will be rebuffed by a one line throw-away comment – which will fully validate my above comments.
=============================================================

Aug 26, 2020
Considering the risks to consumer spending
By Austin Kimson
Vice President, Macro Trends Group, Dallas

In brief: The most critical question facing many companies today is whether consumer spending will retain its relative strength in the months to come. In this brief, we discuss the determinants of consumer spending across income tiers and explain how several macroeconomic scenarios could affect different sectors and businesses.

Consumer spending is a critical engine for both the broader US economy-it accounts for two­ thirds of GDP-and for sectors as varied as retail, telecom and airlines. Today, government policy is supporting this all-important engine from both the top down and the bottom up. Fiscal support, in the form of government relief programs passed in response to the Covid-19 crisis, is shoring up spending among lower-income families. Meanwhile, the Federal Reserve's monetary policy is supporting record-high financial asset prices, effectively propping up spending among upper- income households.

This two- pronged approach has enabled a sharp V-shaped recovery in US retail sales. Retail spending hit an all-time high in July, 2.7% higher than the same month last year. Our Bain Consumer Health Index (CHI), which tracks economic outlooks across the income distribution, similarly increased sharply in May and June after plummeting in the early days of the pandemic. This recovery may seem extraordinary by historical standards, but it's less surprising against the backdrop of the Federal Reserve's record $7 trillion balance sheet (which has increased by nearly $3 trillion in less than three months) and the federal government's $2 trillion spending surge in the second quarter of this year.

Beneath the surface of these headline numbers, however, there are worrying signs that the economic recovery has failed to gain momentum. Total nonfarm payrolls declined by 20.7 million in April (the peak of the economic shutdown). Job growth accelerated in May (to 2.1%, month over month) and June (to 3.6%) but sharply decelerated in July (to 1.3%), and there are signs this deceleration is continuing. At the current trajectory- and we must concede that projecting even a month ahead is far more art than science at this point - the labor market appears to be headed towards a plateau roughly 10% below its prepandemic level. That gap is nearly as large as the divergence seen after the 2007-09 recession, which was, as of that time, the worst downturn since the Great Depression.

The critical question facing many businesses today is whether consumer spending will remain robust in the months to come or whether weakness in the real economy (or some other development) will cause households to retrench. In this brief, we explain how economic conditions affect consumer spending across income tiers and describe how several different economic scenarios might impact various sectors and businesses.

How consumer spending is linked across income tiers

The upper, middle and lower income tiers of US households each account for roughly one-third of consumer spending, although the upper-income segment is the smallest by population (and s lightly outsized in its share of per-capita spending vs. the other two segments). In our work on the CHI, we've found that upper-income spending is most closely tied to conditions in the financial markets, middle-income spending is most affected by the housing market and lower-income spending is driven by the labor market. But spending trends in one income tier also affect the other tiers.
For example, if financial markets maintain their strength, upper-income households will likely continue to spend robustly on goods and services, benefiting the lower and middle-income workers that produce those goods and services. If, however, stock and bond prices are sitting on a bubble that pops, then upper-income households will likely retrench, reducing their spending on everything from travel and leisure to home renovations to apparel - the se spending cuts would hit middle- and lower- income workers employed in affected sectors.

If falling stock prices are accompanied by falling bond prices, higher mortgage interest rates and tighter lending conditions may emerge. Higher mortgage interest rates, especially when triggered by declining stock and bond prices, are bearish for the housing market. The effects of higher rates would likely be uneven across the country, but the cyclical impact of changing financial conditions would almost certainly reduce middle-income household optimism and spending. This could have an outsized effect on sectors such as home building and home improvements and renovations­ these have been unexpected bright spots in the pandemic-crisis economy and an important source of income support for working-class and lower-income Americans.

Similarly, conditions in the labor market and lower income tiers also affect wealthier consumers. When labor market conditions are strong, lower-income consumers spend more money across a broad range of sectors. This spending results in encouraging data that prompts wealthier Americans to buy stocks and bonds, driving up asset prices (and further boosting spending).

The composition of consumer spending under different scenarios

In the most optimistic scenario, financial markets would maintain their historical high levels, but lower-income households would nonetheless experience increased hardships until the November election, after which a legislative deal may be easier to achieve. High asset prices aside, there is simply no escaping the steep deceleration of job market growth in recent months. The notably robust spending among low- income households since the crisis began, largely reflects the pass­ through effect of government stimulus. While the mechanics of another round of federal stimulus are fairly simple, the political alignment is increasingly problematic. At best, new stimulus funds won't hit the economy for another month, but with less than 80 days to go before arguably the most contentious political election in a generation, the chances of a meaningful pre-November stimulus package being signed into law decline by the day. A controversial executive order to provide a temporary stopgap may mildly blunt the abrupt decline in fiscal support that occurred at the end of July but is likely insufficient to offset the pandemic's persistent drag on the economy.

US retail sales in this scenario would likely stall at a transient plateau, leaving spending more reliant on upper-income households vs. lower-income households. The product and geographic mix of spending would likely shift to favor the premiumized retailers and brands favored by upper-income households, while value brands would suffer. Upper-end remodeling and home-buying activity might remain robust, while other activities like auto repair and parts could face headwinds.

In a more adverse scenario, a financial market downturn would undermine spending among high­ income consumers. Of course, policymakers could attempt to avert this outcome by providing additional support for asset prices. The Fed has an unlimited balance sheet, and its formidable powers to stabilize markets should not be underestimated (as evidenced by the recent all-time highs). A market downturn could also catalyze alignment to pass another round of fiscal stimulus, which would likely have a positive net effect on retail spending, although retail sales growth in this scenario would likely still be more muted than its recent breakneck pace. The product and geographic mix of spending growth under this scenario would likely balance more evenly into slow, steady growth across a broad range of categories as sectors that have surged especially catering to upper-income households-moderated while lower-income household spending remained well supported.

In the most adverse scenario, the combination of financial market dislocations and the absence of meaningful fiscal support before November would coalesce into a perfect storm of failing top-­down and bottoms-up support for consumer spending. Retail spending would drop off sharply for all levels of households, effectively forcing a second phase to the recession. The shock of a second steep decline in US economic activity may be enough to mobilize fiscal and monetary support.
Policymakers rallied effectively in March, but as the saying goes, past performance is no guarantee of future results.

One additional risk is present across all these scenarios - an inflation supply-side shock, which would likely force the Fed to scale back its support of the markets in favor of maintaining price stability. This is a scenario that hasn't occurred in forty years, since the stagflation of the 1970s, but as we've highlighted in other articles, there is a growing but unquantifiable risk of an inflationary disruption to the manufacturing supply chain due to geopolitical tensions between the US and China.

General implications for businesses

The strategy question facing firms today is how to balance the risk of missing upside opportunities against the need to protect against downside risks. The specifics of this task will vary for each business but will be informed by a simple asymmetry: Upside opportunities are likely to emerge and unfold more slowly and will likely be reflected in standard data sources, while downside threats will appear quickly and leap ahead of (official) data.

In this environment, if buying downside protection requires a business to forgo value it might enjoy in the event of an upside surprise, the price of that "insurance" may be well worth it. Conversely, rashly investing ahead of real demand on the assumption that a rapid recovery is underway could leave a business dangerously exposed under any but the mildest of scenarios. Fortunately, this cautious stance will likely not be necessary for long. While our typical "near-term" time horizon is one to two years, a stance of watchful waiting need not last more than a few months in this year of accelerated, unprecedented disruptions.

[pogue] 29/8/2020 23:25

rayg5
place your bets.
I have and am moving more into them.
Let's speak in a next year at this time, I like to see who wins and loses. It reaffirms my ability at reading the sheep's entrails or I learn from it.
Good luck

[rayg5] 29/8/2020 22:50

Which measure is this? Please source this claim

[cfro] 29/8/2020 22:32

The real rate of inflation in the UK is already running at between 5-6% (not the CPI)

The only choice is between higher inflation or currency collapse/hyper inflation. Anything else is just bluster and lies.

[rayg5] 29/8/2020 20:55

Lots of speculation here. What is certain is that logic seldom applies to market behaviour and textbook reactions may not be realised. Don't, for instance, see gold as a one way bet. It isn't. The only issue for holders here is how management will cope with a global downturn. Warehouses are a sub set of commercial property which, imo, should survive the downturn across the sector. There will be less demand for offices but why should there be a downturn in demand for warehousing provided the large corporations to which Raven rents its warehouse space remain viable. The pandemic is above all changing attitudes to homeworking with the attendant knock on effect on demand for commercial office space, but warehouses will remain an essential ingredient of the logistics business. My bet is that even if government yields rise corporate yields at the lower quality end of the market will not - that is to say the spread will narrow.

[pogue] 29/8/2020 20:21

Why? My views are my own, you feel the need to post other people's views in reply then at least post ones that are relevant.

[kenny] 29/8/2020 19:34

Therefore, perhaps you could lay out all your views backed by third party cross references to articles and/or commentary so that we can all understand and discuss your opinions.

[pogue] 29/8/2020 15:42

Since you have picked up on only a small part of what I said at least use a reference to an article about American consumers and not EU, different beast, and as I said they will drop helicopter money on the US poor not the retirees. The article misses both points.

[kenny] 29/8/2020 15:28

It was stated in a recent post, that US consumers will return to spending - as they have in the past - and this will push up inflation.

Here is an article which demonstrates that low or negative rates reduce spending. Most of the reduction is because older and retired people, who are a large and growing part of all developed economies - spend less. The article suggests they spend less because their income is reduced by low rates: