Record Share Discussion Threads

[142 minty] 28/4/2010 10:19

SG

Dont agree

Mas's/Bloomberg's comments re Carry trade were reflected in Neil records comments in last interims re the necissitation of "normal" market conditions to retain the viability (and margins?) in the carry trade model and that is what we are seeing now - these AR strategies work over a very long period in order to exploit economic "bubbles" etc - the recent crisis has created challenging moements for the Record model and we are still coming out of it . Also this "worry" over the carry trade is only really primarily relevant to the absolute return product which will pick up the more we get back to common state of play in the opportunities inherent in trading between high and low yielding currencies - and this will return. Record are adapting to the situaution by picking up more hedging mandates - $7 billion from 2 US pension funds recently - this more than plugged the gap of AR outflows over that quarter - and the fee margins are the same as with AR mandates .They also say that although they mayy lose some mre AR customers they are confident to pick up more Active hedging customers over the coming months.Along with all this is the upside of new products - emerging market and index funds linked to the FTSE Record FB indices
On top of this , Numis's last note on Record estimate the same 4.59p dividend for the next 3 years - this would have been "blessed by the company" so although the dicidend cover doesnt look as safe as it did a couple of years ago i am still expecting REC to yield on same basis - there is plenty of cash in the business,no debt- REC will HAVE to maintain div. No director sales at all despite end of lock up awhile ago.I can see the frustartion for some PI's but right now should be seen as a buying opportunity at this level and that is what i have been doing...Good luck to all

[simon gordon] 26/4/2010 21:03

I sold out after the results. The hints of more money departing is just too negative. Their other products are probably not filling the gaps.

Mas your post above strikes to the heart of the problem that REC's business model faces and reinforces why more funds will outflow. Is the dividend safe? What are the catalysts? It could drop so low they take it private because no one is interested in buying the shares.

[masurenguy] 26/4/2010 20:41

Possibly an indicator as to why there is ongoing weakness in the Record share price !

Bloomberg reports that foreign-exchange profits from carry trades are disappearing as differences in central bank interest rates fail to increase fast enough to compensate for swings in currency rates, threatening to crash (oops, don't say "crash") a 20-year run in money movement that has fueled dozens of global bubbles. Royal Bank of Scotland Plc's index tracking the strategy of tapping cash where borrowing costs are low and investing where rates are higher, rose 0.57 percent in the first quarter, the smallest amount in a year, and down from 9.8 percent in all of 2009.

"There is no easy money left in the carry trade," said Henrik Pedersen, the London-based chief investment officer at Pareto Investment Management Ltd., which oversees $45 billion in currency assets. "Most of the high-yielding currencies are overvalued and the low-yielders are undervalued," he said. "The gains you can make on the interest-rate differentials are not going to make you 20 percent a year, it's probably only going to make you about 2 or 3 percent."

[142 minty] 22/4/2010 10:38

Numis note out on 20th April

Plenty of upside to come from new products , active hedging mandates ( offers same margins as abs return prod)and return to normal market conditions.Div at 4.59p/ share ( c. 7% yield) looks safe for next 2/3 years at least.Plenty of upside at current price and 90p target. Profits for 2010 as per market expectations

Edison note out on 21st april

weary wait but will come right with more active hedging contracts - yield very attracttive - current PE in line with sector . geared strongkly to "normal" markets ( abs return requires this to maintain growth ( so more performance fees)- credit crunch has undermined this but expecting more suitable conditions now ,new business lines in development. falling abs return clients - IMHO however new active hedging mandates replacing AR outflows and carry same margins.id say a strong buy at these levels...

[142 minty] 20/4/2010 10:11

"The Board anticipates that pre tax profits will be in line with market expectations for the financial year ended 31st March 2010."



Chairman and CEO, Neil Record, commenting on trading, said "The active hedging business has continued to grow in importance and now represents 35% of our AuME, compared with 13% at 31st March 2009. This product, being systematic in nature, continues to perform in line with client expectations and in particular has generated significant value for our US clients over the quarter. We continue to see interest in the active hedging product and anticipate seeing further client additions within the next twelve months.



"For the absolute return product, investment performance in the quarter was negative, leading to negative performance for the financial year of our Alpha Composite of -0.73%. This compares to a negative return of -3.49% for the whole of the financial year ended 31st March 2009. Whilst the performance to 31st March 2010 compares favourably to the FTSE Currency FRB 5 index that returned -4.78% (in Sterling) over the same period, there remains a risk that there may be further withdrawals over the coming months. We remain confident in the long-term performance and committed to the long-term investment strategy for this product.

[simon gordon] 20/4/2010 07:18

Ying and yang:

For the absolute return product, investment performance in the quarter was
negative, leading to negative performance for the financial year of our Alpha
Composite of -0.73%. This compares to a negative return of -3.49% for
the whole of the financial year ended 31st March 2009. Whilst the performance
to 31st March 2010 compares favourably to the FTSE Currency FRB 5 index that
returned -4.78% (in Sterling) over the same period, there remains a risk that
there may be further withdrawals over the coming months.

Our internally seeded Emerging Markets currency product (which is two times
geared) has had a strong performance since inception on 5th November 2009,
returning 12.1% to 31st March 2010."

[142 minty] 23/3/2010 14:06

thanks Pic

i thought they looked like PI type trades but there are some quity hefty new ones now of 50,000 which bodes well.

best

Minty

[mali7] 23/3/2010 12:12

over a 2 year period, this level seems to be the lowest level, where it has found support previously.

[142 minty] 23/3/2010 11:46

has this been tipped in something recently ? - buyesr coming out in force now

[icarus4123] 22/3/2010 22:17

Mentioned on CNBC, and passed off as a little bizarre, the recent concerns of currency speculators are overdone and will pass like the short selling concerns when the banks went down.

[levr] 21/3/2010 13:37

Has anyone read any analysis of the potential impact on Record's clients of the EU proposals for clamping down on currency 'speculators'?

[simon gordon] 20/3/2010 16:05

Post by Salmonoid on iii - 10/3/10:

I have a feeling they are on the brink picking up a good number of medium sized active hedging mandates which will increase AUME and client inflows after next results are out. This side of the business is the one which can really grow - especially as the growth of FX as a new asset class will necessitate competent managers to run risk and return. They have the reputation as best in the business at this - thats why they picked up the two large US pension funds ($7billion) recently after they had gone to NR for advice after their last managers lost them tonnes of money.

I'm not worried that they had 120 clients and now have 105 after one of the most turbulent periods in economic history - you were bound to have casulaties and therfore outflows. The big mandates/clients (apart from the latest 2) have been with them for years and years and have done well both through hedging services and the absolute return product which still (over 5 years) has shown a positive return to clients .

It seems absolutely crazy to me that this is trading at this price when they have the cash they have on the books, dividend cover still in place and estimated again for next year. Earnings will be down because performance fees on the absolute return will be very much down. But there is HUGE growth potential in this business - they are well ahead in their game and will continue to initiate new forms of business through currency services and management. I saw that Numis had a target of £1.05 post last interims at the end of January so there is plenty of upside on present price.

[simon gordon] 09/3/2010 15:16

Fool piece on REC:

[142 minty] 27/1/2010 16:35

new Numis note out post trading statement on Jan 22nd 2010 - 12 month target £1.05. Currently trading at 68p

[142 minty] 26/10/2009 10:56

Numis note out - target £1

[142 minty] 22/10/2009 15:14

and someone gone and sold 2m at 0.78p!

[toby tots] 21/10/2009 20:48

also tipped in todays Times

[p bear] 06/10/2009 08:30

Whole section in FT today regarding the FX market and REC's business model (with mention). Excellent reading for those looking for some understanding before investing.

[dafrog] 24/8/2009 20:15

Another rise; big spread, low volume but it goes up.

[142 minty] 30/6/2009 10:03

Deutsche Bank ( for a client) were 7m shares.Dont really understand this unless the LSE site is wrong and it was a negotiated trade.I cant believe that Cazenove's , the MM's are going to hold this level of stock unless there was a buyer at the other end.If so and there is no buyer then we have a serious overhang to get rid of here which will surpress the price for a time to come.there must have been a buyer for this level of stock.
Especially as the funds are all up , a $6billion mandate has been concluded - beefing up the AUME and the next interims should look very positive......

[tomoslewis] 23/6/2009 23:39

Any information on the large sells today?

[142 minty] 10/3/2009 16:48

Im definetly going to buy more at this price

Despite the drop in AUM last Q ( and most of this was FX loss due to Sterling reporting vs invoicing currencies , despite some smaller client outflows)there are very strong signals out there that Record is grabbing more and more active hedging mandates.

I estimate that since beginning of 2009 they have signed up at least another $6billion in AUM for their active hedging product - 1 swiss fund ($1billion) (passive) and 2 US pension funds ( $5billion).They are top of the game in this product and i wouldnt be surprised if it was more than this by now. Remember that this is how Record originally started and how the company made their name.More business in this area will tie them through the toufgher times they are having with their AR product - although these funds look like they are doing better from the start of the year

Their active hedging service could bring in a lot of new managment fees - which we wont see till 2010 accounts but which should get us up to 2008 levels of mangement fee income - hopefully by the n performance fees from AR will start to appear again in the accounts.

good luck to all

[142 minty] 11/12/2008 14:09

Nice little pick up in last few days lead by some good buyers ( 250,000 bought a couple of days ago) - Non exec dir. bought 20,000 at 0.73p

lets hope this is supported and we can move on and up to a £ asap