Supermarket Income Reit Share Discussion Threads

[williamcooper104] 22/6/2023 07:22

Bloomberg polled economists were something like 25 out of 27 predicting a fall in core inflation So a lot of people blindsided 50bps probably best on credibility; obvious the forward guidance hasn't worked

[chucko1] 22/6/2023 07:20

Contrary to what I said prior to the really and surprisingly(?) bad inflation report, 50bps may be preferred by the market. You don't want shock and awe as too much deviation from forward guidance may overturn the applecart, but 25bps in the face of what we saw yesterday? If seen as a cop-out, we end up going higher for longer and for longer dated rates which further stresses the housing/mortgage market.

[jonwig] 22/6/2023 07:07

A couple of articles in the FT this morning. One says 25bps as Bank hasn't given forward guidance on more. (That's because BoE got it wrong), another says 50bps essential to regain credibility.

Something I didn't know: Bank's statisticians provide the MPC with the data and then the members decide their views independently. Bailey is last to vote therefore has casting vote if it's 4-4.
The Fed does it differently - they argue, arm-twist, fight (just like US politics generally) before coming to a consensus.
Fed's approach is better, I think.

There won't be a rally until the market senses that the end is nigh. (In a good way.)

[spectoacc] 22/6/2023 06:55

@Jonwig - reckon that's about right, with 0.5% my choice due to the gap until next meeting. If they get lucky, 5% could even prove the peak (rather than 6%).

But per @nicrkl, interest rates are second-order: have to both predict what should be done and predict what they actually will do. Is what makes it so much fun.

As for economists - you all know the sayings :) INO the better educated the economist, the poorer the calls. Let's not forget abrdn's were predicting 2.5% IR's December 2023, and UKCM/API were being (mis)managed on that basis. And absolutely not hindsight to say that now (altho turns out my 4.5% for December surely going to be too optimistic - possible no cuts for even the whole of 2024 now).

[nickrl] 21/6/2023 22:57

@jonwig who knows trying to 2nd guess IR's is a fools errand currently as by BoE own admission there very expensive pool of clever economists, statisticians and modellers have utterly failed to get forecast right. Personally i believe 50bps is too much shock and awe was needed 12mths ago not now when everyday pain is being extended to more homeowners. Still reckon 25bp most likely outcome but was off the money on CPI!!

[jonwig] 21/6/2023 20:02

If I'm reading this right, a 50bpt rise tomorrow should help stabilise gilts and hence shares like this one. 25bpt would be chicken, and zero unthinkable.

The closer to the peak, the better. Or am I quite wrong?

[williamcooper104] 21/6/2023 19:50

My stop slipped and got partially filled at a low of 74.50 Right at the year and indeed all time low

[williamcooper104] 21/6/2023 12:47

Yep and US municipal bonds are tax free for US investors - so not worth looking it if not a US taxpayer as usually the price reflects that

[williamcooper104] 21/6/2023 10:40

They exempted gilts from CGT in the early 80s when most holders were sitting on large unrealised losses So it, at the time, was a tax cut that directly raised tax

[williamcooper104] 21/6/2023 10:39

As are Qualifying Corporate Bonds (from memory need to be listed and denominated in sterling - but would check that if going to rely upon it)

[cc2014] 21/6/2023 10:05

But if HMRC allow start charging gains to income tax of gilts then they have to allow losses to be charged to.

In summary, issues gilts at par, some make gains, some make losses but overall the net affect is zero. It's neutral to HMRC (broadly). So, make it easier for everyone, with no gains and no losses and no administration.

[chucko1] 21/6/2023 09:53

Yes, but that would be a 0.25% Gilt when the market rate is now 5%. HMRC will say that you should be paying income tax on an imputed 5% rate. Were this not the case, then there would be tremendous yield differences between 0.25% securities and freshly issued 5% securities as one would attract a lower rate of tax.

[cc2014] 21/6/2023 09:32

Chucko. I think you are referring to "deeply discounted securities". These are securities which for a very simplified explanation are issued well below par.

Gilts as Specto has pointed out do not fall into this category.

[spectoacc] 21/6/2023 08:59

My understanding is that you do get the gains on Gilts tax-free - eg as per:




"Gilts are completely free from capital gains tax, which means you do not have to pay CGT on any profits you make when you sell or redeem the gilt. This is particularly useful for higher and additional-rate taxpayers who would otherwise pay CGT at 20%. "


Weirdly, the IR even have a list:




Edit - which doesn't have October 2025 3.5% on ? Has all the others.

[nickrl] 21/6/2023 08:58

and in other news new atl here

[weaverbeever] 21/6/2023 08:12

What others are on your list please?

[joey52] 21/6/2023 08:12

Thanks, something to consider.

[williamcooper104] 21/6/2023 08:11

That's my CFD stopped out Alas no need for capital gains free gilts

[spectoacc] 21/6/2023 08:07

Correct, as the rules stand. It's unusual to have such low coupons vs expected return, and the uplift to par is tax-free.

[joey52] 21/6/2023 08:03

Read a lot about gilts on these boards over the last few weeks.
Something I have not previously considered
Can I ask, in the example above January 26

You buy at £89.10 and receive a twice yearly coupon of 0.125% which is taxable then
in January 26 you receive the final coupon and a payment of £100 which is capital gains tax free so, effectively £10.90 profit.

Thanks in advance

[spectoacc] 21/6/2023 07:00

There's some interesting 25's:

TN25 - 0.25%
TR25 - 5%
T25 - 2%
TY25 - 3.5%


Think I hold them all :)

January 2026 0.125%'s (T26) look the pick for taxable a/c's - not a coupon level we'll see again IMO. Wonder who's pension fund bought those at issue.

[chucko1] 20/6/2023 22:16

0.25% Jan 2025 - I cannot recall the TN number, but I think so.

[badtime] 20/6/2023 20:24

TN25 being your gilt purchase?