Is it time to get off the Sirius Minerals bandwagon?

Is it time to get off the Sirius Minerals bandwagon? By John Cornford When I discussed Sirius Minerals in March, I thought it expensive at around 16p, being too far ahead of any meaningful return even though exceptional once it starts (slowly) in ten years time. I thought the same in June at around 19p. However there has been good news recently, and Sirius became doubly more expensive. The question is: Will that hold? The good news included permission for the Teeside port terminal; initial capital expenditure revised downwards; and the vital first-stage funding for the required initial $1.1bn moving ever nearer. And Brexit has made Sirius's majority overseas earnings that much more valuable… Click Here To Read The Full Story The Master Investor Market Report The FTSE 100 closed the day at 6,785.64, a decrease of 35.15 points. The FTSE 250 sank 121.85 points to finish at 17,725.39. The FTSE All Share dropped 19.69 points to finish at 3,698.62. The FTSE AIM All Share finished at 791.01, down by 2.39 points. Builders merchant Grafton Group (GFTU) faced challenging conditions in the UK during the six months ended 30th June, which was countered with good performances in Ireland and the Netherlands. Pre-tax profits were up by 8% at £62.8 million on revenues of £1.2 billion and the interim dividend was raised to 4.75p. Analysts felt that the UK business was underperforming on margins and shares in Grafton dropped by 9.95% to 547.50p. Get our August issue while it's hot! Click HERE to read. Defence equipment manufacturer Chemring (CHG) said that third-quarter revenues were 20.2% above those for last year at £109.1 million as it benefited from a contract supplying 40mm ammunition to a customer in the Middle East. Forward orders were also up by 12% and management expressed confidence that this year's forecasts would be met. Shares in the company rose by 2.25p to 143.25p.  Shares in AIM-listed online gambling firm 888 (888) climbed by 3p to 218p after its revenues increased by 19% to $262 million (£199.4 million) during the six months ended 30th June as its sports betting arm sprinted forwards. Strong performances in the UK, Spain and Italy helped push pre-tax profits up by 39% to $27.8 million (£21.1 million) despite adverse currency fluctuations. Tomorrow's news today  Hays (HAS) will release final results. Quote of the day "All men's gains are the fruit of venturing." - Herodotus Latest Stories IAG hits some Brexit turbulence By Robert Sutherland Smith IAG at 392p, after the first-half figures, looks very cheap in cash and operating cash flow terms, which also makes the prospective estimated dividend yield of 5 per cent look credible and safe. The price remains below the price on Brexit referendum day... Click Here To Read The Full Story Chart of the Day: Hague & London Oil By Zak Mir Rather interestingly, even for those late to the recent share price rise at Hague & London Oil, there would appear to be an opportunity to get on board in the wake of the recent consolidation and news. Hague & London Oil (HNL)… Click Here To Read The Full Story Mellon on the Markets: "Mark Carney should be fired – at once" By Jim Mellon This month, I am composing my column on the train from Edinburgh to London, having just made my thirtieth visit to the Edinburgh Festival. Every year, the Fringe gets bigger and wackier, and every year the ticket prices go up – in fact, quite a lot!… Click Here To Read The Full Story The Evil Diaries: "Apple Will Pay" By Evil Knievil This Apple (NASDAQ:AAPL)/EU tax ruling is Kafkaesque – especially given that the EU intends that Eire banks the loot where Eire has indicated that it declines. (This is understandable given that Eire thought it had entered into an agreement with Apple.)… Click Here To Read The Full Story Chart of the Day: HSBC By Zak Mir Anyone wondering whether the post-Brexit state of flux might be good for at least some banking stocks need look no further than the internationally focused HSBC and the mega rally of recent weeks… Click Here To Read The Full Story Join the movement on social media: Copyright 2016 Master Investor Ltd, All rights reserved. You are receiving this email because you opted in at our website. If a Daily Bulletin is too frequent, why not opt in to our once weekly mailing list for a round up of the week's news straight to your inbox. Once Weekly Round-Up Our mailing address is: Suite 88, 22 Notting Hill Gate, London W11 3JE Master Investor is a trading name of Master Investor Limited. Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd does not accept any liability for any losses suffered by any user as a result of any such decision.

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Macro Digest: Why October 14th 2016 is KEY DATE - MUST READ - SEC new rules for money market (= liquidity crisis)

Conclusion:

 

·         This is potential LIQUDITY RISK.

·         The world is short  USD – a survey among Japanese banks with branches in New York shows 2/3 of their funding is raised through US based CP programs! (Hence the BID over for JPY currency swaps)

·         At bare minimum this is US bullish – as the "hedge" against being short US funding is to own…..US Dollars..

 

 

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This is VERY important to know and understand – there are 2.7 trillion US$ in money market fund in the US. In the past these were mainly going to "Prime funds" which invested in short-term government and commercial papers. Then came Lehman and hell broke loos

 

These funds have in history guaranteed 1$ NAV always – but under Lehman it "broke the buck"….and we had liquidity crisis and a non-existent Commerciall Paper market – now in order to avoid same thing to happen the SEC per October 14^th will allow PRIME FUNDS to trade only to its NAV – (making it significantly more risky….)

 

This has means 500 billion US$ has left "prime funds" and gone to Government funds, which as the name says can only buy government short-term papers – this has then created excess demand for T-bills and left LIBOR bid, because of course, the main difference btw prime fund and government is CP papers – mainly banks and mortgage issuers – ie. 500 Bln USD is "missing" in short-term funding.

 

Hence LIBOR bid…..a further 500 bln. USD is expected to leave before October 14^th according to Morningstar.

 

Of course everything may go smoothly, but with a Fed wanting to hike you need to understand this "indirect" increase in not only the price of money but also the il-liquidity risk.

 

Below article from MACRO-OP on this theme, an attachment from Vanguard Prime Fund, the world biggest Primefund and finally some charts to support/follow the flow.

 

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http://macro-ops.com/what-the-new-sec-money-market-fund-regulations-mean-for-the-financial-system/

 

 

 

JPY 1 year Basis Currency Swap (how much you will pay more for the USD relative to JPY)

 

 

 

 

Total Prime Funds AUM – 1^st time in 17 years below 1 triliion USD!

 

 

 

 

Government Money market funds (MASSIVE bid for T-bills)

 

 

 

Total amount of AUM in Money market funds – 2.7 trillions US (JPM and Vanguard biggest players)

 

 

 

 

One month LIBOR

 

 

 

 

 

Two Year US generic Government yield…

 

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

 

Mellon On The Markets: “Mark Carney Should Be Fired – At Once”

Mellon On The Markets: "Mark Carney Should Be Fired – At Once" By Jim Mellon This month, I am composing my column on the train from Edinburgh to London, having just made my thirtieth visit to the Edinburgh Festival. Every year, the Fringe gets bigger and wackier, and every year the ticket prices go up – in fact, quite a lot! This ticket price inflation contributes to a noticeable change in the demographics of the audience – i.e. they are getting older (as am I!). When I first started going, tickets were generally a pound or two, and now they are between ten and fifteen pounds. Young people simply can't afford them, so apart from being denied decent affordable housing and a free education, they are also denied culture. Ah well, there's always drink! And this brings me to the point of this anecdote. Inflation may appear to be low, but if you are a consumer of services, or of housing, or of coffee shop time, or of public transport, you will not find it to be so. Sure, electronic goods and textiles have been falling in price (not any more though!) and this has masked the true rate of inflation, which is much higher than the official stats suggest. This is why Mark Carney should be fired – at once, preferably. I talked about the plague and curse of academic/investment banking central bankers at the Master Investor Show this year, and how they were manipulating economies into long-term stagnation with their ever running printing presses and distortion of the Wicksellian rules on the true rate of interest and allocation of capital… Click Here To Read The Full Story The Master Investor Market Report The FTSE 100 closed the day at 6,820.79, a decrease of 17.26 points. The FTSE 250 sank 83.55 points to finish at 17,847.24. The FTSE All Share dropped 10.40 points to finish at 3,718.31. The FTSE AIM All Share finished at 793.31, up by 0.50 points. Distribution outfit Bunzl (BNZL) increased its pre-tax profits for the six months ended 30th June by 6% to £155.6 million as operating margins grew and it benefited from advantageous currency movements. Revenues also climbed by 10% to £3.44 billion on the back of recent acquisitions and the firm remains committed to a takeover-based expansion strategy, with three new purchases announced this morning worth a combined value of £101 million. Bunzl shares closed the day at 2,418p, down by 2p. Get our August issue while it's hot! Click HERE to read. Components supplier Dewhurst (DWHT) said that trading during the third quarter of the financial year ending 30th September was a continuation of the recovery that was seen in the first half and the recent fall in the value of the pound has also had a positive impact on revenues. As a result of these developments, full-year profits are now expected to be ahead of previous forecasts. The shares shot upwards by 13.15% to 710p.  Shares in AIM-listed estate agency Purplebricks (PURP) climbed 9.75p to 135p after the company announced the formal launch of its Australian business. The company believes its flat fee structure and service offering will attract customers and let it take a slice of Australia's £3.3 billion real estate market. The initial operations will be located in Melbourne and Brisbane, with rollouts in other cities planned for later this year.  Tomorrow's news today  HSS Hire (BSS) will release interim results. Quote of the day "Good questions outrank easy answers."  - Paul Samuelson Latest Stories The Evil Diaries: "Apple Will Pay" By Evil Knievil This Apple (NASDAQ:AAPL)/EU tax ruling is Kafkaesque – especially given that the EU intends that Eire banks the loot where Eire has indicated that it declines. (This is understandable given that Eire thought it had entered into an agreement with Apple.)… Click Here To Read The Full Story Chart of the Day: HSBC By Zak Mir Anyone wondering whether the post-Brexit state of flux might be good for at least some banking stocks need look no further than the internationally focused HSBC and the mega rally of recent weeks… Click Here To Read The Full Story Zak's Weekend Charts Round-Up By Zak Mir FTSE 350 Stocks Antofagasta (ANTO): June Price Channel to 600p While some of the other mining sector giants such as Randgold Resources (RRS) seemed to head for the upper reaches of the stratosphere with relative ease… Click Here To Read The Full Story Something for the Weekend – Britain's Got Telecom By Adrian Kempton-Cumber It amazes me that people here are so absorbed by foreign politics but scarcely seem to engage with domestic politics at all. The Trump campaign is a classic example. I see countless retarded posts by Brits on Facebook saying things like "we've GOT to stop Trump getting elected"... Click Here To Read The Full Story Can Persimmon Build on This Recovery? By Robert Sutherland Smith I last wrote on Persimmon (PSN) shares last month when they were languishing at 1,239p and it struck me that they were looking remarkably good value on the fundamentals. It is always a bit risky calling shares before the actual results but where there is risk there is the potential for reward as well… Click Here To Read The Full Story Join the movement on social media: Copyright 2016 Master Investor Ltd, All rights reserved. You are receiving this email because you opted in at our website. If a Daily Bulletin is too frequent, why not opt in to our once weekly mailing list for a round up of the week's news straight to your inbox. Once Weekly Round-Up Our mailing address is: Suite 88, 22 Notting Hill Gate, London W11 3JE Master Investor is a trading name of Master Investor Limited. Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd does not accept any liability for any losses suffered by any user as a result of any such decision.

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What the Olympic Medals Table Tells Investors

What the Olympic Medals Table Tells Investors By Victor Hill It is five days now since the world's Olympians filed out of the stadium in Rio heading home in a blaze of samba. But for the glorious lasses and lads of Team GB their homecoming on golden-nosed flight BA2016 on Tuesday – which we were told was groaning with Champagne – was triumphant. Of course, I'm biased. Putting national pride aside, as an economist, one would have expected the UK to have done well. Its new-found sporting superpower status aligns precisely with its long-held status as a soft-power superpower whose books, fashions, TV formats, music and ideas resonate around the world. As an illustration of this status, I cite an experience I had some time ago. I stumbled into a bar in a remote part of Tajikistan only to find that the semi-nomadic yokels were entranced by TV coverage of the English Premier League. (My knowledge of the local patois was not up to explaining that, at a national level, the British – with the noble exception of the Welsh – are rubbish at football.) Actually – and far be it for me to rain on our parade – the main reason why Team GB ended up in second place in the medals table (trailing the almighty USA by a long way) was that China underperformed – at least relative to the last three Olympics. At London 2012 the Chinese won 88 (a lucky Chinese number) medals, of which 38 gold. This time they won a total of 70 medals, of which "just" 26 gold. By the way, Team GB got 29 gold medals in London versus 27 in Rio. But no one talks about Britain's underperformance because of the second place in the medals' league… Click Here To Read The Full Story The Master Investor Market Report The FTSE 100 closed the day at 6,838.05, an increase of 21.15 points. The FTSE 250 rose 47.94 points to finish at 17,930.79. The FTSE All Share climbed 11.19 points to finish at 3,728.71. The FTSE AIM All Share finished at 792.81,up by 3.14 points. Shares in hospitality outfit Restaurant Group (RTN) rose by 3.6% to 422p today despite the company reporting that it swung to a pre-tax loss of £22.5 million during the 27 weeks ended 3rd July. Like-for-like sales dropped 3.9% and management have announced that they will close 33 underperforming locations with immediate effect. Shore Capital said that the results were ahead of expectations but that more had to be done to stabilise the business. Get our August issue while it's hot! Click HERE to read. Vehicle and tool rental specialist Speedy Hire (SDY) has agreed the sale of its large mechanical plant fleet for a cash consideration of £14.4 million. The proceeds of the deal will be used to reduce debt. The fleet earned revenues of £3.2 million during the year ended 31st July and Speedy has entered a re-hire agreement that will run for up to seven years. The shares climbed 2% to 38p.  Gardening products firm Marshalls (MSHL) grew pre-tax profits by 21% to £25.1 million during the first half of the year as operating margins improved by 170 basis points. Revenues were up by 2% as an improvement in domestic sales outweighed a 10% drop in sales in international markets. Management believe that the medium- and long-term outlook for the business is good and are confident in meeting 2016 full-year targets. The shares climbed in early trading, but settled back to 314.20p by the close. Tuesday's news today  BATM Advanced Communications (BVC) will release interim results. Quote of the day "All money is a matter of belief."  - Adam Smith Latest Stories Something for the Weekend – Britain's Got Telecom By Adrian Kempton-Cumber It amazes me that people here are so absorbed by foreign politics but scarcely seem to engage with domestic politics at all. The Trump campaign is a classic example. I see countless retarded posts by Brits on Facebook saying things like "we've GOT to stop Trump getting elected"... Click Here To Read The Full Story Chart of the Day: Global Resources Investment Trust By Zak Mir There may be some of us who are kicking ourselves for missing out on the great 2016 rebound for mining and energy stocks. However, even though it is not exactly early days to try to get on board, there are some contenders relatively near to the low end of their respective ranges… Click Here To Read The Full Story Can Persimmon Build on This Recovery? By Robert Sutherland Smith I last wrote on Persimmon (PSN) shares last month when they were languishing at 1,239p and it struck me that they were looking remarkably good value on the fundamentals. It is always a bit risky calling shares before the actual results but where there is risk there is the potential for reward as well… Click Here To Read The Full Story The Evil Diaries: Molins, Orsu and Olympic Heroes By Evil Knievil I caught up with Molins (MLIN) yesterday afternoon in the light of their results statement to 30th June 2016. The pension deficit (i.e. the excess of the computation of actuarial liabilities over fund assets of c. £350m) is £10m or so… Click Here To Read The Full Story Chart of the Day: Jimmy Choo By Zak Mir Considering that the last pair of shoes I purchased was £29.99 at Top Man, it could be argued quite fairly that the Jimmy Choo proposition is not really something which I espouse. But then again, with the stock market, knowing when to separate business from pleasure is all important… Click Here To Read The Full Story Join the movement on social media: Copyright 2016 Master Investor Ltd, All rights reserved. You are receiving this email because you opted in at our website. If a Daily Bulletin is too frequent, why not opt in to our once weekly mailing list for a round up of the week's news straight to your inbox. Once Weekly Round-Up Our mailing address is: Suite 88, 22 Notting Hill Gate, London W11 3JE Master Investor is a trading name of Master Investor Limited. Material contained within Master Investor Magazine and its website is for general information purposes only and is not intended to be relied upon by individual readers in making (or refraining from making) any specific investment decisions. Master Investor Ltd does not accept any liability for any losses suffered by any user as a result of any such decision.

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