Where next for UK equities?

Where next for UK equities? By Robert Sutherland Smith According to the FTSE Actuaries Share Indices published by the Financial Times last week, the FTSE100 Index was valued at nearly forty times earnings and on a dividend yield of 3.7 percent; clearly showing that the big market cap, publicly quoted companies – largely internationally trading – were on average, paying dividends out of capital not from reported statutory earnings. Roughly speaking, the "earnings" yield on that basis is about 2.5 percent; self evidently inadequate to cover a dividend yield of 3.7 percent. The valuation measures for the UK oriented FTSE350 Index were a price earnings ratio of 34 times (an earnings yield of some 3 percent) and a dividend yield of 3.5 percent. Naturally, this does not reflect the 'adjusted' and 'underlying' earnings of companies, with which we are now long familiar and which need to be taken into account when making judgements about the central ongoing 'core' of business activity. One of the important differences between equity investment and bond investment is that the latter is a hostage to fortune whereas the former is a pro-active responder to it by changing business models to adapt to rapidly changing circumstances. If a subsidiary company that is performing less well is sold, then investors need to know what that will mean in terms of earnings growth, dividends and cash flow etcetera… Click Here To Read The Full Story The Master Investor Market Report The FTSE 100 closed the day at 6,700.90, a decrease of 76.05 points. The FTSE 250 fell 163.95 points to finish at 17,730.24. The FTSE All Share dropped 39.97 points to finish at 3,661.41. The FTSE AIM All Share ended the day at 801.46, down by 3.83 points. Primark owner Associated British Foods (ABF) said that full-year operating profits will be ahead of those in the prior period due to a good underlying performance during the second half as well as the effect of the recent fall in the value of sterling. However, the drop in long run bond yields means that the firm's pension scheme will have a defecit for the year of roughly £200 million. Shares in the company dropped 10.80% to 2,815p.    Don't miss our September issue! Click HERE to read. Investment manager Aberdeen Asset Management (ADN) has had its regulatory capital requirements raised to £475 million. The FCA made the decision as part of a period review and it was based on the removal of insurance mitigation from the model of operation risk. However, the company said that its capital levels were comfortably above the new requirements. The shares fell by 5.40p to 320.10p. Life science tools manufacturer ABCAM (ABC) saw its shares climb by 8.13% to 791p after announcing that revenues during the year ended 30th June rose by 19.2% to £171.7 million. Margins dropped slightly due to changes in exchange rates and reported profits before taxation fell 1.5% to £45.4 million due to investment in systems and the costs of acquisitions.  Tomorrow's news today JD Sports Fashion (JD.) will release interim results. Quote of the day "You may delay, but time will not." - Benjamin Franklin Latest Stories Is this fund the ideal inflation hedge? By Nick Sudbury Last week I wrote about the merits of investing in index-linked gilts as a way of protecting your capital against inflation. There are several specialist funds that operate in this sector, but if you don't want to get involved in such a niche area you could get a decent exposure via a core portfolio holding… Click Here To Read The Full Story Chart of the Day: Wishbone Gold By Zak Mir The run up to a company returning to profitability can be as positive on a fundamental basis as the technical run up to a golden cross buy signal between the 50 day and 200 day moving averages… Click Here To Read The Full Story The Evil Diaries: Churchill China and Clear Leisure By Evil Knievil Churchill Mining (CHL) keeps crawling up. And it is nothing to do with the general trend of indices. But have the buyers got wind of a touch of fair play on the way from the Republic of Indonesia?… Click Here To Read The Full Story Something for the Weekend – German Economic Decline By Adrian Kempton-Cumber I have a lot of ideas for pieces, and in many cases they don't turn into full articles, and get buried in digital dust. I came across this next paragraph of an idea the other day. I quite like it but never fleshed it out and the moment has gone to some extent perhaps… Click Here To Read The Full Story Zak's Weekend Charts Round-Up By Zak Mir FTSE 350 Stocks Lloyds Banking (LLOY): Above 50 Day Line Promises 65p Zone It would appear that shares of Lloyds Banking, and the rest of the High Street majors in its sector have staged something of a fightback over the summer... 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.

This email was sent to educationspeculator.davinci@blogger.com why did I get this?    unsubscribe from this list    update subscription preferences Master Investor Ltd · Suite 88 · 22 Notting Hill Gate · London, London W11 3JE · United Kingdom