Holdings

TUESDAY 11TH AUGUST 10.00GMT Global shares rally as investors bet on new stimulus. Stocks defy increased US-China tension as traders focus on Washington talks. World stocks inched to 5-1/2 month highs on Tuesday, lifted by bets a U.S. fiscal stimulus package will be reached and by signs Sino-U.S. tensions have eased ahead of a crucial round of trade talks. European stocks hit a near three-week high on Tuesday as automakers gained on a surge in China sales numbers, with hopes of a steady economic recovery from the coronavirus crisis boosting global sentiment. The Dow jumped 1%, the S&P 500 inched up and the Nasdaq closed lower on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a U.S. fiscal support bill. UK sheds nearly 750,000 jobs during coronavirus crisis. Number claiming out-of-work benefits in the UK rises to 2.7m in July, more than double the pre-pandemic level. The number of people in work in Britain fell by 220,000 in the three months to June, the most since 2009, as the coronavirus crisis hammered the number of self-employed, Office for National Statistics says. Britain’s Heathrow Airport renewed its call for COVID-19 testing at airports on Tuesday as it reported an 88% plunge in July passenger numbers due to ongoing restrictions on travel which it said were strangling the UK economy.
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PORTFOLIO PERFORMANCE:2017   2019 Trades   2019  Recent Purchases: BGO  Saga   Bvc   Ltg    Ctec    Cnc  Cprx   Odx    Segro  

Trading Activity  Bought [10 Aug] 3700 Shares in Bango Plc @ £1.492  Sold [7 Aug] 1800 Shares in Catalyst Pharmaceuticals @ $4.07 Bought [5 Aug] 400 Shares in Segro Plc @ £9.84 Sold [5 Aug] 30000 Shares in Iofina plc @ £0.133 Bought [24 July] 697 Shares in Segro Plc @ £9.29 Sold [12 July] 2500 Shares in ITM Power Plc @ £2.61 Bought [9 July] 2500 Shares in ITM Power Plc @ £3.11 Bought [9 July] 2250 Shares in BATM Advanced communications Ltd @ £1.308 Sold [9 July] 10000 Shares in Omega Diagnostics@£0.364 Sold [9 July] 3700 Shares in ConVaTec Group Plc @ £1.92 Bought [3 July] 2750 Shares in BATM Advanced communications Ltd @ £1.178 Bought [2 July] 50000 Shares in SAGA Plc @ £0.166 Bought [2 July] 6000 Shares in Learning Technologies Group Ltd @ £1.236 Bought [1 July] 2000 Shares in BATM Advanced communications Ltd @ £1.078

STRATEGY FOR Week Commencing 10 August  The devastating Lebanese explosion of last week that ripped the country apart shows just how much one needs to be prepared for the unexpected. Knock on effects from black swan events can be catastrophic. Black swan events have unpredictability as their core feature. This week’s video of the financial impact of COVID19 CLICK HERE explains that the features of a black Swan event show it has to be a rare event, has an extreme impact, and has retrospective predictability. All the hallmarks of COVID 19 which is not going away as the impact continues to spread far and wide. I have previously emphasised that sector investing may be the way forward to provide a financial defensive mechanism to find a way out from the maze of uncertainty. The effects of the pandemic on the once thought untouchable sectors such as the airline industry is a stark reminder that one needs to employ defensive and diversification strategies in order to offset unintended consequences from black swan events. The pandemic effects, has highlighted how demand and supply of commodities has also been affected. The recent resurgence of gold now over $2000 an ounce, has provided comfort as a safe haven asset whether warranted or not. In India, for example, exporters are having a tough time filling orders for export. The biggest problem is unavailability of workers to actually put the rice in the proper containers and load the containers for export, due in large part to the coronavirus.  Keeping people locked in their homes, added to a shortage of containers to actually fill with rice in the first place have obvious effect on supply chains, that’s acting as a crimp on supply in the region, which is bad news for people who eat rice but good news for people who sell it. As another example, the impact of COVID-19 is not fully understood but the negative impact (on sugar consumption) seen in India and China is very unlikely not to have been replicated across the globe. Deteriorating global demand for sugar for example can feed into trading decisions on the likely projection of future prices of sugar due to changing demand and supply of sugar. CLICK HERE -sugar-prices/ annual loss as surplus looms. Last week the portfolio saw a +3.47% increase. I decided to liquidate my holdings of Iofina with a large loss as the performance of this share has continually disappointed and had become a drag/dog on the portfolio. Debt rescheduling and unwillingness of lenders to support requested financing together with the lack of real progress in share price performance meant me taking losses on the chin and moving on. Sometimes shares just do not perform and this headscratcher share was one for the dustbin. Removing a poor performer often requires such necessary action to allow the portfolio to be starting to live again. Disposal proceeds from Iofina was added to additional acquisition to my Brexit trade ‘Segro’ holdings. SEGRO goes ex divi this Thursday [13 Aug]. I also sold out from US share Catalyst pharmaceutical Inc another disappointing and non-performer. SDI Group has of late seen robust performance and recovering from a bad situation with a +15% increase [Perhaps holdings off for disposal]. Last week’s update from Spirent Communications on excellent earnings initially had a muted response from the market but ended last week crossing the £3 threshold finishing on £3.04     a 8.5% increase on the week. This Thursday [13 Aug] sees the company go Ex divi so expect a retracement post Ex divi. Spirent’s performance continues to excite and retention of this share is my strategy. Omega Diagnostics has gone off the boil and I may well set a price target for achievement. UK Houses prices were in the ascendency last week as both Bellway +2% and Redrow +3% saw rises. Recent Acquisition Learning Tech Group has helped provide respectable stable comfort with a +4% increase. I see the growth of online learning a positive factor looking forward. BATM Advanced communications has seemed to have stabilized following recent falls but again a price target may be on the horizon in order to offset the loss taken on poor performing Iofina. I will be reviewing whether SAGA is worth keeping if price falls continually to disappoint given the continued uncertainty in the travel business. Disposal proceeds from Catalyst will be used at the appropriate time for a new adventure or redistribution. Black swans may be flying again one never knows until it happens. Too big too fail bank perhaps – Deutsche watch out. Until Next time.

STRATEGY FOR Week Commencing 3 August  Week – 27 July    WC20 July   WC 13 July    WC  6 July                   

CALL TO ACTION TO ALL MY VISITORS-SAVE OUR OCEANS FROM PLASTIC HERE

Portfolio for week commencing  10th August

11Aug 2020 US/UK Price Price Price wkcge 11-Aug Price Chart
Stock Shares Bought 31-Jul 07-Aug % 10.00gmt Now
FTSE 100 FTSE Entry 6123.82 6032.18 2.52 6184.14 Index
NASDAQ NDX at Bid 10363.18 11010.98 -0.39 10968.36 Index
Company Symbl £ £ £ % £ £1.308
Bango plc BGO 1.49 1.44 1.50 -1.00 1.49 Price£
BATM BVC 1.01 1.23 1.22 -1.23 1.20 Price£ Bvc
Bellway plc BWY 17.86 25.46 26.01 -2.01 25.49 Price£ Bwy
Bristol Myers BMY 47.12 45.64 46.75 1.08 47.25 Price$ Bmy
Cetene Corp CNC 49.37 49.88 49.25 -2.16 48.19 Price$ Cnc
Learning Tech Grp LTG 1.24 1.33 1.38 3.19 1.43 Price£ Ltg
Omega Diagnosts ODX 0.20 0.59 0.59 -0.02 0.59 Price£ Odx
Redrow RDW 4.64 4.28 4.41 -1.50 4.35 Price£ Rdw
SAGA Plc SAGA 0.17 0.15 0.15 3.02 0.15 Price£ Saga
SDI Group plc SDI 0.76 0.55 0.63 1.59 0.64 Price£ Sdi
Segro Plc SGRO 9.29 9.69 9.84 -1.18 9.72 Price£ Sgro
Spirent comms SPT 1.45 2.80 3.04 -0.49 3.03 Price£ Spt
WkyPortfolio Performance +0.32% +3.47%

Update on Shares in the Portfolio

Spirent Communications Plc 6 August

Spirent posts first half growth despite Covid. Spirent Communications saw revenue rise 7% in its first half to $233.7m (£177.53m), it said on Thursday, as order intake improved 6% year-on-year to $232.1m. The FTSE 250 company said its gross margin improved 1.4 percentage points over the prior year, to 73.4% for the six months ended 30 June, while its adjusted operating profit was 91% higher at $39.5m. Its adjusted operating margin was 7.4 percentage points higher at 16.9%, as its adjusted basic earnings per share rose 88% to 5.7 US cents.On a reported basis, operating profit was up 97% at $35.6m and its profit before tax improved 93% to $36m, while basic earnings per share grew 94% to 5.28 cents.Cash at period end totalled $221.4m, up $79.6m, while the board declared an interim dividend of 2.17 cents per share, up 12%.The board described the first half as a “good result”, despite a challenging second quarter environment, with the revenue growth driven by a strong uptick in 400G ethernet test solutions and continued 5G acceleration, particularly in the Asia-Pacific region.Spirent said it saw strong orders and revenue growth from its lifecycle service assurance business, with the gross margin improvement coming from growth in its software content.

Bellway 17 July

Bellway has asked subcontractors to cut their rates by 5% as the housebuilder seeks to pass on some of the costs created by the Covid-19 crisis, according to a report.The company wrote to its suppliers to say the impact of the crisis was “signifiant and unprecedented”, The Times reported.Bellway said on 9 June it had “substantial” forward sales and that its order book was 6,038 homes compared with 6,312 a year earlier. The homes’ carrying value was £1.57bn, slighly less than the £1.64bn a year earlier. The company said construction had restarted at about 230 sites and all sales offices had reopened.

Omega Diagnostics 8 July

Omega Diagnostics completes open offer to raise £11m. Omega Diagnostics reported the results of its open offer on Wednesday, netting gross proceeds from its recent fundraising of £11m before expenses.
The AIM-traded firm announced its intention to raise up to £11m through a placing, subscription and open offer on 19 June, all at an issue price of 40p per share.It said on Wednesday that a total of 27,531,100 new shares would be issued at the issue price, of which 7,515,350 shares had already been admitted to trading under the first placing on 25 June. A total of 12,434,650 new shares would be issued under the second placing, 50,000 under the subscription, and 7,531,100 under the open offer.Omega said the open offer closed on 7 July, receiving valid acceptances for 4,089,048 new shares, or 54% of the open offer shares.In addition, the firm said it received applications under the excess application facility for 6,138,510 new shares, representing 82% of the open offer shares.

Omega Diagnostics 2 July

Omega Diagnostics’ ELISA antibody test gets approval in India. Medical diagnostics company Omega revealed on Thursday that its CE-Marked Mologic ELISA antibody test had been approved for Covid-19 testing in India.Omega said the Central Drugs Standard Control Organization, part of India’s Ministry of Health and Family Welfare, had published a list of kits approved for testing of Covid-19 on Wednesday, which included Omega’s ELISA antibody test.The AIM-listed group said approval for sale remained conditional on the submission of supporting technical data, of which the company said it was “confident” it would be successful, granting the firm the ability to sell its antibody test directly into the “potentially significant target market”.While Omega said “the quantum of future sales” was unknown at present, it highlighted that India was “clearly a significant addressable market”.Chief executive Colin King said: “We have an established direct sales team and we believe a reliable and high-performance antibody test will be very attractive to our laboratory customers.”Clearly this is an important market for us to target and I look forward to updating shareholders on our commercial traction.”

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