Tribe Technology set to deliver healthy pipeline of orders from Tier-One miners. Watch the video here.
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Summary: The UK stock market is becoming a global backwater as US and Chinese markets forge ahead.
The UK is not alone in falling behind. All European bourses are more or less moribund, relatively speaking.
Daily volumes so far in 2021 have averaged:
$554bn in the US
$174bn in China
$47bn in Europe
and the London Stock Exchange just $6.1bn
But there are also homegrown reasons for the UK’s market decline. None is more peculiar (or farcical) than the role of income funds, the UK fund management sector’s signature dish.
These funds are a uniquely UK phenomenon. They prioritise dividends over any other kind of return from a company and therefore by definition penalise growth.
There is no comparable fund management sector anywhere in the world. According to the Investment Association, of the £744bn of equity funds that comply with its criteria, some 29 per cent are in UK income or related UK all-company strategies.
British income fund managers believe they have a mission to protect the incomes of pensioners (an honourable objective), but this leads them to insist on companies paying out the lion’s share of their income rather than investing it back in the business.
This is a form of financial decadence, discouraging capital investment and stifling growth and productivity.
https://www.ft.com/content/847b0335-7835-4b4f-9dc6-39ba944baadc
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My Thoughts:
Could pressure from Centamin's largest shareholders be the reason its BOD have prioritized super-sized dividends over growth, exploration and expansion? And over share buybacks during those times we've been excessively cheap?
Could pressure like this also be the reason for bad open pit management - delaying waste clearing expenses that would disrupt the larger-than-life dividend policy?
Hi Cowichan,
Fair comments, I don't like the holding and influence BlackRock has the world over it is an insidious, parasitical evil organization , BlackRock wanted Angela Merkel Former German chancellor out because she wouldn't tow their line and now they have their choice as German chancellor https://www.dw.com/en/who-is-friedrich-merz-the-new-head-of-germanys-cdu/a-56247517
https://www.handelsblatt.com/english/exclusive-exclusive-former-top-german-politician-to-join-blackrock-supervisory-board/23533144.html
BlackRock have heir tentacles in the present and former UK Tory governments
Can Chancellor George Osborne find a day a week in his busy schedule to work for BlackRock, the world’s largest fund manager. At £650,000 a year, or £13,000 a day, it sounds a more lucrative gig than editing the London Evening Standard on the other four weekdays. The former chancellor may also be given shares in the US firm, so we do not know if the salary is the starter or the main course.
At his peak, Osborne held as many as nine jobs at once. It is not clear how many of these positions he will give up in total ahead of his move!
https://citywire.com/wealth-manager/news/george-osborne-quits-blackrock-role-for-manda-boutique/a1458845?section=wealth-manager
Robey Warshaw was founded in 2013 by a trio of leading investment bankers, who made their names at Morgan Stanley and UBS.
Also the E Raghys were keen to establish and enthusiastic supporters of the present dividend policy.
You see government's don't really run the world it's those that run the funds,the banks, big business and those who manipulte the markets who control things, and they don't want change despite what went on at the recent climate conferences, Big Money wants the little people to keep propping up the corrupt and unfit for purpose monetary system!
The Yank's big funds and businesses don't want the gas pipeline between Russia and Europe it doesn't fit in with their plan to keep us all subservient to the American way!
So you may well be on the right track!
Share buybacks are just another way of returning cash to shareholders. I think Horgan wants to spend it all drilling. Which is a good thing right, investing in growing the business?
At a time like this it a make make sense to reduce the number of shares in circulation and boost the share price, this would make the company more expensive for any hostile takeover or predator or to acquire rather at a knock down price whilst the Sukari clearance is taking place.
There has been quite enough drilling and then sitting on results in West Africa for the present and exploration drilling is already underway in Eygpt.
Had more money and resources been spent in the past on managing the Sukari operations properly then the Sukari output would have been nearer to the 500,000 oz with lower AISC and a share price of over £2 even with POG at these levels.
The investment situation in Eygpt has changed by offering new resource prospects that may be opened up and considering the already as yet non producing West African reserves then it makes no sense to start on other projects, this is where so many other miners seem to go wrong spending shed loads of investors money without actually returning much or anything at all to them apart from unfulfilled promises.
Get the engine room (Sukari)back up to speed as a the priority and the rest will follow.
fair enough I'm a newbie to the travails of this company, but I'd still prefer to see its capital spent on developing the business than supporting the share price, isn't that in effect where the last lot went wrong? But I do get your point Mr T, if that development spend is unfocused and wasteful then it's obviously a kick in the head. Mr Horgan is about to start borrowing to fund further development of both the West African and Egyptian operations. I don't think he thinks he's got a spare dollar for buybacks is all?
I agree 3 bear.
share buybacks have no effect on the long term,
I do not know where you got the idea Horgan was about to borrow anything,
No matter what some say the Company still makes a profit.
And there are still adequate funds.
Especially if West Africa is not seen as worth further investment.
But I will be interested to see the year end results..
Egypts future prospects are still excellent.
IMHO.
Horgan said in the last couple webcasts he is reviewing the capital structure of the business and would be looking at debt to fund construction of the Doropo mining phase and in the January results call said he was looking at the possibility of debt to finance development of Egyptian operations? I may have added 2+2=5 but that says to me he's planning to borrow?
In the past it has been made clear all new ventures will have to be self sufficient upon production.
they are registered as part of Centamin, but each will be a seperate entity.
In the Q4 results call Martin Horgan was asked:
Is the board considering share buyback?
What he said:
We flagged at the life of asset day back in December that a review of the capital structure of the business would be under way H1 this year, really looking at how we structure the balance sheet going forward. How we think about things like debt funding, certainly for Doropo, but more broadly things like the three capital projects at Sukari with our costs recovery model, how that looks in terms of production profile going forward in free cash flow generation. How that ties in the business as well. So that whole capital piece is ongoing. Once we’ve got that work done, that will allow us to look at what is the optimal capital structure of the business today and on a go forward basis. And the implications of what we can then do in terms of financial flexibility. So I would say no definitive plans at this stage except to say in the context of a full balance sheet capital structure review is under way and over the first half of this year I’m sure that all sorts of options will be on the table for us to consider as we take the business forward.
What I heard:
No share buybacks. I’m going to borrow money and go mining.
Hi Mr Bond,
That is corporate poliicy at the present.
Hi Mr Bond,
That is the corporate policy at the present.
it does seem odd that he's considering debt when the company is sitting on such large cash reserves...