007nick
12 Feb 2018
Nationalization - It's just Spin NG being nationalized is just Spin.Labour party is desperate for votes so come up with anything they think are vote swings/wins. Reality is that if they did ever get into power they would quickly realize that the major owners of these utility companies are in fact fund managers. The majority of these fund managers being related to pensions ! It's no longer just the well off who have private pensions, now days most people in the workplace have a private pension, so doing anything which hits the value of these companies will directly hit people paying into pensions and people who already have a pension. Labour politicians to dumb to realize that yet.The same goes for their wonderful idea of building all these new council homes, forcing people to sell land at low prices and dramatically increasing the number of homes - if they do that it would have side effects, the most obvious being that it's likely to cause house prices to stagnate or even go down, that would cause a recession. forcing people to sell land at reduced prices also reduces the tax that's paid on it so a double wammy for this great idea.Should labour get in they might try and nationalize a few companies (eg rail) but NG are way down the list of potential targets and they would have opposition from within their own party.ITS ALL JUST SPIN - all about getting people to vote for labour, if you're young or unemployed and that's a few million people who would you vote for ? Reality would hit Labour if they ever got in, they would soon find out they couldn't do what they say they can. Labour talk a good game but it's JUST SPIN
PIE-EATER
12 Feb 2018
Re: Nationalisation Threat - Jimi Hardboy,I agree with some of what you say, but not all.I am interested in the dividend on NG, but that doesn't mean I'm not interested in the SP - far from it. Keeping the subject in the headlines is doing Labour a favour in the market.....the SP proves that. A second point is that it would be very easy to "muddy the waters" on the payout terms......especially if it was not 1 share = 1 bond unit....rebasing a dividend would also be a very easy way to save paying out more.Brexit and the NHS undoubtedly ARE the 2 key issues which matter to the electorate when they are asked and the real issue (as at the last election in many ways) is economy vs Brexit and NHS. That is the reason why I am somewhat doubtful at the moment on the claims of some that the conservatives will walk away with the next election.I am very much a "middle ground" man in that respect in that I voted remain, believe in a better NHS (both through more money and also better "training" of the public on expectations and essentials vs luxury treatment) yet am right leaning on the economy. Streuth, how mixed up can one person be And, if the papers are to be believed, Rees-Mogg vs Corbyn....might as well choose between the bullet and strychnine! (or both just to make sure)PE
WhoSparticus
12 Feb 2018
Re: Nationalisation Threat - Jimi " I suspect it's still Brexit, and Labour are as unclear and disjointed as the Tories on that issue"This is probably true but the problem is that the Tories are in Government and they really should have a clear view of where they are going and they should be able to convince the country about what that view is - I realise they have decided to stage some speeches in the next few weeks to have a go at this but its getting a bit late and looks desperate. Labour on the other hand can be evasive on the issue and get away with it because it isn't their job to sort it out and it won't be until after we have left the EU (March 2019). So if the basis is just Brexit it isn't clear that Labour would lose, indeed it is quite possible that the Tories could make such a mess of the negotiations that Labour win by default. Large portions of the electorate do not analyse political questions rationally but vote on their gut feel or emotions (The referendum result didn't solely come about because of what we feel about EU membership). Thus , if the they are told that utility companies are money grabbing profiteers, they might feel it is fair enough to steal them back. Obviously they won't remember that when they were privatised they were not given away but sold to the public.
Bill1703
12 Feb 2018
Re: What price to buy in? "Is there a certain price level where you'd consider the risk/reward ratio favourable (on the basis on Labour not getting into power?) or would you not touch NG for all the tea in China? Interested on others' thoughts ether way..."FRTEB - a fair question, which as always deserves a straight answer...The answer for me is... certainly not here. The prospective dividend yields (generally now 5-6%) are simply not high enough (yet) to compensate for the risks (yes, SSE yields quite a bit more, but that reflects their own specific issues) - not when there are plenty of other "blue chips" offering similar if not higher yields, without anything like the same existential threat.For me, it's not just Corbyn and renationalisation - both of which need to be put in context anyway (and this board does a fairly good job of that!) It is whether the very highly leveraged capital structures prove to be sustainable - and just as important, whether equity markets view them as sustainable - in a "new world" of steadily rising interest rates and bond yields. This latter issue has been the main thing keeping me away from Utilities generally in recent years - Uncle Jeremy is merely the additional villain of the piece who suddenly popped up stage-right...FWIW on balance, I don't think JC makes it to No. 10 (for all the reasons well trawled on here)... and even if he does, I don't see wholesale structural renationalisation any time soon thereafter, though the rhetoric will remain. But all in all I'd need to see yields of at least 7%, and probably 8% before having a seriously look at the risk/reward - implying a good 15-20% at least below current SPs. All IMHO, as ever...
Hardboy
12 Feb 2018
Re: Nationalisation Threat - Jimi PE:"Scare the markets witless with what they are going to do...NG. (in simplistic terms) falls from a tenner to a fiver....they have already halved the cost"I don't think it's that simple. Labour plan to give shareholders bonds in place of shares, so the income on those bonds would have to compensate for the dividends on shares, and in reality most folks owning shares in utility companies are dividend hunters, so the share price should be of little relevance, only the payout; and I don't think the utility companies have dropped dividends of late - not all any way. On the point of Labour's current popularity; although privatisation may be the most important issue on this Discussion board, it is probably not the most important issue in the mind of most of the electorate. I suspect it's still Brexit, and Labour are as unclear and disjointed as the Tories on that issue - only Liberals & UKIP (who are no longer relevant) seem unified in their approach to that issue. I don't necessarily think nationalisation IS unpopular with much of the electorate. Younger people, who do not remember the shambles of nationalised industries may think it a good idea; and a lot of people believe what they read in the media about greedy corporate shareholders (like their pension funds) who want to bleed the taxpayer dry.
Jimi Marshall
12 Feb 2018
Re: Nationalisation Threat - Pref The job of the press is to sell papers. Utilities are the topic of the day. The latest YouGov poll puts to Tories into the lead - CON 43%(+1), LAB 39%(-3), LDEM 8%(+2). Seems that disenchanted Labour voters are going to the LDEM's but that always happens.What with Brexit and May, Labour still can not make any headway!!!Wages are forecast to slowly improve and turn upwards around the time of the next election, IMO the Tories will win by a landslide.I believe that the Labour Party have never won an election with the Trots supporting Labour via the Worker rag. The process will never be triggered and in NG.'s case, the valuation will be for the UK part of the business whose UK assets are valued at less than the proportionate SP.GL
PIE-EATER
12 Feb 2018
Re: Nationalisation Threat - Jimi They don't plan to pay full market value.....if they actually DO pay.The rationale is simple.....Scare the markets witless with what they are going to do...NG. (in simplistic terms) falls from a tenner to a fiver....they have already halved the cost. As long as they start out far enough before the expected election they will be able to say they have "paid" the market price.As for the laughable lies re not costing them anything and not increasing debt.....well ! Is it too early to open the Glen - wotchamacallit?PE
Jimi Marshall
11 Feb 2018
Re: Nationalisation Threat - Pref Hi Again Pref,'I suspect that they would probably send their own auditors in to do a valuation (likely on a “fire sale” basis !)' BS.Parliament decides the value of nationalised companies. It is a statute.The labour party could not have a rosier picture in the last 6 months and currently Corbyn is dropping according to the opinion polls, Labours nationalisation vision is not positive according to the polls, let alone the centre ground Labour MP's who would not vote for NationlisationI notice that the Trotsky’s are backing Corbyn in the Socialist Worker paper, with the trots backing Corbyn, there is no way those even wavering Conservative voters will vote for the hard left in a general election.So the idea of a Labour government, even without a majority in 4 years is pure fantasy and a lot of hot air.GL
PrefInvestor1
11 Feb 2018
Re: What price to buy in? Hi FRTEB,NG, SSE, CNA, UU, SVT - out and staying that way, until the political situation improves. Not buying at any price.ATBPref
Guitarsolo
11 Feb 2018
Re: Nationalisation Threat If ever we needed a glimpse of how bad things would be during/after a Corbyn & McDonnell government this sums it up. So it would be "cost free" to make shareholders take gilts in place of our equity? Funny, I had always assumed that if you borrow (or issue debt if you're a government) then you have to ultimately pay that debt back. Obviously not though! It is so easy to spend other people's money isn't it.
Lazy M
11 Feb 2018
Re: Nationalisation Threat Limited EditionDon't fret yourself. It always works out in the end. It's all noise....it's what you get with a Twitter/ Snapchat world. Company failure is an important part of capitalism. As for Corbyn and his madpersons (politically correct for heavens sake)... they would totally destroy this country.Bring on Brexit and world trade rules and a 'go get' economy.
dregor
11 Feb 2018
Re: What price to buy in? Hi FRTEB,Not really answering your question, but I bought NG yonks ago for about 547p and have top sliced a couple of times, but still retain a reasonable holding.Have been watching in some disbelief the fall in sp and ,indeed, the comments from the Marxist Brothers certainly hasn't helped sentiment.Despite the divided and rather rudderless Tory party, Labour are ,at best, only neck and neck in the polls and provided the Government doesn't implode any time soon, I have faith that when ;s--t comes to shove, the great British public will come to its collective senses and shun the terrifying prospect of a far left idealogue rabble.Anyway, having said that, if I didn't already have a slug of NG, I reckon I would bet on the above and start tucking a few away about now............possibly on a gradual basis.Good luck, whatever you decide.In the meantime, McDonnell isn't doing the working man's pension funds much good!
FRTEB
11 Feb 2018
What price to buy in? Fortunately I sold NG some time ago but since then it's been on my watchlist with a view to buying back in if my target price ever materialised (~90p to go). But given the ongoing fall in National Grid's share price presumably due to the random attacks by labour on utilities in general and now NG being specifically mentioned, at what price would you consider buying (back) in to National Grid, if at all? Is there a certain price level where you'd consider the risk/reward ratio favourable (on the basis on Labour not getting into power?) or would you not touch NG for all the tea in China? Interested on others' thoughts ether way.
dregor
11 Feb 2018
Re: Nationalisation - limited edition Pref, perhaps Limited Edition's diatribe has a simple explanation.......an over indulgence of Chateau Socialisme with his Sunday nut roast!Just a thought!
PrefInvestor1
11 Feb 2018
Re: Nationalisation - limited edition Wow limited edition,Sorry but I am having some trouble trying to work out exactly what you are trying to say in your post. I guess I can infer that you don’t think much of the BBC, the Conservative party, the DUP and that you are supportive of the Labour Party position on Carillion and privatisation ?. Is that what you are trying to say ?. If not would you care to clarify ?. Were you perhaps trying to make some kind of supportive statement in favour of nationalisation ?.ThanksPref
