The Lemon Fool

At these levels I prefer GACB given the lower cash price for similar yield. Currently 103.5/104.5. By my calcs thats around 7.7% yield when you take into account theres about 2.3 points of accrued. That said GACA still look good value too

Whoever was selling these appears to have slowed/stopped since the base rate increase

Magnets wrote:Whoever was selling these appears to have slowed/stopped since the base rate increase

How could you possibly know this (unless it was you!) and what investing application does it have?

GS

hostye wrote:At these levels I prefer GACB given the lower cash price for similar yield. Currently 103.5/104.5. By my calcs thats around 7.7% yield when you take into account theres about 2.3 points of accrued. That said GACA still look good value too

I had assumed that with another 25bps of rate rise to come the price of these and allied opportunities would flatline for a while, but no, that seems to have been outweighed by the signal of falling inflation.....

GACA and NWBD are still near the bottom, but GACB has moved up, also the bond funds such as BIPS, NCYF, SHRS.

I just topped up AV.A, GACA, NCYF, SMIF, TFIF.

If you have funds, it seems the time to buy is now.

V8

88V8 wrote:

hostye wrote:At these levels I prefer GACB given the lower cash price for similar yield. Currently 103.5/104.5. By my calcs thats around 7.7% yield when you take into account theres about 2.3 points of accrued. That said GACA still look good value too

I had assumed that with another 25bps of rate rise to come the price of these and allied opportunities would flatline for a while, but no, that seems to have been outweighed by the signal of falling inflation.....

GACA and NWBD are still near the bottom, but GACB has moved up, also the bond funds such as BIPS, NCYF, SHRS.

I just topped up AV.A, GACA, NCYF, SMIF, TFIF.

If you have funds, it seems the time to buy is now.

V8

I think the current FI optimism created by the better than expected inflation figure is short term and will evaporate once the next interest rate rise kicks in. And then the one after that. Even with inflation coming down, they will still have to raise rates at least another 0.5-0.75% if they continue to target inflation at 2% or whatever they have stated they need to achieve. If I am right the time to buy was last week and in around 1-2 months time. Handily just when the BOI funds drop in fact.

I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

88V8 wrote:

hostye wrote:At these levels I prefer GACB given the lower cash price for similar yield. Currently 103.5/104.5. By my calcs thats around 7.7% yield when you take into account theres about 2.3 points of accrued. That said GACA still look good value too

I had assumed that with another 25bps of rate rise to come the price of these and allied opportunities would flatline for a while, but no, that seems to have been outweighed by the signal of falling inflation.....

GACA and NWBD are still near the bottom, but GACB has moved up, also the bond funds such as BIPS, NCYF, SHRS.

I just topped up AV.A, GACA, NCYF, SMIF, TFIF.

If you have funds, it seems the time to buy is now.

V8

Yes very disappointing I'm planning on some purchases of NCYF, AV.B, LLPC and possibly LGEN, and some SMDS in one account now ahead of a sale in a different account after the divi is paid ( as a bed and ISA) should have done the SMDS purchase a few days ago.

hiriskpaul wrote:I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

Agreed those Standard Chartered STAC 8.25 pref look great value here.
I like that they have less risk to UK economy too. Great for diversification away from the likes of Lloyds, Natwest, Abbey etc.
Also they pay divi on 1st Oct so around 133 days interest embedded in current market price....at 103.9 cash price = circa 8.18% yield by my calcs when including embedded accrued.

hostye wrote:

hiriskpaul wrote:I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

Agreed those Standard Chartered STAC 8.25 pref look great value here.
I like that they have less risk to UK economy too. Great for diversification away from the likes of Lloyds, Natwest, Abbey etc.
Also they pay divi on 1st Oct so around 133 days interest embedded in current market price....at 103.9 cash price = circa 8.18% yield by my calcs when including embedded accrued.

Yes, another way to do the calc is to lay out the purchase price, the next 2 dividends and a disposal at the purchase price in one years time, then calculate the internal rate of return using XIRR:

STAC
20/07/2023 -104.4195
01/10/2023 4.125
01/04/2024 4.125
20/07/2024 104.4195
xirr 8.23%

That's my preferred way these days for undated prefs as it saves me having to look up XD dates. I have added 0.5% to your cash price of 103.9 by the way.

I have just noticed in my HL account that I disposed of my previously held position in STAC on 19/12/2017 for 155, so plenty of upside opportunity IMHO. Likely true of lot's of these bank prefs IMHO. We may of course get lower tender offers and they may be somewhat coercive like the current BOI one.

hiriskpaul wrote:I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

I am rather wary of Standard Chartered for exactly the same reasons some clearly rate it, namely it’s exposure to markets other than the UK. It conducts most of its business in justifications that are rather less democratic than ours and the chances of government intervention in, say, China for instance are high*. As background I’ll note that I became concerned about and disposed of anything vaguely related to Russia a few years ago and don’t regret that one bit. Any one of the governmental players in Stan Charts major markets can and do drop regulatory hand grenades from time to time.

YMMV.

*same could apply to HSBC though I concede.

Padders72 wrote:

hiriskpaul wrote:I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

I am rather wary of Standard Chartered for exactly the same reasons some clearly rate it, namely it’s exposure to markets other than the UK. It conducts most of its business in justifications that are rather less democratic than ours and the chances of government intervention in, say, China for instance are high*. As background I’ll note that I became concerned about and disposed of anything vaguely related to Russia a few years ago and don’t regret that one bit. Any one of the governmental players in Stan Charts major markets can and do drop regulatory hand grenades from time to time.

YMMV.

*same could apply to HSBC though I concede.

Yes, I can see the systemic risk there. Let's hope the tender comes sooner rather than later!

Padders72 wrote:

hiriskpaul wrote:I maybe shooting myself in the foot by mentioning it, as I want to buy more, but I have been pre-spending the proceeds from BOI on the Standard Chartered pref STAC. Running yield about 8%.

STAB would be another option, on a slightly lower yield, but lower risk of capital loss on repayment at par through capital reduction. Last time I checked, the running yield was about 7.8%, based on the buy price, accrued dividend and stamp duty.

I am rather wary of Standard Chartered for exactly the same reasons some clearly rate it, namely it’s exposure to markets other than the UK. It conducts most of its business in justifications that are rather less democratic than ours and the chances of government intervention in, say, China for instance are high*. As background I’ll note that I became concerned about and disposed of anything vaguely related to Russia a few years ago and don’t regret that one bit. Any one of the governmental players in Stan Charts major markets can and do drop regulatory hand grenades from time to time.

YMMV.

*same could apply to HSBC though I concede.

Standard Chartered was actually one of the best performing banks in bonds and equity markets during the 2007-2009 financial crisis.
Also, if you look at the current pricing of Standard Chartered bonds in the institutional market currently you will find they are trading at tighter yields than many of the top European and US banks.
Equity performing better than most too!
I prefer to base my judgement on institutional instruments/investors as they have far superior knowledge than any private investor.
I think many UK private investors are not familiar with Standard Charted and therefor stick to names they know such as Lloyds, Santander, Natwest, etc

Padders72 wrote:

88V8 wrote:I had assumed that with another 25bps of rate rise to come the price of these and allied opportunities would flatline for a while, but no, that seems to have been outweighed by the signal of falling inflation.....
GACA and NWBD are still near the bottom, but GACB has moved up, also the bond funds such as BIPS, NCYF, SHRS.
If you have funds, it seems the time to buy is now.

I think the current FI optimism created by the better than expected inflation figure is short term and will evaporate once the next interest rate rise kicks in. And then the one after that. Even with inflation coming down, they will still have to raise rates at least another 0.5-0.75% if they continue to target inflation at 2% or whatever they have stated they need to achieve. If I am right the time to buy was last week and in around 1-2 months time. Handily just when the BOI funds drop in fact.

Oooh look Sir, he's timing the market Sir, oooh

Well you may be right, but I think we're near enough the bottom and I don't want to be left on the platform as the train steams out of the station.
I recall cases when I firmly believed the price would fall to X and it didn't so I just sat there like piffy while it rose... and rose...
That said, I haven't totally emptied the piggy banks yet....

V8

Puzzling that RSAB price has increased rapidly over the past week or so - now 10% more expensive than STAB which has the same yield. Dividend pays out on same date for both.

bruncher wrote:Puzzling that RSAB price has increased rapidly over the past week or so - now 10% more expensive than STAB which has the same yield. Dividend pays out on same date for both.

I gave up wondering about difference in Pref. Share yields about 20 years ago. Life is too short.

Maybe one is considered safer than the other? e.g. ELLA.


Steve

Following the initial heads-up on this, I purchased some GACA back in 2022 and have basically let it trundle along since.

Was just a touch surprised this morning to find that it had jumped to 179.3.

Thing is, I can't actually track down why it ha suddenly catapulted itself to this level. I'm quite confident that I'm missing something blindingly obvious but any pointers would be gratefully accepted.

TIA

Not sure where you're getting that price from, my broker has them 131.66 bid and 132.78 offered.

wolvokid wrote:Following the initial heads-up on this, I purchased some GACA back in 2022 and have basically let it trundle along since.

Was just a touch surprised this morning to find that it had jumped to 179.3.

Thing is, I can't actually track down why it ha suddenly catapulted itself to this level. I'm quite confident that I'm missing something blindingly obvious but any pointers would be gratefully accepted.

TIA

Seems it was just someone with fat fingers entering an errant trade at 9am that has since been deleted according to my data.

simoan wrote:

wolvokid wrote:Following the initial heads-up on this, I purchased some GACA back in 2022 and have basically let it trundle along since.

Was just a touch surprised this morning to find that it had jumped to 179.3.

Thing is, I can't actually track down why it ha suddenly catapulted itself to this level. I'm quite confident that I'm missing something blindingly obvious but any pointers would be gratefully accepted.

TIA

Seems it was just someone with fat fingers entering an errant trade at 9am that has since been deleted according to my data.

Still showing as +36% on II

Thank you to the three above posters for responding. I was beginning to wonder whether I was losing it.

ii currently has it at 129 /134 but with a day high of 179

T212 has a day high of 179.3

HL has 129/134

Fidelity has 129/134 with a day high of 179.

I can't at the moment locate any commentary on what has happened but at least I know my sanity is relatively intact.