Insights for June 2016

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Finally here comes the ‘Day’ when in a surprise move Britain voted to exit European Union on 23rd June 2016. Britain voted by 52% to 48% to leave EU. Well, this was surely a surprise move which leads to huge turmoil across the global markets on 24th June. Investors hate any kind of uncertainty and Britain leaving European Union leads to a lot of open questions in the investors mind.  However, many experts are of the opinion that Brexit may lead to recession in United Kingdom, many are optimistic also and saying that there would be political developments in Europe, which would be positive for global markets. Although post the event, assurances have been coming from UK finance minister, George Osborne that despite the Brexit, the economy still remained strong but FTSE 100 continued to fall. George Osborne clearly said that they had prepared for the contingency of Brexit. Bank of England also said,”We are equipped for whatever happens”. It seems that atleast for the short term, volatility would be seen in markets around the globe and sentiments too would be dampened. Another big impact was seen on the pound which fell by nearly 10% against the dollar. The pound plunged 10% against the dollar to $1.3150 at 3o year low. The UK prime minister, David Cameron also resigned the same day and would be stepping down in October. Although Britain accounts for merely 4% of the world economy, but lately, sluggish US economy and China slowdown have already been impacting world markets. Therefore, any negative implication because of Brexit could have atleast short term to medium impact on the stock markets. Also, falling pound may increase the inflation and therefore may impact the disposable income as well.

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Topics: Analysis

Rolls Royce Plc

The technical chart of Rolls Royce suggests that the stock is all set for breakout and lately huge volumes have also been witnessed in the stock. A few trading sessions back, Rolls Royce was seen making lows at 600 pence, after a steep correction of up to 10%. However, the stock has bottomed out at 600 pence and thereafter start rising again. We expect the stock would continue to rise in the coming trading sessions and would be seen trading range bound between 630p-660p in the short term. The stock finished trading on London stock exchange at 635 p a share on 22nd June.  The immediate support for the stock lies at 630p and resistance at 660p. If the stock manages to breach 660p, it may be seen heading towards 720p as well. However if the stock again goes below 630p, then it may breakdown up to 599p again. Therefore traders shall watch these levels and hedge their positions with stop loss. In the last trading session, the stock has form ‘doji’candlestick pattern which indicates slight indecisiveness amongst traders. (Read more)

BT group Plc is a compelling ‘Buy’ at the current levels and we see an upside of up to 10% from the current price level.  Lately, the stock went through a deep correction of upto 16% and has come down from 450p to 396p. However, it seems that the stock has started consolidating now and has also bounced back from 396p to 422p in the latest trading sessions. The stock finished trading on London Stock exchange at 422 p a share on 21st June.

BT Group plc is a communications services company and has a market cap of £39.42B. The Company's activities are the provision of fixed-line services, broadband, mobile and television products and services, as well as managed networked information technology services in both the United Kingdom and across the globe. The Company operates in five segments: BT Global Services, BT Business, BT Consumer, BT Wholesale and Openreach. BT Global Services is engaged in managed networked IT services. BT Business provides communications and IT services in the United Kingdom and the Republic of Ireland. BT Consumer segment is a provider of fixed-voice and broadband services in the United Kingdom. BT Wholesale provides services in Great Britain to more than 1,400 communications providers (CPs). Openreach provide services, such as copper and fiber connections between its exchanges and homes, and businesses. Out of all the business segments, the company generates 30% of its revenue from BT Global services, 14% from BT business, 20% from BT consumer and the remaining revenue comes from the other two segments. The good thing to note here is that the company business segments are diversified and is not dependent on any one segment. (Read more)

Topics: Analysis
Other Insights on Related Shares: BT.A.L
Related Shares: Bt Group Plc Share Price

Anglo-American (AAL.L.), the diamond and precious metals miner, seems to have turned a corner, according to recent market indications, and has become again an attractive investment prospect. The mining giant, which among other ventures is the owner of the De Beers diamond conglomerate, had a torrid 2015. Having fallen victim to the worldwide fall in commodity prices, especially in iron ore, it reported a loss of 55% in Earnings Before Interest and Tax (EBIT), sliding from the $2.2 billion it reported in 2014 to $0.8 billion last year. Anglo-American was also in the midst of a restructuring aimed at reducing operating expenses and net debt which also impacted its top line figure. Its shares plummeted as a result. (Read more)

Topics: metals, mining
Other Insights on Related Shares: AAL.L
Posted by MaxMarioni on 10 June 2016, 7:03 PM

Investing in Renewables in the LSE

A report by the International Renewable Energy Agency (IRENA, the UN agency for renewable energy promotion and monitoring) announced an impending boom in the use and production of renewable energy around the world. A share of 40% of electricity output will come from renewable sources, the report's authors predicted. “We anticipate with the lower technology cost, by 2030 we’re going to have renewables capacity in the global power system at around 40 percent, which is quite remarkable growth”, especially when compared with the 22% of electricity output renewables provide today, the IRENA Director-General Adnan Amina said. The report also observed that the renewable energy sector is estimated to have already produced 8 million jobs in the US in renewables' manufacturing, installation and maintenance. Across the world, employment in the sector has risen by 5%. (Read more)

Topics: Energy, Renewable
Other Insights on Related Shares: NESF.L, PVCS.L

National Grid Plc is a ‘Hold’ at current price levels and we see an upside of up to 5% from the current price levels. On 2nd June, the stock gapped down by 23.5 p on the bourses and crashed even more by 17.0 p same day and closed down at 960p. However, it seems that the utility giant has consolidated at 960 p and is now seen trading in the channel of 974p-987p in the coming trading sessions. The stock finished trading on London Stock exchange at 980 pence on 7th June. Currently the stock has been trading below its 20 DMA and 50 DMA of 993p and 990 p respectively.  The immediate resistance for the stock would be its 20 DMA and 50 DMA respectively. If the stock manages to break the resistance levels, it may test the levels of 1010 p again. Therefore, traders and investors shall keep an eye on these levels and trade with caution. In any case, if stock crashes again and even go below the last support zone of 960 p, it may make fresh lows as well. Technically, stock has been making ‘Doji’ patterns on the chart which indicates indecisiveness so a right direction and pattern may be seen in the coming days in National Grid Plc.

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Topics: Analysis
Other Insights on Related Shares: NG..L