Insights for January 2017

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BT group PLC should be strictly avoided for the time being as the stock nearly crashed by 20% on 24th January 2017, post the company announced that investigations of accounting practices have revealed that the extent and complexity of inappropriate behavior in the Italian business were far greater than previously identified and have revealed improper accounting practices and a complex set of improper sales, purchase, factoring and leasing transactions. These activities have resulted in the overstatement of earnings in the company’s Italian business over a number of years.

The adjustments identified have increased from the £145m announced in its  half-year update to a total of around £530m.However, the company is still evaluating what proportion of the total adjustments should be treated as prior year errors, and what proportion should be treated as the reassessment in the current year of management estimates. For the financial year 2016-17, the management now expects a decrease in adjusted revenue of around £200m, in adjusted EBITDA of around £175m, and of up to £500m of normalized free cash flow due to the EBITDA impact and the one-off unwind of the effects of inappropriate working capital transactions. For 2017/18, the management expects a similar annual impact to adjusted revenue and adjusted EBITDA as in 2016/17, with the EBITDA impact flowing through to normalized free cash flow. (Read more)

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

Barclays, according to Reuters, is planning to move its EU headquarters to Dublin, as part of its preparations for confronting the challenges posed by Brexit. The bank, which is looking to more than double its staff count in the Irish capital, is already factoring in the eventuality of losing the so-called EU “passporting rights”. Passporting is an EU-wide scheme which makes the provision of financial services by firms authorised in the UK possible throughout the European Economic Area (EU and Switzerland), without administrative friction and transaction costs. The loss of access to the passporting privilege is made more likely by the determination of the government to take Britain not just out of the European Union, but also out of the European single market for goods and services. (Read more)

Other Insights on Related Shares: BARC.L
Related Shares: Barclays Share Price
Posted by ShrutiAggarwal on 27 January 2017, 10:28 AM

BP Plc overvalued at current stock prices

BP PLC shall be avoided for the time being as the stock seems to be in a correction and consolidation mode right now. However, even the fundamental analysis and valuation also suggests that the stock is slightly overpriced at the current levels. Therefore, investors or traders shall wait for the stock to consolidate and done with its correction and then initiate fresh longs.

The stock finished trading on the London Stock exchange at 489.7 on 24th January, 0.52% up from the previous close. BP PLC has been trading 5% below its 52 weeks high and 96% above its 52 weeks low. The stock had not been able to breach the resistance at 520 and has been in the correction mode since last few days.  However, significant support zones for the stock lies at 487p and 476p respectively. If the stock goes below 476p also, then the stock may test lows of 460p as well. Therefore, traders and investors shall carefully keep an eye on the prices and levels of the stock and accordingly hedge their positions respectively.  Currently, the stock has been trading above 50 day moving average (DMA), 100 DMA and below 20 DMA of 482p, 470p and 508p respectively.  (Read more)

Topics: Analysis
Other Insights on Related Shares: BP..L
Related Shares: Bp Share Price

It is the time when we reflect on what lies ahead, and on what are the trends which are shaping the economy of the year which just begun. Technological innovation as always is one of the main driving factors of change in the business world. The Internet of Things (IoT) is the next big trend which is set to hit the economy in 2017. From self-driving cars to homes equipped with smart metres to smart clothing, the industry for connected devices is going to permeate the way we will live our lives. The Internet of Things is going to make its big impact, in business and in society, and as with any far-reaching innovations launched in Silicon Valley, there is the potential for substantial profits to be made. (Read more)

Other Insights on Related Shares: TCM.L
Related Shares: Telit Share Price

Centrica is a compelling ‘Buy’ with an upside of up to 10% from the current levels. The trading update announced on 15th December seems to cheer the investors sentiments on the bourses as the stock jumped by almost 5% same day.

The stock finished trading on the London stock exchange at 231.6 on January 13th, up by 0.42% compared to the previous close. In terms of technical analysis, the stock has been forming ‘Doji’ pattern which indicates indecisiveness amongst the traders and investors.  However, Centrica continued rallying post the trading update and it seems that the upside might continue for sometime. It has been trading above its 20 day moving average (DMA), 50 DMA and 100 DMA of 230.8p, 217.0p and 220p respectively. The immediate resistance for the stock is at 240p and in case of breakout above 240p, the stock would be all set for the new highs. The support for the stock is at 230p. (Read more)

Topics: Analysis

As fronts of freezing cold weather have swept across Europe and the UK, this has caused disruption all over the continent. On the black sea, movements of vessels in the Bulgarian port of Varna were curbed because of blizzards and gales, while three Ukrainian harbours were blocked by ice. Vessels entering and exiting Costanta, one of Romania's – and Europe's – major grain transporting hubs, have also been delayed, with potential effects on the European market for wheat and other cereals exported through that port. Further inland, navigation on the Danube between Germany and Hungary has also been disrupted. In England, flights were temporarily suspended between Heathrow and Gatwick. (Read more)

Topics: Energy, Gas
Other Insights on Related Shares: CNA.L
Related Shares: Centrica Share Price

What surprises will 2017 hold for the stock investor, both in the UK and elsewhere, and how is it going to be different from 2016? Certainly we already know there are going to be changes, primarily of a political nature, which will feed economic dynamics which in turn are predicted to have significant repercussions on stock performance. Right at the start of the year, the major turning point will take place across the pond. We have known for some time already that Donald Trump will be the next President of the USA, and we have already seen the reaction, both in the US and abroad, of markets and pundits to his election. However, it is only after the new President's inauguration on January 20st that the public will know how and which of the President's elect policy proposals will be implemented. (Read more)

Topics: Analysis