FCA To Cut Red Tape
There was some good news this week in terms of the performance of London small caps up 1.69% and the FTSE 100 up by exactly the same amount. All of this comes against a backdrop of the powers that be as far as the stock market, the FCA – its regulator, finally attempting to equal the experience of being listed with being a private. As things stand, only those with who are really keen on red tape and giving vast amounts of cash to lawyers, accountants, auditors and Nomads would enjoy being listed. Or those for whom £500k a year plus is just a drop in the ocean.
What we have been told is that the FCA plans to slash red tape for investment firms by 70%. So this tells us how much companies are wasting time and money, when they could be generating wealth. It also shows us how much regulators via lawyers, accountants and auditors, have heaped on more and more red tape over the years, to give these aforementioned service providers an opportunity to charge their clients more and more, for more and more unnecessary work. How this will all pan out remains to be seen. Such initiatives are traditionally slow, half baked, and too late. With the new government desperate to get people to work harder to splurge money on things that no one wants, and more importantly no one voted for, there might be some momentum in making being listed worth it. But if it is, this would be a first in recent history.
Lord John Lee
It is usually true to say that no one likes a smart arse, and of course it is very British to be humble regarding one’s achievement. Presumably, now that we are all multicultural such values are out of date. Nevertheless, John Lee’s brag in The Telegraph that he made 600% gains during the financial crisis had to be read. If only on the basis that our friendly Baron, is one of the few people who have actually made money on the markets, know them, and are actually allowed to write on a decent forum. We are told that his big wins in the 2008 crash were BBA Aviation and Fenner. More recently, the tariff tumble allowed him to buy / top up his holdings. With the FTSE 100 up 10% from its lows and the rug pull earlier this month, it would appear that boasting or not, Lord Lee’s buy the dip selectively strategy is on track.
This Week’s Risers On News
It is very easy if you hate the stock market, hate people who try and make money on it, and want small cap companies to fail, to knock a company when it comes out of potentially transformational news. While most of the motivation with mudslinging is malevolent, bitter and sadistic, the result is that the few stock market players out there these days can be put off by such unsolicited and usually unverified or even worse, partially verified intervention. In the case of BSF (BSFA), after a long period in the wilderness, the company came up with a potentially transformational announcement. This news is that BSF’s subsidiary has partnered with VML (a group company of WPP (WPP)) and genomic engineering leader The Organoid Company to create the first-ever leather inspired by the DNA of an extinct species: Tyrannosaurus rex. Obviously, this is just the first step, and early days. But rather than pouring cold water, would it not be best to give this situation the benefit of the doubt, and simply enjoy the 100% initial share price rebound?
Stakebuilding was the reason behind a sharp rise in shares of Chesterfield (CHF), as the LSE listed mineral exploration company revealed a new 6.3% shareholder. Presumably the 88% rise on the week for the stock was a case of the market deciding that one plus one could equal three. The same may be true at Team (TEAM) where the wealth management group also revealed a new 6% new shareholder.
Eco Buildings (ECOB), a UK-listed modular construction company, was a 17% riser on Friday, as it announced that it has set up a new subsidiary Eco Buildings Senegal LLC to address the significant market opportunities for modular housing in Senegal. The difference here is that a local partner G2 Invest has pledged a €1.75M investment into the new subsidiary. This solves the problem ECOB seems to have had before in not being able to ask clients for enough of an advance so that it can build its buildings. Now that the money is in, it may be the case that the company has enough cash to deliver on new orders, and will finally be on its way.
Fragrant Prosperity Holdings (FPP) announced the appointment of David Brown to its newly formed Investment Advisory Board. FPP said that David is a recognised leader in fintech, digital payments, and AI-driven financial innovation. I would go even further and say that he is a rockstar in the space, and that the shares should see the kind of ongoing rise that Capai (CPAI) managed when its tech rockstar Professor Ronjon Nag joined the company earlier this month. FPP said Brown “brings deep industry expertise and a strong network to FPP’s acquisition strategy.”
Although Vast (VAST) shares were a fraction off on Friday, after a big initial spike, they have been rising for months. It may be the case that the release of its diamond parcel in Zimbabwe after being held in captivity for some 15 years, will ensure the 4x rise in the shares since January continues.
Speaking of rallies continuing, as far as GreenRoc (GROC) was concerned, there was a good reaction for its Final Results, perhaps combined with relief that Trump will not be walking into Greenland any time soon to disrupt the activities of the critical minerals development in that territory.
Stocks Rising On No News
While it may be that the Phoenix Copper (PXC) has cried wolf as far as its copper bond / funding, the recent subscription of £300,000 by a well known London investor at the lows, and the tariffs situation making domestic copper production not only a no brainer, but a necessity, all suggests that being long of the stock at 4p versus 20p plus a year ago, could be a bargain basement move. PXC’s Empire Mine is in the frontline as far as prospects in copper, and if nothing else, the downside at a £8.8m seems negligible.
A board and financing re-jig at the beginning of the month effectively gave Electric Guitar (ELEG) a reboot from which the shares are starting to rise sharply. It would appear that the world is its oyster off the back of ELEG saying it “can now pursue its strategy as an AIM Rule 15 cash shell to invest in and/or acquire companies which show significant potential for growth, cash-generation, and a profitable exit in the medium term. Leveraging their knowledge and contacts, the new Board will actively seek to identify suitable investment and/or acquisition opportunities, with a view to completing a reverse takeover pursuant to the AIM Rules for Companies. At this stage, the new Board would not seek to exclude any particular sector or jurisdiction.”
Perhaps in a similar vein, the former Guild Esports Plc, now Cassell Capital (CASS) saw its shares rise 60% on the week, on no near term news. Perhaps someone sniffs something is imminent? It really has been a couple of months of “back from the dead” situations, something which is the most encouraging development we have seen on the London market since the pandemic bubble of H1 2021.
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