The Return of Dave
It has been a particularly eventful week in politics, and as someone who follows the mainstream media commentors, all centre or to the left, it was wonderful to see them frothing at the mouth regarding the return of David Cameron. Even better, this became another excuse to throw in the alleged 13 wasted years of Conservative austerity government, the folly of Brexit, and the imminent implosion of the Tories themselves. Interestingly enough, even the likes of Andrew Marr of the New Statesman, and even James (Ampleforth / LSE) O’Brien with his faux working class accent, have not been able to mention Labour once this week. Neither as having an alternative, or being a credible entity in any way to the current government. And this is the giveaway. There is actually only one policy that unites all Conservatives: it is that it is the natural party of power. So the past 13 years fit very well in this notion. As for Labour, the country has had a financial collapse in every recent administration, 1967, 1976, and of course 2007. How many would there have been between 2010 -2023? What can we look forward to from 2024, if, despite all his efforts as presenting himself as being totally unsuitable to being Prime Minister, Keir Starmer wins?
The real sizzle this week for me was to be reminded how much the centrist dictatorship we have in this country works so well. Was there ever any doubt that the Supreme Court would ever give the thumbs up to Rwanda? It would not even have given the thumbs up to sending migrants to Malibu, just as there was no chance it would ever be in favour of anything pro-Brexit. It is a political organization, and this week reminded us of that. It arrived in the Blair years, and was clearly set up to ensure that on the difficult issues the (centrist) establishment would always have back up. And of course, are any of the Judges of the Supreme Court going to be anything other than part of the liberal metropolitan elite?
Luckily, none of the above is anything that affects my day to day life. What may do is what will be revealed in the Autumn Statement on Wednesday. Successive governments and regulators having brought the stock market to their knees, and so we wait with baited breath for revolutionary policies to turn this around. Will any possible changes reduce the government’s tax take?
As the saying goes, no one rings a bell at either the top of the bottom of the market. But perhaps if they did this week’s bid for Hotel Chocolat (HOTC) by Mars at a massive premium could be the closest we get to a bell ring. Of course, the mainstream media’s financial journalists who do not understand the stock market and hate money said that the takeover is a bad thing as foreign companies are targeting UK companies. They miss the half a billion Pound coming into the UK which we sorely need to pay for welfare / NHS.
Although Hotel Chocolat was the big M&A win of the week, there were nearly two of them. The one that did not get over the line was the offer for Atlantic Lithium (ALL). Assore said it was disappointed that the 33p a share offer was rejected, the prevailing price was in the low 20p’s. While one would understand that the board of ALL would like to see the job through, there must have been some part of them that thought would it not be nice to head into the sunset, if not at 33p, but maybe 43p.
One of the aspects of the stock market that perhaps we should all learn from is the way that many of the best investment situations are hidden in plain sight. The problem is that most retail investors are automatically attracted to companies that are a punt, risky, edgy. After all, why go for a brilliant niche play such as Ondo (ONDO). This week the claims prevention technology group made it big in the U.S. via a deal with Nationwide. The shares were up 50%, and one would expect the re-rate here will be ongoing.
If there is any word that has been the theme on the stock market in 2023, it has been the F word: funding. Indeed, it is noticeable that many companies who we know are in need of cash have not been able to raise it so far this autumn. At some point there will be a reckoning in the small cap space. Part of this will be using private sources, rather than shareholders (who seem to be skint.) This week the creative fund raise approach came from Amte Power (AMTE). Here the company was going for a conditional subscription agreement to raise £2.5 million at 1.7 pence per share from Pinnacle International Venture Capital Ltd. Alas, this situation still looks to be quite a nail biter.
In a rather less fraught position is Andrada Mining (ATM). Here the African technology metals mining company focused on Namibia, announced the receipt of $25 million. What did the market do? The shares were unchanged on the week. Perhaps the company needed to get the message out regarding the funding in a rather more dynamic way.
To finish, a couple of companies where the rumour mill has been correct, or may prove to be correct. The first is Brave Bison (BBSN) where I heard quite a while ago that the company and its management were worth keeping an eye on. This week has proven the case as the digital advertising and technology service provider confirmed £4 million in new and renewed contracts.
One the subject of companies where the rumour mill has yet to deliver, we have Wildcat Petroleum (WCAT). Here the announcement of the company’s AGM on December 22, may imply that whatever news the bulls are waiting on here could be delivered by that date. As I suggested last week, with the company having raised cash recently, and the shares still near the lows, the risk / reward may be appealing to those looking forward to news of a potential oil production sharing agreement with the Sudanese government by the end of this year.