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Friday Email: 22 February 2013

Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:

That was an interesting week. We have been waiting for a bit of a sell off and we certainly saw that on Wednesday with some follow through on Thursday. You never want to see the market falling, but there is always the compensation that yields will rise and opportunities will present themselves. I still remain bullish for the year as a whole and have no idea if this minor fall can become more substantial. Looking at the futures this morning, the FTSE 100 looks set to open up about 25 points and could well bounce.

We saw a few companies 'rebase' their dividends this week. Who makes this stuff up? Morgan Sindall slashed it's dividend by 36% and RSA Group similarly by 33%. RSA is a bit worrying as they cited low bond yields. Here at DividendMax we have been saying buy equities for some time in the face of low bond yields, but it seems that RSA cut their exposure to equities by over £250 million last year. It looks like bad timing. I am sure that they employ all sorts of sophisticated hedging techniques, but you cannot help wondering what will happen to their capital base if bond yields rise!

Drax cut its dividend 8%. Go-ahead group maintained at last years level.

Elsewhere the dividend bonanza continued with increases (in brackets) from CSR (15%), Ladbrokes (14.1%), BAE (4%), Filtrona (19%), Mondi (8%), Galliford Try (33%), Spectris (16%), Travis Perkins (25%), BHP (4%), Rexam (6%), Intercontinental Hotels (16%), AZ Electronics (7%) and today Millenium & Copthorn hotels increased by 10.4%.

Next week my dividend of the week will be from the Investment Trusts as we try to pick out some investment managers who can outperform the market or at least give you a decent yield for what they charge.

 

This email was originally sent on Friday 22 February 2013

The Friday email is delivered to over 20,000 subscriber’s every week, and remains a widely read run-down of recent events and what investors can expect in the week ahead written by our chief analyst Mark Riding.

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