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Friday Email: 21 June 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:

As we predicted last week the US stock markets have gone into serious reverse for precisely the reasons that we stated. This has dragged down the the UK indices and the reversal is becoming significant enough for me to start feeling very optimistic about yields again. As I write the Dow is down 350 points on the day after a big fall yesterday for a 2 day fall approaching 500 points. Markets can still fall further from here.

Some decent dividend increases declared during the week including a 26% increase from Micro Focus. Berkeley Group paid a lump of the massive return to shareholders in a programme that is very similar to that declared by Persimmon. You don't know quite what you are going to get each time but you do know that there is another 360p per share payable by September 2015 (the first milestone) After that there is another 866p per share in two further milestones (2x433p) by September 30th 2018 and September 30th 2021. That is some serious returns. The final dividend worthy of mention was Ashtead group who increased their final dividend by a whopping 240% from 2.5p  to 6p.

The week ahead looks tricky and the shake out is now well underway. Rapidly falling stock markets means most income stocks are getting cheaper and yields will be rising rapidly, especially if things carry on at the pace we have seen over the past two days. The market still does not look cheap however and we have some way to go down before we see the yields that we saw 12 months ago.


This email was originally sent on Friday 21 June 2013

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