Standard Life Shares

bugbod

Thanks
They are doing nicely today:D

So far.......

cheerfulcat

EdInvestor wrote:

All the fuss about the so called 5bn pension raid ( more like 2bn from what I've heard) only started when it became clear the life and pension funds were in deep doodoo because of the stockmarket falls five years ago.

This is incorrect. The likely effects of the abolition of the ability to reclaim the dividend tax credit were known in advance. In fact, the present situation - the crisis in pensions and savings - was predicted by opponents of the plan. And the raid was on all pensions, as well as on ISAs and PEPs - not just lifeco products.

The FSA actually had to *force* them to put a reasonable amount of money in safe assets to back their guarantees.

Thus compounding the problem further.


PS I'm rather surprised that you dismiss Gordon Brown's theft from pensions so very lightly, Ed; you are usually the first to point out the deleterious effects of charges on investment returns!

Chrismaths

And an 80% weighting in equities in March 2003 was probably a serious underweight, considering that the FTSE 100 was actually yielding more than Bonds!

EdInvestor

I'm afraid this issue has become very politicised - here's some reports which try to clarify the matter a bit.

The Government certainly should take some responsibility for the problems in pensions,specifically for the useless post-Maxwell MFR arrangements which made company pensions appear to be safe when they weren't - and also for the ban on "overfunding" which led to the contribution holidays which are at the root of the problem.

At lifecos, the problem had more to do with incompetent investment management, particularly excessively risky investment in With profits funds combined with excessive payouts in the 90s to boost marketing profiles, combined with unfortunate regulatory timing (for some companies) when it was realised the rules had to be tightened up in the wake of the fall of Equitable Life.

Affecting all investments, but compounding the problems with pensions is the switch from the high inflation, high interest rate environment to the opposite ( Brown again which has meant that annuity rates have plummeted.The stockmarket crash in 2001-03 didn't help either.

So very substantial change in the financial climate overall - this one issue of the dividend tax is just that: one of many issues.

ReportInvestor

There was more good news about the shares yesterday from Cazenove, the broker, who classed them as "outperform" - which helped lift them 5p to 254p.

That's the third optimistic broker report.

The company is also due to be admitted to the FTSE100 Index on September 18 which should also help if the good news story continues.

ReportInvestor

But not everyone's positive today

Morgan Stanley has Standard as "underweight" and Merrill Lynch is "neutral" on the shares (with a 284p target price).

Gorgeous_George

£2.84 would do me fine! 30% gain on the additional shares and over £3K worth of free ones (more than 23% better than bailing out on flotation day at £2.30)

Perhaps £3 is achievable.



GG

bugbod

Getting ever nearer George!

I'm completely ignorant about the market, so can somebody tell me if my thinking is rubbish, please.

It seems that a lot of people are waiting (hopefully) for the magic £3.00 BUT if we all jump in and sell when (if) it gets there. then will the price not go down? Would it be better to sell at say £2.90?

I know it's only speculation as they could go down as easily as up, but speculation is what it's all about, isn't it?

ReportInvestor

ReportInvestor wrote:

Merrill Lynch is "neutral" on the shares (with a 284p target price).

Thursday's Times has clarified Merrill's stance further. The 284p is said to represent "fair value".

Surely this couldn't be the same Merrill Lynch whose 210p-270p price recommendation to the Standard Life board resulted in a 230p float price ? - IA link

MSErs who sold @ 230p may be a tad annoyed at these City "experts" :mad:

ReportInvestor

bugbod wrote:

I'm completely ignorant about the market, so can somebody tell me if my thinking is rubbish, please.

It seems that a lot of people are waiting (hopefully) for the magic £3.00 BUT if we all jump in and sell when (if) it gets there. then will the price not go down? Would it be better to sell at say £2.90?

It's not a daft approach. It's perhaps a variant on the theme of "always leave a little profit for the next (wo)man" and don't get too greedy - and ordinary shareholders can wait for and act on "significant" numbers like £3.

However the different brokers are all setting different target prices (280p, 284p, 299p - and they will change / review these). So there will be different selling pressures at different prices.

And are ordinary shareholders still driving this market? Aren't many of them now likely to wait until July 2007 and the 5% bonus shares / first dividend?

As the price goes up, so does the potential value of that bonus .