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The big move to safety #investments

I’ve noticed a lot of movement this year from the FTSE 250 to the FTSE 100 where it appears to be safer. Yesterday there was a big move to safety as investors dumped mid-caps in favour of safer companies. Retailers, in particular, were hit as retail sales figures worried investors. The Bank of England MPC was split and doesn’t seem to know what it’s doing with interest rates. Obviously, mortgage rates need to go up to take the heat out of the housing market but short term borrowing probably keeps retail sales going. It seems likely the government will now abandon its austerity drive and try to stimulate the economy with infrastructure projects. I hope these new projects will be hospitals and road improvements and not vanity projects like HS2. The proposed Severn barrage project makes more sense than HS2.

move to safety

The move to safety

The move to safety also affected the AIM market as investors tried to reduce risk. I have too much invested in the AIM market and so I had a bad day losing about 2% yesterday. The market isn’t open yet today but I expect there will be investors looking to pick up a bargain today. Retailer DFS lost about 10% yesterday and so we could see those shares snapped up this morning when the market opens.

The AIM market

My AIM market pharmaceuticals now look under-valued. Both Immupharma and Verona Pharma look like good bets today and undervalued. Solo Oil issued a long RNS explaining it’s position yesterday but it didn’t inspire confidence. They at least realise there is a problem to be fixed. The important bit of that RNS was “To reflect these enhancements and to emphasise our position as an independent investment company, we will be undertaking a re-branding exercise in the second half of this year.  We look forward to providing further information to our shareholders on this exercise. “  If they can rebrand the company and engage with investors then they can raise more capital from private investors and stop diluting the market capital. When they make a placing with institutional investor at a discount they cheat the private investors and the new shares get fed back into the market increasing supply and depressing the share price.

FTSE 250

There are bargains to be had on the FTSE 250 assuming the economy picks up again. Certainly, some companies appear good long-term investments. Debenhams share price has crashed to just 46p and they have plans to restructure the company. ITV seems to have some upside, as does the AA. I recently received my dividend from Carillion and it seemed too high. The dividend is important but so is reinvesting profits for growth.

Oil

The oil price has dropped again and despite agreements to cut production stocks still seem high. BP has cut its break-even point down to $30 a barrel so they are making a profit at the current price. The US frackers are making a loss and so are many small oil companies. The low oil price seems to favour the big oil companies who can now drive the small ones out of business. So Solo Oil’s diversification into Helium isn’t so crazy.

That’s all my investment ideas for this week. If you would like to follow this blog and get updates just enter your email address at the top of the sidebar or follow me on Twitter. There are links on my Facebook page too.

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