Connect with us

Markets

Trainline insiders cash in during fourth quarter

Published

on


Bosses at Trainline were intent on accentuating the positive when the rail and coach ticketing platform revealed its half-year figures at the beginning of November.

Under the circumstances, it may seem churlish to question whether its ability to scale back operations as passenger numbers slump will be enough to ward off the worst effects of the pandemic. But the company is uniquely exposed, not only to the immediate impact of the Covid-19 lockdowns, but also to a potential decline in commuter journeys over the long haul.

Towards the end of October, it was announced that Clare Gilmartin, who has been at the helm of the business for seven years, intends to step down from the board next February. Ms Gilmartin successfully took the company public midway through 2019, but she could not have imagined how events would pan out within six months of the initial public offering. In the lead-up to her resignation, she offloaded shares in the company to the value of £3.2m, which should provide a degree of solace.

Another insider has just followed suit. Chief financial officer Shaun McCabe has sold 600,000 shares in the FTSE 250 constituent, at an average price of 480p a share, giving a total value of £2.88m. The news came a fortnight after it was revealed that Mr McCabe had been appointed as a non-executive director of embattled fast-fashion retailer Boohoo — he clearly does not mind a challenge.

With Trainline that amounts to new lockdown measures and expansion of the tier systems. We cannot be sure whether the rollout of vaccination programmes through the early part of 2021 will result in a significant increase in commuter numbers, so we remain downcast on immediate prospects despite the recent share price rally.


Precious metals miners have had a charmed run in 2020 for the most part. While there were some shutdowns, most producers saw earnings skyrocket as gold cracked $2,000 (£1,488) an ounce and silver stayed comfortably above $20/oz.

Hochschild Mining was not so lucky as the Peruvian government brought in tougher restrictions than most other mining countries. Hochschild’s largest mine — Inmaculada — was closed twice this year, in April and July, to stop Covid-19 outbreaks from worsening. 

Its production will probably be down 40 per cent from 2019, putting unit costs under pressure. The higher precious metals prices have insulated the company from a collapse in earnings, however, and the board has brought back the half-year dividend, which will be paid on December 31. 

In one of the largest deals of the year, Eduardo Hochschild has offloaded over £120m in shares, although the miner said this does not amount to the company chairman bailing out. The 200p a share sale, equal to 12 per cent of the company’s shares on issue, was undertaken because “Mr Hochschild believes now is an appropriate moment to recycle some capital from his holding in the company to facilitate investments elsewhere across his existing businesses and in new opportunities”. The chairman now holds 38 per cent of the miner. His grandfather founded Hochschild over a century ago, and the company listed in London in 2006. 

The strike price was 15 per cent below the closing price on the day prior to the deal, and the company fell to 198p on the next day of trading. Fellow Americas-focused precious metals miner Fresnillo has been one of London’s best performers this year, climbing 76 per cent to 1,136p. Hochschild’s share price is up 12 per cent from the opening 2020 price of 176p — so perhaps it was an opportune moment for the chairman. 

The march of the precious metals prices slowed in the past two months. Gold dipped below $1,800/oz and silver came back from almost $30/oz. The continued equity boom, at least in the US, and the upcoming distribution of Covid-19 vaccines could see investors moving away from precious metals. This could be Mr Hochschild’s approach — although Fresnillo investors would be in a far better place to take profits.



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Markets

Further reading

Published

on

By



Andrew Yang; Facebook; WallStreet Bets and much more . . . 



Source link

Continue Reading

Markets

A carbon registry leaves polluters with nowhere left to hide

Published

on

By


The writer is the founder and executive chair of the Carbon Tracker Initiative, a think-tank

No one yet knows which countries will extract the last barrel of oil, therm of gas or seam of coal. But the jostling has started. Every nation has reasons to believe it has the “right” to continue fossil fuel extraction, leaving others to deal with the climate crisis.

In the Middle East, oil producers can argue that the cost of extraction is low. In Canada, they market their human rights record. Norwegians trumpet the low-carbon intensity of their operations. And in the US under Donald Trump, they touted the virtues of “freedom gas” and called exports of liquefied natural gas “molecules of freedom”.

The dilemma for governments is that if one country stops producing fossil fuels domestically, others will step in to take market share. And so the obligation to contain emissions set out in the Paris Agreement risks being undermined by special pleading.

In the UK, the furore over plans for a new coal mine in Cumbria the year that the country is hosting the UN’s climate summit is indicative of the contrary positions many countries hold. Facing one way the government says it is addressing climate change. But looking the other, it consents not just to continued extraction, but to support and subsidise the expansion of production.

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here 

To keep warming under the Paris Agreement limit of 1.5C, countries need to decrease production of oil, gas and coal by 6 per cent a year for the next decade. Worryingly, they are instead planning increases of 2 per cent annually, the UN says. On this course, by 2030 production will be too high to keep temperature rises below 1.5C. The climate maths just doesn’t work.

One of the problems in attempting to track fossil-fuel production is the lack of transparency by both governments and corporations over how much CO2 is embedded in reserves likely to be developed. This makes it difficult to determine how to use the last of the world’s “carbon budget” before temperature thresholds such as 1.5C are exceeded.

Governments need a tool that establishes the extent to which business as usual overshoots their “allowance” of carbon. There needs to be a corrective because the cost competitiveness of renewable energy, and the risk of stranded energy assets, has not stopped governments heavily subsidising fossil fuels. During the pandemic, stimulus dollars have been dumped into the fossil-fuel sector regardless of its steady financial decline, staggering mounds of debt and falling job count. 

This is why my initiative and Global Energy Monitor, a non-profit group, are developing a global registry of fossil fuels, a publicly available database of all reserves in the ground and in production. This will allow governments, investors, researchers and civil society organisations, including the public, to assess the amount of embedded CO2 in coal, oil and gas projects globally. It will be a standalone tool and can provide a model for a potential UN-hosted registry.

With it, producer nations will have nowhere left to hide. It will help counter the absence of mechanisms in the UN’s climate change convention to restrain national beggar-thy-neighbour expansion of fossil-fuel production.

No country, community or company can go it alone. But governments can draw from the lessons of nuclear non-proliferation. First, they must stop adding to the problem; exploration and expansion into new reserves must end. This must be accompanied by “global disarmament” — using up stockpiles and ceasing production. Finally, access to renewable energy and low-carbon solutions must be developed in comprehensive and equitable transition plans.

The choice is between phasing out fossil fuels and fast-tracking low-carbon solutions, or locking-in economic, health and climate catastrophe. A fossil-fuel registry will help governments and international organisations plan for the low-carbon world ahead.

Twice weekly newsletter

Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here.



Source link

Continue Reading

Markets

Hasty, imperfect ESG is not the path for business

Published

on

By


The writer is a global economist. Her book ‘How Boards Work’ will be published in May

Good environmental, social and governance practices take a company from financial shareholder maximisation to multiple stakeholder optimisation: society, community, employees. But if done poorly, not only does ESG miss its sustainability goals, it can make things worse and let down the very stakeholders it should help.

To be sure, the ESG agenda should be pursued with determination. But there are a number of reasons why it threatens to create bad outcomes. The agenda is putting companies on the defensive. From boardrooms, I have seen organisations worry about meeting the demands of environmental and social justice activists, leading to risk aversion in allocating capital. Yet innovation is the most important tool to address many of the challenges of climate change, inequality and social discord.

Pursued by $45tn of investments, using the broadest classification, ESG is weighed down by inconsistent, blurry metrics. Investors and lobbyists use different evaluation standards and goals, which focus on varied issues such as CO2 emissions and diversity. Metrics also depend on business models.

Without a clear, unified compass, companies that measure themselves against today’s standards risk seeming off base once a more consistent regulator-led direction emerges (for example, from worker audits, the COP26 summit and the Paris Club lender nations).

ESG is not without cost and the best hope for long-term success lies with business leaders’ ability to stay attuned to its impact and unintended consequences. For example, while the case for diversity is incontrovertible, efforts at inclusion should account for the possible casualties of positive discrimination.

Furthermore, despite ESG advocates setting a strong and singular direction for governance, organisations have to maintain their operations and value while managing assets and people in a world where cultural and ethical values are far from universal. While laudable, a heightened focus on ethics (such as human rights, environmental concerns, gender and racial parity, data privacy and worker advocacy) places additional stress on global companies.

It is often asked if advocates appreciate that ESG is largely viewed from the west’s narrow and wealthy economic perspective. To be truly sustainable, ESG demands global solutions to global problems. Proposals need to be scalable, exportable and palatable to emerging countries like India and China, or no effort will truly move the needle.

Much of the agenda is too rigid, requires aggressive timelines and lacks the spirit of innovation to achieve long-term societal progress. Stakeholders’ interests differ, so ESG solutions must be nuanced, balanced and trade off speed of implementation against the breadth and depth of change.

Business leaders are aware of the need for greater focus and prioritisation of ESG. We also understand that deadlines can provide important levers for senior managers to spur their organisations into action. After all, in the face of pressure for a solution to the global pandemic, vaccines were produced in months instead of the usual 10 years.

I live at the crossroads of these tensions every day. Raised in Africa, I have lived in energy poverty, and seen how it continues to impede living standards globally. As a board member of a global energy company, I have seen much investment in the energy transition. Yet from my role with a university endowment, I have also been under pressure to divest from energy corporations. 

Business leaders must solve ESG concerns in ways that do not set corporations on a path to failure in the long term. They must have the boldness to adopt a flexible, measured and experimental agenda for lasting change. In this sense, they must push back against the politically led narrative that wants imperfect ESG changes at any cost.



Source link

Continue Reading

Trending