Ophir Energy’s (OPHR) remaining 20 per cent Tanzania stake is being valued at half of what the other 20 per cent was hived off for towards the end of last year. In fact, it is owed and should soon receive $1.25bn from Pavilion Energy for the stake which it acquired. That comes on top of another $667m which are in the bank. Amongst the other “worthless” assets belonging to the oil explorer are Gabon – although it is admittedly untested - and some other frontier licences in places such as Kenya, Somaliland and a license off Seychelles. Lastly, there is also some acreage off Equatorial Guinea which may contain close to a sixth as much gas as those Tanzanian assets.
As well, some upcoming drilling results could spark some progress in the shares, if successful. Should the shares remain at their current level and those numbers continue to stack up then, at some stage, one of the majors should come knocking, writes The Times’s Tempus.
Avoid the insurance sector. The Budget effectively killed of annuities, so while the larger insurers may be able to adapt the smaller specialist groups will face a difficult time. That is because even if annuities are still a sensible option for those who seek guaranteed income the greater choice will lead to keener pricing. Particularly hard hit have been recently floated companies such as Partnership Assurance and Just Retirement. Broker Panmure Gordon believes the latter will see sales drop by about 80 per cent from current levels.
Amongst the biggest players, Killik & Co. believes Legal & General (LGEN) is most exposed, as it derives around 25 per cent of its operating profits from annuities in the UK. Aviva (AV.) and Prudential (PRU), on the other hand, might take between a 3 per cent and 4 per cent hit to full-year profits. Lastly, St James’s Place (STJ) and Old Mutual (OML) should be able to compensate for the impact of the reforms as they are not as exposed to annuities and should be able to attract new business, says The Daily Telegraph’s Questor team.
BUSINESS PRESS HEADLINES:
The fact that the OBR cut its estimate of the output gap means that more of the growth which was lost during the recession will never be recovered. That was the message delivered by ratings agency Fitch, who said there is little prospect of Britain recovering its coveted top-notch rating before 2018. Meanwhile, insiders at the Treasury believe Fitch is implicitly backing the government so that it gets the debt down and on to a steady footing. Likewise, IHS Global Insight believes the Budget may have forestalled the UK losing its lone remaining triple-AAA rating from Standard and Poor’s, The Times reports.
Workers have given their resounding approval to the Chancellor’s dramatic pensions reform at the last Budget. The changes have found the backing of 66 per cent of those individuals canvassed by YouGov, according to a poll published in The Sun.
The US has upped the ante in its diplomatic response to Russia’s annexation of Crimea via a new round of sanctions aimed at the country’s President, Vladimir Putin, and some of his wealthiest and most influential supporters – members of his inner circle. Also targeted is a high-profile lender. This raises the possibility that retaliations could spiral as Moscow has struck back itself, The Wall Street Journal Europe reports.
Airbnb, the website which offers homes for rent, is preparing a stock market flotation that may see it attain a valuation of $10bn, well ahead of some its established traditional hotel peers. Private equity firm TPG will likely head the transaction, which is expected to raise between $400m and $500m, The Times says, citing a report in The Wall Street Journal. By the end of the funding round in 2012 the company had obtained approximately $200m. It was then valued at around $2.5bn.
A 30-year veteran bond trader at Credit Suisse, Mark Stevenson, has received a fine of £662,700 from the Financial Conduct Authority and has been banned from the industry. That comes after an investigation found that he tried to artificially increase the mid-market price for a given series of Gilts ahead of a reverse auction from the Bank of England. His aim was to make his offers to the central bank look superficially attractive when compared to the mid-market price, The Daily Telegraph writes.
After cashing in on bonus share awards the Scots-born Chief Executive at broadcaster ITV, Adam Crozier, is to receive a pay packet which at £8m triples last year’s in size. That will come alongside a basic salary of £841,000, which saw an increased on the £818,000 given to him in 2012. The former boss of Royal Mail received over £2m from ITV’s performance share plan and an award of approximately another £4m for joining the outfit in 2010, The Scotsman reports.
