The views expressed in this article are those of its author and not necessarily those of ShareSoc.
PM Truss’s proposal is a cap on prices, not on overall cost so people with big houses with large gas consumption will still pay more. Fracking is also being permitted to boost local gas production.
Truss did not give in to calls for this largess to be funded through a windfall tax. She said this would undermine the national interest by discouraging the very investment we need to secure home-grown energy supplies. You can’t tax your way to growth she said. So it will be funded by more Government debt in essence.
Is this wise? I believe it is the lesser of evils as it will help to bring inflation under control which is essential to keep the economy healthy and avoid a severe recession. These decisions by Truss and her new cabinet are positive in my view and should help the stock market.
But she is still committed to net zero by 2050 which, in my opinion, is simply an unrealistic and unachievable objective.
I attended a couple of interesting results webinars this week. The first was from Verici DX (VRCI) who provide pre and post diagnostic technology for kidney transplants to avoid rejection. This is a subject in which I have a strong interest as a transplant patient and I do hold the shares which were acquired free as a scrip dividend when they spun off from EKF. The company is making progress but revenue is some way off and profits impossible to forecast so I would not purchase the shares at this time.
I did attend a two-hour seminar at Guys Hospital recently for pre-transplant patients as I need another. It was apparent that transplant procedures have not changed much in the last 25 years. Back then there was hope of xeno-transplantation but that faded away. More recently a bioartificial kidney has been developed (see https://pharm.ucsf.edu/kidney ) but that could be years away from clinical use.
The other webinar I attended was that of Equals Group (EQLS) which I have held in the past. Financial figures are improving and a focus on the SME sector has clearly helped. It’s a complex payment business though and the webinar only helped in some degree to understand it. It might be another UK technology business vulnerable to being acquired by a trade buyer who understands the technology and regulatory environment. The company has been tipped recently by Simon Thompson in Investors Chronicle.
One company I do hold which is also looking cheap in the payments world is Paypoint (PAY) – probably because it operates in the retail sector and has been around a long time. There is a good write-up on the company in the latest Techinvest newsletter. But like Equals it is a complex business providing a number of different services. Both Equals and Paypoint could do with better communications on their business activities.
All of Verici DX, Equals and Paypoint have one advantage – they are not affected by the price of energy except very indirectly!
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )