Pre 8 a.m. comments
The Budget yesterday contained a positive measure for small cap investors, in that 0.5% Stamp Duty is to be abolished for AIM shares. That's a useful step in the right direction, which I'm pleased about. We need to tackle ridiculously wide bid/offer spreads next, which is badly needed in order to create a small caps market that is attractive to investors. Wide spreads is by far the biggest problem for the UK small caps market.
Apart from that, the Budget measures seemed just more tinkering from the political class who have hardly any real world commercial experience between them, and who place more emphasis on presentation, tactics, and squabbling with each other, than with any sort of deep thinking about policies.
The two big mistakes made by this Coalition, in my opinion are;
1. They have crushed confidence by constantly talking down the economy and the prospects. Austerity isn't real austerity, since public spending is actually still rising. If you're going to talk tough, then be tough, and get the difficult decisions out of the way. Instead they have talked tough, but been weak, with the result that we have a continuous narrative of doom & gloom. This does affect the decisions of the public, and to a lesser extent, of businesses.
2. Companies (even quite large ones) find it very difficult or impossible to obtain secure, long-term funding from the Banks. Facillities are only renewed for 2-3 years in almost all cases, and the bottom line is that the Banks are still considerably under-capitalised, and are not lending in a way which is needed for sustainable economic growth. We should fully nationalise RBS and Lloyds HBOS, pour in however much money is needed, and tell them to get out there and lend long-term to people with sound business propositions.
Turning to individual company results, Peter Jones of TV's "Dragons Den" holds 42% of a small technology etailer called Expansys (LON:XPS). He gives the impression of knowing what he's doing as an investor, when he's busy crushing the aspirations of delusional members of the public on TV, but he certainly seems to have taken his eye off the ball at XPS. They've put out another profits warning, and it's a pretty bad one, where they say (my bolding added):
Trading to date in…
