A change in
direction this week on the SIPP, and it could lead to a significant future investment
strategy. First though, early today there was strong speculation (later confirmed) of a bid for the Worldpay Group by the US-based payment processing and
technology provider Vantiv Inc and JPMorgan Chase Bank. The SP is up over
20% this morning from Monday’s close of 320 to 390 as I write this (noon on
Tuesday 4th July). That a major bank is starting to take the
internet payment processing system seriously enough to put together a bid for Worldpay
is extremely significant. To me it signals that banks (some of them at least)
are beginning to come to the conclusion that the internet (combined with other
technology such as smart-phones and pads) is bringing an end to the banking
industry as we know it.
For my SIPP, there has been some strengthening of the SP of
PAYS (up 9 to 515) and I can see that should the Worldpay bid prove successful,
and Worldpay is swallowed-up and removed from the FTSE100, then we could see
other banks looking to find their own similar target. PAYS would fit that bill well and, at only
35% of the Market Value of Worldpay, would be a very cheap option. Not that I’d
expect a bid at 515-520 for PAYS to be successful, we can look forward to a
significant premium on that SP should a bid occur.
I've long been of the opinion that banks as we know them are coming to the end of their shelf-life and a new form of finance-house will take their place. It will mean "adapt or die" for the major banks, and it looks like JPMorgan Chase is the first bank to take that step to protecting and preserving their future. Hopefully, my strong position in PAYS which forms 25% of my SIPP value will see that opinion bear fruit. However, I have been growing in awareness over the past 12-months of another financial development that is undermining the foundations of the banking industry - crytocoin.
The major "player" of crypto coins is Bitcoin which currently have a total market value of US$43bn which is approximately 40% of the total value of cryto coins in circulation. Yes, cryto coins have a total market value in-excess of US$100bn (see coinmarketcap).
There was recently an article on the Crypto Coin phenomena published in the Investors Chronicle and I expect we will see more written about crypto coin in the next 6 months as the banking industry starts to get it's head around just what the future does (or rather, doesn't) hold for their businesses. The big advantage of something like Bitcoin is that international financial transactions using bitcoin "side-step" the need to pay commission and fees to the banks - and banks make considerable profits from the movement of currencies in business around the World. That profit is in serious danger of being lost to the banks, unless the banks do something about it - and that (in my opinion) can only be by taking a serious interest in the cryto coin market.
There was recently an article on the Crypto Coin phenomena published in the Investors Chronicle and I expect we will see more written about crypto coin in the next 6 months as the banking industry starts to get it's head around just what the future does (or rather, doesn't) hold for their businesses. The big advantage of something like Bitcoin is that international financial transactions using bitcoin "side-step" the need to pay commission and fees to the banks - and banks make considerable profits from the movement of currencies in business around the World. That profit is in serious danger of being lost to the banks, unless the banks do something about it - and that (in my opinion) can only be by taking a serious interest in the cryto coin market.
With much of my funds tied-up in the SIPP, in order to take advantage of cryto coin I've bought some units in the XBT-Provider tracker fund (BIT-XBT) which trades in "notes" which tracks the movement in the Bitcoin currency. My intention is to build-up a position equivalent to 5% of the value of the SIPP over the next 6 months, and my initial purchase is £1,250 worth of units.
The current holdings (as of today 4th July) are: 1) BAE (BA.) : 1115 shares @ 654
2) BlackRock Smaller Co IT (BRSC) : 1170 shares @ 1175
3) G4S (GFS) : 2058 shares @ 341
4) GlaxoSmithKline (GSK) : 393 shares @ 1710
5) GVC Holdings (GVC) : 1031 shares @ 775
6) HG Capital Trust (HGT) : 220 shares @ 1680
7) ICG Enterprise Trust (ICGT) : 470 shares @ 743
8) Imperial Brands (IMB) : 170 shares @ 3454
9) JPMorgan Emerging Markets (JMG): 625 shares @ 791
10) Lancashire Holdings (LRE) : 1209 shares @ 705
11) Legal & General (LGEN): 2489 shares @ 262
12) Pacific Assets (PAC) : 1912 shares @ 246
13) Paysafe (PAYS) : 7000 shares @ 515
14) Sage Group (SGE): 931 shares @ 678
15) Schroder Asia-Pacific (SDP) : 1252 shares @ 409
16) Segro (SGRO) : 1607 shares @ 487
17) Senior (SNR) : 1574 shares @ 235
18) XBT Provider (BIT-XBT) : 129 units @ 986.82
Cash @ £531
SIPP Value = £140,140
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