Musings from the trading floor (OOO Brisbane Edition)
Names in play this week: £WHR, £BBOX, £UKW, £TRIG
11th July 2025
Musings from the trading floor (OOO Brisbane Edition)
Names in play this week: £WHR, £BBOX, £UKW, £TRIG
Equities: UKX +1.34%, Eurostoxx +1.79%, ASX: -0.27%, SPX: -0.39%
Credit: XO 7bps tighter
Interest Rates: 1Yr flat, 10Yr 8bps higher
Friday UK Close
Geo-Macro Mania
US: As expected, this week, we would be another week of tariff narratives. Leaks and shock headlines, before deals get done – markets getting a bit fatigued by it all, but there is real tail risk so tactical and nimble.
UK: UK economy shrunk, that wont help gilt yields, as there is more focus right now on addressing the fiscal issues facing the country, and a shrinking economy isn’t going to help the tax take!
Actual Musings
Warehouse REIT Bids: The revised bid for Warehouse REIT (WHR: LN) is welcome. The arbs liked it, after the deal originally got of to a shaky start. The share price implies the stock hasn’t gone ex! But that’s likely due to the trade bidder’s (BBOX: LN) recent public statements. The snag for BBOX right now is, its part shares/cash offer doesn’t look as a good post Reeve’s PMQs, so sweetening the deal will require a revised ante, and possibly a little more upfront or more dilution for existing BBOX shareholders.
Financial Stability: Climate Risk or Policy Risk? Is climate risk truly a major threat to financial stability, or is the Bank of England leaning into virtue signalling? Climate-related risks are real, of course, but they’re not new. Insurers have been pricing in natural disasters for decades, adjusting premiums accordingly after each event. The idea that this will suddenly trigger a systemic repricing of credit feels overdone. Yes, we might see some inflationary pass-through post-events, but will that really translate into a sustained 50bps move in risk-free rates or a 100bps widening across credit curves? Unlikely. By contrast, consider what does move markets: just a fortnight ago, it wasn’t a natural disaster but a welfare policy proposal and the Chancellor’s dwindling support that sent gilt yields moving sharply. If we’re talking about financial stability, energy security and policy credibility deserve far more airtime. Poorly managed fiscal or monetary policy has a far more immediate and material impact.
Power Play: Zonal Pricing Plan Scrapped. The UK government’s decision to abandon zonal electricity pricing brings welcome certainty to the renewables sector. The now-shelved proposal would have seen southern regions pay more for electricity than Scotland, potentially deterring investment in large-scale wind generation - just as the UK pushes towards both decarbonising its grid by 2030 and energy security. While some stakeholders such as Octopus have argued the status quo limits efficiency and increases consumer costs, the move avoids introducing regional risk and complexity into the wholesale market - a net positive for energy generators specifically renewable energy companies. Beneficiaries include UK Wind (UKW: LN), and The Renewable Infrastructure Group (TRIG: LN), all of which rely on stable policy frameworks to support capital deployment and long-term returns. The focus now shifts to more targeted reforms, such as transmission charge reviews and investment in storage - incremental, but less disruptive. For investors, the big takeaway is clarity.
UK Energy M&A: There have been over 27 UK renewable energy and Battery storage transactions done in 2025, with a combined value in excess of £7.5bn. The table to the right are just BESS or BESS + generation systems.
Australia really takes its coffee and wine seriously. This week it’s been coffee shop Rise – strong, almond tasting 8.25/10
Full on week, boat trips, the Ginger Factory, Bluey World, Mining (yes actual mining, had to pay royalties on the output by the KG!),
Espressos Consumed SB: 1653
P.