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Has anyone here opened an SIPP account at Interactive Brokers?
Hey all, I have a pension with Aviva through my employer but recently realized that the 0.5% fees they're charging are a bit high. For the size of my pension portfolio (~£300k) this comes to about £1500 per year. Moreover, I've recently started to take a bit of interest in managing my investments and I find myself limited by the funds they provide. They also take too long (~upto a week) to process requests for moving investments. For these reasons, I've been looking at opening an SIPP. An SIPP would hopefully give me a bit more control and also cost less. I'm primarily interested invest in US Shares & ETFs. I compared some of the popular pension providers like HL, Interactive Investor, iWeb. My observations about the fee structure:
The annual maintenance fees doesn't seem to vary a lot, with most of them being somewhere ~£200/yr.
Share dealing fees also appear to be a bit all over the place, ranging from £3 - £10. It could end up being a lot depending on the number of trades.
For me the largest component seems to be the forex charge. Most of them appear to be charging 1% - 1.5% for foreign exchange and it also didn't look like they allow you to hold funds in USD in the SIPP. So, if I assume that I'll be moving around investments worth £50k each year, the forex charges could get to about £50k x 1.5% x 2 = £1500.
So now, I'm looking for an SIPP which ideally has the following:
Allows me to trade in US shares & ETFs
Has low (<0.5%) foreign exchange fees
Has maintenance fees in a similar range, < £300
Allows holding balance in foreign currency, mainly USD
During my search, I stumbled upon a lesser known route using which you can get an SIPP account at Interactive Brokers - https://www.interactivebrokers.co.uk/en/index.php?f=38149. IB themselves are not SIPP administrators so you need to register with an SIPP administrator who has a master account at IB and then you can get an IB Cash sub-account under that administrator. IB appears to be checking all my boxes, but I'm just not very sure about the SIPP Administrators that I might need to use. I found a few: https://www.atsipp.co.uk/, http://www.candpsipp.co.uk/, https://www.optionspensions.co.uk/personal-pensions. They all appear to be somewhat less popular names and small in size. Has anyone here done this? Do you have any recommendations on which SIPP Administrator I should use? Any gotchas? Or maybe there's another SIPP that provides the features I'm looking for?
No, the British did not steal $45 trillion from India
This is an updated copy of the version on BadHistory. I plan to update it in accordance with the feedback I got. I'd like to thank two people who will remain anonymous for helping me greatly with this post (you know who you are) Three years ago a festschrift for Binay Bhushan Chaudhuri was published by Shubhra Chakrabarti, a history teacher at the University of Delhi and Utsa Patnaik, a Marxist economist who taught at JNU until 2010. One of the essays in the festschirt by Utsa Patnaik was an attempt to quantify the "drain" undergone by India during British Rule. Her conclusion? Britain robbed India of $45 trillion (or £9.2 trillion) during their 200 or so years of rule. This figure was immensely popular, and got republished in several major news outlets (here, here, here, here (they get the number wrong) and more recently here), got a mention from the Minister of External Affairs & returns 29,100 results on Google. There's also plenty of references to it here on Reddit. Patnaik is not the first to calculate such a figure. Angus Maddison thought it was £100 million, Simon Digby said £1 billion, Javier Estaban said £40 million see Roy (2019). The huge range of figures should set off some alarm bells. So how did Patnaik calculate this (shockingly large) figure? Well, even though I don't have access to the festschrift, she conveniently has written an article detailing her methodology here. Let's have a look.
How exactly did the British manage to diddle us and drain our wealth’ ? was the question that Basudev Chatterjee (later editor of a volume in the Towards Freedom project) had posed to me 50 years ago when we were fellow-students abroad.
This is begging the question.
After decades of research I find that using India’s commodity export surplus as the measure and applying an interest rate of 5%, the total drain from 1765 to 1938, compounded up to 2016, comes to £9.2 trillion; since $4.86 exchanged for £1 those days, this sum equals about $45 trillion.
This is completely meaningless. To understand why it's meaningless consider India's annual coconut exports. These are almost certainly a surplus but the surplus in trade is countered by the other country buying the product (indeed, by definition, trade surpluses contribute to the GDP of a nation which hardly plays into intuitive conceptualisations of drain). Furthermore, Dewey (2019) critiques the 5% interest rate.
She [Patnaik] consistently adopts statistical assumptions (such as compound interest at a rate of 5% per annum over centuries) that exaggerate the magnitude of the drain
The exact mechanism of drain, or transfers from India to Britain was quite simple.
Drain theory possessed the political merit of being easily grasped by a nation of peasants. [...] No other idea could arouse people than the thought that they were being taxed so that others in far off lands might live in comfort. [...] It was, therefore, inevitable that the drain theory became the main staple of nationalist political agitation during the Gandhian era.
The key factor was Britain’s control over our taxation revenues combined with control over India’s financial gold and forex earnings from its booming commodity export surplus with the world. Simply put, Britain used locally raised rupee tax revenues to pay for its net import of goods, a highly abnormal use of budgetary funds not seen in any sovereign country.
The issue with figures like these is they all make certain methodological assumptions that are impossible to prove. From Roy in Frankema et al. (2019):
the "drain theory" of Indian poverty cannot be tested with evidence, for several reasons. First, it rests on the counterfactual that any money saved on account of factor payments abroad would translate into domestic investment, which can never be proved. Second, it rests on "the primitive notion that all payments to foreigners are "drain"", that is, on the assumption that these payments did not contribute to domestic national income to the equivalent extent (Kumar 1985, 384; see also Chaudhuri 1968). Again, this cannot be tested. [...] Fourth, while British officers serving India did receive salaries that were many times that of the average income in India, a paper using cross-country data shows that colonies with better paid officers were governed better (Jones 2013).
Indeed, drain theory rests on some very weak foundations. This, in of itself, should be enough to dismiss any of the other figures that get thrown out. Nonetheless, I felt it would be a useful exercise to continue exploring Patnaik's take on drain theory.
The East India Company from 1765 onwards allocated every year up to one-third of Indian budgetary revenues net of collection costs, to buy a large volume of goods for direct import into Britain, far in excess of that country’s own needs.
So what's going on here? Well Roy (2019) explains it better:
Colonial India ran an export surplus, which, together with foreign investment, was used to pay for services purchased from Britain. These payments included interest on public debt, salaries, and pensions paid to government offcers who had come from Britain, salaries of managers and engineers, guaranteed profts paid to railway companies, and repatriated business profts. How do we know that any of these payments involved paying too much? The answer is we do not.
So what was really happening is the government was paying its workers for services (as well as guaranteeing profits - to promote investment - something the GoI does today Dalal (2019), and promoting business in India), and those workers were remitting some of that money to Britain. This is hardly a drain (unless, of course, Indian diaspora around the world today are "draining" it). In some cases, the remittances would take the form of goods (as described) see Chaudhuri (1983):
It is obvious that these debit items were financed through the export surplus on merchandise account, and later, when railway construction started on a large scale in India, through capital import. Until 1833 the East India Company followed a cumbersome method in remitting the annual home charges. This was to purchase export commodities in India out of revenue, which were then shipped to London and the proceeds from their sale handed over to the home treasury.
While Roy's earlier point argues better paid officers governed better, it is honestly impossible to say what part of the repatriated export surplus was a drain, and what was not. However calling all of it a drain is definitely misguided. It's worth noting that Patnaik seems to make no attempt to quantify the benefits of the Raj either, Dewey (2019)'s 2nd criticism:
she [Patnaik] consistently ignores research that would tend to cut the economic impact of the drain down to size, such as the work on the sources of investment during the industrial revolution (which shows that industrialisation was financed by the ploughed-back profits of industrialists) or the costs of empire school (which stresses the high price of imperial defence)
Since tropical goods were highly prized in other cold temperate countries which could never produce them, in effect these free goods represented international purchasing power for Britain which kept a part for its own use and re-exported the balance to other countries in Europe and North America against import of food grains, iron and other goods in which it was deficient.
Re-exports necessarily adds value to goods when the goods are processed and when the goods are transported. The country with the largest navy at the time would presumably be in very good stead to do the latter.
The British historians Phyllis Deane and WA Cole presented an incorrect estimate of Britain’s 18th-19th century trade volume, by leaving out re-exports completely. I found that by 1800 Britain’s total trade was 62% higher than their estimate, on applying the correct definition of trade including re-exports, that is used by the United Nations and by all other international organisations.
While interesting, and certainly expected for such an old book, re-exporting necessarily adds value to goods.
When the Crown took over from the Company, from 1861 a clever system was developed under which all of India’s financial gold and forex earnings from its fast-rising commodity export surplus with the world, was intercepted and appropriated by Britain. As before up to a third of India’s rising budgetary revenues was not spent domestically but was set aside as ‘expenditure abroad’.
So, what does this mean? Britain appropriated all of India's earnings, and then spent a third of it aboard? Not exactly. She is describing home charges see Roy (2019) again:
Some of the expenditures on defense and administration were made in sterling and went out of the country. This payment by the government was known as the Home Charges. For example, interest payment on loans raised to finance construction of railways and irrigation works, pensions paid to retired officers, and purchase of stores, were payments in sterling. [...] almost all money that the government paid abroad corresponded to the purchase of a service from abroad. [...] The balance of payments system that emerged after 1800 was based on standard business principles.India bought something and paid for it.State revenues were used to pay for wages of people hired abroad, pay for interest on loans raised abroad, and repatriation of profits on foreign investments coming into India. These were legitimate market transactions.
Indeed, if paying for what you buy is drain, then several billions of us are drained every day.
The Secretary of State for India in Council, based in London, invited foreign importers to deposit with him the payment (in gold, sterling and their own currencies) for their net imports from India, and these gold and forex payments disappeared into the yawning maw of the SoS’s account in the Bank of England.
It should be noted that India having two heads was beneficial, and encouraged investment per Roy (2019):
The fact that the India Office in London managed a part of the monetary system made India creditworthy, stabilized its currency, and encouraged foreign savers to put money into railways and private enterprise in India. Current research on the history of public debt shows that stable and large colonies found it easier to borrow abroad than independent economies because the investors trusted the guarantee of the colonist powers.
Against India’s net foreign earnings he issued bills, termed Council bills (CBs), to an equivalent rupee value. The rate (between gold-linked sterling and silver rupee) at which the bills were issued, was carefully adjusted to the last farthing, so that foreigners would never find it more profitable to ship financial gold as payment directly to Indians, compared to using the CB route. Foreign importers then sent the CBs by post or by telegraph to the export houses in India, that via the exchange banks were paid out of the budgeted provision of sums under ‘expenditure abroad’, and the exporters in turn paid the producers (peasants and artisans) from whom they sourced the goods.
Sunderland (2013) argues CBs had two main roles (and neither were part of a grand plot to keep gold out of India):
Council bills had two roles. They firstly promoted trade by handing the IO some control of the rate of exchange and allowing the exchange banks to remit funds to India and to hedge currency transaction risks. They also enabled the Indian government to transfer cash to England for the payment of its UK commitments.
The United Nations (1962) historical data for 1900 to 1960, show that for three decades up to 1928 (and very likely earlier too) India posted the second highest merchandise export surplus in the world, with USA in the first position. Not only were Indians deprived of every bit of the enormous international purchasing power they had earned over 175 years, even its rupee equivalent was not issued to them since not even the colonial government was credited with any part of India’s net gold and forex earnings against which it could issue rupees. The sleight-of-hand employed, namely ‘paying’ producers out of their own taxes, made India’s export surplus unrequited and constituted a tax-financed drain to the metropolis, as had been correctly pointed out by those highly insightful classical writers, Dadabhai Naoroji and RCDutt.
It doesn't appear that others appreciate their insight Roy (2019):
K. N. Chaudhuri rightly calls such practice ‘confused’ economics ‘coloured by political feelings’.
Surplus budgets to effect such heavy tax-financed transfers had a severe employment–reducing and income-deflating effect: mass consumption was squeezed in order to release export goods. Per capita annual foodgrains absorption in British India declined from 210 kg. during the period 1904-09, to 157 kg. during 1937-41, and to only 137 kg by 1946.
If even a part of its enormous foreign earnings had been credited to it and not entirely siphoned off, India could have imported modern technology to build up an industrial structure as Japan was doing.
This is, unfortunately, impossible to prove. Had the British not arrived in India, there is no clear indication that India would've united (this is arguably more plausible than the given counterfactual1). Had the British not arrived in India, there is no clear indication India would not have been nuked in WW2, much like Japan. Had the British not arrived in India, there is no clear indication India would not have been invaded by lizard people, much like Japan. The list continues eternally. Nevertheless, I will charitably examine the given counterfactual anyway. Did pre-colonial India have industrial potential? The answer is a resounding no. From Gupta (1980):
This article starts from the premise that while economic categories - the extent of commodity production, wage labour, monetarisation of the economy, etc - should be the basis for any analysis of the production relations of pre-British India, it is the nature of class struggles arising out of particular class alignments that finally gives the decisive twist to social change. Arguing on this premise, and analysing the available evidence, this article concludes that there was little potential for industrial revolution before the British arrived in India because, whatever might have been the character of economic categories of that period,the class relations had not sufficiently matured to develop productive forces and the required class struggle for a 'revolution' to take place.
Yet all of this did not amount to an economic situation comparable to that of western Europe on the eve of the industrial revolution. Her technology - in agriculture as well as manufacturers - had by and large been stagnant for centuries. [...] The weakness of the Indian economy in the mid-eighteenth century, as compared to pre-industrial Europe was not simply a matter of technology and commercial and industrial organization. No scientific or geographical revolution formed part of the eighteenth-century Indian's historical experience. [...] Spontaneous movement towards industrialisation is unlikely in such a situation.
So now we've established India did not have industrial potential, was India similar to Japan just before the Meiji era? The answer, yet again, unsurprisingly, is no. Japan's economic situation was not comparable to India's, which allowed for Japan to finance its revolution. From Yasuba (1986):
All in all, the Japanese standard of living may not have been much below the English standard of living before industrialization, and both of them may have been considerably higher than the Indian standard of living. We can no longer say that Japan started from a pathetically low economic level and achieved a rapid or even "miraculous" economic growth. Japan's per capita income was almost as high as in Western Europe before industrialization, and it was possible for Japan to produce surplus in the Meiji Period to finance private and public capital formation.
The circumstances that led to Meiji Japan were extremely unique. See Tomlinson (1985):
Most modern comparisons between India and Japan, written by either Indianists or Japanese specialists, stress instead that industrial growth in Meiji Japan was the product of unique features that were not reproducible elsewhere. [...] it is undoubtably true that Japan's progress to industrialization has been unique and unrepeatable
So there you have it. Unsubstantiated statistical assumptions, calling any number you can a drain & assuming a counterfactual for no good reason gets you this $45 trillion number. Hopefully that's enough to bury it in the ground. 1. Several authors have affirmed that Indian identity is a colonial artefact. For example seeRajan 1969:
Perhaps the single greatest and most enduring impact of British rule over India is that it created an Indian nation, in the modern political sense. After centuries of rule by different dynasties overparts of the Indian sub-continent, and after about 100 years of British rule, Indians ceased to be merely Bengalis, Maharashtrians,or Tamils, linguistically and culturally.
But then, it would be anachronistic to condemn eighteenth-century Indians, who served the British, as collaborators, when the notion of 'democratic' nationalism or of an Indian 'nation' did not then exist.[...]Indians who fought for them, differed from the Europeans in having a primary attachment to a non-belligerent religion, family and local chief, which was stronger than any identity they might have with a more remote prince or 'nation'.
Chakrabarti, Shubra & Patnaik, Utsa (2018). Agrarian and other histories: Essays for Binay Bhushan Chaudhuri. Colombia University Press Hickel, Jason (2018). How the British stole $45 trillion from India. The Guardian Bhuyan, Aroonim & Sharma, Krishan (2019). The Great Loot: How the British stole $45 trillion from India. Indiapost Monbiot, George (2020). English Landowners have stolen our rights. It is time to reclaim them. The Guardian Tsjeng, Zing (2020). How Britain Stole $45 trillion from India with trains | Empires of Dirt. Vice Chaudhury, Dipanjan (2019). British looted $45 trillion from India in today’s value: Jaishankar. The Economic Times Roy, Tirthankar (2019). How British rule changed India's economy: The Paradox of the Raj. Palgrave Macmillan Patnaik, Utsa (2018). How the British impoverished India. Hindustan Times Tuovila, Alicia (2019). Expenditure method. Investopedia Dewey, Clive (2019). Changing the guard: The dissolution of the nationalist–Marxist orthodoxy in the agrarian and agricultural history of India. The Indian Economic & Social History Review Chandra, Bipan et al. (1989). India's Struggle for Independence, 1857-1947. Penguin Books Frankema, Ewout & Booth, Anne (2019). Fiscal Capacity and the Colonial State in Asia and Africa, c. 1850-1960. Cambridge University Press Dalal, Sucheta (2019). IL&FS Controversy: Centre is Paying Up on Sovereign Guarantees to ADB, KfW for Group's Loan. TheWire Chaudhuri, K.N. (1983). X - Foreign Trade and Balance of Payments (1757–1947). Cambridge University Press Sunderland, David (2013). Financing the Raj: The City of London and Colonial India, 1858-1940. Boydell Press Dewey, Clive (1978). Patwari and Chaukidar: Subordinate officials and the reliability of India’s agricultural statistics. Athlone Press Smith, Lisa (2015). The great Indian calorie debate: Explaining rising undernourishment during India’s rapid economic growth. Food Policy Duh, Josephine & Spears, Dean (2016). Health and Hunger: Disease, Energy Needs, and the Indian Calorie Consumption Puzzle. The Economic Journal Vankatesh, P. et al. (2016). Relationship between Food Production and Consumption Diversity in India – Empirical Evidences from Cross Section Analysis. Agricultural Economics Research Review Gupta, Shaibal (1980). Potential of Industrial Revolution in Pre-British India. Economic and Political Weekly Raychaudhuri, Tapan (1983). I - The mid-eighteenth-century background. Cambridge University Press Yasuba, Yasukichi (1986). Standard of Living in Japan Before Industrialization: From what Level did Japan Begin? A Comment. The Journal of Economic History Tomblinson, B.R. (1985). Writing History Sideways: Lessons for Indian Economic Historians from Meiji Japan. Cambridge University Press Rajan, M.S. (1969). The Impact of British Rule in India. Journal of Contemporary History Bryant, G.J. (2000). Indigenous Mercenaries in the Service of European Imperialists: The Case of the Sepoys in the Early British Indian Army, 1750-1800. War in History
Creating a blog couldn’t be easier and yet more complicated in 2020. There are so many different things to think about, and yet so many different platforms you can use to streamline the process. Understandably you’ll already have an idea of what you want to write about, I, unfortunately, can’t help you with that, but what I can do is show you how you can set up a killer blog that will drive readers to your website. We’ll take you through what you’ll need to get started, our five steps to setting your blog up, the best blogging platforms to use, how to get your blog discovered, and the do’s and don’ts of blogging. But first, we need to establish what type of blog you want to set up.
What type of blog?
Firstly you’ll want to have a goal in mind. What are you aiming to achieve through your blog? Do you want to pull in more users to your sales pages by writing about your brand, to increase its publicity? Do you want to build a blog that promotes brands and products from other companies? Or do you just want to set up a blog documenting your travels around the world? In order to pick the right software for you, you’ll want to have a grasp before you start of how big this blog is going to be, whether you’re going to monetize it, and what type of blog it’s going to become. For example, if you’re planning on building an affiliate blogging programme, where you promote other brand’s products and call readers to action to but the products, you’ll be writing a lot of content and will benefit from having a more comprehensive blogging system with lots of plugins to promote sales. But if you’re looking to just set up a personal, or a personal brand blog talking about yourself and your brand, you may not perhaps need as many comprehensive features as you would if you were building an affiliate blog. You may also want to build an online portfolio of your work, which could require an entirely different piece of blogging kit, as opposed to the traditional blog that hosts articles and journals.
What you’ll need to get started.
There are 3 key things you’ll need to get up and running.
A blogging platform.
After you’ve identified the type of blog you want to set up, plus whether you’re going to make money from it, you’ll then need to pick a blogging platform tailored to your needs. Many people chose to operate on WordPress as it is one of the most comprehensive blogging systems going, but they forget platforms like Wix and Squarespace that are great for both helping you save and make money and are great options for those who are less tech-savvy and are new to the blogging game. Plus if you’re blogging for business, you might want to think about using LinkedIn for your business blog. We’ll go into more detail on what blogging platforms are best for your needs shortly, but make sure to keep in mind your objectives and technical experience when choosing the right platform for you.
A hosting platform.
Every website needs a web host to store their website’s information on the internet. A web host is an online service provider that will store your website’s information on one of its online servers. This will put your blog out there to the world. The best web hosts will perform a variety of functions for you, for example, Wix is an all-in-one package that will host your website for you, allow you to register a domain name, and has easy to use website design tools to help you start your blog. Web hosting can be expensive though so make sure you pick the best value for money host that can cater to the amount of traffic you have running through your website. Check out our post on the 11 best hosting providers. [Insert blog link here]
A domain name.
I’m sure by now you already know what sort of blog you want to set up, whether that’s a travel, blog, a blog accompanying your online store, or perhaps an affiliate marketing product review blog. You’ll have a niche and an idea and now all you need is a name. Every website online has what’s called a domain name. It’s included in the website address at the top of your search bar, for example, our domain name is www.digitalsupermarket.com. You’ll need to register a domain name after you purchase a hosting plan, to enable customers to find your site quickly and easily. One good tip is to find a hosting platform like Bluehost or GoDaddy that will provide you with a free domain name when you register for one of their web hosting plans as domain registration can be fairly pricey. Pick a great domain name that is easy for customers to read and type into Google so they can find it easier online. TOP TIP: To increase your blog’s search engine ranking, and to help more people find you on Google, try to pick a domain name that has either a .com or .co.uk ending. These domains often rank a lot higher in Google searches than .org’s, .net’s, and .info’s, and for that reason can be slightly more expensive, yet can help boost your site’s reach and credibility.
The Best Blogging Platforms For You.
There are a wealth of platforms out there catering to all your blogging or online portfolio needs. We have listed some of the main ones below shedding some light on what needs they service and why they might be a great option for you.
WordPress - The best software to give you full customisation.
WordPress is perhaps one of the most renowned blogging platforms in the world, running approximately 35% of the internet. It’s favoured highly by professional bloggers because it gives you total freedom to do whatever you want with your blog. WordPress can help you build your blog using one if its search engine optimised themes, you can customise using its drag and drop website builder tool to create a stunning blog. What’s more, is you’ll be able to use its professional blogging service to post your content online and take advantage of the hundreds of third party app plugins, you can integrate into your blog, to improve automation, add new features, and drive traffic to your site. The only downside of WordPress is that it can be quite technical and can take some time getting used to, but once you’ve got the hang of things, you’ll have great control over everything on your webpage. Pros: Cons:
Domain name registration
Tons of third-party plugins and apps
Technical and can take some getting used to
Not the best if you’re not tech-savvy or are just starting out.
Wix - Best for monetizing your site.
Wix is probably the most streamlined and easiest blog providers. It’s so simple and easy to use, it’s therefore great for anyone just starting out in the blogging world. You can customise one of its stunning templates with Wix’s drag and drop editor, and then upload blog posts to your site by slotting in pictures, gifs, social media buttons, sidebars, and other widgets that will help your blog stand out. One of the coolest features about Wix is its marketplace integration, where you can install a whole variety of third-party applications to your blog to provide your users with greater features and usability. Wix is the perfect all-in-one blogging solution to help you easily build a platform to amplify your business to the world, helping you to make more money, but it can also save you a lot of money as it’s cost-efficient plans roll up, web hosting, blog posting, and domain registration all into one product! Check out our Wix review and our comparison of Wix and Squarespace for a deep dive into Wix’s main blogging features. [Insert link here] Pros: Cons:
Streamlined and easy to use blogging software
Includes as a package, web building tools, domain registration, and web hosting
Tons of third-party plugins and apps on the Wix marketplace
Great platform to help make money and save money on its reasonably priced subscription plans
Don’t get the same full control as you see with WordPress
Locked into using Wix’s templates.
Squarespace - Best for creating visually stunning blogs.
Squarespace is very similar to Wix, in that it is an all-in-one web building and blogging platform that can help you build a blog you can monetize efficiently. It sets itself aside though through its better design and customisation features, making it one of the best platforms on the marketing if you’re looking to design a visually aesthetic blog. I’d recommend using this platform if you are a business operating in some sort of design, arts, or culinary industry. Although it offers minimal template options, Squarespace’s templates are works of art and offer you great customization when building your blog. Plus Squarespace offers a great blogging tool that lets you schedule posts and customize your blog to suit more mobile audiences. Pros: Cons:
Streamlined and easy to use blogging software
Can build a visually stunning blog on Squarespace with its streamlined tools
Excellent blogging features
All-in-one web host, domain registrar, and web builder
Can’t add third-party applications on Squarespace
LinkedIn - Best for blogging businesses.
Aside from setting up a blog on your own site, corporate entities can use LinkedIn to enhance and amplify their presence online. LinkedIn has more than 575 million users, most of whom are professionals and members of corporate conglomerates, and you can use this social platform to target some of the most influential people in the world. If you’re blogging about business this is the perfect platform to use a pre-existing community of people to enhance your social standing. You’ll then be able to build connections and followers on your profile who can easily share your blog on their platform through a couple of simple clicks. Pros: Cons:
Utilise LinkedIn’s pre-existing community of business people to amplify your brand
Target corporate directors and influential people directly through LinkedIn
Check out what people are looking at on LinkedIn and tailor your content to that market
Again you are confined within what LinkedIn’s platform will let you do, it’s not your site and you don’t have full customisation
Instagram - Best for the Artists.
Instagram is one of the biggest blogging sites in the world and without realising it, we are all technically bloggers in some way with our Instagram accounts, right? Ultimately for professional use, it is great for building a portfolio that has some form of visual or graphic eye-catching media around it. Instagram lets you post videos, photos, boomerangs, even write a blog in the photo’s caption if you wanted to! Best of all, Instagram is free, and you can use its business software to link up your online store, to drag users away from your profile, using its product tagging features, and land them in your online checkouts. Our top tip for using Instagram is to post regularly and keep on the theme of your blog. Don’t go off-piste as you’re followers will catch on quickly and unfollow you. And with 1 billion people using the platform each day, it is a great way to gain people’s attention and build your brand’s presence online. Pros: Cons:
Best for the creatives.
Totally free and easy to use interface.
Access to a pre-existing community of people.
Online selling capabilities.
Again you are confined within what Instagram’s platform will let you do, it’s not your site and you don’t have full customisation
The Do’s And Don’ts Of Blogging
Here are a couple of top tips to bear in mind when building your blog to help you create an awesome, lead driven platform.
Don’t use complicated language too soon.
With that in mind, do include language that your target audience will understand. But remember they are still here to learn, so don’t drop people in at the deep end right away by using complex jargon off the bat. Define terms and spell it out in layman’s terms for people at the outset, and as the post goes on, then introduce more complex writing. Introducing technical jargon at the start of your posts is an instant turn off for most readers.
Don’t waffle - Keep it succinct.
People want to get to the punchline now. 43% of people admit to skimming through blogs to get to the information they need, meaning to get your blogging site converting leads, you need to engage the reader early on and offer information succinctly throughout your post. Plus don’t make your blog too long. Depending on what you’re writing, a lot of people will see large volumes of text and will switch off immediately. There is no set limit for what a good and bad amount of text is, that’s something you’ll have to figure out per your industry, but from my experience, the shorter, the better.
Don’t make headlines too long.
Also ensure that your headline is not more than 60 characters long. If it gets too long it won’t rank well in search engines and people just won’t want to read it. Check out this headline analysis tool which will analyse the effectiveness of your proposed headlines.
Don’t plagiarise or use credited images.
Copying other people’s work is lazy and can land you in a lot of hot water in extreme cases if you breach a copyright regulation. But it’s also just unfair on the person who has worked hard or been creative to write that work. The same goes for images, people need to make a living from the content and photos they’re taking so don’t steal that off them.
Do write killer headlines.
People are like goldfish. You only have about 3 seconds to get their attention. That’s why it is important to write catchy, funny, and enticing headlines to draw your reader in. One good way to do it is to use the “How To” and “10 Best” strategies. These sorts of titles telling people ‘How to set up a blog’ or ‘the ten best web hosting platforms’ are search engine optimised, lead winning titles that rank highly in Google searches. Try them out and see!
Do post regularly.
The key to creating a great blog that builds leads is posting regularly. Although it is not the best idea to post regularly. Ideally, you want to post 3-4 times a week to get the best influx of traffic to your site. You’ll also want to check out when’s best to post for your target audience, for example, if you’re in the FOREX market, you’ll want to post your blogs perhaps at 8 AM, before the markets open when city workers are on their staring at their phones on their morning commuter trains to the city.
Do share on social media.
Share your content far and wide on your social platforms. Everyone is on social media these days and its outreach is simply phenomenal. That’s why you should always share your posts to your social channels to get greater traffic on your website, and include share buttons all-around your blog to invite your readers to share your articles too!
Do use SEO keywords to drive more traffic.
In a nutshell, SEO keywords are the phrases people put into search engines when they are looking for information on a certain subject. They are how you get found on your website. Depending on what you are writing about, there is always a set of keywords relating to that topic that you can implement, to help you show up higher in people’s google searches. For example, people might regularly search in google, ‘what is the best compost for growing sunflowers?’ When you come to writing about growing sunflowers in your blog, you might want to use these words or incorporate this question into your blog somewhere, to help you rank higher on Google.
Do use call’s to action to take your readers to the next step.
If you don’t challenge your reader at the end of your blog to follow you on Instagram, or check out your sales pages, you’ll never get the leads or sales you are looking for. With that in mind, build compelling calls to action at the end of each of your posts, to pull readers into taking the next step. Check out our post on landing pages to see a couple of cool ways on how to implement calls to action on your site [insert link here].
Do identify a target audience.
People will often tell you to write as though you were in the shoes of the person you’re looking to bring to your website, but it’s true! Identify what type of people you’re writing to, for instance, if you’re writing a business blog about FOREX trading, you’ll write with potential traders in mind who have one eye on the stock market and the other on your blog. Or if you’re a wedding florist, you’ll set your portfolio up to target those people looking to get married in the next year.
Leads, Sales, Results.
Blogging is one of the most influential marketing strategies in the world and the best bloggers can reap some awesome rewards for producing some truly awesome content. It is fairly straightforward to get started and we advise if you’re a small business, or someone with minimal blogging experience, to try out Wix or Squarespace first before you jump into using more technical platforms like WordPress. Once you’re up and running remember our top tips on what to do and what to avoid when writing your blog. Plus don’t forget to think about optimising and adding useful applications to your site to help you build and grow your content. Check out these 39 awesome blogging tools you can use to drive greater traffic to your site! Found this article useful? Make sure you share it with your friends on Facebook and Twitter and let us know in the comments if you have any other useful blogging tips.
Google is ready to ban binary option and cryptocurrency ads
Well, it’s about time, Google is next in line to pose a stiff challenge to the largely fraudulent online trading industry. The world’s largest search engine has just announced that it plans to ban all cryptocurrencies and binary options advertisements, and it is cracking down on ads for various other speculative financial products.
Say goodbye to binary options & cryptocurrency ads
The new rules, which are scheduled to take effect in June, will flat out ban adverts for binary options, cryptocurrencies and all related content (including initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice. Cryptocurrencies have surged in popularity over the last year thanks to a boom in the price of bitcoin towards the end of fiscal 2017. This coincided with a surge in initial coin offerings (ICOs), where numerous startups have issued their own cryptocurrency in exchange for money to construct their businesses.
Taking Facebook’s lead
Google’s hard-line approach follows a similar ban that Facebook enacted earlier in the year in banning cryptocurrency related advertising on its platform. Scott Spencer, Google’s Director of Sustainable Ads said in a recent blog post that the clampdown is part of Google’s efforts to shield consumers from online trading scams. However, much of the online trading world is unregulated, which in turn has attracted scammers looking to make quick money. Last year myriads of “pump and dump” filled the market, while this year bogus ICO projects have become routine.
Forex & CFD Crackdown
Google is additionally coming down on ads for contracts for difference (CFD), spread betting, and foreign exchange (forex) instruments on its platform. These products carry a high level of risk and the entire industry is under increasing regulatory scrutiny across Europe over the past year thanks to severe investment fraud sweeping through the continent. The UK’s Financial Conduct Authority (FCA) issued a warning in November that cryptocurrency CFDs are incredibly high-risk, speculative products that risk the investor suffering significant losses. Research conducted by the FCA showed 82% of people who use the products lose money, implying CFDs are more similar to gambling than investing.
Affiliate marketing for online trading takes a hit
Google additionally announced it is banning ads from affiliates and aggregators who traffic leads to online trading brokers. These websites earn a commission for referring new clients to these products that are lightly regulated. The search giant will require CFD, spread bet, and forex websites to register with it if they want to advertise on its platform and all brokers must be licensed in the country they are looking to advertise in.
Pressure getting to Google
Google’s financial marketing crackdown arises among continued pressure on the search giant, which additionally owns YouTube, regarding the way it runs its advertising procedure. Google has been heavily criticized by the media and politicians for permitting everything from radicalization to binary options trading on its advertising platform due to careless controlling of content and advertising. Spencer did state in his blog post that Google removed 3.2 billion “bad” ads last year and announced, “Improving the ads experience across the web, whether that’s removing harmful ads or intrusive ads, will continue to be a top priority for us.” We shall see. However, there is a pretty good chance that these fraudulent brokers will just simply change the name of their product in order to get around Google’s ban and deceive an unsuspecting user.
What you can do
If you are the victim of an HBC Broker scam be sure to send your complaint to [[email protected]](mailto:[email protected]), and we will do our very best to get into contact with you as soon as we can to initiate your funds recovery process.
Binary Options Review; Best Binary Options Brokers
Binary Options Review; Best Binary Options Brokers We have compared the best regulated binary options brokers and platforms in May 2020 and created this top list. Every binary options company here has been personally reviewed by us to help you find the best binary options platform for both beginners and experts. The broker comparison list below shows which binary trading sites came out on top based on different criteria. You can put different trading signals into consideration such as using payout (maximum returns), minimum deposit, bonus offers, or if the operator is regulated or not. You can also read full reviews of each broker, helping you make the best choice. This review is to ensure traders don't lose money in their trading account. How to Compare Brokers and Platforms In order to trade binary options, you need to engage the services of a binary options broker that accepts clients from your country e.g. check US trade requirements if you are in the United States. Here at bitcoinbinaryoptionsreview.com, we have provided all the best comparison factors that will help you select which trading broker to open an account with. We have also looked at our most popular or frequently asked questions, and have noted that these are important factors when traders are comparing different brokers:
What is the Minimum Deposit? (These range from $5 or $10 up to $250)
Are they regulated or licensed, and with which regulator?
Can I open a Demo Account?
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Is there a Bonus available for new trader accounts? What are the Terms and
Who has the best binary trading platform? Do you need high detail charts with technical analysis indicators?
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How much is the minimum trade size or amount?
What types of options are available? (Touch, Ladder, Boundary, Pairs, etc)
Additional Tools – Like Early closure or Metatrader 4 (Mt4) plugin or integration
Do they operate a Robot or offer automated trading software?
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Who has the best payouts or maximum returns? Check the markets you will trade.
The Regulated Binary Brokers Regulation and licensing is a key factor when judging the best broker. Unregulated brokers are not always scams, or untrustworthy, but it does mean a trader must do more ‘due diligence’ before trading with them. A regulated broker is the safest option. Regulators - Leading regulatory bodies include:
CySec – The Cyprus Securities and Exchange Commission (Cyprus and the EU)
FCA – Financial Conduct Authority (UK)
CFTC – Commodity Futures Trading Commission (US)
FSB – Financial Services Board (South Africa)
ASIC – Australia Securities and Investment Commission
There are other regulators in addition to the above, and in some cases, brokers will be regulated by more than one organization. This is becoming more common in Europe where binary options are coming under increased scrutiny. Reputable, premier brands will have regulation of some sort. Regulation is there to protect traders, to ensure their money is correctly held and to give them a path to take in the event of a dispute. It should therefore be an important consideration when choosing a trading partner. Bonuses - Both sign up bonuses and demo accounts are used to attract new clients. Bonuses are often a deposit match, a one-off payment, or risk-free trade. Whatever the form of a bonus, there are terms and conditions that need to be read. It is worth taking the time to understand those terms before signing up or clicking accept on a bonus offer. If the terms are not to your liking then the bonus loses any attraction and that broker may not be the best choice. Some bonus terms tie in your initial deposit too. It is worth reading T&Cs before agreeing to any bonus, and worth noting that many brokers will give you the option to ‘opt-out’ of taking a bonus. Using a bonus effectively is harder than it sounds. If considering taking up one of these offers, think about whether, and how, it might affect your trading. One common issue is that turnover requirements within the terms, often cause traders to ‘over-trade’. If the bonus does not suit you, turn it down. How to Find the Right Broker But how do you find a good broker? Well, that’s where BitcoinBinaryOptionsReview.com comes in. We assess and evaluate binary options brokers so that traders know exactly what to expect when signing up with them. Our financial experts have more than 20 years of experience in the financial business and have reviewed dozens of brokers. Being former traders ourselves, we know precisely what you need. That’s why we’ll do our best to provide our readers with the most accurate information. We are one of the leading websites in this area of expertise, with very detailed and thorough analyses of every broker we encounter. You will notice that each aspect of any broker’s offer has a separate article about it, which just goes to show you how seriously we approach each company. This website is your best source of information about binary options brokers and one of your best tools in determining which one of them you want as your link to the binary options market. Why Use a Binary Options Trading Review? So, why is all this relevant? As you may already know, it is difficult to fully control things that take place online. There are people who only pose as binary options brokers in order to scam you and disappear with your money. True, most of the brokers we encounter turn out to be legit, but why take unnecessary risks? Just let us do our job and then check out the results before making any major decisions. All our investigations regarding brokers’ reliability can be seen if you click on our Scam Tab, so give it a go and see how we operate. More detailed scam reports than these are simply impossible to find. However, the most important part of this website can be found if you go to our Brokers Tab. There you can find extensive analyses of numerous binary options brokers irrespective of your trading strategy. Each company is represented with an all-encompassing review and several other articles dealing with various aspects of their offer. A list containing the very best choices will appear on your screen as you enter our website whose intuitive design will allow you to access all the most important information in real-time. We will explain minimum deposits, money withdrawals, bonuses, trading platforms, and many more topics down to the smallest detail. Rest assured, this amount of high-quality content dedicated exclusively to trading cannot be found anywhere else. Therefore, visiting us before making any important decisions regarding this type of trading is the best thing to do. CONCLUSION: Stay ahead of the market, and recover from all kinds of binary options trading loss, including market losses in bitcoin, cryptocurrency, and forex markets too. Send your request via email to - [email protected]
With Bitcoin Suddenly Surging, Canaan Stock Is Also Going Up Today
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Share of world GDP from 2.43% in 2014 to 3.08% in 2018
Average GDP 7.3% against 6.7% in previous regime
Forex reserves from 300 bn USD in 2014 to 420 bn USD in 2018
Doubling of FDI inflow from 36 bn USD in 2014 to 66 billion USD in 2018
Inflation less than 2.3 % (Nov 18) against 10.1% in 2014
Growth of sensex from 24,121.74 in 2014 to 36,395.03 on 12 Feb 19 (50.88%)
Fiscal deficit under control
Per capita income increased by 45% from Rs 86,647 in 2014 to Rs 1,25,397
IT exemption from 2 lakh in 2014 to 5 lakh (effectively 9.85 lakh with home loan)
Restaurant bills tax reduced from 18% in 2014 to 5%
Transaction charges through card down from 1% to 0%, domestic money transfer fee down from Rs 5 in 2014 to zero
Financial inclusion (32 crore bank accounts with 260 billion worth deposits). Almost 100% coverage from earlier 50%
DBT (savings of 83000 crores @ 15000 crore annually), No of govt schemes DBT applied to increased from 34 in 2014 to 433, 2.7 lakh fake mid-day meal students, 3.3 crore fake LPG connections, 87 lakh fake MNREGA job cards, 3 crore fake ration cards eliminated
Zero IT for businesses with turnover upto 60 lakhs
GST exemplifying cooperative federalism, rates of 83 items down from pre-GST rates, out of 1211 items only 35 items in above 18% slab, 39% reduction of cost of basic household items. Average 1 lk crore monthly revenue through GST collection. Exempted for business upto 40 lk
Insolvency and Bankruptcy Code, constitution of NCLT, 3 lakh crores of NPAs recovered, 66 cases resolved, 260 cases liquidated, resolution of stressed assets, 2100 companies pay back 83000 crore to banks settling their pending loan repayments
75 billion $ or Yen to Rupee exchange agreement with Japan
2.92 lakh km of optical fibre laid, 0.02% to 50% gram Panchayat connectivity
Swachh bharat mission has saved, according to WHO, 3 lakh lives and will save 1.5 lakh lives per year.
IT filers increase from 3.79 crore to 6.08 crore, enterprises registered for indirect tax up from 64 lk to 118 lakh
Entry of India in global regimes Missile Technology Control regime (MTCR), WA (Wassenaar Arrangement) and Australia Group
17 crore soil health cards
1.5 crore houses built, 91.37 crore in rural areas and 13.5 lakh in urban areas against 25 lakh houses built between 2010-2014. House for all target year is 2022.
1,78,346 houses built in NE over existing 2875 houses built till 2014
Home loan interest rate down from 10.3 % in 2014 to 8.4% in 2018, annual savings of Rs 47,160 for 30 lakhs over 30 years, no GST on affordable housing, 5% on remaining
Trading agreement in rupee with Iran and UAE
Common service centres up from 84k to 3 Lakh
OROP implemented after 43 years, 35000 crores disbursed to 8 crore veterans
India's vaccination programme Indradhanush amongst 12 best practices of world
5035 Jan Aushadhi and - 1054 medicines under price control (60-90% discounts).
More than 150 Amrit stores, reduction of cost of cromium cobalt Knee implant from 1.58-2.5 lakh to 54,720 and high flex implant from Rs181728 to 56490 (69%), 85% reduction in cardiac stent price to Rs 28000
87% reduction in 400 cancer drugs
Rate of Interest on higher education loans dropped from 14.75 in 2013 to 10.88% in 2019, savings of 1.18 lakh on 10 lakh loan over tenure of 60 months, Rs 2000 savings on EMI
Data revolution: Cost of 1 GB $0.26 in India against $12.37 in US, $6.66 in UK and $75.2 in Zimbabwe. Unlimited mobile+ 45 Gb data = Rs 150 against Rs 1000 in 2013; annual savings of 10,200
Katra rail line work completed after 16 years
Dhola Sadiya bridge work completed after 16 years
Sardar Sarovar Dam work completed after 15 years
Pakyong airport completed after 10 years
Chennai Nashri Tunnel after 10 years
Assam NRC after 40 years
National War Memorial after 50 years
NE cpas after 60 years
Kollam bypass after 43 years
Indo-Bangladesh enclaves after 42 years
Bansagar canal project after 40 years
Bogibeel bridge after 23 years
Western peri expressway after 15 years
Kota Chambal bridge after 11 years
Maibang-Lumding Stretch completed
Delhi Meerut Expressway completed
Ganga Expressway project (world's longest) underway
Metros in Ahmedabad, Nagpur, Jaipur, Lucknow, Washermenpet
All umanned level crossings eliminated
Ayushman Bharat: annual 5 lakh health care to every family, 15.05 lakh hospital admissions for secondary/ tertiary treatment, 2.4 crore e-cards generated as on 10 Mar 19 in 170 days. Target 50 crore people.
59minutes loan portal: 92,000 loan applications of MSME amounting to 30,000 crores approved, 6000 crores sanctioned till Nov 18
87% of farming house (owning land of 2 hctrs) or 12 cr ppl to get kisaan sammaan nidhi of Rs 6000 pr year. Rs 5215 cr transferred directly to 2.6 crore farmers in 37 days (for households with holding less than 0.01 hectares incm per month so far was Rs 8136 agnst exp of 6594
1.5 million electric rickshaws
Procurement of 36 Rafale on Government to Government Basis avoiding middlemen
05 billion$ S 400 Triumf air defence missile system deal with Russia
Udaan scheme - flight cost down from Rs 5000/1000 km in 2013 to 3400/1000 km in 2018, 34 airports operationalised, small towns connected, all states on aerial
Preventive conservation of 39275570 folios, curative conservation of 3656863 filios, digitisation of 2.83 lakh manuscripts consisting of 2.93 crore pages
India is now world's largest 2-wheeler manufacturer, 2nd largest smartphone manufacturer (94% of mobiles sold now made in India), 4th largest automaker, 2nd largest steel producer
5100 m Mandvi Bridge in Goa in 3.5 years
Ease of doing Business ranking jump from 134 in 2014 to 77 in 2019
Therubali - Singapur Bridge No 588
Restoration of Asurgarh Fort, Kalahandi
GeM portal with 731431 product categories, 180,862 registered sellers and 32114 govt buyers
10% EWS reservation
40% of ongoing 700 NH projects completed, adding 40,039 km between 2014-18 against 91,287 km between 1947-2014
Highway construction rate jumped from 12 km/day in 2014 to 27 km/day in 2019
101 terrorists and 11 offenders extradited
90,000 ex-partite Indians evacuated
Chabahar port, Sittwe port and Duqm port
Military installation in Seychelles
International logistics agreements with US, France and Singapore
Work underway on 25 MLD ZLD Common Effluent Treatment Plant at Gujarat Eco Textile Park and will save 25 million litres of water per day
Beautification of 65 railway stations, all stations fitted with LED lights, wi-fi, multi-brand food centres, kiosks, executive lounges, lifts (445 from 97 in 2014), escalators (603 from 199 in 2014), travellators and ramps
100% electrification of railways underway, first solar powered railway station (Guwahati). First solar powered train (world's second), savings of Rs 40 Lakhs and 90,000 ltrs diesel per year
Make in India semi-high-speed trains - Tejas, Gatiman and Vande Bharat
Humsafar and Antodaya trains, Deen Dayalu and Anubhuti coaches, UDAY double decker, glass dome Vistadome coaches
Project Swarn and Project Utkrisht to upgrade Rajdhani/Shatabdi and Mail/Express respectively
Largest coach production in world at ICF, Chennai
No more human extreta on railway tracks. Installation of 1.37 lakh out of 2.5 lakh completed in Jun 18.
400 wi-fi railway stations (Aug 18)
80% reduction in rail accidents
10 high speed rail corridors underway, target date 2025-26
Export of world class customised coaches from MCF, Rae Bareli
LIC and Air India register profit
2300 km rail tracks constructed, speed jumped from 4.1 km/day in 2014 to 6.53 km/day in 2018
Neem coating of urea
Gokul mission - record 160 million ton milk production
Online availability of CBSE and NCERT books
10 crore LED bulbs distributed, 5000 crore savings
Investment in urban infrastructure jumped from 157703 crores to 795500 crores
Statue of Unity to commemorate Iron Man of India
Rs 2509 crore sales in Khadi
482.36 million digital transactions worth Rs 74,978 crores in Oct 2018 against 0.3 million transactions worth Rs 90 crores in Nov 2016
30% increase in ATMs, 208% increase of PoS machines from 10.81 lakh in May 14 to 33.32 lakh in Aug 18, 111% increase in credit cards from 1.94 crore in May 14 to 4.10 crore in Aug 18, 144% increase in debit cards from 40.17 crore to 98.02 crore
Ease of Doing Business Index 142 (2014) to 100 (2018)
Ease of getting electricity index 99 (2014) to 26 (2018)
UN's e-govt index 118 (2014) to 97(2018)
Globalisation index 112 to 107 (2018)
Innovation index 76 to 60 (2018)
Competitiveness index 71 to 39
Logistics performance index 54 to 35
Global peace index 141 to 137
DBR ranking 100 to 77
India ranks 3rd in global start up ecosystem
06 crore jobs in MSME sector based on CII data
448 million formal jobs based on EPFO, NPS and PPF data
10 crore jobs in entrepreneurship via mudra and other schemes
80% increase in tax payers, 51.3 % increase in gross tax revenue
Black Money report card - Voluntary income declaration scheme (Rs 65250 crore), IT search and survey operations (35,460 crore), Pradhan Mantri Garib Kalyan Yojana(5000 crore), Benami transactions Act (4300 crore), Black Money and Imposition of Tax Act (4100 crore)
160 Rs 6000 financial assiatence for pregnant women 161/1 . Sagarmala: port capacity increase from 8 to 14.7 lakh ton, cargo up from 89 to 116 MMT 8 new national waterways including ganga waterway NW-1 and Brahmaputra waterway NW-2. 161/2. domestic cruise service between Mumbai and Goa, ro-ro services on Ghoga-Dahej reducing travel distance from 294 to 31 km 161/3. New international cruise terminals at Chennai and Goa, railway line between Haridaspur and Paradip underway, LNG import terminal at Kamarajar port, Oil berth ai Jawahar Dweep,Coal berth at Mangalore port 161/4 . deep draft Iron ore berth at Paradip berth, JNPT SEZ, Kandla and Paradip smart industrial port city, largest dry dock and international ship repair facility at CSL, modernisation of 17 fishing harbours
800 km Delhi-Mumbai Expressway underway
Replacement of bio-toilets with upgraded vacuum bio toilets in trains underway. Order for 500 placed on experimental basis.
No terror strikes in hinterland
103 new KVs
62 new Navodaya Vidyalayas
6 new IITs against 16 in previous 57 years
6 new IIMs against 13 in previous 57 years
7 IIITs against 7 in previous 57 years
02 new IISER
12 new AIIMS against 7 in previous 57 years.
141 new universities against 30 in previous 57 years
01 new NIT
Life Insurances @ Rs 12 annual and @ Rs 12 monthly premiums
Atal Pension Yojana
Pension to 42 crore people of unorganised sector
BHIM application for digital payments
Khelo India Initiative for tracking of athletes' development, Rs 5 lk per annum scholarship for 1000 budding athletes per year for eight years each; monthly Rs 50000 out-of -pocket exptr, 2000 PETs, salary cap of coaches doubled from Rs 1-2 lk per month, target 15 yrs
Special Task Force for Olympics
Bullet train maiden project
182/1. Rs 6.92 lakh crore Bharatmala project, 44 economic corridors with 9000 km road, 2000 km port connectivity, 9000km roads to connect district HQs with NH, 182/2. 2000 km road with Nepal, Bhutan, Bangladesh and Myanmar, opening up of 185 choke points, road development to char dham, 12 greenfield expressways spanning 1900 km
36 murtis retrieved and brought back to India in 2014-2019 under India Pride Project against 02 between 2000-2013, 02 in 90s, 03 in 80s, 01 in 70s and nil in 50s and 60s
Unemployment rate 3.8% against 13.8 % in 2013
India is a less-cash society now
Develpment of Trincomalee and Columbo port while checkmating China's Hambantota by taking operations of near by (15 km away) Mattala Rajapaksha International Airport
Plugging the 'double taxation avoidance' black money loophole through a new tax agreement with Mauritius
Deal with Switzerland for automatic tax data sharing from 01 Jan 2019
189/1 Varanasi - Varanasi ring road phase 1 completed, phase 2 underway, inland waterways terminal, Babatpur airport highway, 140 MLD Dinaput STP, facelift to railway station, big cow shelter for stray cattle, BPO centre, piped gas project, Varanasi-Balia rail project, 189/2. Vande Bharat Express, Kashi Vishwanath temple - Ganga Ghat corridor project, renovation of all bathings ghats, LED illuminations of ghats and major roads, underground electricity cabling, 189/3. new sewage plants, 02 cancer treatment facilities, 65th to 29th rank in swachhata sarvekshan (2016), 90% ODF district.
Creation of 100 Smart cities, 100 crore per year per city for 05 years, 500 acres for retrofitting, 50 acres for redevelopment, 250 acres for green field projects, 10% of energy from renewable resources, 80% of green building construction, special purpose vehicles.
191/1 Development of 500 AMRUT cities underway, urbanization project of rejuvenation and transformation which includes beach front development, prevention of beach erosion, improvement of water supply, replacement of pipelines, 191/2. New sewerage connections, greenery and open spaces, digital and smart facilities, e-governance, LED streetlights, public transport, storm water drainage projects in a phased manner, Target date 2022
Increase in Child Sex Ratio (CSR) in 104 BBBP (Beti Bachao Beti Padhao) districts, anti-natal care registration in 119 districts and institutional deliveries in 146 out of total 640 districts as in Mar 18. CSR of Haryana increased from 871 to 914.
International Yoga Day
Aspirational Districts Programme: 115 'backward' districts placed under 'prabharis' and for competitive development on the basis of 49 performance indicators, target year 2022.
195/1. Make in India: 16.4 lakh crore investment committments, 1.5 lakh crore investment inquiries, 60 bn USD FDI, 26 sectors covered, 23 positions jump in World Bank's Doing Business Report (DBR), 32 places in WEF's Global Competitiveness Index (GCI), 195/2 19 places in Logistics Performance Index, 42 places in Ease of Doing Business index, schemes include Bharatmala, Sagarmala, dedicate freight corridors, industrial corridors, UDAN-RCS, Bharat Broadband Network, Digital India.
251 Passport Seva Kendras (PSKs) and Post Office Passport Seva kendras (POPSKs) against 77 till 2014, target of one PSK every 50 km across India.
Unanimous election of Justice Dalveer Bhandari to ICJ forcing UK to pull out own nominee Christopher Greenwood, demonstrating India's clout in international arena.
India Post Payments Bank: India's biggest banking outreach with 1.55 lakh post offices (2.5 times banking network) linked to IPPB system
Philip Kotler award, Seoul Peace prize, Champion of the Earth Award, Grand Collar of the State of Palestine, Amir Abdulla Khan Award, King Abdulaziz Sash award, Amir Amanullah Khan award.
1900 gifts and memorabilia received by Modi auctioned and 11.7 crores added to Namami Gange fund, 1.4 c of Seoul Peace award also to Nammami Gange.
Removal of article 370 and thereby also 35a after several decades.
Giving citizenship to persecuted minorities in Pakistan, Bangladesh and Afghanistan through passing of CAA.
Trust for creation of Ram Mandir underway.
Abolishment of Haj subsidy.
Abolishment and criminalization of instant triple talak.
Deal with Bodo community.
Getting Maulana Masood Azhar listed as an UN designated terrorist.
The Daily Autist 03/31/20 For The Autists, By An Autist
The Daily Autist
TLDR Of TheNewsTo Inform YourMoves Dumb bulls and gay bears, welcome. Robinhood falsely gave me a PDT warning so I can’t buy or sell anything until it’s fixed. Until 04/03 I’m effectively just a spectator as I can’t close any position I open. My QQQ and SPY options will expire worthless when the market closes due to not being able to close after opening positions to sell later in the day yesterday. So get ready for a bitter one. (I know RH is shit, but everywhere else requires minimum balances or an arbitrary pass/fail determination so it is what it is)
Keep buying short term calls until there’s a significant signal otherwise. All the DD in the world gets wiped out by a heavy enough BRRRRRRRt. I got some far OTM calls to hedge my put bets Friday EOD and Monday and if it weren’t for the false PDT warning I would have almost made back the losses to be back to even. So try not to go full retard on the puts, and if you can afford it, don’t use Robinhood.
Post your thoughts, questions, complaints, compliments, and plays in the comments.
Edited for formatting errors due to importing from Grammarly.
https://preview.redd.it/gp18bjnlabr41.jpg?width=768&format=pjpg&auto=webp&s=6054e7f52e8d52da403016139ae43e0e799abf15 Download PDF of this article here:https://docdro.id/6eLgUPo In light of the recent fall in oil prices due to the Saudi-Russian dispute and dampening demand for oil due to the lockdowns implemented globally, O&G stocks have taken a severe beating, falling approximately 50% from their highs at the beginning of the year. Not spared from this onslaught is Hibiscus Petroleum Berhad (Hibiscus), a listed oil and gas (O&G) exploration and production (E&P) company. Why invest in O&G stocks in this particularly uncertain period? For one, valuations of these stocks have fallen to multi-year lows, bringing the potential ROI on these stocks to attractive levels. Oil prices are cyclical, and are bound to return to the mean given a sufficiently long time horizon. The trick is to find those companies who can survive through this downturn and emerge into “normal” profitability once oil prices rebound. In this article, I will explore the upsides and downsides of investing in Hibiscus. I will do my best to cater this report to newcomers to the O&G industry – rather than address exclusively experts and veterans of the O&G sector. As an equity analyst, I aim to provide a view on the company primarily, and will generally refrain from providing macro views on oil or opinions about secular trends of the sector. I hope you enjoy reading it! Stock code: 5199.KL Stock name: Hibiscus Petroleum Berhad Financial information and financial reports: https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=5199 Company website: https://www.hibiscuspetroleum.com/
Hibiscus Petroleum Berhad (5199.KL) is an oil and gas (O&G) upstream exploration and production (E&P) company located in Malaysia. As an E&P company, their business can be basically described as: · looking for oil, · drawing it out of the ground, and · selling it on global oil markets. This means Hibiscus’s profits are particularly exposed to fluctuating oil prices. With oil prices falling to sub-$30 from about $60 at the beginning of the year, Hibiscus’s stock price has also fallen by about 50% YTD – from around RM 1.00 to RM 0.45 (as of 5 April 2020). https://preview.redd.it/3dqc4jraabr41.png?width=641&format=png&auto=webp&s=7ba0e8614c4e9d781edfc670016a874b90560684 https://preview.redd.it/lvdkrf0cabr41.png?width=356&format=png&auto=webp&s=46f250a713887b06986932fa475dc59c7c28582e While the company is domiciled in Malaysia, its two main oil producing fields are located in both Malaysia and the UK. The Malaysian oil field is commonly referred to as the North Sabah field, while the UK oil field is commonly referred to as the Anasuria oil field. Hibiscus has licenses to other oil fields in different parts of the world, notably the Marigold/Sunflower oil fields in the UK and the VIC cluster in Australia, but its revenues and profits mainly stem from the former two oil producing fields. Given that it’s a small player and has only two primary producing oil fields, it’s not surprising that Hibiscus sells its oil to a concentrated pool of customers, with 2 of them representing 80% of its revenues (i.e. Petronas and BP). Fortunately, both these customers are oil supermajors, and are unlikely to default on their obligations despite low oil prices. At RM 0.45 per share, the market capitalization is RM 714.7m and it has a trailing PE ratio of about 5x. It doesn’t carry any debt, and it hasn’t paid a dividend in its listing history. The MD, Mr. Kenneth Gerard Pereira, owns about 10% of the company’s outstanding shares.
Reserves (Total recoverable oil) & Production (bbl/day)
To begin analyzing the company, it’s necessary to understand a little of the industry jargon. We’ll start with Reserves and Production. In general, there are three types of categories for a company’s recoverable oil volumes – Reserves, Contingent Resources and Prospective Resources. Reserves are those oil fields which are “commercial”, which is defined as below: As defined by the SPE PRMS,Reservesare “… quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions.” Therefore, Reserves must be discovered (by drilling, recoverable (with current technology), remaining in the subsurface (at the effective date of the evaluation) and “commercial” based on the development project proposed.) Note that Reserves are associated with development projects. To be considered as “commercial”, there must be a firm intention to proceed with the project in a reasonable time frame (typically 5 years, and such intention must be based upon all of the following criteria:) - A reasonable assessment of the future economics of the development project meeting defined investment and operating criteria;- A reasonable expectation that there will be a market for all or at least the expected sales quantities of production required to justify development;- Evidence that the necessary production and transportation facilities are available or can be made available; and- Evidence that legal, contractual, environmental and other social and economic concerns will allow for the actual implementation of the recovery project being evaluated. Contingent Resources and Prospective Resources are further defined as below: -Contingent Resources: potentially recoverable volumes associated with a development plan that targets discovered volumes but is not (yet commercial (as defined above); and)-Prospective Resources: potentially recoverable volumes associated with a development plan that targets as yet undiscovered volumes. In the industry lingo, we generally refer to Reserves as ‘P’ and Contingent Resources as ‘C’. These ‘P’ and ‘C’ resources can be further categorized into 1P/2P/3P resources and 1C/2C/3C resources, each referring to a low/medium/high estimate of the company’s potential recoverable oil volumes: - Low/1C/1P estimate: there should be reasonable certainty that volumes actually recovered will equal or exceed the estimate;- Best/2C/2P estimate: there should be an equal likelihood of the actual volumes of petroleum being larger or smaller than the estimate; and- High/3C/3P estimate: there is a low probability that the estimate will be exceeded. Hence in the E&P industry, it is easy to see why most investors and analysts refer to the 2P estimate as the best estimate for a company’s actual recoverable oil volumes. This is because 2P reserves (‘2P’ referring to ‘Proved and Probable’) are a middle estimate of the recoverable oil volumes legally recognized as “commercial”. However, there’s nothing stopping you from including 2C resources (riskier) or utilizing 1P resources (conservative) as your estimate for total recoverable oil volumes, depending on your risk appetite. In this instance, the company has provided a snapshot of its 2P and 2C resources in its analyst presentation: https://preview.redd.it/o8qejdyc8br41.png?width=710&format=png&auto=webp&s=b3ab9be8f83badf0206adc982feda3a558d43e78 Basically, what the company is saying here is that by 2021, it will have classified as 2P reserves at least 23.7 million bbl from its Anasuria field and 20.5 million bbl from its North Sabah field – for total 2P reserves of 44.2 million bbl (we are ignoring the Australian VIC cluster as it is only estimated to reach first oil by 2022). Furthermore, the company is stating that they have discovered (but not yet legally classified as “commercial”) a further 71 million bbl of oil from both the Anasuria and North Sabah fields, as well as the Marigold/Sunflower fields. If we include these 2C resources, the total potential recoverable oil volumes could exceed 100 million bbl. In this report, we shall explore all valuation scenarios giving consideration to both 2P and 2C resources. https://preview.redd.it/gk54qplf8br41.png?width=489&format=png&auto=webp&s=c905b7a6328432218b5b9dfd53cc9ef1390bd604 The company further targets a 2021 production rate of 20,000 bbl (LTM: 8,000 bbl), which includes 5,000 bbl from its Anasuria field (LTM: 2,500 bbl) and 7,000 bbl from its North Sabah field (LTM: 5,300 bbl). This is a substantial increase in forecasted production from both existing and prospective oil fields. If it materializes, annual production rate could be as high as 7,300 mmbbl, and 2021 revenues (given FY20 USD/bbl of $60) could exceed RM 1.5 billion (FY20: RM 988 million). However, this targeted forecast is quite a stretch from current production levels. Nevertheless, we shall consider all provided information in estimating a valuation for Hibiscus. To understand Hibiscus’s oil production capacity and forecast its revenues and profits, we need to have a better appreciation of the performance of its two main cash-generating assets – the North Sabah field and the Anasuria field. North Sabah oil field https://preview.redd.it/62nssexj8br41.png?width=1003&format=png&auto=webp&s=cd78f86d51165fb9a93015e49496f7f98dad64dd Hibiscus owns a 50% interest in the North Sabah field together with its partner Petronas, and has production rights over the field up to year 2040. The asset contains 4 oil fields, namely the St Joseph field, South Furious field, SF 30 field and Barton field. For the sake of brevity, we shall not delve deep into the operational aspects of the fields or the contractual nature of its production sharing contract (PSC). We’ll just focus on the factors which relate to its financial performance. These are: · Average uptime · Total oil sold · Average realized oil price · Average OPEX per bbl With regards to average uptime, we can see that the company maintains relative high facility availability, exceeding 90% uptime in all quarters of the LTM with exception of Jul-Sep 2019. The dip in average uptime was due to production enhancement projects and maintenance activities undertaken to improve the production capacity of the St Joseph and SF30 oil fields. Hence, we can conclude that management has a good handle on operational performance. It also implies that there is little room for further improvement in production resulting from increased uptime. As North Sabah is under a production sharing contract (PSC), there is a distinction between gross oil production and net oil production. The former relates to total oil drawn out of the ground, whereas the latter refers to Hibiscus’s share of oil production after taxes, royalties and expenses are accounted for. In this case, we want to pay attention to net oil production, not gross. We can arrive at Hibiscus’s total oil sold for the last twelve months (LTM) by adding up the total oil sold for each of the last 4 quarters. Summing up the figures yields total oil sold for the LTM of approximately 2,075,305 bbl. Then, we can arrive at an average realized oil price over the LTM by averaging the average realized oil price for the last 4 quarters, giving us an average realized oil price over the LTM of USD 68.57/bbl. We can do the same for average OPEX per bbl, giving us an average OPEX per bbl over the LTM of USD 13.23/bbl. Thus, we can sum up the above financial performance of the North Sabah field with the following figures: · Total oil sold: 2,075,305 bbl · Average realized oil price: USD 68.57/bbl · Average OPEX per bbl: USD 13.23/bbl Anasuria oil field https://preview.redd.it/586u4kfo8br41.png?width=1038&format=png&auto=webp&s=7580fc7f7df7e948754d025745a5cf47d4393c0f Doing the same exercise as above for the Anasuria field, we arrive at the following financial performance for the Anasuria field: · Total oil sold: 1,073,304 bbl · Average realized oil price: USD 63.57/bbl · Average OPEX per bbl: USD 23.22/bbl As gas production is relatively immaterial, and to be conservative, we shall only consider the crude oil production from the Anasuria field in forecasting revenues.
Valuation (Method 1)
Putting the figures from both oil fields together, we get the following data: https://preview.redd.it/7y6064dq8br41.png?width=700&format=png&auto=webp&s=2a4120563a011cf61fc6090e1cd5932602599dc2 Given that we have determined LTM EBITDA of RM 632m, the next step would be to subtract ITDA (interest, tax, depreciation & amortization) from it to obtain estimated LTM Net Profit. Using FY2020’s ITDA of approximately RM 318m as a guideline, we arrive at an estimated LTM Net Profit of RM 314m (FY20: 230m). Given the current market capitalization of RM 714.7m, this implies a trailing LTM PE of 2.3x. Performing a sensitivity analysis given different oil prices, we arrive at the following net profit table for the company under different oil price scenarios, assuming oil production rate and ITDA remain constant: https://preview.redd.it/xixge5sr8br41.png?width=433&format=png&auto=webp&s=288a00f6e5088d01936f0217ae7798d2cfcf11f2 From the above exercise, it becomes apparent that Hibiscus has a breakeven oil price of about USD 41.8863/bbl, and has a lot of operating leverage given the exponential rate of increase in its Net Profit with each consequent increase in oil prices. Considering that the oil production rate (EBITDA) is likely to increase faster than ITDA’s proportion to revenues (fixed costs), at an implied PE of 4.33x, it seems likely that an investment in Hibiscus will be profitable over the next 10 years (with the assumption that oil prices will revert to the mean in the long-term).
Valuation (Method 2)
Of course, there are a lot of assumptions behind the above method of valuation. Hence, it would be prudent to perform multiple methods of valuation and compare the figures to one another. As opposed to the profit/loss assessment in Valuation (Method 1), another way of performing a valuation would be to estimate its balance sheet value, i.e. total revenues from 2P Reserves, and assign a reasonable margin to it. https://preview.redd.it/o2eiss6u8br41.png?width=710&format=png&auto=webp&s=03960cce698d9cedb076f3d5f571b3c59d908fa8 From the above, we understand that Hibiscus’s 2P reserves from the North Sabah and Anasuria fields alone are approximately 44.2 mmbbl (we ignore contribution from Australia’s VIC cluster as it hasn’t been developed yet). Doing a similar sensitivity analysis of different oil prices as above, we arrive at the following estimated total revenues and accumulated net profit: https://preview.redd.it/h8hubrmw8br41.png?width=450&format=png&auto=webp&s=6d23f0f9c3dafda89e758b815072ba335467f33e Let’s assume that the above average of RM 9.68 billion in total realizable revenues from current 2P reserves holds true. If we assign a conservative Net Profit margin of 15% (FY20: 23%; past 5 years average: 16%), we arrive at estimated accumulated Net Profit from 2P Reserves ofRM 1.452 billion. Given the current market capitalization of RM 714 million, we might be able to say that the equity is worth about twice the current share price. However, it is understandable that some readers might feel that the figures used in the above estimate (e.g. net profit margin of 15%) were randomly plucked from the sky. So how do we reconcile them with figures from the financial statements? Fortunately, there appears to be a way to do just that. Intangible Assets I refer you to a figure in the financial statements which provides a shortcut to the valuation of 2P Reserves. This is the carrying value of Intangible Assets on the Balance Sheet. As of 2QFY21, that amount was RM 1,468,860,000 (i.e. RM 1.468 billion). https://preview.redd.it/hse8ttb09br41.png?width=881&format=png&auto=webp&s=82e48b5961c905fe9273cb6346368de60202ebec Quite coincidentally, one might observe that this figure is dangerously close to the estimated accumulated Net Profit from 2P Reserves of RM 1.452 billion we calculated earlier. But why would this amount matter at all? To answer that, I refer you to the notes of the Annual Report FY20 (AR20). On page 148 of the AR20, we find the following two paragraphs: E&E assets comprise of rights and concession and conventional studies. Following the acquisition of a concession right to explore a licensed area, the costs incurred such as geological and geophysical surveys, drilling, commercial appraisal costs and other directly attributable costs of exploration and appraisal including technical and administrative costs, are capitalised as conventional studies, presented as intangible assets. E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an E&E asset may exceed its recoverable amount. The Group will allocate E&E assets to cash generating unit (“CGU”s or groups of CGUs for the purpose of assessing such assets for impairment. Each CGU or group of units to which an E&E asset is allocated will not be larger than an operating segment as disclosed in Note 39 to the financial statements.) Hence, we can determine that firstly, the intangible asset value represents capitalized costs of acquisition of the oil fields, including technical exploration costs and costs of acquiring the relevant licenses. Secondly, an impairment review will be carried out when “the carrying amount of an E&E asset may exceed its recoverable amount”, with E&E assets being allocated to “cash generating units” (CGU) for the purposes of assessment. On page 169 of the AR20, we find the following: Carrying amounts of the Group’s intangible assets, oil and gas assets and FPSO are reviewed for possible impairment annually including any indicators of impairment. For the purpose of assessing impairment, assets are grouped at the lowest level CGUs for which there is a separately identifiable cash flow available. These CGUs are based on operating areas, represented by the 2011 North Sabah EOR PSC (“North Sabah”, the Anasuria Cluster, the Marigold and Sunflower fields, the VIC/P57 exploration permit (“VIC/P57”) and the VIC/L31 production license (“VIC/L31”).) So apparently, the CGUs that have been assigned refer to the respective oil producing fields, two of which include the North Sabah field and the Anasuria field. In order to perform the impairment review, estimates of future cash flow will be made by management to assess the “recoverable amount” (as described above), subject to assumptions and an appropriate discount rate. Hence, what we can gather up to now is that management will estimate future recoverable cash flows from a CGU (i.e. the North Sabah and Anasuria oil fields), compare that to their carrying value, and perform an impairment if their future recoverable cash flows are less than their carrying value. In other words, if estimated accumulated profits from the North Sabah and Anasuria oil fields are less than their carrying value, an impairment is required. So where do we find the carrying values for the North Sabah and Anasuria oil fields? Further down on page 184 in the AR20, we see the following: Included in rights and concession are the carrying amounts of producing field licenses in the Anasuria Cluster amounting to RM668,211,518 (2018: RM687,664,530, producing field licenses in North Sabah amounting to RM471,031,008 (2018: RM414,333,116)) Hence, we can determine that the carrying values for the North Sabah and Anasuria oil fields are RM 471m and RM 668m respectively. But where do we find the future recoverable cash flows of the fields as estimated by management, and what are the assumptions used in that calculation? Fortunately, we find just that on page 185: 17 INTANGIBLE ASSETS (CONTINUED) (a Anasuria Cluster) The Directors have concluded that there is no impairment indicator for Anasuria Cluster during the current financial year. In the previous financial year, due to uncertainties in crude oil prices, the Group has assessed the recoverable amount of the intangible assets, oil and gas assets and FPSO relating to the Anasuria Cluster. The recoverable amount is determined using the FVLCTS model based on discounted cash flows (“DCF” derived from the expected cash in/outflow pattern over the production lives.) The key assumptions used to determine the recoverable amount for the Anasuria Cluster were as follows: (i Discount rate of 10%;) (ii Future cost inflation factor of 2% per annum;) (iii Oil price forecast based on the oil price forward curve from independent parties; and,) (iv Oil production profile based on the assessment by independent oil and gas reserve experts.) Based on the assessments performed, the Directors concluded that the recoverable amount calculated based on the valuation model is higher than the carrying amount. (b North Sabah) The acquisition of the North Sabah assets was completed in the previous financial year. Details of the acquisition are as disclosed in Note 15 to the financial statements. The Directors have concluded that there is no impairment indicator for North Sabah during the current financial year. Here, we can see that the recoverable amount of the Anasuria field was estimated based on a DCF of expected future cash flows over the production life of the asset. The key assumptions used by management all seem appropriate, including a discount rate of 10% and oil price and oil production estimates based on independent assessment. From there, management concludes that the recoverable amount of the Anasuria field is higher than its carrying amount (i.e. no impairment required). Likewise, for the North Sabah field. How do we interpret this? Basically, what management is saying is that given a 10% discount rate and independent oil price and oil production estimates, the accumulated profits (i.e. recoverable amount) from both the North Sabah and the Anasuria fields exceed their carrying amounts of RM 471m and RM 668m respectively. In other words, according to management’s own estimates, the carrying value of the Intangible Assets of RM 1.468 billionapproximates the accumulated Net Profit recoverable from 2P reserves. To conclude Valuation (Method 2), we arrive at the following:
Accumulated Net Profit from 2P Reserves
RM 1.452 billion
RM 1.468 billion
By now, we have established the basic economics of Hibiscus’s business, including its revenues (i.e. oil production and oil price scenarios), costs (OPEX, ITDA), profitability (breakeven, future earnings potential) and balance sheet value (2P reserves, valuation). Moving on, we want to gain a deeper understanding of the 3 statements to anticipate any blind spots and risks. We’ll refer to the financial statements of both the FY20 annual report and the 2Q21 quarterly report in this analysis. For the sake of brevity, I’ll only point out those line items which need extra attention, and skip over the rest. Feel free to go through the financial statements on your own to gain a better familiarity of the business. https://preview.redd.it/h689bss79br41.png?width=810&format=png&auto=webp&s=ed47fce6a5c3815dd3d4f819e31f1ce39ccf4a0b Income Statement First, we’ll start with the Income Statement on page 135 of the AR20. Revenues are straightforward, as we’ve discussed above. Cost of Sales and Administrative Expenses fall under the jurisdiction of OPEX, which we’ve also seen earlier. Other Expenses are mostly made up of Depreciation & Amortization of RM 115m. Finance Costs are where things start to get tricky. Why does a company which carries no debt have such huge amounts of finance costs? The reason can be found in Note 8, where it is revealed that the bulk of finance costs relate to the unwinding of discount of provision for decommissioning costs of RM 25m (Note 32). https://preview.redd.it/4omjptbe9br41.png?width=1019&format=png&auto=webp&s=eaabfc824134063100afa62edfd36a34a680fb60 This actually refers to the expected future costs of restoring the Anasuria and North Sabah fields to their original condition once the oil reserves have been depleted. Accounting standards require the company to provide for these decommissioning costs as they are estimable and probable. The way the decommissioning costs are accounted for is the same as an amortized loan, where the initial carrying value is recognized as a liability and the discount rate applied is reversed each year as an expense on the Income Statement. However, these expenses are largely non-cash in nature and do not necessitate a cash outflow every year (FY20: RM 69m). Unwinding of discount on non-current other payables of RM 12m relate to contractual payments to the North Sabah sellers. We will discuss it later. Taxation is another tricky subject, and is even more significant than Finance Costs at RM 161m. In gist, Hibiscus is subject to the 38% PITA (Petroleum Income Tax Act) under Malaysian jurisdiction, and the 30% Petroleum tax + 10% Supplementary tax under UK jurisdiction. Of the RM 161m, RM 41m of it relates to deferred tax which originates from the difference between tax treatment and accounting treatment on capitalized assets (accelerated depreciation vs straight-line depreciation). Nonetheless, what you should take away from this is that the tax expense is a tangible expense and material to breakeven analysis. Fortunately, tax is a variable expense, and should not materially impact the cash flow of Hibiscus in today’s low oil price environment. Note: Cash outflows for Tax Paid in FY20 was RM 97m, substantially below the RM 161m tax expense. https://preview.redd.it/1xrnwzm89br41.png?width=732&format=png&auto=webp&s=c078bc3e18d9c79d9a6fbe1187803612753f69d8 Balance Sheet The balance sheet of Hibiscus is unexciting; I’ll just bring your attention to those line items which need additional scrutiny. I’ll use the figures in the latest 2Q21 quarterly report (2Q21) and refer to the notes in AR20 for clarity. We’ve already discussed Intangible Assets in the section above, so I won’t dwell on it again. Moving on, the company has Equipment of RM 582m, largely relating to O&G assets (e.g. the Anasuria FPSO vessel and CAPEX incurred on production enhancement projects). Restricted cash and bank balances represent contractual obligations for decommissioning costs of the Anasuria Cluster, and are inaccessible for use in operations. Inventories are relatively low, despite Hibiscus being an E&P company, so forex fluctuations on carrying value of inventories are relatively immaterial. Trade receivables largely relate to entitlements from Petronas and BP (both oil supermajors), and are hence quite safe from impairment. Other receivables, deposits and prepayments are significant as they relate to security deposits placed with sellers of the oil fields acquired; these should be ignored for cash flow purposes. Note: Total cash and bank balances do not include approximately RM 105 m proceeds from the North Sabah December 2019 offtake (which was received in January 2020) Cash and bank balances of RM 90m do not include RM 105m of proceeds from offtake received in 3Q21 (Jan 2020). Hence, the actual cash and bank balances as of 2Q21 approximate RM 200m. Liabilities are a little more interesting. First, I’ll draw your attention to the significant Deferred tax liabilities of RM 457m. These largely relate to the amortization of CAPEX (i.e. Equipment and capitalized E&E expenses), which is given an accelerated depreciation treatment for tax purposes. The way this works is that the government gives Hibiscus a favorable tax treatment on capital expenditures incurred via an accelerated depreciation schedule, so that the taxable income is less than usual. However, this leads to the taxable depreciation being utilized quicker than accounting depreciation, hence the tax payable merely deferred to a later period – when the tax depreciation runs out but accounting depreciation remains. Given the capital intensive nature of the business, it is understandable why Deferred tax liabilities are so large. We’ve discussed Provision for decommissioning costs under the Finance Costs section earlier. They are also quite significant at RM 266m. Notably, the Other Payables and Accruals are a hefty RM 431m. What do they relate to? Basically, they are contractual obligations to the sellers of the oil fields which are only payable upon oil prices reaching certain thresholds. Hence, while they are current in nature, they will only become payable when oil prices recover to previous highs, and are hence not an immediate cash outflow concern given today’s low oil prices. Cash Flow Statement There is nothing in the cash flow statement which warrants concern. Notably, the company generated OCF of approximately RM 500m in FY20 and RM 116m in 2Q21. It further incurred RM 330m and RM 234m of CAPEX in FY20 and 2Q21 respectively, largely owing to production enhancement projects to increase the production rate of the Anasuria and North Sabah fields, which according to management estimates are accretive to ROI. Tax paid was RM 97m in FY20 and RM 61m in 2Q21 (tax expense: RM 161m and RM 62m respectively).
There are a few obvious and not-so-obvious risks that one should be aware of before investing in Hibiscus. We shall not consider operational risks (e.g. uptime, OPEX) as they are outside the jurisdiction of the equity analyst. Instead, we shall focus on the financial and strategic risks largely outside the control of management. The main ones are: · Oil prices remaining subdued for long periods of time · Fluctuation of exchange rates · Customer concentration risk · 2P Reserves being less than estimated · Significant current and non-current liabilities · Potential issuance of equity Oil prices remaining subdued Of topmost concern in the minds of most analysts is whether Hibiscus has the wherewithal to sustain itself through this period of low oil prices (sub-$30). A quick and dirty estimate of annual cash outflow (i.e. burn rate) assuming a $20 oil world and historical production rates is between RM 50m-70m per year, which considering the RM 200m cash balance implies about 3-4 years of sustainability before the company runs out of cash and has to rely on external assistance for financing. Table 1: Hibiscus EBITDA at different oil price and exchange rates https://preview.redd.it/gxnekd6h9br41.png?width=670&format=png&auto=webp&s=edbfb9621a43480d11e3b49de79f61a6337b3d51 The above table shows different EBITDA scenarios (RM ‘m) given different oil prices (left column) and USD:MYR exchange rates (top row). Currently, oil prices are $27 and USD:MYR is 1:4.36. Given conservative assumptions of average OPEX/bbl of $20 (current: $15), we can safely say that the company will be loss-making as long as oil remains at $20 or below (red). However, we can see that once oil prices hit $25, the company can tank the lower-end estimate of the annual burn rate of RM 50m (orange), while at RM $27 it can sufficiently muddle through the higher-end estimate of the annual burn rate of RM 70m (green). Hence, we can assume that as long as the average oil price over the next 3-4 years remains above $25, Hibiscus should come out of this fine without the need for any external financing. Customer Concentration Risk With regards to customer concentration risk, there is not much the analyst or investor can do except to accept the risk. Fortunately, 80% of revenues can be attributed to two oil supermajors (Petronas and BP), hence the risk of default on contractual obligations and trade receivables seems to be quite diminished. 2P Reserves being less than estimated 2P Reserves being less than estimated is another risk that one should keep in mind. Fortunately, the current market cap is merely RM 714m – at half of estimated recoverable amounts of RM 1.468 billion – so there’s a decent margin of safety. In addition, there are other mitigating factors which shall be discussed in the next section (‘Opportunities’). Significant non-current and current liabilities The significant non-current and current liabilities have been addressed in the previous section. It has been determined that they pose no threat to immediate cash flow due to them being long-term in nature (e.g. decommissioning costs, deferred tax, etc). Hence, for the purpose of assessing going concern, their amounts should not be a cause for concern. Potential issuance of equity Finally, we come to the possibility of external financing being required in this low oil price environment. While the company should last 3-4 years on existing cash reserves, there is always the risk of other black swan events materializing (e.g. coronavirus) or simply oil prices remaining muted for longer than 4 years. Furthermore, management has hinted that they wish to acquire new oil assets at presently depressed prices to increase daily production rate to a targeted 20,000 bbl by end-2021. They have room to acquire debt, but they may also wish to issue equity for this purpose. Hence, the possibility of dilution to existing shareholders cannot be entirely ruled out. However, given management’s historical track record of prioritizing ROI and optimal capital allocation, and in consideration of the fact that the MD owns 10% of outstanding shares, there is some assurance that any potential acquisitions will be accretive to EPS and therefore valuations.
As with the existence of risk, the presence of material opportunities also looms over the company. Some of them are discussed below: · Increased Daily Oil Production Rate · Inclusion of 2C Resources · Future oil prices exceeding $50 and effects from coronavirus dissipating Increased Daily Oil Production Rate The first and most obvious opportunity is the potential for increased production rate. We’ve seen in the last quarter (2Q21) that the North Sabah field increased its daily production rate by approximately 20% as a result of production enhancement projects (infill drilling), lowering OPEX/bbl as a result. To vastly oversimplify, infill drilling is the process of maximizing well density by drilling in the spaces between existing wells to improve oil production. The same improvements are being undertaken at the Anasuria field via infill drilling, subsea debottlenecking, water injection and sidetracking of existing wells. Without boring you with industry jargon, this basically means future production rate is likely to improve going forward. By how much can the oil production rate be improved by? Management estimates in their analyst presentation that enhancements in the Anasuria field will be able to yield 5,000 bbl/day by 2021 (current: 2,500 bbl/day). Similarly, improvements in the North Sabah field is expected to yield 7,000 bbl/day by 2021 (current: 5,300 bbl/day). This implies a total 2021 expected daily production rate from the two fields alone of 12,000 bbl/day (current: 8,000 bbl/day). That’s a 50% increase in yields which we haven’t factored into our valuation yet. Furthermore, we haven’t considered any production from existing 2C resources (e.g. Marigold/Sunflower) or any potential acquisitions which may occur in the future. By management estimates, this can potentially increase production by another 8,000 bbl/day, bringing total production to 20,000 bbl/day. While this seems like a stretch of the imagination, it pays to keep them in mind when forecasting future revenues and valuations. Just to play around with the numbers, I’ve come up with a sensitivity analysis of possible annual EBITDA at different oil prices and daily oil production rates: Table 2: Hibiscus EBITDA at different oil price and daily oil production rates https://preview.redd.it/jnpfhr5n9br41.png?width=814&format=png&auto=webp&s=bbe4b512bc17f576d87529651140cc74cde3d159 The left column represents different oil prices while the top row represents different daily oil production rates. The green column represents EBITDA at current daily production rate of 8,000 bbl/day; the orange column represents EBITDA at targeted daily production rate of 12,000 bbl/day; while the purple column represents EBITDA at maximum daily production rate of 20,000 bbl/day. Even conservatively assuming increased estimated annual ITDA of RM 500m (FY20: RM 318m), and long-term average oil prices of $50 (FY20: $60), the estimated Net Profit and P/E ratio is potentially lucrative at daily oil production rates of 12,000 bbl/day and above. 2C Resources Since we’re on the topic of improved daily oil production rate, it bears to pay in mind the relatively enormous potential from Hibiscus’s 2C Resources. North Sabah’s 2C Resources alone exceed 30 mmbbl; while those from the yet undiagnosed Marigold/Sunflower fields also reach 30 mmbbl. Altogether, 2C Resources exceed 70 mmbbl, which dwarfs the 44 mmbbl of 2P Reserves we have considered up to this point in our valuation estimates. To refresh your memory, 2C Resources represents oil volumes which have been discovered but are not yet classified as “commercial”. This means that there is reasonable certainty of the oil being recoverable, as opposed to simply being in the very early stages of exploration. So, to be conservative, we will imagine that only 50% of 2C Resources are eligible for reclassification to 2P reserves, i.e. 35 mmbbl of oil. https://preview.redd.it/mto11iz7abr41.png?width=375&format=png&auto=webp&s=e9028ab0816b3d3e25067447f2c70acd3ebfc41a This additional 35 mmbbl of oil represents an 80% increase to existing 2P reserves. Assuming the daily oil production rate increases similarly by 80%, we will arrive at 14,400 bbl/day of oil production. According to Table 2 above, this would yield an EBITDA of roughly RM 630m assuming $50 oil. Comparing that estimated EBITDA to FY20’s actual EBITDA:
FY21 (incl. 2C)
Daily oil production (bbl/day)
Average oil price (USD/bbl)
Average OPEX/bbl (USD)
EBITDA (RM ‘m)
Hence, even conservatively assuming lower oil prices and higher OPEX/bbl (which should decrease in the presence of higher oil volumes) than last year, we get approximately the same EBITDA as FY20. For the sake of completeness, let’s assume that Hibiscus issues twice the no. of existing shares over the next 10 years, effectively diluting shareholders by 50%. Even without accounting for the possibility of the acquisition of new oil fields, at the current market capitalization of RM 714m, the prospective P/E would be about 10x. Not too shabby. Future oil prices exceeding $50 and effects from coronavirus dissipating Hibiscus shares have recently been hit by a one-two punch from oil prices cratering from $60 to $30, as a result of both the Saudi-Russian dispute and depressed demand for oil due to coronavirus. This has massively increased supply and at the same time hugely depressed demand for oil (due to the globally coordinated lockdowns being implemented). Given a long enough timeframe, I fully expect OPEC+ to come to an agreement and the economic effects from the coronavirus to dissipate, allowing oil prices to rebound. As we equity investors are aware, oil prices are cyclical and are bound to recover over the next 10 years. When it does, valuations of O&G stocks (including Hibiscus’s) are likely to improve as investors overshoot expectations and begin to forecast higher oil prices into perpetuity, as they always tend to do in good times. When that time arrives, Hibiscus’s valuations are likely to become overoptimistic as all O&G stocks tend to do during oil upcycles, resulting in valuations far exceeding reasonable estimates of future earnings. If you can hold the shares up until then, it’s likely you will make much more on your investment than what we’ve been estimating.
Wrapping up what we’ve discussed so far, we can conclude that Hibiscus’s market capitalization of RM 714m far undershoots reasonable estimates of fair value even under conservative assumptions of recoverable oil volumes and long-term average oil prices. As a value investor, I hesitate to assign a target share price, but it’s safe to say that this stock is worth at least RM 1.00 (current: RM 0.45). Risk is relatively contained and the upside far exceeds the downside. While I have no opinion on the short-term trajectory of oil prices, I can safely recommend this stock as a long-term Buy based on fundamental research.
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