Good morning! We're heading for a fairly civilised open, with the FTSE 100 Futures indicated up 16 points to 6,451.
As usual, I'll start with any news from shares in my personal portfolio. I'm encouraged by news of a successful Placing at Clean Air Power (LON:CAP). Regulars might recall that this is my favourite speculative share, given that it offers a new technology which is developed and already selling, with a major new market opening soon (the USA), with the shares at a reasonable price (in my opinion).
Their technology enables diesel-engined HGVs to operate on a hybrid basis, using natural gas some of the time, thus delivering significant fuel cost savings, especially given the boom in cheap shale gas in USA. There are two other companies doing a similar thing apparently, so it's important to remember CAP are not unique in this space, but that's usually true of everything.
I knew that CAP would need to raise more cash, and in the last few years that would have stopped me investing. However, in this case it didn't concern me, as I explained in my report here on 1 Aug 2013:
"I suspect they might need to raise a bit more cash in the not too distant future, but in a buoyant stock market, with interesting products, that should not be a problem. It's much easier to raise a smallish amount from Placings at the moment, there is just a lot more investor appetite than for the last five years, from what I've observed subjectively."
Before the Placing, the market cap was £16.8m, with the shares at 9.5p (there being just over 177m shares in issue). Today's successful Placing (i.e. it has already happened) raises another £5m, which should be plenty to keep them going for the time being (their cash burn in c.£2-3m p.a. from memory).
There are several positive aspects to this Placing:
- It has been done at a 10% PREMIUM to the prevaliing share price in the last 30 days. That is a positive sign, and is unusual (usually investors demand a discount) - that investors were keen to get involved, and are hence likely to be buying in the open market too.
- Two Russian billionaires (one being Roman Abramovich) offered to finance the entire Placing, but were scaled back to 1.5%…
