Keeping up with the news

What would you do if you were very busy — or on holiday abroad — and were told that the share price of a company in which you had invested had plunged by more than 50 per cent? Dump the shares in panic? Check the reason for the fall? Smile because you already knew the reason for the fall?

This is what happened to me last month. My self-invested personal pension (Sipp) has a shareholding in Premier Oil, and the share price was listed as £18.57 on May 20. At the market close on May 23, however, it was 454p. Fortunately, I did not need to panic as I knew the reason — I had read Premier’s announcement on April 15 that, at its annual general meeting on May 20, shareholder approval would be sought for a four-for-one share split. On May 20, Premier reported that approval had been given with implementation planned for May 23.

But I wonder if all shareholders knew. Stockbrokers, company directors, politicians and quangocrats are increasingly making it difficult for private investors to receive company reports and documents direct. Instead, investors are forced to use broker nominee accounts that may not pass on information in a timely fashion (if at all) or exact an extra charge if they do.

Consider what happened to Premier’s shares. After the split, the share price was 454p. But four times 454p is £18.16, a drop of 41p from £18.57 before the split. Was part of that fall due to some people not receiving details of the change in share structure? Did some computer programs miss it and trigger a “sell” order? Or was the fall simply due to general market conditions? Did some people try to cash in on the fall? Premier’s share price ended May 24 at 467.4p.

Even if you look out for company announcements, it is sometimes difficult to keep track of them. Some companies, such as Swiss pharmaceuticals giant Novartis, will issue statements on Saturdays and Sundays.

For example, on June 4, Novartis gave details of two encouraging phase 3 studies relating to its trials of JAK inhibitor INC424 (ruxolitinib) for the treatment of myelofibrosis, a bone marrow disorder. Then, on June 5, the company reported “significant overall survival benefit” for patients with gastrointestinal stromal tumours (GIST) taking the firm’s Glivec drugs. A day later, Novartis reported European Commission approval for the use of it Lucentis (ranibizumab) treatment for patients with visual impairment due to retina problems).

But I already regard Novartis as a long-term hold. It has many remarkable products and, even if some of its research leads to delays or abandonment of a potential new drug, I would hope its other research and existing products can make up for this. So immediate reading of all its announcements is not always necessary.

In the case of the other pharmaceuticals shares in my Sipp — such as Oxford BioMedica, Immupharma, Epistem and BTG — I would pay much closer attention, as they are considerably smaller and their track records are not so well-established.

For example, I was especially pleased by the May 23 announcement from Oxford BioMedica regarding new clinical data from its trials of ProSavin, a gene therapy product for the treatment of Parkinson’s disease. It said the product had brought about improvement in “average motor function” and maintained a “favourable safety profile”.

Other good news has come from industrial engineer Weir which, on May 4, reported “strong performance during the first quarter”. This led its directors to “anticipate full year profit before tax and intangibles amortisation ... around £20m ahead” of previous expectations, after taking account of “year to date adverse foreign currency translation effects.”

Unfortunately, miner Lonmin warned on June 10 that its board was reducing its earlier “guidance” for platinum production due to “illegal industrial action” at its Karee platinum operations, and higher costs. Will this prompt a takeover bid?

Kevin Goldstein-Jackson is an active private investor writing about his own investments. He may have a financial interest in any of the companies and trading strategies mentioned.