The end of the lock-up period after the first blue-chip results earlier in February has yielded some interesting director sells.
The banks’ reporting season was punctuated by disappointing takes on the prospects for interest rate-fuelled expansion this year, with a nagging sense that lenders may have seen the best of the margins that the Bank of England’s generosity initiated in the final quarter of 2022.
While there are hints that the sector has been talking down its prospects — a reflexive habit based on a decade of underperformance — the end of lock-up and start of the tax season has seen some notably chunky share sales.
Chief among these was the 2.9mn shares sold by Lloyds Banking Group interim chief operating officer David Oldfield at an average 52p a share, yielding £1.53mn. Oldfield is a Lloyds lifer who joined on a graduate trainee scheme in 1984 and has risen steadily through the ranks. Meanwhile, an apparently lower appetite for risk has prompted Lloyds’ chief risk officer Stephen Shelley to sell 2.7mn shares at 52p a share, raising £1.42mn in cash. Claire Shelley, a close associate, also sold 1.31mn shares at the same price, raising close to £690,000.
Whether all this activity presages a bumpy patch for Lloyds is impossible to tell — tax bills do need to be paid at this time of year. It is worth noting that Lloyds’ share price has been glacially slow to rise above 50p, in contrast with the more rapid improvement at NatWest. Still, the shares have been showing decent relative strength, so now might be as good a time to cash in outstanding options as any.
Atome boss buys as hydrogen spending slows
Green hydrogen provides a conundrum in the energy space because it will require significant renewable energy capacity, a massive infrastructure build, and doesn’t travel well given the inefficiency of transporting hydrogen in general. Its uses will probably be limited to so-called ‘hard to abate’ sectors like steelmaking.
Despite the seeming urgency as the sector gets up to speed, project announcements slowed down last year. Consultancy Wood Mackenzie said companies had knuckled down instead. “There was a lack of mega projects announced in Q4 2022, but existing projects saw major progress,” WoodMac said.
Retail investors who are bullish about the technology do have some options in this space, despite green hydrogen being in its infancy as an industry.
ITM Power was one, but it has burnt investors after falling into the chasm between technology development and full commercial rollout. Alternatively, Hydrogen bulls can jump on the coat tails of Emirati royal Sheikh Ahmed Dalmook Al Maktoum. His 70-per-cent-owned Oracle Power has just signed a deal with a Chinese state-controlled energy company to build a green hydrogen plant in Pakistan: this is perhaps an investment for those keen on China’s pan-Asian, infrastructure-focused Belt and Road Initiative.
Atome Energy, meanwhile, has some more bona fides. It is operating in Paraguay, which already has excess hydroelectric energy, and is lining up buyers for ammonia made from the green hydrogen, with production slated for 2025. Chief executive Olivier Mussat seems confident, buying £764,640 in shares from chair Peter Levine at the end of February, taking his holding to 3.95 per cent.
Levine remains the largest individual shareholder, with just under a quarter in his own name. He also owns 29 per cent of Molecular Energies, which holds 25 per cent of Atome. “I am pleased to facilitate this significant demonstration of [Mussat’s] personal commitment,” Levine said.