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A formula free first look at energy spot prices

Choosing the appropriate process for modelling energy prices is essential to calculate value, risk and hedging for energy derivatives and assets. The best choice of which price process to is especially vexing in the energy sector since energy spot prices are particularly difficult to model when compared to other asset classes. This post takes a formula free first step into modelling energy spot processes
Sustainable Growth Rate

Companies should look to maximise growth but how much is too much?

It comes as quite a surprise to many managers when they learn that growth is not always a blessing. Rapid growth can put considerable strain on a company’s resources, and unless management is aware of this effect and takes active steps to control it, rapid growth can lead to bankruptcy. This post looks at one way companies can measure whether they are growing too fast or too slowly and the corrective measures they can make.
Corporate Finance Cash Dead Money

Dead money as corporation cash builds up

Cash has building up on the balance sheets of companies across the world and they show very little interest is liberating it. Natural-resource companies account for a disproportionate proportion of the $900 billion of the cash-build up citing concerns over the euro-zone, middle east upheaval, possible recession in China and America's economic health. This Economist article looks at the issue of cash build up and how it impacts upon the economy in general

A review of Short-term Asset Generation Valuation with options

The first of a two-part post looking at the background to the short-term valuation of generation assets. It also considers how options can be used to achieve this and why classic financial options theory overestimates value.
China UK Nuclear Deal

Financing UK nuclear plants – China in investment talks

Reports that DECC is seeking Chinese investment in new Nuclear plants should come as no surprise but broader concerns around the financing costs of the UK Nuclear builds remain. The post looks at those factors and impact of existing ventures and presents The Guardian article
Severn Trent Water Bond

Severn Trent launches new bond for private investors

Seven Trent (SVT.L) plans on launching a 10 year inflation linked bond returning 1.3% per year. The bond is being offered until 4th July and then commence trading on LSE on 11th July.
Financial Times image of market data

Difference between Futures and Forwards

Covering the basics of Futures and Forwards along with a little on how they are traded and priced