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Dowgate Capital - Capitalising on the booming AIM market (DGT)
overgrowth
- 09 Feb 2005 20:52
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Dowgate Capital (DGT) are sitting in the middle of a goldmine! This company through their sole trading arm City Financial Associates are looking to take full advantage of the "booming" AIM market this year. Dowgate provide NOMAD (NOMinated ADvisor) services to AIM companies and also have full Corporate Broker status which means that they can fund placements on behalf of the companies they represent. |
 Website: www.cityfin.co.uk |
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On first sight, the fact that Dowgate exist in the often veiled financial services sector makes you think twice about investing in company such as this because it would be impossible to understand what they were doing - however, think again! DGT bring new companies to the AIM (Alternative Investment Market). For each new company "floated" on AIM, they take arrangement fees when acting as NOMAD. After the company is launched then for a nice steady earner DGT get another healthy chunk of cash every year for looking after them (note that all AIM companies must have a nominated adviser - thereby securing a ready source of recurring income). Because DGT also act as a Corporate broker they can get a very healthy percentage for arranging placement of shares with insititutions before a new company floats. In addition, because placements come outside the sphere of yearly NOMAD work, they can also gain healthy percentages of placements which companies may need to make throughout the year when they need a quick injection of cash to speed growth. Current NOMADships: 28 companies represented (gives recurring income of approx 480,000 per year) Current on-going Brokerage agreements: 19 companies (income depends on placements) For flotations, depending on the size of a company, fees charged will be anything from 50,000 to 100,000+ For placements (the real earner), DGT get anything from 3% to around 12% of the TOTAL AMOUNT RAISED - For example a new company raising 3M though a placement will earn DGT anything from 90,000 to 360,000 ! These figures are indicative as actual deals all differ due to circumstances and DGT sometimes take payment in shares - they still have a tasty chunk of Setstone shares and when this Russian exploration company comes back to AIM, predictions are that the share price will rocket. Note that the amount that this little company can earn in fees is huge and every new deal that comes through we know will contribute another healthy chunk into the bottom line. The good news with every new floatation means that it's another chunk of recurring revenue which could go on for years, with DGT having to do very little. New clients gained in 2005 are: Mediazest (NOMAD & broker) Elite Strategies (NOMAD) Process Handling (NOMAD) Poland Investment Fund (NOMAD) Nanotech Energy (NOMAD & broker) Archimedia Ventures (NOMAD & broker) Red Leopard Holdings (NOMAD) Alba Mineral Resources (NOMAD & broker) Intandem Films (NOMAD & broker) Motive Television (NOMAD) IncaGold (NOMAD) Sportswinbet (NOMAD & Broker) Infoscreen Networks (NOMAD & Broker) Mark Kingsley (NOMAD & Broker) Croatia Ventures (NOMAD & Broker) Pantheon Leisure (NOMAD) Firenze Ventures (Ofex Advisor) FlightStore Group (NOMAD & Broker) Euro Capital Projects (NOMAD) Pearl Street Holdings (NOMAD) Worldwide Natural Resources (Ofex Advisor) Dovedale Ventures (Ofex Advisor) Other 2005 work completed:Neptune-Calculus VCT offer for subs of up to 12 million Advisory work for TGM on London Bus disposal for 20.4M Advisory work for Creightons on property disposal Advisory work for Hampton Trust on company restructuring Advisory work for Interbulk Investments on acquisition of Inbulk Advisory work for Fundamental-e Investments on two disposals Advisory work for Designer Vision re: Design Rights against Centurion Electronics Click Here for fundamentals and profit projections. |
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ptholden
- 13 Jul 2005 23:45
- 1113 of 2787
I have studied DGT and watched the SP movements quite closely over a period of 2 years and something at the moment is not quite striking a chord. Generally any sells of a small cap such as DGT tend to move the price more or less immediately down and sustained buying will move it up. This is not happening with DGT at the moment. Over the last week or so, sells have not moved the price down, nor have the buys had any great affect. Tie this into the fact that the MMs are just not interested in selling PIs stock (you could only buy relatively small quantities on line, 100k for most of today) in other words actively discouraging buyers..
One possible scenario is that the MMs are filling a big order at an agreed price and are are hanging onto whatever stock is sold for this purpose. They can't move the SP up because then they would have to buy outside of the set limit and lose money. They know if they drop the price, they will be over run by PIs snapping up cheap stock. and be no further on towards filling the order.
I may be way off the mark, but it does raise an interesting question or two.
Who's buying - private or business?
Are they buying for the profit opportunity on the run up to H1?
Somebody building a stake for whatever reason?
When, if at all will we find out exactly what is going on?
In the final analysis this is all supposition, and helps pass the time, but if there is any truth to this it can only do the SP good.
pth
stockdog
- 14 Jul 2005 00:38
- 1114 of 2787
sd
sidtrix
- 14 Jul 2005 09:15
- 1115 of 2787
Am also in around .45 mark however narrowly missed out topping at .35 & .37 DAMMIT!!!
ptholden
- 14 Jul 2005 09:41
- 1116 of 2787
Don't really think that 0.75p is much of a risk in my opinion, but we shall see.
pth
sidtrix
- 14 Jul 2005 09:44
- 1117 of 2787
P.S got a spare 5k to invest for short term... any decent stocks to look out for guys?
stockdog
- 14 Jul 2005 10:01
- 1118 of 2787
ptholden
- 14 Jul 2005 10:22
- 1119 of 2787
pth
carchase - 14 Jul 2005 20:03 - 1120 of 2787
Yesterday I insisted "Below 0.65p is not wanted, and to pull through above 0.75p on TA alone, a little delayed." Well both ends of the spectrum were tested today.
The TA absolutely showed no signs of a rise, it was more a case of holding what we have, and whatever chance we had on Wednesday was taken away. The MM on the other hand showed no reason to play the online limits the way they had. So why have these two issues been in conflict today?
Firstly its becoming clear that MM, DO NOT WANT THE PRICE TO DROP, and that is based on the online limits. This is because even with the strict online limits we had today, it did not deter the buyers, imagine what a drop in price and online limits will do now? They are not looking at supplying stock, but DEMANDING stock. Are they short of stock? certainly by todays actions its looking more and more that way. So the MM are stuck. By dropping will increase demand, something it looks like they cannot cope with. Going against them is the TA indicators. They are showing that there is room for them to keep testing 0.65p Mid for a little longer, or dare I say lower, but they seem more fearful to take it there. Instead they had to test 0.75p today, the other end of the range!
So what caused the intraday rise? Well for a start the clue is in the online limits. They were totally against MM selling stock to Joe Public, but Joe just could not help getting aboard anyway, thinking online limits were a clear sign that the expected break upwards was here finally.
Why did it drop back? The distressed sellers smart enough to realise that the TA was not strong anyway, used the inflated price to sell. Some traders took advantage and sold out, and down it went back to the begining again. This is safe ground for the MM. The MM will not take blame from me for this. They are trying to make a market in circumstances which are really against them. This little incident today did not help them, but to their rescue came distressed sellers while they held a large spread. Imagine what positive news realised tomorrow could do to them? I can see them diving for cover.
The window we are playing within is clear now, 0.65p mid, to 0.75p Mid. Either way, breaking these levels, will signal the confirmed direction. MACD is still declining, and I am looking for the end of the week position on this one. Stocastics are falling, but the speed is almost too slow, and has on my data broken below the 80pts mark, which signals we are out of overbought territory anyway. RSI and OBV have also declined. So todays rise was a bit premature.
Intraday once again signals that 0.65p Mid must be held at all cost.
Just add to this post which is not on iii, and that is the last three session have bought candlesticks which are totally lost for direction. We have had three days ago, the drop, with a recovery, nothing at all yesterday, and today a rise with a drop back. Its testing all levels within the box of 0.65p to 0.75p mid.
ptholden
- 14 Jul 2005 21:22
- 1121 of 2787
Just reading through your post, thought I would either agree or disagree with your thoughts.
1. Agreed the MMs are short of stock as previously agreed.
2. Agreed that dropping the SP will precipitate further buying for which they have little or no stock to supply demand.
3. Agreed that the Joe Public thinks that the next leg up is not far away and is probably immiment. (Note, I certainly do)
4. I disagree with your rationale for the rise and subsequent fall today, for the following reasons:
a. My belief is that for some reason the MMs require stock and for more than a few million shares.
b. It is possible that a Buy Order has been placed with a limit at which the 'investor' is prepared to pay. The MMs have agreed to fill the order.
c. Now the problem, a slowly falling SP has not precipitated the same level of sellers as followed the previous leg up. In fact, everytime the SP falls a little, buyers appear to snap up what is available. By raising the SP, the MMs must be approaching the Buy limit set by the investor and therefore eroding if not destroying any profit they may make on the deal. So how do they acquire the required stock?
d. Assuming that my theory is correct (a leap of faith on my part, nevermind anyone else!) the MMs played the stock beautifully today. By raising the Offer for a short period of time, they were able to flush out a few weak sellers and although I didn't post at the time I was certain that after the sellers appeared the SP would fall back and probably finish in the red. Once the MMs dropped the price they were able to 'scare' even more sellers into letting go their shares. And like turkeys voting for Xmas, this they duly did. So in summary, today was not market driven, but entirely MM driven. Aim accomplished, although I doubt that the net gain was all that significant in terms of stock acquired.
e. Agreed that the range is 0.65p-0.75p and will remain so until this scenario runs its course.
f. Agreed regarding the TA which doesn't know quite what to do. The reason I believe for this confusion is that the stock is not being driven by market conditions, but because it is being manipulated by the MMs.
All my own thoughts, which may be a complete load of waffle, but on line limits, buy / offer spreads, timing of SP moves all make this quite feasible. The truth is out there, and no doubt we will find out soon enough.
pth
carchase - 14 Jul 2005 21:49 - 1122 of 2787
Not only do I enjoy your discussions but I think you are like a surfer riding the wave with confidence. You are watching its every move and then making your own.
I am not as confident as you yet mate that the MM are raking in stock for a large buyer just yet. Its possible, but there is still little evidence. Online limits might be favour of the MM right now, but the price remains static nearly always. Last Thursday's event without sounding direspectful, kind of rescued the MM. That day was supposed to challenge the upper end of 0.75p, however sadly due to those unfortunate events, a lot of the build up was removed from previous days. We came knocking on its door again, and once again fell away. Whenever the next time we go into that area, we really have to go passed it this time, or else buyers will wait on news only.
I am clear on what you say regarding dropping the price slowly to gain sellers, but not sure about the rest of point C mate.
Point D is interesting. There is always going to be distressed sellers mate , and today was a gift for them to get out, whether in profit or not. If a small portion of the other sellers could read TA indicators, then they would have known that there was weakness over the longer ranges already, and this intraday jump was false. Their problem now, is that if they sold to get in cheaper, they are taking a big gamble. Those who however sold into the drop need to ask why they bought in the first place!
All your points A through to D, seem to be interconnected and rely on each situation to be aiding the other. MM raises price, seller comes in, and large order is a little closer to being filled. This all depends on an order being in the pipeline mate, and maybe there is.
100% agree that the day was MM driven.
ptholden
- 14 Jul 2005 23:01
- 1123 of 2787
thanks for the reply. The point I was trying to make in Para C is that if a Buy Order has been placed, it will have been negotiated at a certain price level. I doubt very much that the buyer would say fill up to a 1p, more likely in the region of 0.75p. This would place a signifcant restriction on the manoeuvering room available for the MMs to obtain the stock. Remember once the MMs have agreed to fill an order they must (I believe) honour that committment.
You are absolutely riight that my whole arguement hangs on a thread, being the assumption that there is a buyer. But as we all know, we only see a small part of the picture and trying to make sense of it all is akin to completing a jigsaw puzzle blindfolded!
I think that this is one of those situations where a little 'blue sky thinking' is required. Start by asking yourself two questions:
Why don't the MMs want the SP to fall?
Why don't the MMs want the SP to rise?
pth
markusantonius
- 15 Jul 2005 08:06
- 1124 of 2787
ptholden
- 15 Jul 2005 08:16
- 1125 of 2787
pth
markusantonius
- 15 Jul 2005 08:18
- 1126 of 2787
ptholden
- 15 Jul 2005 09:12
- 1127 of 2787
pth
corehard - 15 Jul 2005 10:21 - 1128 of 2787
overgrowth
- 15 Jul 2005 12:58
- 1129 of 2787
DGT is looking very strong now, approx. 5 weeks to interims so let's see those predicted 600K profits coming through and we'll be en route to 2p !
stockdog
- 15 Jul 2005 15:12
- 1130 of 2787
ptholden
- 15 Jul 2005 15:17
- 1131 of 2787
pth
corehard - 15 Jul 2005 15:53 - 1132 of 2787
Apologies - I meant the link to this message board without going to the investors room.
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