Four compact tech investments for your financial portfolio
Investor Concerns and Market Trends in the UK
The UK economy is currently facing a wave of uncertainty, with investors keeping a watchful eye on the upcoming Budget and Chancellor Rachel Reeves' policies. The economic backdrop is characterized by persistent inflation, higher-than-expected unemployment, negative economic growth, and rising government debt that challenges fiscal forecasts.
The fragile macroeconomic environment has led to concerns about economic volatility, political and regulatory uncertainty, fiscal risks, and market caution towards the Budget policies. Investors are particularly cautious about how Chancellor Reeves will address inflation, government debt, and economic growth without exacerbating volatility.
One area of interest is the potential growth sectors, such as commercial vehicles like lorries, mining equipment, haulage, aviation, and rail, where advanced computer vision technology could play a significant role. Companies like Seeing Machines (Aim: SEE), which develops such technology for driver monitoring, have a huge potential market, with over 2.2 million cars currently using their technology. However, the shares of Seeing Machines are not far off their 52-week lows.
Seeing Machines is investing heavily in research and development, with the aim of reducing fatigue-related incidents by more than 90%. Despite this, profits are not currently projected until 2026, with a huge Ebitda loss of between $17 million and $19 million forecast for the financial year 2024.
Elsewhere, THG (LSE: THG), formerly known as The Hut Group, recently issued new shares to raise capital. The funds will be used to develop Ingenuity, its proprietary ecommerce platform, with a view to spinning it off eventually. The share placing for THG was more than four times oversubscribed, but the closing price the day of the placing was lower than the offering price.
Investor sentiment has also been affected by the suggestion that the Budget will be painful, and fears of fiscal prudence, with some worrying that government debt might spiral out of control. The upcoming Budget has caused uncertainty in the markets, leading to a decline in investor sentiment.
Rachel Reeves' policies and Labour's stance on the economy are contributing to market concern. For instance, her recent article in The Sunday Times did not alleviate market jitters. THG, on the other hand, is planning to raise capital to fund Ingenuity, its proprietary ecommerce platform.
In summary, the UK economy is facing a complex and uncertain landscape, with investors adopting a cautious but watchful stance. The total addressable market for Seeing Machines is considered huge, and the company is investing heavily in R&D. However, profits are not currently projected until 2026. THG, on the other hand, has recently issued new shares to raise capital for its ecommerce platform, but the closing price the day of the placing was lower than the offering price. The upcoming Budget is causing uncertainty in the markets, with investors expressing concern over the future of inheritance tax relief on Aim shares and the potential impact of fiscal policy decisions.
Investors are closely monitoring the upcoming Budget and Chancellor Rachel Reeves' policies, with concerns about economic volatility, political and regulatory uncertainty, and fiscal risks, particularly with regards to addressing inflation, government debt, and economic growth. Despite companies like Seeing Machines investing heavily in advanced technology like computer vision, profit projections are not expected until 2026, and shares are not far from their 52-week lows. THG, on the other hand, is seeking to raise capital for its ecommerce platform development by issuing new shares, but concerns about market sentiment and the potential impact of fiscal policy decisions are having an effect.
