Bailey concluded his comments with the remark that the Shell dividend is uncovered. That means the company is not generating enough cash to pay the dividend itself.
David Thorpe 25 Aug 2016
Stephen Bailey, who runs the Liontrust Macro Equity Income fund has revealed the reasons why he has sold all of his shares in Shell and BP.
He began selling his Shell shares about a year ago, and completed the sale, ‘during the month of August’ 2016.
Bailey commented, ‘A year ago we had 9 per cent of the fund in oil, now it’s zero. You have to look at the macro view on this, and be very concerned about the oil market. The big suppliers in the market can no longer be controlled by OPEC, the Saudis recently announced an initiative called project 2030 which is aimed at boosting other areas of the economy, and they are doing that because they expect to receive less revenue from fossil fuels in the future.’