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A quick heads up. We’re noting a lot going on to do with air pollution today, and it really does seem to be the topic of the moment as we round off the week.
As yet more revelations surface about car emissions in the wake of last year’s VW scandal, it’s now become apparent that a UK ‘spot check’ programme to randomly test older vehicles for dangerous gases was scrapped five years ago, leaving car manufacturers essentially free to regulate themselves. This is a real concern, especially for those that dwell in the UK’s cities. We wonder whether the outrage sparked by Volkswagen is now beginning to snowball and whether it’s a virtual given that we’ll see tighter rules enforced more thoroughly moving forward. This is after all a matter of public health and an easy play for anyone looking for votes in the London mayoral election. We’re a long way from electric vehicles dominating our roads after all.
In all seriousness though, I see this as something that will be dealt with and therefore something that’s due to change for the better. And there could be some great o
pportunities for investors as a result! Companies like UK 100 blue chip Johnson Matthey (JMAT) specialise in making catalytic converters that help control harmful emissions from cars. Furthermore, these pieces of equipment need precious metals such as platinum to be effective. Johnson Matthey has already benefited from the emissions scandal, and it could well do so further as the corporate scandal evolves into a political one dealing with the air pollution in our cities.
As mentioned above, it’s highly likely that the dire situation the car manufacturers find themselves in now can translate into some seriously attractive opportunities. Tighter regulations, and the promise they will be enforced rigorously, should buoy specialist markets within precious metals (which are after all highly valued in industry as well as luxury fashion…) and the companies that both mine, refine and utilise them to manufacture emission control components for cars.
We frequently highlight situations similar to that outlined above in our daily trade ideas, sent directly to our research subscribers. We’re an execution only broker, so there’s never any obligation to trade. Just check them out and decide for yourself.
From your research team here at Accendo Markets, have a great bank holiday weekend!
Augustin Eden, Research Analyst (29 Apr)
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