LONDON (ShareCast) - The Conservative party's decision to sell the state's remaining stake in Lloyds - should it retain power - is a cockamamie scheme, as it would impose extra costs on the bank. Management should be focused on executing strategy, not on fulfilling election pledges. Nonetheless, the equity story for retail investors - who can already buy in now - is still decent. The stock offers an attractive 5.1% dividend yield and the lender looks like it has the ability to pay. Growth in the loan book, at 2%, was unexciting over the first quarter. Likewise, the shares are trading at 1.3 times book value, the highest such valuation of any major UK bank. However, net interest margin jumped from 2.3% to 2.6% courtesy of better pricing on deposits. That suggests the dividend should not be a problem. Furthermore, at 13.4% of assets capital looks solid although there is still potential for more misconduct charges, says the Financial Times's Lex column.
Vedanta grabbed the headlines last week with its $3bn (£2bn) write-down of the value of its oil business, as a result of the 40% collapse in the price of crude oil. However, what should focus investors' minds is the company's debt pile after it paid £9.6bn for Cairn India in 2011. Over the past few years, the company's boss, Anil Agarwal, chipped away at that mountain of debt, whittling it down to $7.9bn last year. Yet the decision taken in the first-half to pay for a share buyback and increase its stake in a subsidiary saw debt reverse and rise to $9.1bn. That comes as HSBC estimates profits will fall by over a third this year to $966m and creditors begin to knock on the door. The company must pay-back or refinance $1.9bn next year. The firm's zinc and aluminium units may help make up for some of the shortfall in the oil arm, but not all of it. Sell, says the Sunday Times's danny Fortson.

Consumption of vegetable oil is set to double by 2020 as emerging nations become richer and develop a taste for more fried foods. Approximately 60% of current consumption is accounted for by palm oil, chiefly from Malaysia and Indonesia. Yet ennvironmetal damage and a lack of new land suited to the crop means investors are casting their eye towards West Africa, which has a climate similar to South East Asia and more land. Following acquisitions by oriental investors DekelOil has been left as one of the few remaining independents. The palm trees on the Ivory Coast firm's 4,500-acre plantation will take time to bear fruit. In the meantime it sources product for its mill from local landholders.

Production has soared from 900 tonnes in December to 4,200 tonnes in March. Over the next few years production is set to rise to at least 70,000 tonnes. A maiden profit of €2.7m this year should rise to €7.4m next year, analysts say. Palm oil prices have been hit by the drop in oil and a bumper harvest of soya, its nearest substitute, but should rise steadily over the long-term. Eventually the company is looking to export to Europe and owns another 60,000-acre site. Its second plantation will be developed as the first one becomes more profitable. There may be some interesting developments in the short term, too. "At 1.025p, the shares are not for the cautious. But for the adventurous, the stock could prove rewarding.," says The Midas column.

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