At 3.30pm the FTSE 100 was up 50 points at 6816 – just 114 points from its all-time high on 31st December 1999. There were a few pegs for investors to hang their hats on – Firstly the World Bank upgraded global growth to 3.2% for 2014. Secondly equities still remain the best asset class. Then BOA pre-opening – reported net income of $3.4 billion, or 29 cents per share, on revenues of $21.7 billion. Analysts had expected Bank of America to post a profit of 28 cents per share on revenues of $21.08 billion. All in all the market remains in quite good shape. Burberry initially saw its shares rally by 7%. They have settled up 4.86%. Taylor Woodrow saw some profit taking – -1.5%. Wandisco and Fusionex, two of Panmure’s babies both posted very satisfactory results. However these shares had travelled and arrived and they lost 4% and 3.4% in value. Anglo American snatched the yellow jersey from Burberry – up 5.4%. G4S grabbed 3.3% and GKN and Rexam 2.5%. The losers were Hargreaves Lansdown -4.5% and Centrica 3.2%.

On the Street of Dreams BOA was up 3.3% but then throttled back to being just 0.4% to the good. Apple surged by 2%. The DOW added 100 points just before 4.00pm.

The RBS bonus bandwagon selected another gear today in response to Ed Miliband grotesquely repetitive banker bashing rhetoric. He seems to have qualified support from the PM. The PM insists that cash bonuses will not exceed £2,000 and that after this round of bonuses which may allow distribution of up to 200% of salary in the form of share incentive schemes, subject to shareholder improvement despite his objection. Then the EU guidelines of no more 100% are likely to be adopted! The government and politicians in general must make up their mind if they want RBS to be a global bank. We all understand that RBS owes the taxpayer – Learn to live with it if that is what is required to recover!

Conversely Bank of England governor Mark Carney said he does not back a “crude bonus cap” on pay in banks or proposals to restrict their size. His comments to MPs on the Treasury Select Committee are likely to be seen as a rejection of Labour rhetoric on the financial sector. Labour has little credibility in this space and the electioneering adopted is rather crude. Mr Carney confirmed his support for the TSC submission for banking standards that it was not convinced a “crude bonus cap” was the right way to control pay. Mr Carney said: “Just breaking up an institution doesn’t necessarily create or enable a more intensive competitive structure.”

These are David Buik’s personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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