“Stirs its ashes and embers, its burnt sticks

An eye powdered over, half melted and solid again
Ideas that collapse
At the first touch of attention

The light at the window, so square and so same
So full-strong as ever, the window frame
A scaffold in space, for eyes to lean on

Supporting the body, shaped to its old work
Making small movements in gray air
Numbed from the blurred accident
Of having lived, the fatal, real injury
Under the amnesia

Something tries to save itself-searches
For defenses-but words evade
Like flies with their own notions

Old age slowly gets dressed
Heavily dosed with death’s night
Sits on the bed’s edge

Pulls its pieces together
Loosely tucks in its shirt

Ted Hughes – poet laureate – 1930-1998

When you list the people from Mike Newell at Notts, to Peter Moores of Sussex and England to Duncan Fletcher, to Andrew Strauss to Andy Flower and finally to Alistair Cook, that failed to build a relationship with Kevin Pietersen, the very sad decision to terminate the South African born batsman’s contract with England was hardly surprising. His disruptive influence must have been intolerable. Personally speaking I cannot imagine an England team without him. When in full flow he lit up whatever ground he was playing on. KP in full cry was a sight for sore-eyes. He will be sorely missed by me and hundreds of thousands of cricket lovers all over the world. But for Paul Downton, he must have felt that it was ‘Hobson’s Choice!’ It is extraordinary that no manager or captain has managed to harness the best from our most talented player and that it has always ended in tears. He should still be playing for England! He puts ‘bums on seats!’ It appears that only Shane Warne, whilst he was at Hampshire, was amongst a few to find the key to bringing out the best in KP!

The best analogy I can submit would be the Jockey Club looking to host the best mile race on turf, being ambivalent as to whether ‘Frankel’ took part! – Unthinkable!

Yesterday still had all the hallmarks of volatility and uncertainty stamped across all global markets – particularly equities and foreign exchange, though bonds were not exactly immune. The script hasn’t been changed – Tapering, emerging markets, quality of earnings and valuations all contributed to the acute anxiety displayed by investors. Europe finished the session yesterday just below the Plimsoll line with the FTSE just 16 lower at 6449. It was sort of a nebulous session with traders in the city and Canary Wharf looking over their shoulders to see what the Street of Dreams made of it all. The mood on Wall Street was more positive with the 3 main indices grabbing an average of 0.75%. There were some really positive results posted – Michael Kors was up 17% and Yum Brands!, the owners of KFC and Pizza Hut +8.9%.

Asia did not seem to be prepared to adopt an upbeat approach apart from Japan – up 1.2%. It is still the Chinese New Year; so Shanghai will not bring its influence to bear until Friday. The Hang Seng was down nearly 0.5% at the close today. There were great numbers from Panasonic – sales up 20% which triggered a 17% rise in the share price. This morning the FTSE started in negative territory but it has regained some poise during the day – up 16 points at 6468. DMGT saw a 6% increase in revenues. ICAP was up results against bank leverage and tighter regulatory controls – revenues down 6%. Hargreaves Lansdown has been forced to cut charges to clients and after its numbers were posted, the shares eased by 6%. Glaxo posted pleasing numbers which saw shares up 2.4%.

Glaxo saw a £26.5bn turnover – increase of one per cent. Core earnings per share of 112.2p (+4% constant exchange rate) and dividend of 78p (+5%). £5.2bn of cash returned to shareholders through 5% increase in 2013 dividend to 78p, (Q4 23p) and repurchase of £1.5bn of shares. Exceptional year for R&D delivery with approvals for six major products and five additional regulatory filings completed. New product launches strengthen businesses in Respiratory, Vaccines, HIV and Oncology. Pipeline opportunity remains substantial with Phase III data for six potential new drugs and vaccines and around ten NME Phase III starts across 2014 and 2015.

It never was going to take long for Stephen Hester to land a top job. Mr Hester was allowed just a few months to contemplate his navel before RSA came knocking at his door. After 3 profits warnings, caused by a £200 million hole in the balance sheet after issues in Ireland and Scandinavia, which saw its shares down from 128p to 98p, Simon Lee resigned as CEO. His predecessor Andy Hastie, recently flagged up as a possible chairman of RBS, was a huge success, but this company has lost its way. Stephen Hester has a great CV – CA, Credit Suisse, Abbey, Santander and British Land before the government tugged him to rebuild RBS. He has been woefully treated by the government. There was clearly no chemistry with George Osborne. One suspects Mr Hester knew that there was no chance of RBS returning to the private sector for at least 5 years, which may not have fitted in with the Chancellor’s plans. Many like me think Mr Hester is perfect casting – ‘eating nails for breakfast and spitting rust out’

Finally may I offer food for thought? I cannot see any way that M&S’S Marc Bolland can possibly pull around the UK’s favourite brand and deliver profits of £1 billion+ as it has only done once since 1997 in 2008. The fashions are dowdy, the shops are uninviting and poorly laid out and above all else the expense of running M&S is too great. It is not going to happen, but Mr Bolland should rattle NEXT’S Lord Simon Wolfson’s chain. The mixture of the M&S brand coupled with Lord Wolfson as the ‘King of Gowns & Blouses’ could be electric. Next’s Directory, M&S’S food prowess and Next’s fashion savvy looks attractive to me. And whilst there are at it, M&S could lighten up the property portfolio, if at all possible and deliver value back to shareholders. It won’t happen, but why can’t I dream!

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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