“Now, God be thanked Who has matched us with His hour,
And caught our youth, and wakened us from sleeping,
With hand-made sure, clear eye, and sharpened power,
To turn, as swimmers into cleanness leaping,
Glad from a world grown old and cold and weary,
Leave the sick hearts that honour could not move,
And half-men, and their dirty songs and dreary,
And all the little emptiness of love!

Oh! we who have known shame, we have found release there,
Where there’s no ill, no grief, but sleep has mending,
Nought broken save this body, lost but breath;
Nothing to shake the laughing heart’s long peace there
But only agony, and that has ending;
And the worst friend and enemy is but Death.

Rupert Brooke – poet & soldier – 1887-915

In last week’s ‘Spectator’, Alex Massie wrote an article on Scotland’s Independence drive and how Alex Salmond was on course to win! I suspect he and the wily, articulate SNP leader did not expect a massive wall of resistance in the media from such an august collection of political, economic and business luminaries – Messrs Cameron, Osborne, Balls, Alexander, MacPherson and Dudley plus a raft of retail moguls. They all stuck their ‘two penny’s worth’ in. Mr Salmond and his thousands of followers delude themselves if they think Scotland can walk out of the Union dictating draconian terms! – No chance! North Sea oil won’t pay all your bills, particularly if the major exploration companies come further south and drill off East England!

Alex Massie wrote a terrific article, but he is clearly a great romantic rather than a pragmatist – much in the same vein as Owen Jones, who promulgates a style of left-wing politics which are simply impossible to deliver. Close the vote on Scottish independence may be, but at the day of reckoning, it would be economic suicide for Scotland to say ‘sayonara’ to the union!

When Mohamed Al Fayed sold Fulham FC to the Pakistani/American business man – the owner of the NFL Jacksonville Jaguars – Shahid Khan, I was full of hope for the future. Our side was ageing and Martin Jol had failed to bring in sufficient young, experienced and talented new blood. Mr Khan has a thing or two to learn about the Premiership. You have to be proactive. Khan changed the manager too late and what CEO Ian McIntosh was doing during the transfer window left a lot to be desired? However good Felix Magath is, Rene Meuelensteen was treated shabbily. Magath’s appointment won’t stop Fulham being relegated. If Fulham miraculously beat the drop it will be down to luck and a little bit of Meuelensteen organisation.

So Lord Stevens, the former Chief Commissioner of the Metropolitan Police, in his submission from his enquiry, privately commissioned by Sheikh Mohammed, has exonerated the UAE Prince from any blame, in terms of the doping scandal in his racing empire in Newmarket. So we’ll take that as read. However we need some names who were involved, apart from his trainer, Mahmood Al Zarooni. Don’t tell the racing world at large to accept that Al Zarooni was the only person involved in this unacceptable practice.

It was sad for all football fanatics to hear of the death of Sir Tom Finney at the age of 91 years. When the likes of Sir Tom played for PNE and England conditions were totally different. The playing service was very often like a ploughed field, the football boots were like army boots and the ball, when it was wet weighed a ton. Heading it very often rattled your brains! That is why it would be wrong to under-estimated the skill the likes of Finney and Matthews gave to the game – every bit as exceptional in their own way as Best, Rooney, Marsh and Bowles in their day.

Last week certainly had its moments in terms of the global economy and the performance of equities. In the face of appalling weather in the US, retail sales falling by 0.4% in January, dipping consumer confidence, indifferent monthly employment data for December and January, the Street of Dreams bizarrely put its best foot forward, allowing the S&P 500 to increase in value by 2.07%.

The FED and the BOE certainly grabbed centre stage for part of the week. Janet Yellen spoke very much in the same vein as Bernanke about her aspirations for the US economy, continuing with the tapering of QE, provided the US economy remained robust and unemployment continued to fall below 6.5% – currently 6.6%, though the accuracy of the that figure would be challenged in every one of the 52 states in the union! M/S Yellen was crystal clear in saying US’S recovery, which looks positive at around 3-3.5% for 2014 is very much work in progress. As for Mark Carney’s chairing of this quarter’s Inflation Report, the governor came in for some unwarranted stick with many suggesting that his ‘forward guidance’ policy was in tatters.

I disagree! The policy was always supposed to engage the average ‘John Doe’, mortgagees and small businesses, so that they can all plan their respective lives. It was not for the benefit of the ‘City.’ So the economy has ‘come under a wet sale’ since August of last year. In those circumstances it is perfectly reasonable to alter the financial yardsticks for raising interest rates in 2015 rather than in 2016, IF unemployment continues to fall and assuming wage inflation gathers some momentum and there is little sign of that happening, apart from the better off, then rates will increase modestly to about 2% maximum. There is still plenty of slack in the economy and deflation, which threatens the EU’s economy may also knock at the UK’s door, starting on Thursday, when official inflation for January is expected to drop below 2% for the first time in 5 years at least. Mr Carney said the BOE had raised its growth target from 2.8% to 3.4% in 2014. That surprised many observers – quite rich in the circumstances.

Barclays’ results were embroiled in controversial bonus issues, coupled with draconian redundancies totalling 12k. It is possible that Sir David Walker and Sir Mike Rake may not remain as chairman and deputy of Barclays in a few months from now. Lloyds posted a really bold recovery and almost dismissed the £8 billion that has been returned to customers for PPI misdemeanours as irrelevant. The government’s ambitious plans for the sale of the remaining 33% of LBG may push on in the spring. Investors may be cautious in their approach as these shares have already rallied by 65% in the last year. LBG is now ‘Boring Bank PLC’ – it is hard to get excited about growth at a lower rate of progress.

Rolls Royce incurred the wrath of its shareholders with a murky outlook for 2014 and accounting issues over its very attractive servicing contracts with existing clients. John Rishden the CEO is under the cosh as shares fell by 15%. Tate & Lyle another old UK brand also had a profits warning, driving shares down by 16%. Anglo-American improved its market standing after a torrid year. Anglo shares fell by 25% in 2013. A profit of £1 billion was posted. Rumours abound that Centrica, despite losing 400k clients in the energy price row, may increase profits above last year’s £2.7 billion to be announced on Thursday. It is possible that Sam Laidlaw could leave in the not too distant future. BP’s Chris Weston has been flagged up as a possible successor. No , all be revealed by Centrica’s new Chairman Rick Haythornthwaite.

Essar Energy could make a retreat in to the private hands of the Ruia family, rumoured to be aided and abetted by finance from a Kremlin bank at about 75p a share, a far cry from the IPO 420p a share. Vodafone are expected to return £21 billion to shareholders. That means the 133k shareholder will get an average pay out of £3,500. Finally to these awful flood in the UK and the devastation and anguish they have caused. The damage has been loosely estimated at £11 billion. Consequently profits at RSA, Direct Line and Aviva could fall between 9-12% this year.

Last week the FTSE 100 added1.4%, European stocks an average of 2.4% with the NIKKEI falling by 1%. This week the following companies post results or trading statements – Monday – HAMMERSON, BHP BILITON, Tuesday – DRAX, IHG, JOHN WOOD, ESSAR ENERGY (TS), Thursday – BAE SYSTEMS, CENTRICA, PLAYTECH, REXAM, Friday – MILLENNIUM COPTHORNE.

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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