TODAY’S FAYRE – Friday 28th March 2014 – LSE & MAN UTD

TODAY’S FAYRE – Friday 28th March 2014

“NO, no! go not to Lethe, neither twist
Wolf’s-bane, tight-rooted, for its poisonous wine;
Nor suffer thy pale forehead to be kist
By nightshade, ruby grape of Proserpine;
Make not your rosary of yew-berries,
Nor let the beetle, nor the death-moth be
Your mournful Psyche, nor the downy owl
A partner in your sorrow’s mysteries;
For shade to shade will come too drowsily,
And drown the wakeful anguish of the soul.

But when the melancholy fit shall fall
Sudden from heaven like a weeping cloud,
That fosters the droop-headed flowers all,
And hides the green hill in an April shroud;
Then glut thy sorrow on a morning rose,
Or on the rainbow of the salt sand-wave,
Or on the wealth of globèd peonies;
Or if thy mistress some rich anger shows,
Emprison her soft hand, and let her rave,
And feed deep, deep upon her peerless eyes.

She dwells with Beauty—Beauty that must die;
And Joy, whose hand is ever at his lips
Bidding adieu; and aching Pleasure nigh,
Turning to poison while the bee-mouth sips:
Ay, in the very temple of Delight
Veil’d Melancholy has her sovran shrine,
Though seen of none save him whose strenuous tongue
Can burst Joy’s grape against his palate fine;
His soul shall taste the sadness of her might,
And be among her cloudy trophies hung”

John Keats – poet – 1795-1821

Barry Manilow, the eccentric American crooner well known for that song ‘Cocacabana’, is 70 years of age. He comes to London to sing in concert in May at Wembley Stadium. From the advertising boards you can see he has had so much facial plastic surgery that were he to smile naturally his face would shatter! So if you are going to one of his gigs, don’t make him laugh
I salute Alex Hale for his brilliant 116 against Sri Lanka yesterday – the first hundred by an Englishman in a 20/20 international. However special praise should be heaped on Eoin Morgan whose 57 was the backbone of English innings. In recent times he has been shabbily treated by the selectors and the England management. I beseech the next manager to persevere with Morgan. Give h I’m a chance! His name is Morgan. It starts with an ‘M.’ It comes after ‘L’ and I will spell it – M-O-R-G-A-N!

When Xavier Rolet succeeded Dame Clara Furse as CEO of the LSE, many observers felt he had collected a ‘hospital pass’ as the LSE had been surrendering market share for some years thanks to parochial management and its attitude towards global markets. Not only was the LSE expensive to trade on but in the same breath the LSE failed to aggressively take London to rest of the world and the world felt there were other choices apart from London. Considering what happened I think M Rolet has done a remarkable job restoring the LSE’s reputation as a major centre to do business thanks to technology and more to the point by attracting capital raising projects. In the eleven months to the end of February £28 billion had been raised on the LSE – that’s an increase of 91% on the same quarter last year. IN that period IPOS have gone up from 107 to 162.

The surge in IPO business started last autumn with the controversial Royal Mail Group sale. The City knew, at the same time, that much of the £30+ billion gleaned from Vodafone’s sale of its stake in Verizon, would have to be reinvested. Most of the UK IPOS have been very successful this year – Poundland,, Boohoo and copious SMES. The taxpayer’s holding in Lloyds Banking Group has also dropped about £10 billion of stock on the market. Only Pets at Home has been mildly disappointing.

However there will also be tranches of shares in TSB and Williams & Glyns to look forward to, plus and most important of all the possibility of a slew of bank rights issues by those European banks that may be undercapitalised. So there is plenty of choice and investors should not think the next few months will be plain sailing for these banks or the likes of Just Eat, Saga and House of Fraser. Sentiment needs to remain positive in stock markets. So well done to all for UK Retail Sales +1.7% last month and +3.7% on an annual basis. That kind of data is very helpful. Political jingoism, average 2nd quarter results and economic issues in China would be considered unhelpful. Nor was the US missing marginally on GDP at 2.6% and a decline in Consumer Confidence what the Doctor ordered. However all in all a great effort by the LSE. Let’s hope sentiment and confidence remains positive. SME IPOS and capital raising are going very well as it provides variety and long term investment planning – witness the success of Panmure’s Horizon Discovery Group – up from 180p to 214p – +19% yesterday on the first day of trading.

As we head to the weekend, the media will be full of corporate stories and market movement. I was amused by the front page of the Sun, suggesting that the purchase of Salford City by the Neville Brothers, Giggs, Scholes and Butt might be a precursor to a full scale bid for Manchester United. Man Utd shares went up 5% yesterday and have risen from $14.50 to $17.01 since 19th February, the initial impetus coming from a 24% stake bought by Baron Capital. When asked by Nick Ferrari on LBC this morning what I thought of the rumour, I told him I thought it was drivel. Of course he did not tell me that he had the Editor of the Sun in the studio, reviewing the papers. He told me that there was evidence to back up a supposition of that nature apart the Salford City acquisition.

Unless these “Likely 1992 Lads” are working with Baron Capital, which seems unlikely, I find it hard to fathom, unless the Glazer family, who together with Baron Capital own 80% of the club, feel it is time to cash in on Man Utd, who are unlikely to qualify for the Champions League next year; even the Europa Cup may be beyond their grasp.

Having dismissed the idea with derision, I had a re-think. Man Utd is still heavily in debt – circa £350 million and the Glazers seem to have used Man Utd as a cash cow to service their other business and sporting ventures in Florida to date. May be the idea of a $2 billion price tag on a deal has some appeal. Greater business brains than the “Beckham Boys” such as Jim O’Neil have attempted to mount a bid, but with respect these boys are a far more influential brand. I still find it very unlikely. The Beckham Boys are rich but spend probably a billion of their own or borrowed money on Man Utd? I cannot see it, but what a great story! Having ruminated again, I can’t have that idea at any price. Maybe I am wrong! Time alone will tell!

A peaceful weekend!

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

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