TODAY’S FAYRE – Monday 28th April 2014

TODAY’S FAYRE – Monday 28th April 2014

“Believe me, if all those endearing young charms,
Which I gaze on so fondly to-day
Were to change by to-morrow, and fleet in my arms,
Like fairy-gifts fading away,
Thou wouldst still be adored, as this moment thou art,
Let thy loveliness fade as it will,
And around the dear ruin each wish of my heart
Would entwine itself verdantly still.
It is not while beauty and youth are thine own,
And they cheeks unprofaned by a tear,
That the fervor and faith of a soul can be known,
To which time will but make thee more dear;
No, the heart that has truly loved never forgets,
But as truly loves on to the close,
As the sun-flower turns on her god, when he sets,
The same look which she turned when he rose.”

Thomas More – poet – 1779-1852

AP McCoy, who will be 40 years of age next week, was duly crowned ‘Champion National Hunt jockey’ at Sandown Park last Saturday for the 19th year in succession – a record, I think I can say, will never be beaten in my life time and perhaps no one else’s. This is an astonishing achievement of bravery, relentless commitment to be the best in the business for whomever he rides for, for achievement and talent. All those football supporters, cricket, tennis, boxing and petrol-heads who have lauded their champions over the years, resulting in knighthoods and other prestigious awards, for me in terms of longtime achievements they must surely sit in the shade! Let’s hope the Royal ascent becomes evident before too long for this true champion of his sport! An amazing athlete and a fully paid-up member of the human race!

Last week, though the US earnings season was proving to be very satisfactory, the downgrading of Russia by S&P against a background of increased sanctions against the ‘Hammer & Sickle Mob’ for failing to de-escalate tensions in the Ukraine, triggered the removal of some equity froth and momentum towards the end of last week, though most Western bourses remained above the Plimsoll line by Friday night. The S&P 500 gained 0.14%, the FTSE 100 +0.91% and European bourses by an average of 0.31%.

Last week’s initial rally was aided and abetted by further M&A mania. Astra Zeneca was the subject of Pfizer’s attentions, thanks to a bid that was submitted on 5th January – rejected out of hand by Pascal Soirot and his board. The share price for Astra was £35 then. Many analysts and market observers could see the value of this bid if between £46 and £50 a share was tabled, as Astra’s drug pipeline is becoming rather thin on the ground. Apart from the fact that Pfizer has a $70 billion war chest, it was harder to see the synergies. Anyway it Monday Merger Mania and superficially it appears that Pfizer has gone hostile in offering £46.61 in cash and shares. We await developments. If the bid is improved to £50 a share, it would be hard to see it being turned down, despite Soirot remaining wholly ambivalent to Pfizer’s overtures. This deal would value the joint operation at about £120 billion. Astra has 7000 employed in this country and Pfizer 2,400. Astra shareholders would be offered a significant cash element and the joint company would be quoted on the NYSE.

The market was very happy with Glaxo’s plans to interchange oncology with vaccination operations with Switzerland’s Novartis. This looks like good business focusing on strength. Then it was the turn of Canada’s Valeant Pharmaceuticals that owns Bausch & Lomb (gig-lamps and lenses) to make a speculative $40 billion bid for Allergan (BOTOX!), which is likely to be successful. Merck has put up its consumer unit for sale with a price of $14 billion on it.

On Friday night late GE table a speculative bid of $13 billion for the French rail carriage builder Alstom. It seemed to make sense to keep the competition away from China, Japan and the UK/Canada. Siemens gets wind of this and comes storming over the hill with an improved offer, clearly with the tacit approval of President Francois Hollande, who would have been concerned about loss of jobs. I doubt his standing could be lower amongst voters in France than it currently is. Also Siemens made a pathetic excuse about its inability to compete for trains with Alstom being the perfect riposte enabling Alstom to fill that gap. This is EU protectionism at its very worst – another reason why the UK needs to get free from these chains of bondage. Clearly France and Germany do not believe in free markets. I’ll give the market a clue PM Cameron won’t try and find a more suitable UK/EU predator than Pfizer to take over Astra Zeneca.

Finally Premier Oil have rejected Ophir Energy’s overtures to be taken over to form a £3 billion exploration operation. This week the following companies in the UK post results or trading statements – BP, PETROPAVLOVSK, REDROW, WHITBREAD, Wednesday – HOME RETAIL, STANDARD LIFE, GREENE KING, BATS, CSR, GLAXO SMITHKLINE, GREGGS, Thursday – LLOYDS BANKING GROUP, BG GROUP, SMITH & NEPHEW, BSKYB, WOLFSON ELECTRONICS, N BROWN

US – Monday – CORNING, Tuesday – SPRINT, BRISTOL MYERS SQUIBB, VALERO ENERGY, MERK, BOSTON SCIENTIFIC, GOODYEAR, MARRIOTT, EBAY, Wednesday – TIME WARNER, REVLON, PITNEY-BOWES, Thursday – EXXON MOBIL, VIACOM, BJ RESTAURANTS, Friday – CHEVRON

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
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