TODAY’S FAYRE – Thursday 12th June 2014

TODAY’S FAYRE – Thursday, 12th June 2014

“Have you got a brook in your little heart;
Where bashful flowers blow,
And blushing birds go down to drink,
And shadows tremble so?

And nobody, knows, so still it flows,
That any brook is there;
And yet your little draught of life
Is daily drunken there.

Then look out for the little brook in March,
When the rivers overflow,
And the snows come hurrying from the hills,
And the bridges often go.

And later, in August it may be,
When the meadows parching lie,
Beware, lest this little brook of life
Some burning noon go dry!”

Emily Dickinson – poet – 1830-1865

The 20th World Cup gets under way today when the host nation takes on Croatia. However this hugely anticipated competition starts under a really dispiriting cumuli nimbus cloud called FIFA and the prospect of its 78 year old President Sepp Blatter after 16 years in the job has every chance of being re-elected. Surely this is just a bad dream. Football must wake up!

What is wrong with football’s governing bodies? Is Greg Dyke the only dissenting voice? Should another world football body be set up to bypass this ’Club’ which is permanently shrouded in controversy, skullduggery, mystery and mistrust?

From a professional and market perspective, despite geo-political issues and share valuation concerns, some economies – probably not Brazil’s, which seems to be making a great effort to fall off a cliff – may well see temporary benefits for the following companies – Coca-Cola, McDonald’s, WPP, Molson Coors, Carlsberg, Heineken, SAB Miller, Inbev Anheuser, Nike, Adidas, Sports Direct, NEXT, M&S, JD Wetherspoon, Spirit Pubs, Enterprise Inns, Thos Cook and Tui Travel and no doubt many others due to a feel good factor prevailing.

When Messrs Bush & Blair elbowed their way in to Iraq, reluctantly I and millions of others thought they were right, to prevent further Saddam Hussein barbaric behaviour. However no one legislated for the fact that the US and UK had NO workable contingency plans to put Iraq back on its feet, by helping to introduce/build a proper infrastructure as well as schooling its army and police adequately. The world appears to have wasted billions of dollars and thousands of lives, with little to show for it! It appears the peace keeping forces left with indecent haste.

Yesterday the Street of Dreams had its cage rattled by the insurgency problems in Iraq with the DOW surrendering 0.6%, the S&P 500 0.35% and the NASDAQ by a parsimonious 0.14%. Asia found little to get its teeth in to or for that matter much to be encouraged about in other parts of the world. The ASX was down 0.3% and as we head for the close Shanghai is easier by 0.06%, Hang Seng -0.33%, with the NIKKEI closing down -0.6%. Trading conditions around the world are worryingly somnolent and volatility virtually non-existent. This morning most of the European bourses are expected to open just below the Plimsoll line. That record for the FTSE 100 – 6930 seems to be getting more out of reach for the time being, the FTSE 100 having closed at 6838 yesterday.

The news on the employment front in the UK is encouraging with the unemployment rate having fallen from 7.8% 2 years ago to 6.6% last month. The economy appears to be more broad-based, but there is now a threat of symbolically higher interest rates by the end of 2014. Rolls Royce could well have done without losing that Emirates Airbus contract which wiped a £1 billion off its share price. It looks as though Etihad will invest E1.25 billion over the next 4 years in Alitalia. Mitsubishi are joining forces with Siemens to bid for Alstom’s assets, which will cause GE to have a re-think.

I am very pleased that Lady Christina Green is going to be able to stash away another £43 million to her Monaco based fortune. At least it shows us that Arcadia and Top Shop are alive and well and creating jobs and contributing to the economy.

Talking of regulation it is interesting to note that the powers that be have refused immediate access to Quindell, a well-supported software consultancy, which also owns golf courses and other non-core operations to the FTSE 250. It appears an apprenticeship is necessary before an invitation is forthcoming.

George Osborne makes his annual Mansion House Speech tonight. The regulation of foreign exchange and penalties for rigging was expected to be near the top of the agenda. It appears that rigging will be a criminal offence but the Chancellor may fall short of adopting the EU rule book on this issue.

Today the following posted numbers – WS ATKINS, BOOHOO, MULBERRY, PETS AT HOME, PZ CUSSONS, HOME RETAIL GROUP. Mulberry saw profits down by 45% to £14 million with sales down 9% in the last quarter. Home Retail continues its recovery in the 1st quarter with like for like sales as Argos up 4.9%.

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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