TODAY’S FAYRE – Thursday, 28th August 2014
“The fascination of what’s difficult
Has dried the sap out of my veins, and rent
Spontaneous joy and natural content
Out of my heart. There’s something ails our colt
That must, as if it had not holy blood,
Nor on an Olympus leaped from cloud to cloud,
Shiver under the lash, strain, sweat and jolt
As though it dragged road metal. My curse on plays
That have to be set up in fifty ways,
On the day’s war with every knave and dolt,
Theatre business, management of men.
I swear before the dawn comes round again
I’ll find the stable and pull out the bolt.”
William Butler Yeats – poet – 1865-1939
Jacques Chirac avoided the strong arm of the law, in fact so has virtually every French political heavyweight in living memory. Now the climate has changed, probably caused by the advent of a head-strong socialist government. Nicolas Sarkozy and Mme Christine Lagarde suddenly find themselves under the legal cosh. The Managing Director of the IMF is being charged by the French authorities with ‘simple negligence’ surrounding ministerial wrongdoings over a pay-out of €400 million to the colourful French businessman, Bernard Tapis – Once the owner of Olympique Marseilles and a major shareholder in Adidas from 1990-1993. Monsieur Tapis did 6 months ‘bird’ for corruption in 1995. Mme Lagarde strenuously denies the allegations. I doubt very much she will be found guilty, but in the unlikely event – porridge??
I understand that to remove a senior local government official, criminal intent has to be proved. However Shaun Wright, the SYP&CC, must be joking in not immediately tendering his resignation. Even his own political party believes his number should be up. The same goes for all those officials associated with this dreadful litany of barbaric child abuse. Have these people no shame or collective accountability and responsibility?
I stupidly watched the Channel 5 highlights of yesterday’s ODI at Cardiff. The England team performance was dire! Barring a miracle, Graeme Swann is right – No chance of winning next year’s World Cup in Australia!
On the Street of Dreams yesterday is thought to have been the second quietest trading day of the year after 3rd July 2014 – just 4.2 billion shares traded on all markets. The Dow closed up a smidgen at +0.09%, the S&P 500 was flat and the NASDAQ was down by 0.02%. It is interesting to note that since 9th March 2014, the value of the US equity market has increased from $25 trillion to $63 trillion. Yesterday Best Buy regained some poise in adding 6%. Tiffany’s posted decent numbers – +1%. Smith & Wesson’s efforts did not pass muster – down 14%.
As the market waits with frenzied enthusiasm for ALIBABA’S forthcoming IPO, probably scheduled for 8th September, onlookers and potential investors will have been thrilled at the news that profits were sharply up at $2 billion for the last quarter. Alibaba has 279 million users – up 51% last year and 9% up from 3 months ago. 32.8% of the volume is traded through mobiles – 188 million mobile users. Jack Ma owns 25% of this company, which will look to raise $20 billion – just 10% of the perceived value of $200 billion. Jack was an English teacher in Shanghai and started the company with 18 people. What a huge success story – apparently, post the IPO, Ma will be the richest man in China.
There were two other stories that captured my imagination yesterday – the RBS fine and Ryanair’s initiatives to have a pop and Cyprus Airways and offering a business class service. The loquacious, bumptious and arrogant Michael O’Leary believes he can up the passenger carry from 600k to 3 million. Well he thinks he can move mountains! His star has fallen rather behind that of easyJet’s Carolyn McCall. Ryanair has had customer service issues. It failed to land Aer Lingus and there’s nothing Mr O’Leary likes more than a spat with airports over their charges. Ryanair has chosen this time to revamp its services and up its advertising game. The economy carrier will be introducing a business class service. The Business Plus ticket, which starts from £59.99, will offer free flight changes and a 20kg checked-in baggage allowance, as well as “premium seating”. Does Europe really need a business class service from an economy carrier, when many of the airports are miles from its final destinations? To me it is just marketing waffle! We shall see!
For the crime of miss-selling mortgages, RBS seemed to get off quite lightly with a £14.5 million fine. Some of these misdemeanours took place between 2011-2103, under CEO Ross McEwan’s watch. The idea of telling a potential mortgagee that rates could go to 5.5% in that climate is irresponsible, if true. It is possible that 30,000 people will have to be written to and many may need compensation. Restoring trust with its customers must be RBS’S and NatWest’s prime prerequisite. This is a bitter setback and frankly the fine imposed by Tracy McDermott was cheap at the price.
At 8.30am the FTSE 100 was down just 10 points. Tullow Oil found some oil – +0.75%, Xaar posted another profits warning – down 27%. CSR rallied by 18% based on informed takeover gossip. Hays posted satisfactory results and Salamander Energy fell by 4% with figures looking a little light.
UK companies posting results tomorrow – Friday – BWIN, COMPUTERCENTER & RESTAURANT GROUP. BIG LOTS posts interim results tomorrow.
These are David Buik personal views
Twitter – @truemagic68
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