TODAY’S FAYRE – Tuesday, 16th September 2014

“Home is so sad. It stays as it was left,
Shaped to the comfort of the last to go
As if to win them back. Instead, bereft
Of anyone to please, it withers so,
Having no heart to put aside the theft
And turn again to what it started as,
A joyous shot at how things ought to be,
Long fallen wide. You can see how it was:
Look at the pictures and the cutlery
The music in the piano stool. That vase.”

Philip Larkin – poet – 1922-1985

Between 6-8k people, including yours truly, turned up to support Dan Snow’s ‘Let’s Stay Together’ campaign in Trafalgar Square. There were inspiring, provocative and eloquent comments from Dan Snow, himself, Al Murray, Bob Geldof and Eddie Izzard. It was great to see Dan’s illustrious father – Peter Snow broadcaster & swingometre doyen – amongst the crowd with his daughter-in-law and grandson. There was plenty of UK passion on display, bringing back memories of the ‘bon hommie’ which prevailed during London’s Olympic Games in 2012.

In the event of a ‘YES!’ vote, this opens up a can of worms politically across Europe and the UK! Enter stage Right – Nigel Farage, UKIP and the right wing Tories. Their influence could lead to further fragmentation of the political landscape. As for Spain; if Catalonia were ever given independence; those who have Spanish bonds – the 10-year variety, currently yielding 2.34% – can kiss goodbye to them! Just think about repapering your loo with them!

With the possibility of increased rates in the US transpiring earlier than anticipated added to China’s economy threatening to flat-line and Europe’s economy lying flat on its back, which required a boot injection from the OECD yesterday, the Scottish Independence vote paled in to insignificance in terms of a ‘market mover and shaker!’, apart from the potential damage a ‘YES’ vote will eventually do to the Scottish economy. One can see that Sterling has recovered a little bit of poise and the performance of the FTSE 100, which lost a couple of points to 6804, illustrated investors’ deep-seated level of absolute ambivalence. Despite the rather downbeat sentiment in equities there are still plenty of deals around at present.

The brewing sector is proving quite a cauldron of intrigue. SAB Miller is clearly feeling the heat in the kitchen from InBev, aided and abetted by help and clout from the Brazilian entrepreneur, Carlos Brito, see the South African based brewer as a tasty morsel to add to its portfolio. With a view to taking the spotlight off itself, SAB Miller had a half-hearted pop and Heineken. Their overtures were rejected out of hand. There is also, of course, the much vaunted and rumoured merger gossip between Diageo and SAB Miller still doing the rounds. Molson Coors also jumped in on the act and these shares rose like a grilse – up 7.5%. The rumour mill was also keen to throw Rio (+1%) in to the pit with Glencore, rather than consider Anglo American as a serious bed partner.

Across the pond Microsoft paid $2.5 billion to reel in Sweden’s Mojang, the makers of Minecraft – a game involving lego-styled blocks. This business was formed in 209 by Notch Perrson and the company has sold 54 million copies and it made a profit of $100 million last year, employing only 40 people. This is just another asset for Microsoft to add to its Xbox portfolio. With Google’s android giving plenty of momentum behind Apple’s and Samsung’s products, Microsoft needs to be proactive – hence deals of this nature. On the first day of trading Apple sold 4 million iPhone6 yesterday – Unbelievable! Despite many internet stocks getting larruped yesterday including the likes of Facebook and Twitter – both losing 3.5%, Alibaba’s financial advisors raised the issue price for its forthcoming IPO from $60-66 to $66-68 a share, valuing the issue at $25 billion and the company at about $185 billion – such was the appetite from the road shows to buy in to this phenomenon. The Street of Dreams closed the day mixed – DOW+0.29%, S&P 500 -0.17% and the NASDAQ down by 1.07%

John Caudwell, the founder of Phones 4U, who sold the operation to BC Partners in 2006 for £1.5 billion, suggested on Bloomberg TV this morning that by withdrawing their custom from Phones 4U by 02, Vodafone and EE could well be guilty of collusion. Strong words! UK CPI was a non-event for August – down 0.1% to 1.5% thanks to no food or clothes inflation and Sterling falling about 3% in value. The case for higher interest rates in the UK must lose some sense of urgency. Tomorrow the minutes of the MPC are likely to confirm a 7-2 majority in favour of no change in base rate at 0.5%, as well as leaving the QE facility at £375 billion. At 10.30am the FTSE 100 was down 28 points at 6776 – ASOS losing 15% on poor numbers and profit taking on Thos Cook saw its shares down by 3.5%.

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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