TODAY’S FAYRE – Thursday 25th September 2014

TODAY’S FAYRE – Wednesday, 24th September 2014

“Too hot, too hot!
To mingle friendship far is mingling bloods.
I have tremor cordis on me: my heart dances;
But not for joy; not joy. This entertainment
May a free face put on, derive a liberty
From heartiness, from bounty, fertile bosom,
And well become the agent; ‘t may, I grant;
But to be paddling palms and pinching fingers,
As now they are, and making practised smiles,
As in a looking-glass, and then to sigh, as ’twere
The mort o’ the deer; O, that is entertainment
My bosom likes not, nor my brows! Too hot, too hot!
To mingle friendship far is mingling bloods.
I have tremor cordis on me: my heart dances;
But not for joy; not joy. This entertainment
May a free face put on, derive a liberty
From heartiness, from bounty, fertile bosom,
And well become the agent; ‘t may, I grant;
But to be paddling palms and pinching fingers,
As now they are, and making practised smiles,
As in a looking-glass, and then to sigh, as ’twere
The mort o’ the deer; O, that is entertainment
My bosom likes not, nor my brows!”

William Shakespeare – playwright & poet – 1564-1616

I must have seen Verdi’s ‘Rigoletto’ thirty times, more often than not at the Royal Opera House – with the likes of Sherill Milnes, Ingmar Wixel, Peter Glossop, Piero Capucilli and Renato Bruson in the little role – also at the ‘Met’, at Holland Park and in Tokyo. Never have I seen empty seats at any these venues as I did last night. I suppose there comes a time when £220 a pop for a seat is a bit too rich for some of the public’s blood, particularly if the main singers are unfamiliar to the audience. Those who stayed away have missed an absolute triumph of a production.

The performances of Simon Keenlyside in the title role and Aleksandra Kurzak as ‘Gilda’ were electric – both full of remorse, passion and jealousy in almost equal portions coupled with exquisite singing – as good as anything I have seen since Sherrill Milnes, Joan Sutherland and Luciano Pavarotti appeared in the 1976 production at the ROH – just superb! For choice the director and make-up people might have made Rigoletto look a little older. Saimir Pirgu as the licentious Duke of Mantua had delightful and lyrical belcanto tenor voice, but it was too small for the huge auditorium and the deep stage at Covent Garden. Surely there has never been a better ‘Sparafucile’ than Brindley Sherratt, whose rich bass voice was every bit as powerful as that of Martti Talvela, the giant Finn, who dominated base roles in the ‘60s and ‘70s. What a privilege it was to witness this rendition! – Unequivocally my favourite opera. I will never tire of it!

After 3 days of equity reverses, due mainly to a compendium of uncertainty created by bombing raids made by US coalition on Syria and Iraq, the damage to the world’s economy inflicted by sanctions on Russia, the inability of the EU’s economy to get out of second gear, tax inversion threats and China’s ailing economy. However yesterday investors on the Street of Dreams decided that this fall had gone far enough, unless it just turns out to be a ‘bear squeeze rally!’ Time alone will tell! The DOW added 0.9%, the S&P 500 0.78% and the NASDAQ 1.03%. Decent New Home Sales – up 18%; the best figure for 6 years – helped to buoy sagging confidence. Healthcare, retail and consumer stocks on rumours of decent holiday sales performed with aplomb with Bed, Bath & Beyond excelling adding 7.4% in value. Walmart also had a little run on the rails adding over 2%. Post the Obama tax inversion edict Pfizer is rumoured to have rattled Actavis’s chain about joining hands in holy matrimony. NIKE and MICRON TECHNOLOGY post interim results. Consumers have companied about software issues re Apple’s iPhone and whether it is robust enough!

RBS sold 25% of Citizens Bank yesterday at $21.50 a share in an IPO. Many thought shares would go on sale between $23-25. However there was a 7% premium initially and $3 billion is on its way to RBS’s coffers. It is hoped that this bank will do well, which will swell the taxpayers insatiable appetite to be repaid in full ASAP. It was ironic that news of RBS’S chairman Sir Philip Hampton served notice to leave the bank and head for the hot-seat at Glaxo SmithKline replacing the indomitable Sir Chris Gent – he of Vodafone fame a decade or so ago. Glaxo will be keen to restore its tarnished reputation post the $490 million fine imposed by the Chinese authorities for bribing doctors and hospitals. I sincerely hope that RBS heads for Lord Myners’s services. Whether he will do the job remains to be seen. However he ticks all the boxes. He was the minister responsible for RBS during the crisis. He is well known and respected in the corridors of political and commercial power and he is a successful financial heavyweight in every respect. To finish with banks, not only has Barclays had to recently contend with ‘dark pool’ allegations in the US, but the manner shares were purchased by Qatar during the credit crisis is under scrutiny.

Across the Channel the economic news is not good with some leading countries. France’s PMI data last month was the lowest experienced in 2014. There is also considerable concern about growth in Germany. This will not have escaped ECB’s Mario Draghi attention. He felt that unemployment was unacceptably high and that it may be necessary to let it be known that monetary policy may have to be loosened and who knows, though he and Merkel are fighting the prospect, QE may not be too far away in coming. Bank are struggling to recover, fresh capital is needed and the banking sector’s appetite for risk is waning and capital requirement costs for trading and for investment banking by the Central banks is prohibitive. Chancellor Osborne also had news ahead of the Conservative party conference starting this coming weekend that he could well have done without – an extra borrowing requirement of £11.6 billion.

The FTSE 100 rallied by 30 points yesterday to 6706. The news re Tesco was still dispiriting. Why are there no non-executive directors with retail experience? Why did Philip Clarke take responsibility for the role of FD when Laurie McIlwee left on 4th April – 5 months! Blackrock sold £150 million worth of shares. That send out the wrong message. The sooner the results of Deloitte’s investigation are posted the better. CEO Dave Lewis’s and FD Alan Stewart’s hands are more or less tied until then. Tesco also have a £2.6 billion pension fund deficit to deal with. RAC’s future may not be in an IPO. There is a possibility that Singapore’s GIC could step up to the plate.

In Asia China’s banks look as if they will offer fresh stimulus to the property market in the form of easier mortgage facilities. Shanghai Composite was up 0.78% at lunch, the Hang Seng was just below the Plimsoll line at -0.1% and the Nikkei on a softer Yen blazed the trail +1.28%. We expect a reflective opening in Europe this morning, – FTSE unch, DAX +12, CAC +5. Hennes & Mauritz have seen sales increase by 15% in the last 9 months and profits for the 3rd quarter were in line at SKR 7 billion – shares are up 17% in the past year.

Finally Bloomberg posted some interesting data in regards to shareholdings by company insiders. Only 7,181 insiders bought shares in their own companies so far this year through September 12, down 8% from a year ago, while 23,323 sold shares – approaching the worst buy-sell ratio since 2000.
This insider aversion for their companies’ stock is in sharp contrast to stock buybacks that their companies have undertaken. When it comes to using their own money, insiders have become very bearish, diversifying out of their companies, selling hand over fist. When it comes to using other people’s money, they have no such compunction: corporate share buybacks reached a near record in the first half. And for the trailing 12 months, according to FactSet, buybacks jumped 29% to $539 billion.

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
http://www.panmure.com – The information in this e-mail and any attachments is confidential and may be legally privileged. It is intended solely for the addressee(s). If you are not an intended recipient, please delete the message and any attachments and notify the sender of miss-delivery: any use or disclosure of the contents of either is unauthorised and may be unlawful.

David Buik
Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
http://www.panmure.com

The information in this e-mail and any attachments is confidential and may be legally privileged. It is intended solely for the addressee(s). If you are not an intended recipient, please delete the message and any attachments and notify the sender of mis-delivery: any use or disclosure of the contents of either is unauthorised and may be unlawful.

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