TODAY’S FAYRE

TODAY’S FAYRE – Monday, 3rd November 2014

“When love has changed to kindliness —
Oh, love, our hungry lips, that press
So tight that Time’s an old god’s dream
Nodding in heaven, and whisper stuff
Seven million years were not enough
To think on after, make it seem
Less than the breath of children playing,
A blasphemy scarce worth the saying,
A sorry jest, “When love has grown
To kindliness — to kindliness!” . . .
And yet — the best that either’s known
Will change, and wither, and be less,
At last, than comfort, or its own
Remembrance. And when some caress
Tendered in habit (once a flame
All heaven sang out to) wakes the shame
Unworded, in the steady eyes
We’ll have, — that day, what shall we do?
Being so noble, kill the two
Who’ve reached their second-best? Being wise,
Break cleanly off, and get away.
Follow down other windier skies
New lures, alone? Or shall we stay,
Since this is all we’ve known, content
In the lean twilight of such day,
And not remember, not lament?
That time when all is over, and
Hand never flinches, brushing hand;
And blood lies quiet, for all you’re near;
And it’s but spoken words we hear,
Where trumpets sang; when the mere skies
Are stranger and nobler than your eyes;
And flesh is flesh, was flame before;
And infinite hungers leap no more
In the chance swaying of your dress;
And love has changed to kindliness.”

Rupert Brooke – poet & soldier – 1887-1915

I haven’t been political canvassing for 50 years, when I helped a prospective Tory candidate, James Moorehouse, fight Kenneth Robinson in St Pancras North. Robinson, won the seat easily and became Health Secretary in Harold Wilson’s 1964 government. He was one of those moustached well educated champagne socialists, whom I have never really understood – decent man but I never knew where he was coming from. To tell you how long ago that was, it was pre Frank Dobson days!

Anyway I was amongst 70 eclectic Tory supporters who went down to help Kelly Tolhurst canvass in her campaign at Rochester & Strood last Saturday. I think she will prove to be an excellent candidate, who is a successful local business woman. The seat used to be Labour (Bob Marshall Andrews QC). However Mark Reckless seems to have built up quite a lead according to the polls, having sworn undying love to UKIP’s cause, triggering a by-election. It is a pity that Kelly was not adopted two weeks before. I expect the vote to be much closer than the current poll suggests. The UKIP bandwagon may continue to attract adverse publicity. I fear that the 2015 General Election could be fought on immigration. That will make it unpleasant in the extreme.

William Hague confirmed my thoughts that he still has wonderful interpersonal skills. He was there wearing out shoe-leather for much of Saturday. My job was delivering 270 leaflets around a few local housing estates. I doubt I brought much influence to bear. However what I can tell you is that there are a great number of solid Labour supporters who do not want any part of UKIP. If that were confirmed on 20th November, Mr Farage may see his support diminish.

I know it was on an article in ‘Der Spiegel’ but nonetheless Frau Merkel’s attributed remarks that the UK was heading towards the EU exit, if it persisted with its demands on limiting immigration freedom, seemed to come from a well-informed source. Most people working in the City and in business accept the importance of our relationship with the EU as a trading partner, but I think we are all getting heartily tired of the disrespect we are receiving from Juncker, Barroso and now Chancellor Merkel. The UK is being treated like a naughty schoolboy. This must stop, NOW!

If the UK’s demands are a bridge too far for Germany – so be it. The UK must not be fazed at the prospect of leaving the EU. The EU still needs us a trading partner. However we have a great big wide world out there to trade with – South America, Africa, China, the Middle-East and our beloved Commonwealth, whom we have neglected for years. As for financial business, London remains the centre of the time zone. Tax rates will attract business, regulation is probably more practical in the EU – NO transaction tax and an altogether better banking system than much of the EU. Also in the UK we are the best in world at raising capital and trading. So nil desperandum! If PM Cameron can succeed in negotiating radical changes in EU legislation; then brilliant! If not it will be an exciting and eventually very successful bold move! The EU and Germany, in particular, must be told the UK is not grandstanding! It’s for real!

October was an extraordinary month for equities with dramatic volatility being rampant. Who would have believed after the first week’s dramatic sell off that the DOW would have ended up 1.13%, the S&P 500 1.17% and the NASDAQ 1.4%. Last week the DOW added 7% and the S&P 500 6%! There were a couple of M&A titbits that hit the wires this morning- Publicis agrees to buy Sapient for $3.7 billion in principle in an all cash deal. Diageo confirmed that it would shed Bushmills to make room in its portfolio for Tequila manufacturer Don Julio for a net cash consideration of $408 million. The bumptious Michael O’Leary posted a very upbeat trading statement this morning, which saw Ryanair’s shares sharply higher – up 6.6% initially. It was interesting to note over the weekend that Michael Spencer sold City Index for $118 million (His holding company owns 2/3rd) to Gain Capital of the US. He is unlikely to have made much money out of this transaction thanks to the banking crisis of 2008, which cost the company millions. City Index has provided a tremendous service to the world of spread betting. Michael deserves great praise for digging the company out in 1987 as well as in 2008!

Chinese PMI was slightly tepid this morning, which saw most Asian markets put in performances which left their respective indices slightly below the Plimsoll line. Tokyo was closed today for a public holiday. HSBC posted interim results this morning. The ‘Local’ bank with 6,200 branches in 74 countries posted a 2% increase in profits to $4.6 billion for the 3rd quarter, though a 6% drop in PBT of $16.969 billion for the nine months. In isolation this was a decent effort. But shareholders may be disappointed that expenses rose by 15% to $11.09 billion. Shareholder return came in at 9.5%. Tier One capital came in a tick higher at 11.4%. Provisions for bad debts were lower but conduct charges were alarmingly high – PPI +$700m, US housing litigation +550 million and FX rate fixing litigation and fines $378 million.

UK companies posting results or trading statements this coming week – Tuesday – IMPERIAL TOBACCO, AB FOODS, L&G, ADVANCED COMPUTER SOFTWARE, UNITE, WEIR, 888 HOLDINGS, SANTANDER, Wednesday – M&S, OLD MUTUAL, FIRST DERIVATIVES, HILTON FOODS, JD WETHERSPOON, AER LINGUS (TS), MEGGITT, Thursday – GEM DIAMONDS, ASTRA ZENECA, RSA, XCHANGING, SUPERGROUP, SCHRODERS, COBHAM, TATE & LYLE, WM MORRISON, STV GROUP, HALFORDS, C&W, LONDON MINING, DAIRY CREST, INMARSAT, RANGOLD, EXPERIAN, COCA-COLA HBC, Friday – NATIONAL GRID, ADMIRAL (TS), BOVIS HOMES (TS), TULLOW OIL (TS).

Monday – LOEW’S, SPRINT, TENET HEALTHCARE, Tuesday – OFFICE DEPOT, MOTOROLA SOLUTIONS, EASTMAN KODAK, Wednesday – DUKE’S ENERGY, TIME WARNER, DYNERGY, Thursday – GAP, WALT DISNEY, AOL. MOLSONS COORS, ZYNGA
These are David Buik’s 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

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