TODAY’S FAYRE – Thursday, 3rd December 2014


Fear death?—to feel the fog in my throat,

The mist in my face,

When the snows begin, and the blasts denote

I am nearing the place,

The power of the night, the press of the storm,

The post of the foe;

Where he stands, the Arch Fear in a visible form;

Yet the strong man must go:

For the journey is done and the summit attained,

And the barriers fall,

Though a battle’s to fight ere the guerdon be gained,

The reward of it all.

“I was ever a fighter, so—one fight more,

The best and the last! I would hate that

Death bandaged my eyes, and forbore,

And made me creep past.

No! let me taste the whole of it, fare like my peers,

The heroes of old, Bear the brunt, in a minute pay glad life’s arrears

Of pain, darkness and cold.

For sudden the worst turns the best to the brave.

The black minute’s at end,

And the elements’ rage, the fiend voices that rave,

Shall dwindle, shall blend, Shall change, shall become first a peace out of pain.

Then a light, then thy breat,

O thou soul of my soul! I shall clasp thee again,

And with God be the rest!”


William Wordsworth – poet – 1770-1850


Despite the fact I thought the autumn statement was politically quite clever in places – more on the content later – one cannot help feeling that the country is rudderless and devoid of strong leadership. My word how we in the UK would benefit from the qualities of Baroness Thatcher – I am just dreaming – RIP!


Panmure Gordon’s economist, SIMON FRENCH makes two very worthwhile points –

  • The Corporation Tax hit on banks (50% of losses offset rather than 100%) is estimated to raise £700m next year. This is against a baseline of £1.6bn of Corp Tax paid by British Banks last year (13/14). Fairly material therefore and a hit on a return to higher dividends by Banks to Ordinary Shareholders – Bank shares took a knock yesterday as a result


  • The public sector commitments while completely achievable (they could be done without damaging public service) it would mean some pretty radical changes (1m job losses in public sector) that neither party has shown the appetite to do in this Parliament. This is why Ed Balls is calling this ‘fantasy economics’ on the wires this morning. He is right given the levels of political bravery on show but he is wrong that they damage the economy in the long run. In reality austerity knocks 0.5%-1% off the growth rate next 5 yrs (hence the downgrades to growth post 2016 we saw yesterday) but won’t lead to a crisis in public services and wont tip the UK back into recession given falling oil price, cheap credit and high employment levels.



There was decent data emanating from the US yesterday, including the ADP index, which ratified that 208k jobs had been created in the private sector in the US in November with further encouragement from the contents of the Beige Book, which confirmed that there are labour shortages in the US, which could contribute to wage inflation – Joy! This news may augur well for Non-Farm Payrolls tomorrow – EST +230K. Wish we had that problem here in Old Blighty!  These nuggets of good news encouraged investors on the Street of Dreams to put their best foot forward, resulting in the DOW adding 0.58%, the S&P 500 up by 0.38% and the NASDAQ by 0.39%. This feel good factor caught investors’ imagination in Asia, where substantial gains were made in China and acceptable efforts in Japan.



The US looks as if it still has some momentum behind it and it seems as though 2015 offers opportunities. I wish I could feel the same about UK equities. Though this index has a strong international flavour and is not representative in terms of being a barometer for the UK economy, it is having difficulty selecting another gear, as banks, energy, some mining stocks plus supermarkets are just not performing. This morning on the back of the US and Asia, you would have been forgiven for thinking that the FTSE might have selected another gear –but oh no! Inertia is there in spades.



At 12.04pm the FTSE 100 is up a miserable 5 points at 6720. There were some noticeable results from smaller operators. The yellow jersey went to Betfair, which doubled profits to £60 million. This share has finally breached through its IPO issue price of £13 from October 2010. Tui Travel told the market that summer bookings were up 9% – shares up 4.25%. Greene King awaits its takeover of Spirit Pubs, which should be good news for the merged company. However Greene King’s results were uneventful and shares were unchanged. Banks seem to make back yesterday’s losses and added a tad of value.




Sky sold its Skybet for £720 million to CVC. This news saw Sky’s shares were up 0.8%, but this news gave a great fillip to William Hill +2% and Ladbrokes +2.8%. Talking of Ladbrokes, there is much speculation about who will succeed Richard Glyn as CEO. Here are my semi frivolous thoughts with a touch irony! The internal candidates are perfectly decent, but I think one would have already been appointed.


John O’Reilly – fell out with the Chris Bell regime – experience with Corals and Telecity – easily my number one choice, may have contract restrictions – gets 4 miles in a bog! – If I was making odds 7/4


Breon Corcoran of Betfair – ex Paddy Power enjoying Betfair but would relish a challenge from the magic sign – about 4/1


Harriet Green – ‘eats nails for breakfast’ and spits rust out – great track record at Thos Cook – control freak.  It would work if there was a powerful team at Ladbrokes with improvement with online gaming. – about 10/1


Patrick Kennedy – ex Paddy Power – maybe under contract – 12/1



Jim Mullen – head of online at Ladbrokes – if it were going to happen he would probably be appointed – 14/1


Henry Birch – Home team – the rag – circa 16/1


The MPC left interest rates and QE as it was! Don’t hold your breath for the ECB introducing full on QE in 15 minutes!


David Buik

Market Commentator


+44 (0)20 7886 2775

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom


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