TODAY’S FAYRE – Tuesday, 9th December 2014


“WHAT is this life if, full of care,

We have no time to stand and stare?—

No time to stand beneath the boughs,

And stare as long as sheep and cows:

No time to see, when woods we pass,

Where squirrels hide their nuts in grass:

No time to see, in broad daylight,

Streams full of stars, like skies at night:

No time to turn at Beauty’s glance,

And watch her feet, how they can dance:

No time to wait till her mouth can

Enrich that smile her eyes began?

A poor life this if, full of care,

 We have no time to stand and stare.” 


WH Davies – poet – 1564-1616


Knowing many of the BBC’S business producers and presenters really quite well, I know that they resent being called ‘lefties.’ It offends them as they are very conscious about being biased. You would not believe the number of times I have been warned about being politically balanced in my comments.

That being the case I simply do not understand why from John Pienaar to Norman Smith to Chris Mason to Robert Preston to Fiona Bruce to James Landale to Nick Robinson do not want to comprehend the logic behind George Osborne’ desirable and achievable cuts. Surely all these highly educated BBC luminaries understand that the public sector produces an inadequate amount of revenue for the Treasury. So far better to cut the level of employees who are superfluous to requirement and re-employ them in the world of free enterprise! 


Where’s that Santa Rally? Many of the teenage scribblers were telling us that low oil prices were good for growth and employment. I could say ‘tell that to the marines’ but I’ll say that to the stock market instead! Most global bourses have taken a hit in the last session or two thanks to a further 5% decline in crude oil. Even Uncle Vlad must be moving uncomfortable from one cheek of his bony backside to the other. Though the Rouble, which had fallen 40% against the Greenback in the last year rallied on Friday by 3%, it has surrendered more ground overnight and this morning.


The Street of Dreams had a dose of the ‘Yips’ yesterday with the DOW losing 0.6%, the S&P 500 0.7% and the NASDAQ 0.8%. It was energy stocks that seem to have an attack of the ‘pip!’ Wall Street shook the trees – not much else fell off the branches, though McDonald’s poor performance in November crystallised a few furrowed brows.


After a dispiriting session in Asia where the data from China was hardly inspirational, Europe opened up much lower than we expected. Yes predictably oil and mining stocks opened up down 1-2%, though Shell was only down 0.5% early on. However it was Tesco that caught the imagination or sent cold sweat down investors’ backs, thanks to Dave Lewis, the CEO stating that trading profits were unlikely to beat £1.4 billion for the year, when £2 billion was expected. He also implied that he would be unable to update the market before January. That presupposes that Deloitte’s independent report is not ready. Diseased ridden minds working overtime are beginning to think that maybe the £250 million exaggerated profit was not a ‘one-off!’ Perhaps it goes deeper! Punters must be forgiven for looking for further skeletons in the cupboard. Tesco shares fell 14% early doors then lost even more down to 155p (-16%). At the time of writing they are down 12.5% at 163p. The share capital value of this amazing supermarket – Jack Cohen would turn in his grave! RIP! – have fallen from their height of £28 billion to circa £12.5 billion. The business will take 5 years to pull around. The assets of the company are probably worth more than £12.5 billion.


Tesco – A takeover target, I doubt it! Private equity would surely have to wait an eternity for a real profit, with shareholders perhaps being reluctant to sell it in the bargain basis. Wal-Mart has already backed the truck up with ASDA. Qatar and the Sainsbury family own 40% of their brand name and have trouble enough of their own – down 3.8% today. Wm Morrison is down 4.9% and has recovery issues of its own. I doubt Carrefour or Metro would have the resources. Far East investors are surely out of it and as for the US, who is big enough to pay a premium for a retailer that is struggling? Dave Lewis also needs to totally rebrand Tesco. He needs to do better than ‘every little helps!’ It clearly does not at the moment.




ECONOMICS –Tuesday – UK BRC, UK INDUSTRIAL PRODUCTION +1.8%, Wednesday – UK TRADE DEFICIT Est £9.6 billion, Thursday – EU CPI Est 0.6% Y/O/Y, US RETAIL SALES +0.3%, Friday – US PPI Est 1.6%, US MICHIGAN CONSUMER CONFIDENCE from 88.8 to 89.1.


David Buik

Market Commentator


+44 (0)20 7886 2775

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


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