TODAY’S FAYRE

TODAY’S FAYRE –Tuesday, 10th February 2015

 

“Somewhere on the other side of this wide night

and the distance between us, I am thinking of you.

The room is turning slowly away from the moon.

 

This is pleasurable. Or shall I cross that out and say

it is sad? In one of the tenses I singing

an impossible song of desire that you cannot hear.

 

La lala la. See? I close my eyes and imagine the dark hills I would have to cross

to reach you. For I am in love with you

 

and this is what it is like or what it is like in words.

 

 Carol Ann Duffy – poet laureate– 1955-

 

I don’t think I can ever remember such a spate of fantastic films go on release in such a short space of time as was witnessed at Sunday’s BAFTA awards, which Stephen Fry did everything in his power to ruin, but consummately failed to do! If ‘Selma’ – based on the 1965 Selma to Montgomery voting rights marches led by James Bevel, Hosea Williams, and Martin Luther King Jnr had been included, many would be surprised if it had not received a fair few nominations. The quality of acting by David Oyelowo, as Martin Luther King and Carmen Ejogo as his wife was outstanding. Tom Wilkinson and Tim Roth were both amazing in their respective cameo roles as ‘LBJ’ and Governor George Wallace of Alabama – their southern accents never faltered. Oprah Winfrey acted and co-produced with Brad Pitt.

 

Perhaps it’s just me getting unnecessarily crusty and bad-tempered, but President Obama’s arrogance is plainly not helping the possibility of any resolution to the Ukraine crisis. Sending arms to Ukraine strikes me as crass stupidity until you, Mr President leave the golf course behind and attempt to have meaningful talks with President Putin. NEVER send the oily rags (alias John Kerry & Joe Byden) if the engine driver is available. Chancellor Merkel heads for Minsk today to continue the ‘pow-wow’ with Ukraine, Germany and France as to where to take negotiations forward – notable absentees US and UK; one presumes persona non grata with Russia.

 

As for Greece it appears that Messrs Tsipras and Varoufakis have agreed to disagree with the ECB, J-C Juncker ET all. So it appears no progress has been made on plans for Greece to be given a temporary loan of €10 billion until agreement on debt and serving it can be reached. Though Greece has tapered its rhetoric, the EU needs to understand and appreciate that Syriza was given a mandate to cut the level of austerity. Observers are very uncomfortable in surmising that Greece may be headed for the EU exit door! If Greece does, that could be the beginning of the end of this ‘impossible dream!’ The current level of uncertainty is counterproductive and in the circumstances equity markets are behaving very well, if a tad illogically, though the Street of Dreams and European bourse surrendered some ground yesterday – DOW -0.53%, S&P 500 -0.42%, NASDAQ -0.39%, DAX -1.67%, CAC -1.40% and the FTSE -0.24% to 6837. The fact that China’s exports fell by 3.3% on a year on basis and imports by 19.9% did not help.

 

This morning, however, there was a glimmer of hope from China with PPI falling on annualised basis by 4.3% with the availability of more stimulus packages waiting in the wings. Shanghai ended the day in positive territory, with the Hang Seng flat and the NIKKEI down 0.33%.

 

Away from the daily market machinations it was all about HSBC. I have already bored you all to death with my views. The complexity of taxation ventures to suggest that the CPS was finding it very difficult to bring prosecutions that would stick. Tax avoidance to evasion back in 2007/8 in Switzerland was almost opaque! Lord Green, as the HSBC chairman at the time of these financial indiscretions is likely to come under the cosh from all quarters, particularly as he received severe criticism from the US authorities for not heeding a warning over money laundering issues in Mexico. Margaret Hodge will lead the charge in her capacity as Chairman of the Public Accounts Committee for an explanation from Lord Green. Mrs Hodge said yesterday “Either he didn’t know and he was asleep at the wheel, or he did know and he was therefore involved in dodgy tax practices. Either way, he was the man in charge and I think he has got really important questions to answer.”  This issue is largely historical. HSBC’s Private Bank has changed in culture and in the manner it does business. It has significantly fewer clients. Tighter regulatory controls are in and I suspect Chairman Flint & CEO Gulliver are on top of the situation. Nonetheless HSBC shares have lost 3% in the last two days.

 

Talking of tax, it appears that Ball Corporation which has tabled a £4.3 billion takeover for ‘tin-can’ maker Rexam is not averse to a bit of creative tax accounting – topical, if nothing else. The NIESR yesterday raised its growth target for 2015 for the UK from 2.4% to 2.7%, believing that the drop in the price of oil could be very constructive for the economy. UBS posted results which may have been flattering thanks to a tax credit. Investors took the stock down 3% in early trading. There were satisfactory efforts from ICAP, Millennium Copthorne, Babcock International and Bellway. Tui Travel, post its merger in Germany, saw the loss for travel narrowed by €12 million to €149 million. We wait on SAB Miller’s results in an hour or so.

 

UK companies posting results this week – Wednesday – ARM HOLDINGS, RECKITT BENCKISER, ZOOPLA, QINETIQ, HOME SERVE, DUNELM, TULLOW OIL, MANCHESTER UNITED, THOS COOK Thursday – C&W, INFORMA, IMPERIAL TOBACCO, RIO, SHIRE (Credit Suisse, Commerzbank) Friday – ANGLO AMERICAN, ROLLS ROYCE, SEVERN TRENT, VIRGIN MEDIA

 

US companies posting interim results – Tuesday – STARWOOD HOTELS, DEANS FOOD, COCA-COLA, REYNOLDS AMERICAN, Wednesday – PEPSICO, TESLA, CISCO SYSTEMS, TIME WARNER, Thursday – KELLOGG, HOSPIRA, GROUPON, KRAFT FOODS.

 

 

David Buik – market commentator

 

Panmure Gordon & Co

 

+44 (0)20 7886 2775 – mobile – 07788 144 877

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom  www.panmure.com

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