Monthly Archives: March 2015


TODAY’S FAYRE – Tuesday 31st March 2015


 “I walk and wonder To hear the birds sing,

Without you my lady How can there be Spring?

I see the pink blossoms That slept for a year;

But who could have woke them,

While you were not near?


Birds sing to the blossoms;

Blind, dreaming your pink,

These blush to the songsters,

Your music they think.

So well had you taught them,

To look and to sing;

Your bloom and your music;

The ways of the Spring.”


Isaac Rosenberg – soldier & poet – 1890-1918


The cricket world cup was a momentous competition – just the most exhilarating cricket played except for the final, when sadly Australia out-gunned New Zealand in every department of the game. It was universally agreed that Mitchell Starc was the player of the tournament. What a transformation in three years from a ‘wild & woolly’ quick for Yorkshire and occasionally Australia to the main strike bowler for his country.


However my player of the tournament was unequivocally New Zealand’s Brendon McCullum.  Not only was he an inspirational leader, but he was also the most effective swashbuckling bludgeoning batsmen, who could turn a game in five overs. It was amazing that a country of 4 million people was in a position to win both the cricket and Rugby world cup in one year – A phenomenal effort.  And where was England with 50 million people?  I thought we were playing a different game, we were that bad! The entire management of the ECB and the England coaching staff needs replacing.  We need a ‘Jason Gillespie’ or a ‘Tom Moody’ that all the players can respect and look up to.


I disagree with Andrew Marr that Jeremy Paxman’s tortured and angry disposition spoilt the separate interviews of the PM and Ed Miliband. The public is heartily sick of bland interviews with the same old claptrap being trotted out day after day. JP gave us a break from the daily grind of political platitudes. It was terrific unexpected theatre which the two party leaders did not expect.


Yesterday was a strange. UK equities dealt well with end of year window dressing for the end of the tax year. The FTSE 100 embraced the vagaries of investors’ whims, taking them in their stride. The FTSE ended the day up 36 points at 6891. There was sufficient interest in a number of issues to keep punters on their toes. Was there really any chance of nailing down a deal with Iran on nuclear activity? Many thought so, but to me it looks far from nailed on. Over at Panmure it was media shares that captured our clients’ imagination with Pearson, WPP, ITV, Reed Elsevier and Sky all attracting buyers. Traders enjoyed the ASOS/Net-a-Porter M&A rumours. Patient investors got their just deserts from Quindell, who sold its service arm for £637 million to Salter & Gordon – share up 9.45% towards the end of the day, having initially been up 30%.


Mining stocks were better in the hope that China would introduce more stimulus packages, but the charge to higher ground was very limited! Kingfisher failed in its attempt to add M Bricolage to its portfolio in a £275 million abortive attempt. Kingfisher posted a 7.5% fall in profits to £675m for last year, which has been a torrid one for this DIY titan, thanks to the inertia surrounding the French economy. 60 B&Q stores will be closed (1/6th) plus several Casterama outlets in France. It was also interesting to note that Prada profits, posted yesterday, fell by 28% thanks to a fall in activity mainly in the Eurozone and China/Hong Kong. It just shows that these luxury brands are not immune from economic downturns. Antofagasta has denied it is in discussions with Teck Resources about a potential merger – a Canadian/Japanese joint venture. In this last quarter we have seen a 21% increase in M&A activity globally on last year’s effort. Deals to date total £550 billion in value.


The Street of Dreams suffered from indigestion last month, failing to put together two consecutive days of gains. However yesterday, despite consumer spending data being benign on Friday, encouraging news on Treasury spending and wage increases plus another wave of drug/healthcare M&A activity saw Wall Street select another gear! The DOW added 1.24%, the S&P 500 1.22% and the NASDAQ 1.15%. There was a general rally with oil, retail and drugs enjoying the spring sunshine in beautiful downtown Manhattan. UnitedHealth announced its intention of spending $12.8 billion buying Catamaran. Still there is that feeling that the next quarter’s earnings may not be great. Some think they could fall by 4%.


This morning the Shanghai Composite and the Hang Seng enjoyed a decent run on the rails adding about 0.5% at lunchtime thanks to China offering a window for easy mortgage lending. Conversely concern about Japan’s listless economy saw the NIKKEI surrender 1% by the close.


This morning Phillips confirmed that it had sold its lighting business for $2.8 billion. Thos Cook posted an encouraging trading statement and Mitie disappointed with its effort. Wonderful news from Honda this morning that an extra £200 million will be spent on expanding its business in Swindon. Well done to the workforce! At 9.30am this morning we expect the ONS to confirm that the UK’s economy is in good shape and that GDP on an annualised basis is running at 2.7%. There is also a wave of EU economic data, which I am happy to pass by. I find myself mesmerised by it.


However the Greek Tragedy still has plenty of mileage in it. Greece may run out of funds by 20th April 2015. Is Russia Greece’s last hope of survival, until it comes to some agreement with the EU can ever be agreed? Tsipras is struggling in his attempt to juggle his electorate’s requirements as well as the EU’s. Frankly he has no chance. Greece is broke. The EU, if they want Greece to stay must swallow and digest!


Here are the bold facts – Athens may not have enough cash to meet its immediate obligations.  But even if it does, it needs to repay €450m to the IMF on April 9th.   Two Greek Treasury bills totalling €2.4 billion mature on April 14 and April 17.  Most of this debt is sitting in Greek banks, which have been rolling over these bills with emergency funding obtained from the ECB, rather than demanding repayment from the Greek government.  But these two upcoming bills are different because at least €500 million is owed to investors outside Greece who are going to ask for their money back. There has to be an ending to this shenanigans; otherwise everyone loses whatever credibility it ever had. I still think Greece would eventually be better off outside the EU!


This week’s UK results – Wednesday – FIRST GROUP, EVRAZ, ASOS, Thursday – M&S (TS), DUNELM, BOOKER GROUP, TATE & LYLE

ECONOMIC DATA – Thursday – Non-Farm Payrolls

US companies posting interim results – Friday – RITE AID, MICRON TECHNOLOGIES


David Buik – market commentator


Panmure Gordon & Co



David Buik

Market Commentator


+44 (0)20 7886 2775

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



Even the idea of a long tortuous election campaign failed to quell even a modicum of enthusiasm for share geeks today. I felt so sorry for Lord Michael Howard having to soak up a surfeit of arrogance from Ken Livingstone and Lord Ashdown, but I suppose that is just part of his day to day agenda! Even though Mr Miliband was immensely successful in upsetting my equilibrium first thing this morning with condescending twaddle over business and its relationship with the EU, hard-nosed market makers paid not a ‘jot’ of attention to his shallow platitudes and were happy to take the market up 56 points to 6908 at 10.20am this morning on the back of improved sentiment in New York thanks to Consumer spending rallying and the ‘follow through’ in Asia. Even Japan’s industrial production disappointing data failed to dull enthusiasm. Volumes were marginally better than derisory. What makes me feel so uncomfortable is the fact that so many people are away on holiday. Yes, I have heard of technology, social media and communications but business is trusting providence by extracting the ‘Michael’ vigorously!


Oils were strong with BP +1% and Royal Dutch Shell +1.25%. Drugs played more than spear-carrying roles – Astra +1.25%, GSK +1.75%, though Shire was flat in the wake of Friday’s frenetic activity. Banks were small ‘up’ though the interest was limited and will remain so until the stress test criteria posted at 10.30am has been digested. The mining sector was uninspiring – up an average of 0.5%.


It was the media sector that caught fire! – DMGT +1.25%, ITV +1.5%, Sky +0.2%, Pearson +2.25% and WPP +1.5%. Of those companies that reported results – COMPASS was up just 0.9%. Despite great results NUMIS and CENKOS ‘travelled and arrived’ and were only up 0.25%. The ‘yellow jersey’ went to QUINDELL – up 11.9% at 149.5p, having initially been up 30% at 180p on news of the sale of its service arm for £600k+.


TODAY’S FAYRE – Monday 30th March 2015


 Sombre the night is.

And though we have our lives, we know

What sinister threat lies there.

Dragging these anguished limbs, we only know

This poison-blasted track opens on our camp – On a little safe sleep.

But hark! joy – joy – strange joy.

Lo! heights of night ringing with unseen larks.


Music showering our upturned list’ning faces.

Death could drop from the dark As easily as song –

But song only dropped,

Like a blind man’s dreams on the sand

By dangerous tides,

Like a girl’s dark hair for she dreams no ruin lies there,

Or her kisses where a serpent hides.”


Isaac Rosenberg – soldier & poet – 1890-1918


I choked on my cup of ‘Assam’, when I read the FT’s headline this morning – “Miliband woos business bosses with warning over EU exit risk.” That comment in isolation might be a sensible observation. However since when has Mr Miliband ever been the standard bearer for business in this country? When it comes to business we rarely hear or see him trumpeting its cause and normally he likes to hide himself under some bushel.


Mr M has a reputation for disliking business folk; so apart from the headline, I suspect business acolytes will give him a very wide berth coming in to the election. If Mr M were to head a coalition, one shudders to think how many SMES will have their aspirational lights turned out! SMES are the future of this country and I fear that under a Labour coalition, their needs may just end up being a far cry from the wilderness. With confirmation that one in eleven people are starting a new small business, incentives and help are a prerequisite. In passing we should remember he was a disastrous Energy Secretary and still hasn’t learned from the error of his ways – freezing energy costs!! Whatever next?


This missive will be brevity personified, having vented my spleen on Sunday. In the small hours we learned that Japan’s industrial production had fallen by 3.4% in February. It looks as though the aggressive implementation of QE is having little or no effect. With deflation staring Japan in the face, there seems little likelihood that demand will pick up unless wages start to increase. I shall not be holding my breath.


At 10.30am the Bank of England posts the stress tests, which are likely to become more draconian, thus requiring banks to raise more capital to meet the criteria. Standard Chartered, because of its recent problems and its truly international stance, may have its collar felt by the authorities to keep up their capital requirements. Bill Winters, the new CEO will know that. We also await mortgage applications and unsecured credit growth, which may have risen by as much as 6.1%. Panmure’s senior economist Simon French is also of the opinion that annualised growth for the UK will be maintained at 2.7% tomorrow.


Companies to watch this week – SERCO – Will shareholders approve rescue plan including a £555m rights issue? – RSA – Cevian Capital with Lord Myners at the fore will be keeping CEO Stephen Hester up to his work as this insurance titan continues to struggle. MONDELEZ INTERNATIONAL – post the Kraft/Cadbury merger in 2009, may exercise its rights to sell Philadelphia cream cheese for $3 billion. INMARSAT – is having ‘pow-wows’ with Facebook and Google to improve internet access. SHIRE – keep an eye on this drugs titan to see if rumours about a ‘tie-up’ with BioMarin, is no more than gossip. MARKS & SPENCER – Will Thursday’s update confirm that ‘merchandise’ sales have improved. Will they be flat?


THURSDAY – NON-FARM PAYROLLS – It is expected that 244k jobs will have been created in March with unemployment remaining at 5.7%.


COMPASS GROUP posted an organic revenue growth of 5.5% with margins improving 10bp. There was a positive currency impact – Full Year view remains positive. NUMIS SECURITIES and CENKOS posted much better than expected results with significant M&A earnings.


This week’s UK results – Monday – COMPASS GROUP, Tuesday – KINGFISHER, MITIE, THOS COOK (TS), Wednesday – FIRST GROUP, EVRAZ, ASOS Thursday – M&S (TS), DUNELM, BOOKER GROUP, TATE & LYLE

ECONOMIC DATA – Thursday – Non-Farm Payrolls

US companies posting interim results –Monday AAR, Friday – RITE AID, MICRON TECHNOLOGIES


David Buik – market commentator


Panmure Gordon & Co


David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Sunday 29th March 2015


You are blind like us.

Your hurt no man designed,

And no man claimed the conquest of your land.

But gropers both through fields of thought confined

We stumble and we do not understand.

You only saw your future bigly planned,

And we, the tapering paths of our own mind,

And in each other’s dearest ways we stand,

And hiss and hate. And the blind fight the blind.

When it is peace, then we may view again

With new-won eyes each other’s truer form And wonder.

Grown more loving-kind and warm

We’ll grasp firm hands and laugh at the old pain,

When it is peace.

But until peace, the storm

The darkness and the thunder and the rain.”


Charles Sorley – soldier & poet – 1895-1915


I very much doubt that in modern day times there has been a more powerfully written play that Arthur Miller’s “A View from the Bridge.” Set in New York’s Brooklyn Harbour in the 1950s, respected longshoreman Eddie Carbone lives with his wife and niece in a tight knit Italian community bound by strong moral codes of justice and honour. When Eddie and his wife welcome two cousins into their home, Marco and Rodolpho, recently arrived from Sicily, the balance of Eddie’s family relationships is dangerously rocked. As the young men seek work, wealth and security they find themselves in a threatening country shimmering with the mirage known as The American Dream.


One of the very early productions in New York in 1955 included Robert Duvall as Eddie, Susan Anspach as Catherine and Jon Voight as Rodolpho! The current production directed by Ivo van Hove is an outstanding adaptation with Mark Strong as Eddie and Nicola Walker as his wife, Beatrice. There was also an excellent production at The National Theatre in 1987 at the Cottesloe Theatre It was directed by Alan Ayckbourn and Michael Gambon gave an acclaimed performance as Eddie. In 2009 Ken Stott gave it his best shot, but he never had the presence of a 17 stone stevedore from Brooklyn. There have been several attempts to make a film of this ‘magnus opus’, but none have ever made the cinema.


In view of the number of outstanding financial, political and economic imponderables, it is hardly surprising that equity markets desisted from too many acts of blind faith in support of their cause. Greece is a mess and the EU together with Tsipras and Varoufakis are running around like headless chickens refusing to smell the coffee – the realities of life. Talk of an increase in VAT is just rubbish, even as a temporary solution! Growth in China is hardly at its most virulent. QE seems to be ignominiously failing in Japan, illustrated by dispiriting inflation data. To me, above all else the EU’s recovery seems relatively moribund and the outlook for corporate earnings growth in the US look less rosy that a few months ago. Also let’s not forget the geopolitical issues in Russia and the Middle East (just Yemen so far!!) and the volatility of oil prices.


The FED’s Janet Yellen now seems to be suffering from a dose of Greenspan ‘geek talk’ – in other words she has become hesitant in regard to the timing of any rate hike. This is not really very surprising considering that some of the economic data such as Durable Goods have disappointed and also there is a feeling that earnings in the 3rd and 4th quarter may fall short of expectations.


Last week the S&P 500 eased by 2.3%, the FTSE by 2.4%, European stocks by 2.1% and the Nikkei by 1.4%. It is interesting to note that it is a month since the Street of Dreams put together a 2 day+ rally together. US Consumer spending data increased 4.4% in the 4th quarter on last year, which saw the day’s loss dissipate from measurable losses earlier. The DAX has had a phenomenal run – up 19% in a year, 36% since October and 20% since the start of the year. Surely that is giving too much credence to QE, which is 6 years too late and maybe not enough of it!


Despite sentiment concerns there was still plenty of M&A activity to titillate investors’ imagination – Shire rumoured to be tying up with BioMarin after the successful purchase of NPS Pharma; the gargantuan $80 billion merger HJ Heinz/Kraft Foods, promoted and financed by Warren Buffett and 3G Capital; the possibility of Intel consuming Altera in a $10 billion deal. On a small scale Kingfisher is likely to complete its Bricolage E275 million acquisition. For a smaller broker Cenkos had a great week. The acted as advisor to British Car Auctions £1.2 billion sale to Haversham and an extra tranche of shares for AA. These deals may have created the best part of £30 million of commission. Well done to Jim Durkin and his team!


On the domestic front, the market experienced a fair bit of volatility. SuperGroup rose like the phoenix from the ashes. After that desperate suicide air disaster the likes of IAG, IHG and easyJet felt the temporary wheels of pain across their back. Oil stocks tested investors’ resolve and the mining sector has enjoyed better weeks. The Chancellor announced that a further £500 million worth of share in Lloyds Banking Group had been sold leaving the taxpayer with less than 21%. RBS sold another 24.7% of its stake in Citizens Bank. The Cooperative Bank halved its losses allowing CEO Niall Booker to scoop up an emolument package of £4.6 million. The Bank of England’s Governor Mark Carney and his deputy Ben Broadbent were at odds with Andy Haldane, the BOE’s economists, on where interest rates were next heading. They believe they will eventually head north. Alliance Trust’s CEO, Catherine Garrett- Cox Elliott wasn’t expecting former Non-Executive director Tim Ingram to write a visceral attack on the performance of the trust and her leadership, which might play in to Elliott’s hands.


On Monday we may find out that stress tests for banks supervised by Mark Carney and Andrew Bailey have become more onerous. FX, equity prices and geopolitical pressures will need to be accounted for – not conservatively. Last time only the Cooperative Bank failed. The acquisition of Sir Philip Green’s BHS by Retail acquisition, headed by Dominic Chappell for £1 looks to have had an interesting history and parentage going back. We read in the Telegraph today that Pimco believes that long term the EU cannot survive with the high level of unemployment and low growth – a recipe for a crisis and eventual disaster! After 15 quarters of falling sales M&S on Thursday is expected to post flat sales for the previous 4 months, after Marc Blland posted a 5.8% drop in total merchandise sales in January. The UK banks believe that the increased levy of £5.3 billion – up £900 million will damage regional job revival. If that is the case, God help us if Labour win in May – tin hat time!


Ahead of the UK election and in the face of difficultues in the Middle East, investors may just baton down the hatches. Volatility may prove to be quite virulent!


This week’s UK results – Monday – COMPASS GROUP, Tuesday – KINGFISHER, MITIE, THOS COOK (TS), Wednesday – FIRST GROUP, EVRAZ, ASOS Thursday – M&S (TS), DUNELM, BOOKER GROUP, TATE & LYLE


US companies posting interim results – Monday AAR, Friday – RITE AID, MICRON TECHNOLOGIES


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


TODAY’S FAYRE – Thursday 26th March 2015


“You did not come,

And marching Time drew on, and wore me numb.

Yet less for loss of your dear presence there

Than that I thus found lacking in your make

That high compassion which can overbear

Reluctance for pure loving kindness’ sake

Grieved I, when, as the hope-hour stroked its sum,

You did not come.


You love not me,

And love alone can lend you loyalty; – I know and knew it.

But, unto the store

Of human deeds divine in all but name,

Was it not worth a little hour or more

To add yet this: Once you, a woman, came

To soothe a time-torn man; even though it be

You love not me.”


Thomas Hardy – author & poet – 1840-1928


‘Suite Francaise’ was virtually panned by the press – unfairly so in my opinion – beautifully filmed as a joint production by BBC Films and Canal + with a good cast headed by Kristin Scott-Thomas, Michelle Williams with a really steely though sensitive performance from Ober-Lieutenant Bruno von Falk. This film is a love story in war-ravaged France, involving Lucile (Williams), who initially tries to ignore Bruno von Falk, the handsome and refined German officer staying with them. But soon, a powerful love draws them together and leads them into the tragedy of war. It was certainly worth the price of admission.


Dear Friends – even if you cannot be bothered to read this missive, please open this strap line and just look at the map, which illustrates the way Shiite Muslims surround the Gulf States – UAE, Oman, Bahrain, Kuwait and Qatar. If it all goes off, despite current foreign policy, it might be folly to suggest the US won’t come back for unfinished business in the Gulf. Don’t expect Saudi Arabia to step up to the plate and ‘Uncle Vlad’ will be laughing like a hyena!



It is 26 days since the Street of Dreams put together a two-day rally! Consequently the no sale sign went on Wall Street yesterday resulting in an organised ‘sell-off.’ The DOW lost 1.62%, the S&P 500 1.45% with the NASDAQ easing by 2.37%, with semi-conductors and biotech being the recipient of a good larruping, with Intel, Nvidia, Micron Technology, Texas Instruments and Biogen amongst those to feel the wheels of pain across their back. In 2014 share buy backs in the US tech sector totalled $122 billion, which many feel went some way to bolstering the bold rally of the sector. I am naturally of a nervous disposition and somewhat cynical. Due to the fact that the FED has portrayed such a nebulous outlook towards interest rate hikes, I am beginning to feel that quarter 3 and 4 for results may not be stellar. This thought process seems to have some momentum behind it.



Even the gargantuan $75 billion merger of Kraft and HJ Heinz, orchestrated by Warren Buffett and 3G Capital, with both investors injecting a further total of $10 billion, failed to provide a fillip to the sagging sentiment that prevailed on Wall Street. Though Buffett was happy to endorse this initiative, there were plenty out there, which feel that this is the wrong time for a food merger. Many expect one of the rating agencies to downgrade Kraft. Notwithstanding that on top of the 14.6% after hours rally on Wednesday, Kraft ended the session up 35.6%!! So someone is on to a winner! The fact that Saudi Arabia organised the bombing of insurgent gorillas in Yemen, with Yemen’s acquiescence yesterday, did not trigger a change from the prevailing negative sentiment.




Markets in Europe were beginning to have acute indigestion, with valuations in places starting to look rich. So the FTSE eased a tad yesterday – down 28 points at 6990. This morning the momentum towards temporary disenchantment has gathered pace. At 9.30am the DAX had shed 263 points but is still up a ludicrous 19% and 32% since October. The FTSE was 108 down at 6893. Banks were out of fashion – -1.7% on average – despite the Chancellor Osborne selling another tranche of Lloyds shares (£500 million) taking the taxpayer’s stake below 21% and the fact that RBS seems to have gleaned $3.7 billion for its final stake. Mining shed 1%, retail looks weak and some leisure stocks were trolleyed – easyJet -5% and IHG -5%. This was not surprising in the wake of the Yemen bombing and the plane crash. Asia was not on good terms with itself this morning in the wake of New York’s lack lustre performance with the NIKKEI losing 1.4% and the Hang Seng finishing just below the Plimsoll line -0.13%.




It was pleasing to see that Dubai sold its remaining 17% stake in the LSE, which it bought in 2007, for £1.5 billion. Xavier Rolet has done a superb job as CEO of the LSE. The share price was down 9.6% at 22.94 after the placing this morning, but is still up over 30% this year so far! Remember Keith Hellawell? He was a chief Constable who became Tony Blair’s ‘Drugs Baron.’ Now he is chairman at Sports Direct and he took some stick from Ian Davidson MP on a Commons Select Committee on Sports Direct’s handling of the demise of USC. The MP accused the company of shafting taxpayers. Hellawell put up a robust defence of the company. Politicians need to remember that life is not a philanthropic society. Ashley outs bread on the table for thousands and many draw bonuses of between £20k and £35k for reaching sales and profits targets.



There was a good trading update from AMEC, a slightly disappointing one from DMGT, with an uncertain earnings outlook and a great recovery from SuperGroup, which will start paying a dividend – up 6.5%.  


David Buik – market commentator


Panmure Gordon & Co


David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Wednesday 25th March 2015


“AS evening shaped I found me on a moor

Which sight could scarce sustain:

The black lean land, of featureless contour,

Was like a tract in pain.

“This scene, like my own life,”

I said, “is one Where many glooms abide;

Toned by its fortune to a deadly dun– Lightless on every side.



I glanced aloft and halted, pleasure-caught

To see the contrast there:

The ray-lit clouds gleamed glory; and I thought,

“There’s solace everywhere!”

Then bitter self-reproaches as

I stood I dealt me silently

As one perverse–misrepresenting

Good In graceless mutiny.



Against the horizon’s dim-descernèd wheel

A form rose, strange of mould:

That he was hideous, hopeless, I

could feel Rather than could behold.

“‘Tis a dead spot, where even the light lies spent

To darkness!” croaked the Thing.

“Not if you look aloft!” said I, intent

On my new reasoning.

“Yea–but await awhile!” he cried.

“Ho-ho!– Look now aloft and see!” I looked.

There, too, sat night: Heaven’s radiant show

Had gone. Then chuckled he.”


Thomas Hardy – author & poet – 1840-1928


The ordinary holiday traveller will be scratching his head as to why three Airbus A320 have come down from the skies in a relatively short space of time – Perpignan, the Air Asia crash and yesterday the German carrier claimed 150 lives in the French Alps. Yes we need to find out the content of the black boxes for more data and information, but these disasters are happening too regularly for my liking. Do we need some reassurance from Airbus, whose shares dipped 2% yesterday, that all is well? However, I must confess it strikes me that keeping a plane that is 24 years old in service is perhaps trusting providence too much. Ironically shares in IAG, EasyJet and Ryanair all finished the session in positive territory!


What a sensational cricket outfit the Black Cats (NZ) ODI side are, with their swashbuckling leader Brendon McCullum to the fore! Yesterday’s victory against South Africa was pulsating and it may be folly to think that they are not more than capable of beating Australia or India in the final at the MCG on Sunday 29th March 2015.


Equity markets seem to have run out of steam pro-tem. The earnings season is all but over; large IPOS are scarce and markets are preoccupied with oil and currency prices and their respective volatility. Add to that cocktail of excitement domestic and geopolitical issues and who can blame investors for taking stock and ruminating over the future. Yesterday on the Street of Dreams, despite new House Sales hitting a 7-year high and consumer prices rising more than anticipated last month the performance of the three main indices was rather lethargic and lack-lustre with the DOW easing by 0.58%, taking the S&P 500 down by 0.61% and the NASDAQ by 0.32%.


Then after hours rumours of a large acquisition involving Kraft Foods hit the headlines. Kraft’s share price shot up like a grilse -14.6%, thanks to a perceived, though not confirmed bid by Brazil’s 3G Capital of $40 billion for this giant food conglomerate. In 2013 3G bought HJ Heinz. Many of you will recall the rather tawdry takeover by Kraft of Cadbury Schweppes in 2009 for £10.2 billion. Irene Rosenfeld, Kraft’s CEO behave rather duplicitously in promising few redundancies, which she reneged on. Rosenfeld was replaced by John Cahill at the end of last year as CEO. Food mergers seem to becoming gargantuan in size. Not that long ago, Mondelez and DE Masters 1753 merged to form the biggest coffee shop in the world. – Jacobs, Tassimo, Douwe Egberts and Senseo amongst the brands – with total revenues of $7 billion per annum.


We also heard of a defection from New York to Silicon Valley – Morgan Stanley’s CFO Ruth Porat is returning to her native California, educated at Stanford University, to become Google’s CFO. This is a great coup for Goole. Porat has been very focused at MS on the tech and financial sectors. She also advised the government on the re-financing of Fannie Mae and Freddie Mac and maybe wasn’t a million miles away from becoming Treasury Secretary.


In general it was a fairly muted session in Europe yesterday with the DAX losing 0.8% and the CAC 1%, thanks to a negative sentiment in regards to a sensible outcome to Greece’s financial plight. Greece may run out of money by 20th April and its high time the EU just swallowed Greece’s problem or started organising a satisfactory and controlled exit. The FTSE fared rather better adding nearly 18 points at 7065, with the likes of Diageo, Reckitt Benckiser and Unilever providing some of the ballast. Wolseley and AG Barr, who posted numbers yesterday have enjoyed better sessions in their time – down 2.5% and 5% respectively.


This obsession that Vince Cable has for female directors representing at least 25% of FTSE 100 boards is certainly succeeding – 23% to date with only 17 more to meet his criteria. The current figure is 263 women directors. All I can say is, if all FTSE directors are female they must have been appointed on merit! Everyone would endorse that, but to have a set minimum requirement must be nonsense! The judgement of women is every bit as good as mens’ but ‘force majeure’ is not a good idea!


HSBC set down its stall to put up Chinese walls between retail and investment banking by agreeing to move/relocate/create 100 retail banking jobs in Birmingham to Canary Wharf’s loss. George Osborne preened himself like a peacock! However, as is always the case here in Old Blighty, to correct wrong doings, we always over compensate. We have very little investment banking left here in the UK. We will rue this hasty decision sooner rather than later – RBS all but gone, Barclays thinned out and HSBC likely to concentrate its efforts in Asia and New York – a great shame.



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



Today was just the sort of trading day I try and avoid like the plague. A day when just a few companies of real clout posting numbers and none involved in M&A activity, trying to read Yellen’s and Fischer’s tea leaves re a rate hike in the US plus a fantastic zero inflation rate for February in the UK – great for the consumer and garbage for business. Then all the sheep went’ baaaaaaaa’ when decent PMI numbers for the EU came out – everyone conveniently forgetting that they rose from a very low base, eventually resulting in the DAX adding 1% and the CAC 0.8%. The Euro subsequently rallied to its highest level for a week – Whoopee! Dementia conveniently set in when the subject of the Greek bail-out was mentioned in despatches.


Of those companies that reported Wolseley closed -2.5% and AG Barr -5%. Centrica recovered a tad from its initial loss of 2% on a Deutsche downgrade to close down 0.75%. After the air crash Airbus lost just 2% and IAG, easyJet and Ryanair ‘cocked a snook’ at market perception – all three gained – +2.5%, +0.8% and +0.2% respectively! It was down to the likes of the old perennials such as Diageo, Reckitt Benckiser, Unilever and BATS to fly the flag of solidarity!


TODAY’S FAYRE – Tuesday 24th March 2015


“Between us now and here –    

Two thrown together

Who are not wont to wear    

Life’s flushest feather –

Who see the scenes slide past,

The daytimes dimming fast,

Let there be truth at last,    

Even if despair.


So thoroughly and long    

Have you now known me,

So real in faith and strong    

Have I now shown me,

That nothing needs disguise

Further in any wise,

Or asks or justifies    

A guarded tongue.


Face unto face, then, say,    

Eyes mine own meeting,

Is your heart far away,    

Or with mine beating?

When false things are brought low,

And swift things have grown slow,

Feigning like froth shall go,    

Faith be for aye.”


 Thomas Hardy – poet & author – 1840-1928   


David Cameron announces he will not stand for a third term. Was that a strategically a good time to make such an announcement? The Spectator’s Fraser Nelson makes salient comments


It’s rare but every now and again you come across a person who knows his subject inside out! Yesterday I met such a person and his subject was oil, gas and energy. What he did not know about everything from exploration to distribution and most important of all the politics of energy both globally and domestically probably was not worth knowing.


Firstly he terrified me by telling me that Ed Miliband’s policy of freezing energy prices and dispensing with carbon emissions by 2030 would actually end up costing each family about £1500 a year on top of what they already pay. Renewables are a totally unrealistic alternative. Until recently, when George Osborne called for an audit of decarbonising energy, no such audit has ever taken place. Going ‘Green’ or the ‘renewable route’ has been conservatively estimated to cost £500 billion. That policy is nothing more than daylight robbery of the taxpayer. Wind mills are not only a blight on the landscape they are also hopelessly expensive. However off-shore windmills have some future. Coal is still responsible for about 30% of energy and gas for 40% of energy. Contrary to public perception, neither the government nor the opposition will countenance using gas to its full capacity, which is relatively cheap, though not in synch with the ‘sandal/designer stubble brigade’ way of thinking, it is also clean! Whatever anyone says the jury is still out over ‘climate change!’ In passing the UK is not remotely reliant on Russia for its gas. 40% of our imported gas comes from the friendliest of nations – Norway!


The Department of Energy was always held in very high regard until Tony Blair, in his infinite wisdom and majesty, decided to trash it, by changing its culture in to a climate change think tank, utterly condemning the massive importance of oil to the future of world growth almost into ignominy!!


Now to oil! Let’s start with some basic data. In 1985, 4.8 million barrels were produced in a day at $9 each! At that time Asia was a negligible user; Asia and China are of pre-requisite importance! Today 93 million are produced, the price having dropped from $115 to circa $50 a barrel. The North Sea has dropped from 3 million to 1.5 million a day. Investment in North Sea oil has collapsed and at the current level of production it is unlikely that exploration will increase, despite tax cuts imposed by government. Successive global governments have dangerously milked this most important of all resources.


There is no doubt that Saudi Arabia, Qatar, Kuwait and the UAE have manipulated the price of oil down in response to the US bragging about its shale based production head to towards self-sufficiency. Needless to say Russia is suffering from oil having dropped to savagely as well as fall-out from sanctions. When the Middle East (SA) has made its point, crude oil is likely to rise in price probably back to $75 a barrel in a year! The demand for oil has not dropped that much; this is lethal politics at its most virulent. There is little doubt that the violent movement in oil prices between 2007 and 2010 contributed every bit as much to the recession as did sub-prime lending, banks and the credit crisis. Government needs to understand that fact. I am astonished that Ed Davey, the opposition do not want to listen to the facts surrounding the future of the oil and energy sectors, just concentrating their efforts to get re-elected with popular policies. It is also becoming clear that the US is increasingly becoming isolationist in its outlook, looking for its own economy and the FED to over influence world opinion. As far as the US is concerned, it has done its best to trash BP, HSBC, Standard Chartered, BAE Systems etc. Best friends? I have my doubts!


Yesterday mining stocks and a good feeling enabled the FTSE 100 to consolidate above the 7k threshold. New York seemed to be suffering from inertia with the 3 main indices closing just below the Plimsoll line. In Asia this morning the worst HSBC PMI data for 11 months emanated from China, which took some gilt off the ginger-bread! FTSE 100 was up 5 points at 7045 at 9.15am. Wolseley and AG Barr posted decent numbers but profit takers were initially in the ring. All the old random favourites have popped their heads above the parapet – Diageo, Reckitt Benckiser, Unilever etc to the fore!




David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Monday 23rd March 2015


I said to Love,  “It is not now as in old days 

When men adored thee and thy ways     

All else above;  Named thee the Boy, the Bright, the One 

Who spread a heaven beneath the sun,”     I said to Love.

 I said to him,  “We now know more of thee than then; 

We were but weak in judgment when,     

With hearts abrim, 

We clamoured thee that thou would’st please  Inflict on us thine agonies,”     

I said to him. 

I said to Love,  “Thou art not young, thou art not fair, 

No faery darts, no cherub air,     

Nor swan, nor dove 

Are thine; but features pitiless, 

And iron daggers of distress,”     I said to Love. 


“Depart then, Love! . . .  – Man’s race shall end, dost threaten thou? 

The age to come the man of now     Know nothing of? – 

We fear not such a threat from thee; 

We are too old in apathy! 

Mankind shall cease.–So let it be,”     

I said to Love.”


Thomas Hardy – poet & author – 1840-1936


I think I speak for many in saying how deeply offended I am by the idea that the supremely arrogant and duplicitous former SNP leader at Hollyrood, Alex Salmond, could hold the balance of power and eventually the UK’S political destiny in the palm of his hand, if Aberdeen elect him as their MP at Westminster.

I seem to make the same rather hollow, enthusiastic headline grabbing comments every week – Another momentous week for markets! I should not have to apologise for the fact that last week was just that! Thanks to a clever well tinkered Budget, that did not deter from the government’s resolve to cut debt and thin down the public sector, the FTSE ended the week at its highest level since inception in 1984, when the FTSE changed its constitution from 30 stocks to one hundred – 7022!  Markets were also given some considerable assistance by the FED, whose tone at last week’s two day meeting was rather more dovish than many had expected. So bond yields fell quite sharply with 10-year Treasury yields falling below 2% (1.97%), Gilts to 1.52% and German Bunds to a ludicrously low 0.18%, with Greek bonds rather chillingly and not surprisingly rising above the 11% threshold. With the cost of money remaining at derisory levels, equities were an inevitable beneficiary. It was interesting to note that the ECB’S Mario Draghi was of the opinion that France was probably the greatest transgressors in terms of financial rule breaking.

The Telegraph’s business editor James Quinn captured the imagination of many in an interview with L&G’S Nigel Wilson, who is fearful that the government’s vituperative stance towards the increasing size of the bank levy, may drive banks, if not their business ‘off shore,’

In summary last week, the S&P added 2.87%, the FTSE 4.18%, European stocks by an average of 2.03% and the NIKKEI by 1.59%. The DAX, much of it down to the advent and implementation of QE has added 40% in value since October and 20% this year.  Even taking in to account a 10%+ currency loss! – What a return!

As for the FTSE’S really strong rally towards the end of the week, the prominent sectors such as oil, mining, drugs, utilities, insurance and banks, some aided and abetted by the Budget, were in full spring bloom by Friday. The likes of BP, Shell, AVIVA, L&G, Pru, Vedanta, BHP, Barclays and Lloyds had a decent run on the rails. The purchase of Lloyds’s 50% stake in TSB for a 30% premium by Banco Sabadell brought a little additional colour to the occasion. There may be regulatory and IT issues with this acquisition; time alone will tell.

HOLCIM and LAFARGE seem to have found the key to the kingdom to regenerate interest in its flagging merger with strategic management changes. Shire was popular last week.  As for Lord Wolfson’s comments about the outlook for NEXT, there should be no surprise that his caution took 4.5% off NEXT’S value, but do not forget this retail Titan has rallied by 168% in 3 years. There was considerable ballyhoo over governance issues at Alliance trust and Elliott it’s major shareholder, resulting in Mrs Garrett-Cox appointing more non-executive directors. Much ado about very little, but certainly there were some decent headlines. To alleviate burgeoning costs Tesco announced a £733 million property swap for 21 of its stores, many with British Land.

In the US TIFFANY’S efforts did not meet their acolytes’ expectations, though BIOGEN did over its Alzheimer’s drug, which saw its stock rally by 10% on Friday. The Dollar regrouped a tad last week on news of a benign course for interest rate hikes. China’s CNCC is giving due consideration to a €7 billion takeover of Italy’s tyre manufacturer – Pirelli.
On Tuesday don’t be surprised if inflation falls just short of deflation for February – down from 0.3% to 0.1%, which would put any idea of rate cut in the summer on hold until at least October! In fact we could have deflation in the UK temporarily in June or July!



TODAY’S FAYRE – Friday 20th March 2015




A Rose, in tatters on the garden path,

Cried out to God and murmured ‘gainst His Wrath,

Because a sudden wind at twilight’s hush

Had snapped her stem alone of all the bush.

And God, Who hears both sun-dried dust and sun,

Had pity, whispering to that luckless one,

“Sister, in that thou sayest We did not well —

What voices heardst thou when thy petals fell?”

And the Rose answered, “In that evil hour

A voice said, `Father, wherefore falls the flower?

For lo, the very gossamers are still.’

And a voice answered, `Son, by Allah’s will!'”


Then softly as a rain-mist on the sward,

Came to the Rose the Answer of the Lord:

“Sister, before We smote the Dark in twain,

Ere yet the stars saw one another plain,

Time, Tide, and Space, We bound unto the task

That thou shouldst fall, and such an one should ask.”

Whereat the withered flower, all content,

Died as they die whose days are innocent;

While he who questioned why the flower fell

Caught hold of God and saved his soul from Hell.”


Rudyard Kipling – poet – 1865-1936


The Sky production, filmed in Iceland – ‘Fortitude’ – is becoming just a little too vicious even for me! I have always been up for a bit of gratuitous violence on celluloid but this stuff with bodies not only being torn to shred as well as disembowelled plus clipping off fingers should be a little too rich for most people’s blood. In passing what a wonderful actor Sir Michael Gambon is!


I suppose we could call the latest chapter in this ‘Greek Tragedy’ another ‘Groundhog’ day or another opportunity to kick the can around Le Grand Place in Brussels and down Friedrichstraße in Berlin on Monday. This whole issue is just becoming more of a joke as time marches on – an absolute charade! For a start Germany railroaded Greece in to the EU, when it wasn’t even close to making the financial criteria. Secondly, despite Syriza – the left wing party, who elected PM Alexis Tsipras – wanting no part of austerity and being sufficiently financially illiterate unable to spell ‘tax’ – a word, I hasten to add, with just one syllable, Greece seems desperate to stay within the EU. This current meeting of the EU’s good and the great this time has PMs and Presidents, rather than Finance Ministers. So meetings which lasted until 2.00am, should have resulted in more than statements of intent; not surprisingly it didn’t. It was just waffle without even a semblance of ‘meat and potatoes.’


The EU and the outside world needs to look at the facts. Greece has 11 million people with insufficient numbers employed in industry, manufacturing and commerce. Hell has a better chance of freezing over than Greece has of servicing debt of E240 million, let alone paying it back. The Greek government is currently scrubbing around to find money to pay public servants and keep the country’s infrastructure turning over!


We are all conversant with the fact that if concessions are made towards Greece, Italy, Portugal and Spain will demand similar treatment. The fact remains that if the EU is keen for Greece to stay – Ladies and Gentlemen ‘SWALLOW IT!’ or organise a withdrawal (GREXIT) over a say a 3-year period in a sensible orderly and controlled manner. If 5 years Greece will thrive on a 40% devaluation of the re-introduced Drachma. I respectfully disagree with Chancellor Osborne. The financial fall out with Greece should be controllable. The writing has been on the wall for years over Greece – so if some contingency plans have not been already made by the banks, I have little sympathy. In June 2011 Greek 10-year bond yields were 20.55%. They declined steadily down to 7%+. They now stand at 11.64%. There has been ample opportunity for investors to fill their boots and get out!


It sound patronising, but dear Janet Yellen, the FED chairman! She is beginning to talk in ‘Alan Greenspan FED Talk!’ Call for the Bletchley Park Code book. So ‘Patient’ has gone from the rhetoric but she will not be impatient. Reading between the tea leaves we suspect that the current data will postpone the thought of a June hike for rates in the US. There is talk about September now. Personally if it does not happen this year it will come as no surprise to me. China, despite a re-confirmed GDP target of 7% for this year may disappoint. The EU is hanging in rags and US corporate earnings are threatening unexciting earnings. Wage inflation is key as 2% inflations like the possible zenith of achievement.


Yesterday the FTSE 100 was enjoying the remnants of Euphoria from this so-called ‘sunshine Budget’ in adding 17 points to 6962, having clipped the record of 6982 during the session! Next, after great results eased by 4% thanks to a guarded outlook. However in the last 3 years these shares have rallied by 168% and 15% in the last year – Titfer duly doffed in the direction of Lord Wolfson. European markets were in a nondescript frame of mind! The Street of Dreams, on weaker fuel, Yellen indecisiveness and a softer Dollar saw investors take some risk off the table – the DOW easier by 0.65%, the S&P 500 by 0.41%, though the NASDAQ was up 0.19%. Asian stocks were mixed this morning with the NIKKEI up 0.83% at the close and the Hang Seng down 0.94% at lunchtime.


AutoTrader’s £2.35 billion IPO debut was very successful yesterday– floated from private equity from such activists as APAX, saw a 15% premium on the first day of trading to 275p. Banco Sabadell confirmed its E1.6 billion purchase of TSB at 340p a share. Lloyds will be delighted to get shot of it. Paul Pester will be pleased to hold on to his job. However what a disappointing counterparty as a bed fellow – 4th largest bank in Spain with just E9 billion against Santander E91 billion.




US companies posting interim results – Tuesday – SONIC, CHRISTOPHER & BANKS, Thursday – FRED’S