TODAY’S FAYRE – Thursday 12th March 2015


“Flow down, cold rivulet, to the sea,

Thy tribute wave deliver:

No more by thee my steps shall be,

For ever and for ever. 


Flow, softly flow, by lawn and lea,

A rivulet then a river:

Nowhere by thee my steps shall be

For ever and for ever.

But here will sigh thine alder tree

And here thine aspen shiver;

And here by thee will hum the bee,

For ever and for ever.

A thousand suns will stream on thee,

A thousand moons will quiver;

But not by thee my steps shall be,

For ever and for ever.”


Alfred, Lord Tennyson – poet laureate – 1809-1892


Those who know their NH racing always say the great champion chasers rarely come back from serious injury as good as they were in their hay day – certainly speedsters from the 2 mile division.  And so it was yesterday, with ‘Sire de Grugy’ and ‘Sprinter Sacre’, who were but shadows of their former selves – the latter to be retired thank goodness. The bookies must have had a field day, filling their satchels up with largesse from punters still dreaming of years gone by.  Will we ever learn? As Ruby Walsh said on television – ‘Dodging Bullet’s’ form was fully franked – How right he was!


 Yesterday I listened to Radio-5 live’s excellent Peter Allen and John Pienaar talking about a hung Parliament/coalition with four members of Parliament, who all had their personal views on what might happen on 8th May 2015. Whatever their measured opinions may be, I think we all need to realise that possession is nine points of the law. PM Cameron will not be leaving Downing Street without one hell of a scarp, unless Labour gains an indisputable overall majority. I am less than convinced that is going to happen.


So yesterday ECB President Mario Draghi dragged himself away from the prospect of being engulfed in fruitless talks with Greece and set down his stall on quantitative easing – E60 billion a month facility for EU banks with an overall total of E1.1 trillion. This initiative took the E/$ rate down to a 12 year low of $1.056 (11.5% drop this year), which is good for exports, which only Germany and to a lesser degree France are any good at capitalising on pro-tem. However, holiday makers should be about to stampede in to the Eurozone, with a view to spending their largesse.  The DAX and the CAC responded positively – up 2.6% and 2.4% respectively. Conversely the FTSE 100 only added 18 points to 6721. This rather neutral performance was down to the fact that the Pound remains relatively strong against the Euro and the oil and mining stocks within the FTSE failed to pick up the cudgel and get involved in any mini-dead-cat-bounce!

The session in London yesterday was a non-event. Sadly ‘Dodging Bullets’ success in the Queen Mother Champion Chase seemed to grab everyone’s attention Results from Hikma, Michael Page and Foxton’s were relatively satisfactory, though the latter has seen sales slide in London, thanks to pre-election neurosis. Cairn Energy, thanks to a severe tax claim from the Indian government – rumoured to be £1 billion saw its shares take a bath – down 15.5%. If Sir Bill Gammell was to be in situ, he would not be a happy bunny.


It was good to see Aldermore, one of the new challenger banks with former Barclays executive Philip Monks at the helm, do well in its IPO at the second attempt, with the share price rallying by 10%. I chuckled to myself at Standard City Editor, Jim Armitage’s comments on Robert Jenkins, former investment banking doyen – poacher turned gamekeeper – views on HSBC management – particularly Douglas Flint, the former finance director. They both think Mr Flint should walk the plank, having been in situ when the proverbial hit the fan. Jim never did have much time for banks and sadly I don’t think he’s alone. We should hear news of Shawbrook Bank’s forthcoming IPO today. It looks as though Japan’s Brother Industries will scoop up Domino Printing Sciences for just over a £1billion – a 27% premium to the share price.


Across the pond, after Tuesday’s attempt at a meltdown, equities did their best to regain some poise with all three major indices closing just below the Plimsoll line – DOW -0.16%, S&P 500 -0.19% and the NASDAQ -0.20%. 28 out of the 31 US banks that took the stress test passed with flying colours, which gave the banking sector some impetus yesterday, when the consumer sector was trying to take it in the opposite direction. Goldman Sachs and Morgan Stanley are attempting to implement measurable buybacks.


A weak Yen and the threat of a Chinese rate cut gave some momentum to Asian markets this morning – the NIKKEI close 1.43% to the good and the Hang Seng was up 0.49% at lunchtime.


Wm Morrison’s results were as expected – not very good, but the dividend has not been cut – in fact +5%. Like for like sales down 5.9% ex fuel, profit down 52% and net debt down by £477m to £2.34 billion. David Potts – ex Tesco joins Andy Higginson next Monday – hopefully the show should be back on the road before too long. Home Retail posted a decline in sales in both Argos (-5%) and Homebase (-0.9%) in the last eight weeks, though CEO John Walden has costs under control. ASOS saw sales bounce by 19% in the 3 months to the end of February – UK +27% and International +5% with revenues up 22% in the same period.


UK companies posting results this week – Thursday – WM MORRISON, CINEWORLD, HOME RETAIL, ASOS


 US companies posting interim results – Thursday – MEN’S WEARHOUSE, REVLON, AEROPOSTALE


David Buik – market commentator


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

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


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