TODAY’S FAYRE

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

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