Monthly Archives: May 2015


TODAY’S FAYRE – Sunday 24th May 2015

 “All the loud winds were in the garden wood,

All shadows joyfuller than lissom hounds

Doubled in chasing, all exultant clouds

That ever flung fierce mist and eddying fire

Across heavens deeper than blue polar seas

Fled over the sceptre-spikes of the chestnuts,

Over the speckle of the wych-elms’ green.

She shouted; then stood still, hushed and abashed

To hear her voice so shrill in that gay roar,

And suddenly her eyelashes were dimmed,

Caught in tense tears of spiritual joy;

For there were daffodils which sprightly shook

Ten thousand ruffling heads throughout the wood,

And every flower of those delighting flowers

Laughed, nodding to her, till she clapped her hands

Crying ‘O daffies, could you only speak!”

Suddenly with a shy, sad grace


Robert Nichols – poet – 1893-1944


I am delighted but surprised that the EU referendum and the UK’s insistence on renegotiated terms with its European partners is so high on the government’s agenda. Now, of course, that there is no coalition to answer to, these way overdue negotiations with the PM, George Osborne, Sajid Javid, Lord Maude and Michael Gove in the vanguard, we can at least expect some initial fireworks, as demands on many fronts including immigration and excessive bureaucracy are chucked in to the ring for hopefully more than discussion and consideration.


If a push comes to a shove, I am sure the UK will remain in the EU. Whether better terms for our membership will transpire from meaningful talks remains in doubt. Big business and senior politicians will drive the ‘YES’ vote, but I have my concerns as to whether SMES and the public at large will have been given enough information as to the cost of staying in or coming out. There needs to be a royal commission informing all the public of the ramifications – warts and all. Also apart from UKIP, there are no obvious luminaries to go in batting for the ‘NO!” campaigners. It is fundamental that there must be a full-on debate. The public must not be “rail-roaded!” Finally should those 1 million or so British passport holders who live abroad have a vote? That could be a vital, if possibly unfair ingredient. Also those living in the UK who do not hold UK citizenship; should they be given a vote? I doubt there will be much appetite for their participation.


Lord’s has been a sight for sore eyes for the past three days – Mecca in NW8. New Zealand have been every much in the driving seat and it is easy to understand why this wonderful country with a population of 4 million is ranked number three in the world cricket ratings. The sooner Jason Gillespie is appointed coach the sooner England’s confidence will be restored.


Looking at the performance of some of indices last week in isolation, one could be forgiven for thinking that it was quite a mundane period, apart from Japan and China, whose respective governments cannot throw enough stimulus packages at their economies, come hell or high water – hence the absurdly violent illogical rallies the NIKKEI (+2.69%) and Shanghai Composite have been subjected to. The S&P 500 inched forward by 0.16% – the 32nd record point in the last year. The FTSE 100 bobbed along, singing a song – +1.02%.  European indices rallied by 2.8%, intoxicated by the fumes of QE, despite the fact that the Greek saga bumbles along, without agreement on a bail-out which we are told won’t be forthcoming until the IMF is ‘on-side.’ People have really stopped caring.  They know a fudged deal is in the offing – So, with respect EU/ECB/IMF, please get on with it, before all credibility is lost.

No doubt about it, it has been a full-on week for news, especially here in Old Blighty. I suppose it was a close run race as to whether the FX manipulation bank fines or the Bank of England’s leaked contingency plans on BREXIT, as to who should grab the yellow jersey for the week. I think the BOE won it on the nod with its unfortunate exposure to the Guardian that it was working on contingency plans for a BREXIT under the guidance of Sir Jon Cunliffe – deputy governor.  Sir Jon is masterminding ‘Project Bookend’ – a feasibility study of contingency plans in the event of an unlikely withdrawal from the EU. Frankly there are only two embarrassments – The leak to the Guardian and the comment about an accidental email? I find that hard to fathom the accidental explanation. Apart from that, the country should be delighted that contingency plans to deal with all eventualities are in place. A BREXIT would take probably 5 years to expedite without a complete financial rout. The implications are huge – tax, foreign exchange, bank deposits, bank capital and their regulation, tariffs and trade agreements to name but a few. If the BOE was on the case over an ‘out’ vote on the Scottish Referendum, surely it would be nothing short of irresponsible if there were no plans for BREXIT. I have it on fairly reliable authority that under the coalition government, there were no Treasury plans for any eventuality over EU membership withdrawal, as of course the government had no mandate, with the Lib-Dems remaining truculent, difficult and unsupportive of a referendum.

On Wednesday it was revealed that UK banks were amongst 6 who were collectively fined about $5.7 billion for FX manipulation, with Barclays’ reputation probably the most tarnished with total fines of $2.4 billion. It was also revealed in the Sunday Times that Jonathan Hoffman, a debt trader employed from Lehman with a signing on fee of £53 million bagged bonuses totalling £170 million over 5 years – that is uninspiring PR in the wake of Barclays spending the last few years trying to rebuild trust with its customers.

Of course Pandora’s Box has yet to open for these banks’ manipulation misdemeanours. Litigation on a civil basis is inevitable. FX is largest market in the world – about $5.3 billion; therefore the domino effect to include brokers, traders, property companies, share dealing and the finance of foreign trade is gargantuan.  If people feel they have been ‘skin-flinted’ they will inevitably vent their spleens.

Economic and financial news – both fundamental and tit-bits was there in abundance. The FED’s chairman Janet Yellen seems convinced that the US was recovering from a bad 1st quarter, thanks to inclement weather and should growth and labour market progress continue to be made a rate increase this year was on the cards, with the heat being turned up in 2016.  Certainly retail, manufacturing and housing data have not really ‘floated’ the Street of Dreams’ boat! We wait in awe and trepidation. Wall Street experienced a fairly exciting week, though the Dollar firmed on Yellen’s comments and Treasury yields headed north. At the end of the week retail results were mixed with Aeropostale falling 15% and Ross Stores by 4%. Conversely Deere rallied by 4% and Campbell Soups by 2%.

The market’s reaction to M&S results were very mixed though fashions are VERY slowly improving, margins are better and cash flow generation was excellent. Gains were made in the previous 5 months with the shares rallying by about 50%! However it was Vodafone that captured investors’ imagination with the real prospect of Liberty Media and Europe’s largest mobile operator coming together in a £120 billion deal. Shares in Vodafone rose from 185p in early May to 253p on Friday.  Royal Mail benefitted from Whistl’s problems, though one cannot help feeling that it will be eventually merged or taken over by one of the big three – UPS, FedEX or Deutsche Post. Thos Cook went some way towards mending in its trashed reputation by saying sorry to the Shepherd Family and donating £1.5 million to charity. IPO business seems to be gathering some momentum now that Labour had been cleared away for 5 years as a threat to business. Goldman could bring Equiniti, the UK’S largest private outsourcing operation to the market in a £1 billion deal and Peter Cruddas’s CMC could also seek a listing for a similar amount. CMC has threatened to go public on numerous occasions, but has pulled out on valuation and negative market sentiment? Though perhaps not in IG’s league, nonetheless a good operation that made $32 million last year.

BWIN should announce soon who it will bed down with – CVC/Amaya or 888 Holdings. Graham Beale served notice to leave Nationwide after a 32% increase in profits to £1.2 billion. Lloyds Banking Group was very sad to lose Alison Brittain as CEO to Whitbread.

PM Cameron has been strutting his stuff on the EU stage about renegotiation this week.  It had been a good week for the government with retail sales bouncing by 1.2% last month – up 4.7% on an annualised basis. Also post the election manufacturing output has girded up its loins from a 22 month low.


UK companies posting results – Tuesday – MICRO FOCUS, Wednesday – CARD FACTORY, CALEDONIA INVESTMENTS, Thursday – PAYPOINT, IG GROUP, TATE & LYLE

ECONOMICS – Tuesday – CPI I & PPI, Thursday BOE MPC minutes & FOMC minutes.


US companies posting results – Tuesday – AUTOZONE, Wednesday – CHICO’S FAS, TOLL BROTHERS, TIFFANY & CO, BROWN SHOE COMPANY, COSTCO, Thursday – ABERCROMBIE & FITCH, FRED’S, Friday – BIG LOTS.



David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Thursday 21st May 2015



He’s gone, and all our plans

Are useless indeed.

We’ll walk no more on Cotswolds

Where the sheep feed quietly and take no heed.


His body that was so quick is not as you knew it, on Severn River

Under the blue driving our small boat through.

You would not know him now…

But still he died nobly, so cover him over with violets of pride


Purple from Severn side.

Cover him, cover him soon!

And with thick-set Masses of memorised flowers-

Hide that red wet

Thing I must somehow forget.”


Ivor Gurney – poet & composer– 1890-1937



Yesterday morning I suspect that the banking sector felt as if it was on “death row!” It knew the punishment was coming for foreign exchange and other market manipulation, but the realisation and the ultimate punishment is another experience altogether. The sum of $5.7 billion was levied at six banks. Separately from the more than $2.5bn in total forex criminal penalties being paid to the DOJ, six banks will also be fined more than $1.8bn by the US Federal Reserve. The recipients of these fines were Citibank, BOA, JP Morgan Chase, UBS, Barclays and RBS.


Barclays will pay the largest penalty, at more than $2.3bn. Its larger payment partly reflects the fact that the bank is settling with most of the regulators — including the DFS, the US Commodity Futures Trading Commission and the UK’s Financial Conduct Authority. The FCA’s fine, at £284m, is the largest in the regulator’s history. Also evidence offered by the New York Department of Financial Services (DFS) quoted one Barclays trader as writing in a November 5 2010 chat: “if you ain’’t cheating, you ain’t trying”. Eight Barclays’ dealers have either been dismissed or suspended and one suspects that criminal charges will be made in the fullness of time. Frankly these people should be ‘named and shamed.’ These fraudulent acts have gone on long enough and those responsible must be brought to book. Until people go to jail for this type of activity, there is no real deterrent to stop this subversive activity.


The CFTC also imposed a separate fine of $115m on Barclays for attempting to manipulate US dollar ISDAfix swap rates, marking the first time it has taken action in connection with that benchmark. Barclays also has $488 million fine for electricity contracts in the US to dispute. Barclays believes that the FERC does not have regulatory for commodity futures contracts.


This is by no means the end of the affair. The domino effect could be gargantuan, dragging in litigants from brokers, corporate counter parties, buyers of shares and property; the list could be endless. If they feel they have been wronged, the litigation will rear its ugly head and who can blame them. FX is the largest market in the world with $5 trillion being turned over on a regular basis.


That was not the only banking story yesterday. Having threatened to leave these shores two weeks ago HSBC was rebuffed again in its bid to have Alan Keir installed as chairman of its ring fenced bank by the BOE PRA, implying conflict of interest – existing director of a bank becoming chairman of a ring-fenced bank. This will be another irritant for Stuart Gulliver and Douglas Flint. However it may not be a pivotal issue in HSBC’s decision making process over possible repatriation. The bank levy may well be the key to the kingdom. HSBC is concerned that all it assets globally will used to calculate its share of the bank levy rather than its UK domestic assets. It is also unlikely that HSBC will return to HK, because of concerns that the Chinese government would bring too much influence to bear over its activities. Singapore is a likely friendly port of call.


Global equities experienced an infinitely forgettable session yesterday. In expectation of the FED’s comments due yesterday, activity was somnolent at best. Target’s results were slightly better than expected – shares up 0.3% and Yahoo! served notice that it would like to IPO its stake in Alibaba. The content of the FED minutes were as expected. No chance of a rate hike next month. Weakness of manufacturing and retail data were causes for concern as was falling growth in China and the Greek financial crisis. The Street of Dreams’ reaction was neutral. The DOW closed down -0.15%, the S&P 500 was easier by 0.09% and the NASDAQ finished flat +0.03%. The P/E ratio for the S&P 500 is starting to look a little rich at 17X earnings.


China’s PMI numbers dropped below the 50 threshold mark. These numbers don’t look good, but the Shanghai Composite rallied in the thought that more stimulus would implemented, such as cutting rates before too long. The Shanghai Composite was up 0.82%, with the Hang Seng down by 0.45%. The Nikkei close +0.3%.


More earning were posted this morning. Royal Mail, having seen its shares soar in the wake of problems with Whistl, won’t be delirious about its results today showing a profit of £400 million. It seems to have been a bit of a struggle out there with letters down 3% though parcels are up 4%. The dividend was increased by 5%. Investec posted decent numbers with an 11.7% increase in dividend. Mothercare’s profits were up 37% and Rank saw revenues improve by 5% in the last quarter.


Simon French, Panmure’s economist comments on George Osborne’s speech to CBI last night.


“Chancellor spoke at the CBI annual dinner last night. Main takeaways were a “productivity plan” to be published alongside the Budget on July 8, reappointment of Ian McCafferty (hawk) to the MPC, a “City Devolution Bill” in next week’s Queen’s speech (this is part of Jim O’Neill’s brief on the Northern Powerhouse) and the biggie is the merging of the Shareholder Executive and UKFI (manages HMG’s stakes in LLOY and RBS) into a single GovCo sitting under the Treasury – previously this sat in the Department for Business. I have been carping on about Government mergers for a few weeks and I think this is the first of quite a few. I also think this particular one signals a drive to sell-off government assets during this Parliament (including the Bank stakes).”



US companies posting interim results – Thursday – BEST BUY, DOLLAR TREE, AEROPOSTALE, GAP, ROSS STORES, Friday – FOOT LOCKER, ANN INC.



David Buik – market commentator


Panmure Gordon & Co




TODAY’S FAYRE – Tuesday 20th May 2015


“I walked among the seven woods of Coole:

Shan-walla, where a willow-hordered pond

Gathers the wild duck from the winter dawn;

Shady Kyle-dortha; sunnier Kyle-na-no,

Where many hundred squirrels are as happy

As though they had been hidden hy green houghs

Where old age cannot find them; Paire-na-lee,

Where hazel and ash and privet hlind the paths:

Dim Pairc-na-carraig, where the wild bees fling

Their sudden fragrances on the green air;

Dim Pairc-na-tarav, where enchanted eyes

Have seen immortal, mild, proud shadows walk;

Dim Inchy wood, that hides badger and fox

And marten-cat, and borders that old wood

Wise Buddy Early called the wicked wood:

Seven odours, seven murmurs, seven woods.

I had not eyes like those enchanted eyes,

Yet dreamed that beings happier than men

Moved round me in the shadows, and at night

My dreams were clown hy voices and by fires;

And the images I have woven in this story

Of Forgael and Dectora and the empty waters

Moved round me in the voices and the fires,

And more I may not write of, for they that cleave

The waters of sleep can make a chattering tongue

Heavy like stone, their wisdom being half silence.

How shall I name you, immortal, mild, proud shadows?

I only know that all we know comes from you.”


William Butler Yeats – poet – 1865-1939


So CBI President Sir Mike Rake has joined the big battalion of business titans which include Vittorio Colao of Vodafone, Sir Martin Sorrell from WPP, Stuart Gulliver of HSBC and Anshu Jain of Deutsche Bank in warning with veiled threats about the consequences of leaving the EU. BOE Governor, Mark Carney has also chucked his ‘two cents worth in’ as well, in wanting a quick resolution. Almost to a man they seem ambivalent about the need for change. 


Of course ‘Big Business’ is embroiled in the cobwebs of EU bureaucracy and I suppose the cost of being objective is too great a risk for it to even be considered as an option. I am sure most FTSE 100 CEOS will feel the same as those who have already been vociferous. What about the SMES, which drown in red tape and are attracted by global markets – like those who might make widgets in Wisbech – Will their case be heard?  One should be forgiven for worrying about who will be standard bearers and spokesmen for BREXIT.  It is essential that they should be identified to ensure a proper debate.  Sadly I am not sure Nigel Farage, Peter Hargreaves and JCB’s Lord Bamford and Graeme MacDonald are sufficiently heavyweight luminaries. It would great if Lord Wolfson of Next and Michael Spencer of ICAP – both probably sceptic, but not declared – had the time to pick up the cudgel and run with this thorny issue. Graham Brady, Chairman of 1922 Committee would be a welcome cohort! However if a push come to a shove those voting or wanting BREXIT are, to use the vernacular – flatulating against thunder! It ain’t going to happen!


Dear Old Steve Hilton, PM Cameron’s most prized advisor is back in town – lithe, lissom and gazelle like after hours of bicycling around California! His contempt for convention, in wandering around Downing Street in flip-flops, regardless of what luminaries were visiting knows no bounds. He loves having a tilt at the wind. His tirade against bank bonuses – suggesting top remuneration should be no more than top civil servants £200k+- amused us all! I love his style with his very able wife Rachel Whetstone crying all the way to the bank, having been a successful executive at Google and now on her way to clean up in a senior capacity at Uber.


If you were a market activist on the Street of Dreams, it might have been better to have taken the day off and headed for the Hamptons for a decent lobster washed down with some agreeable Chardonnay! There was little news. Wal-Mart missed by a couple of cents – shares closed down 4.3%. At the end of the session activity could only be described as insipid. The DOW finished the session down 0.07%, with the S&P 500 easier by 0.06% and the NASDAQ -0.17%. The Greenback has regained a fair bit of poise in the last 24 hours against most major currencies. We wait with bated breath for the FOMC minutes, which may venture to suggest a postponement of a rate hike in the late autumn or possibly early 2016. The DAX’s and CAC’s marked rally yesterday – +2.23% and +2.09% respectively, was attributed to front loading of quantitative easing and a weaker Euro. The FTSE 100 enjoyed a more measured rally – up 26 points to 6995.


Japan’s 1st quarter GDP recovered a tad – up by 0.6% (estimate +0.4%) – 2.4% on an annualized basis, with retail better than expected and with inventories looking a big part of this number – which replicates a pattern seen in the recent US and Chinese data, according to Panmure’s economist Simon French. The data suggests that price inflation will remain weak as the market tries to clear. This news was the highlight of the Asian session. though there appeared to be a bear squeeze rally in Shanghai, where the Shanghai composite closed up 0.5% having been up 1.5% earlier in the session. The Hang Seng closed down 0.38%.


Again it has been a big day for results listed below. Dealing to start with; Thos Cook. There has been an improvement in the fact that the losses are narrowing and the business plan is being expanded with an exciting joint venture in China. Investors have already vented their spleens against the company for its callous and appalling PR exercise, when dealing with the Shepherd family post the loss of their lovely two children back in 2006. The shares are unchanged, as I write. So clearly, Cook’s reputational damage going forward looks limited. Burberry, despite increasing revenue by 11% to £2.5 billion last year, saw its shares down by 4.25%. CEO Chris Bailey seemed rather cautious and measured about the outlook.


Finally M&S – I was a little underwhelmed considering the trumpeting that had gone on courtesy of Marc Bolland and his PR agents for the past week. Profits were up 6.1% to £660 million, but the figures I saw lacked detail on general merchandising sales over the past year. The word on the street is that Belinda Earl is making some strides with the dowdy fashions. Retail luminaries like Investec’s Charles Newsome tell me the business model has improved and that margins are better. He also made the observation that the £150m buy back needs to be below intrinsic value. Shares were down 0.9% at 583p. The performance of the share price has been full of expectation – up from 383p in October 2014 – up 53% – ASTONISHING! This of course is a far cry from £1 billion profit made under Sir Richard Greenbury in 1997 and again under Lord Stuart Rose in 2007.


This morning’s MPC minutes are really rather bland and unchanged from last month. Only new language at first glance is “The Committee’s central expectation was that CPI would pick up notably towards the end of the year”, according to Simon French. He has been saying that for a while; see his Feb note on “A year of two halves for UK inflation”.


I am bored commenting on Greece – it’s a poor joke and as Wolfgang Schauble says – no progress appears to have been made.



ECONOMICS – Thursday BOE MPC minutes & FOMC minutes.



David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Tuesday 19th May 2015


“THE brawling of a sparrow in the eaves,

The brilliant moon and all the milky sky, A

nd all that famous harmony of leaves,

Had blotted out man’s image and his cry.

A girl arose that had red mournful lips

And seemed the greatness of the world in tears,

Doomed like Odysseus and the labouring ships

And proud as Priam murdered with his peers;

Arose, and on the instant clamorous eaves,

A climbing moon upon an empty sky,

And all that lamentation of the leaves,

Could but compose man’s image and his cry.”


William Butler Yeats – poet – 1865-1939


The front page of yesterday’s FT looked as if it had a very provocative headline – “Whitehall braced for 100,000 job cuts as Osborne tightens grip – £10 billion cuts sought by 2017/8.” The appointment of Matt Hancock as Cabinet office Minister reflects the government determination to work closely with the Treasury to achieve this goal. It sounds like a huge number, but I am reliably told by my colleague and friend, Simon French, that if handled sensitively it is easily achievable.


Panmure’s chief economist makes the following salient points – “There are 400,000 “Civil Servants” – these include tax officers, job centre workers and prison officers. This is down by around 100,000 since 2010 and follows a downward trend since the 2nd world war – the uptick in 1997-2005 was Brown’s spending splurge. 


This is only 10% of the story however as the wider public sector (council workers, nurses, police, teachers) make up a further 5m people – making the total public sector workforce 5.5m or 17.4% of all workers which is the lowest since 1999.


Productivity does not have to be poor in the public sector (sometimes you say it cannot be as productive as the Private Sector – this is not technically true) but the truth is that it has been poor since the mid-90s by comparison with most other UK sectors. If you bring this into line and boost productivity by 40% to get it into line with finance and insurance then you get a big chunk of the £170bn that amounts to the public sector pay bill.”


It was good to see the whites of BIS Secretary Sajid Javid’s eyes when hearing that he has plans to make £10 billion worth of bureaucratic and red tape cuts in the next 5 years for the benefit of business particularly SMES. The market requires more meat on the bone.


Steve Hilton, David Cameron’s former controversial chief Downing Street advisor is back in town with a vengeance.  In an interview with BBC’S Kamal Ahmed, he said “Any companies that would require a state bailout should they “go wrong” should be considered part of the public sector.” Mr Hilton said such a move would be a “powerful incentive” for reform. It goes without saying that top civil servants receive £100,000 to £200,000 a year compared to multi-million pound salaries for bank bosses.



Yesterday equity markets experienced quite an insipid session, apart from Germany and France, which saw the Euro weaken on the back of a perceived unsatisfactory outcome to the Greek/IMF/EU/ECB crisis, regardless of Varoufakis’s reassuring ‘sweet nothings’ blown in our ears! The Street of Dreams, despite weakening housing data, achieved record levels again, thanks to FED comments that a rate hike may not happen until 2016 plus some positive trading in bank shares and Apple, courtesy of Carl Icahn.  He suggested Apple shares might be worth $240 each, based on input into TV and cars in the next decade (circa +80%). The DOW rallied a smidgen +0.14%, with the S&P 500 and the NASDAQ adding 0.30% and 0.60% respectively. The FTSE was up only 8 points yesterday to 6968. There was some appetite for M&S ahead of tomorrow’s numbers – up 2.3% at 581.5p.


Thos Cook’s shares fell 3% in value yesterday – no surprises for guessing why? As a PR exercise this was an unmitigated disaster. Regardless of the fact that Thos Cook was exonerated from blame for this human tragedy – the death in a Greek hotel of Bobby and Christi Shepherd in 2006 – the public was underwhelmed that Thos Cook had pouched £3.5 million from the hotel in compensation – far more than the Shepherd family received.  The apology to the family took a long time coming and the payment to charity of £1.5 million was some recompense but the horse had already bolted. The CEO Peter Frankheimer, the board and the PR company have incurred serious reputational value. One wonders how much Harriet Green, the deposed CEO knew of this appallingly callous act. The damage to the business may only be temporary, but it will take time to heal reputational wounds. Thos Cook post numbers tomorrow.  A small narrowing of losses is expected. Johnson & Johnson experienced a major problem a few years ago from a death from pain killing capsules – Tylenol.  It cost J&J $100 million in damages, but the company quest to resolve the crisis is now considered a text book example for dealing with a crisis.


Banks grabbed so many headlines yesterday. Barclays may well have to swallow a £2 billion fine for FX manipulation. New Chairman John McFarlane said standards will improve! He means it!  Deutsche Bank’s joint CEOS Anshu Jain and Jurgen Fitschen are digging in for the long haul, refusing to go, despite the $2.5 billion fine the bank received for FX manipulation. However a statement was made that Deutsche Bank would consider repatriating 8000 employees to Frankfurt if the UK left the EU. It is not going to happen. NY, London and the Far-East (HK & Singapore) are the major financial centres.  English is the international banking and financial language. Of course Deutsche Bank should have contingency plans – Auf Wiedersehen, Pet! These comments follow JCB’s management’s provocative comment that the UK should not be frightened of divorce from the EU. There is a great big wide world out there offering huge lucrative challenges.


You have to admire the audacious bid by 888 Holdings to acquire Bwin, despite 888 being the smaller company. It will be interesting to see if it is successful or whether the joint clout of CVC and Amaya beats it to the punch. This move by 888 looks very much like the final roll of the dice to enter gaming’s big league.


There have been a slew of earnings today set out below. Though Vodafone’s 10% increase in revenues was more than acceptable there is still little evidence that Vodafone have a business plan to encompass media and entertainment.  They may well have paid a huge dividend last year on the sale of its stake in Verizon, but investors want to see more innovation and imaginative deals being implemented- down 1.5%.  ICAP saw a 15% drop in profits for the last year. Many believe that ICAP needs more presence in equities – the one stop shop! Shares in ICAP were down 2.5%. Moneysupermarket’s Simon Nixon sold a 3.7% stake in the company at 280p, after an abortive attempt a few months ago.  The shares initially fell 6%. The company have changed broker from Citi to Credit Suisse. At 9.15am the FTSE 100 was up 31 at 7002.


At 9.30am the market is expecting confirmation that inflation fell below the Plimsoll line to -0.1% for the month of April.  This expected to be only a temporary blip.



ECONOMICS – Thursday BOE MPC minutes & FOMC minutes.




David Buik – market commentator


Panmure Gordon & Co



David Buik

Market Commentator


D +44 (0)20 7886 2775

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


TODAY’S FAYRE – Sunday 17th May 2015


Some say love’s a little boy,

And some say it’s a bird,

Some say it makes the world go round,

Some say that’s absurd,

And when I asked the man next door,

Who looked as if he knew,

His wife got very cross indeed,

And said it wouldn’t do.


Does it look like a pair of pyjamas,

Or the ham in a temperance hotel?

Does its odour remind one of llamas,

Or has it a comforting smell?

Is it prickly to touch as a hedge is,

Or soft as eiderdown fluff?

Is it sharp or quite smooth at the edges?

O tell me the truth about love.


Our history books refer to it

In cryptic little notes,

It’s quite a common topic on

The Transatlantic boats;

I’ve found the subject mentioned in

Accounts of suicides,

And even seen it scribbled on

The backs of railway guides.”


WH Auden – poet – 1907-1973


UKIP now appears to be in total disarray with the major factions within the party being inexplicably at war with each other leaving Nigel Farage looking more and more isolated, despite the fact that he seems to be the only senior person in UKIP’S ranks with the charisma to lead the party in to the ‘in-out’ referendum on membership of the EU?

Though like millions of others I support the idea of strong renegotiations tactics with the PM, the Chancellor, Philip Hammond and Lord Maude in the vanguard, providing the momentum to drive a hard bargain, there is no obvious candidate to promote the sceptics from within the government or on the back benches. This has to be wrong. The public is aware of Sir Bill Cash’s virulent views and those of Jacob Rees-Mogg on the subject.  However do they have grass route support from the media to be used as the voice of the ‘Doubting Thomases’.  Could the 1922 Chairman Graham Brady be a suitable standard- bearer? Big business, with the influence and support in the world with the likes of all FTSE 100 CEOS and Roland Rudd giving it plenty, the man who makes widgets in Wisbech, I fear, is not being properly represented. These vital people are not being heard over their concerns about red tape and bureaucracy, which blunts and damages progress and competition. Though ‘Business for Britain’ does a brilliant job sending out alarm signals and creating logical debate, does its input have sufficient clout? Mark Carney suggestion that a solution should be found sooner rather than later must be right and is very constructive, but I detect some ‘rail-roading’ tactics by the big business and political battalions. Not good for democracy.

Labour will need to find someone more charismatic than Yvette Cooper, Andy Burnham, Liz Kendall or Mary Creagh to lead the party or this left of centre party could be out of office for 20 years. Had David Miliband been in the vanguard or Dan Jarvis been available as a candidate, hope might have sprung eternal. Maybe Kier Starmer or Tristram Hunt will make the ‘Red Flag’ wave vigorously again in the breeze!

What a brilliant appointment by the Chancellor – Lord Jim O’Neill as the new commercial secretary to the Treasury with a view to making devolution and the Northern Powerhouse happen!


Saturday’s Lockinge was a decent race, won by Godolphin’s ‘Night of Thunder’ trained by Richard Hannon, but not one of the greats, such as those mile races won by ‘Brigadier Gerard’ ‘Hawk Wing’ or ‘Frankel.’


The week was quite volatile. The European bond market was vituperatively trashed with yields rising uncomfortably and steeply! There were also further signs of the US’S economy failing to select another gear with bland retail sales, faltering PPI and falling Initial Jobless Claims, which perhaps confirmed the reason why FED chairman Janet Yellen seems to reluctant to tell the markets when she is prepared tighten up on monetary policy.  There must be doubts about the strength of the recovery.  Then, though there were signs of some recovery in the EU in the first quarter (GDP +0.5%), particularly France (+0.6%), Greece’ perennial debt problem has fuelled doubts that the Hellenic mob is capable of getting its act together to meet the bail-out criteria for the EU/ECB/IMF. Finally oil prices reversed during the week, which coincided with the rulers of Saudi Arabia visiting President Obama – feels like political manipulation to a naïve old cynic like me.


Here in ‘Old Blighty’ the BOE Inflation Report dropped its GDP forecast a tad – 2.9% to 2.6%, but the economy remains robust and whilst inflation hovers around zero, rates surely won’t go up this year, even though unemployment continues to fall. China’ retail activity was hardly encouraging and nor was industrial output; so stimulus packages remain at the ready, as they have in Japan, almost as long as since ‘the Old King died!’ Not surprisingly equities have bobbed around like a cork in a bath!


Last weeks’ volatility ended with the S&P breaking new ground – up 0.09%, with the FTSE easing by 1.23%, European stocks by an average of 1.1% and the NIKKEI gaining 1.83% after Golden week. On the Street of Dreams some retailers posted adequate results, but this week when Wal-Mart, Target and Home Depot post their numbers will we have a better idea of progress.  At the end of this week, Netflix added 5%, but conversely there were reversals for Symantec -5% and Kings Digital (Candy Crush) -3%.


In the UK there a compendium of company news kept the market on its toes. TalkTalk’s Dido Harding begged Ofcom to spit up BT. SAB Miller was on the beer acquisition trail buying Greenwich Meantime Brewery from Nick Miller for an undisclosed figure. Man Utd felt the wheels of pain by not playing Europe, but commercial sales were strong, though its debt remains far too high. Merlin Entertainment continued to please its acolytes. There was another great set of numbers from ITV under the clever and astute stewardship of Andy Norman and Adam Crozier.  H&M, the Swedish fashion titan posted a 10% increase in annual profits. Lloyds Banking Group’s chairman, Lord Blackwell cheered the taxpayer by intimating that the 19% stake it has could be sold in to private hands by the end of the year. 5 million out of 9 million could be offered to retail investors at a 5% price discount to market price as suggested by Chancellor Osborne in last March’s Budget.  The Chancellor last week announced the date of his emergency budget – 8th July – no doubt necessary cuts in public expenditure will dominate the headlines. Talking of banks it is suggested in Sunday Times that there are talks to water down legislation to split investment and retail banking divisions proposed in the Vickers Report. Were concessions to be made it could be pivotal in terms of HSBC remaining in the UK or repatriating elsewhere.


Now that the political dust seem to have settled in the UK for the time being many expect M&A and IPO business to select another gear. Centre Parcs may come to the market before too long and it would be surprising if the drug, media and telecom sectors did not select another gear in terms of activity. To start the ball rolling in M&A BWIN may be a takeover target of 888 Holdings. This will be interesting with the predator being valued at £600m and BWIN at £819 million on Friday. On Wednesday we are expecting M&S to unveil increased profits to £648 million – the first increase for 4 years but a far cry from the £1 billion made in 1997 and 2008. Inflation data posted this coming Tuesday may see the ONS announce temporary deflation of -0.1% for April – the first time in 55 years.






David Buik – market commentator


Panmure Gordon & Co





TODAY’S FAYRE – Friday 15th May 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 – 1840-1928


I am less than convinced that we saw the Derby winner in the Dante yesterday. The two John Gosden trained colts – Golden Horn & Jack Hobbs – together with Elm Park finished way ahead of the rest, However there was more give in the ground than perhaps there will be in the Derby and Epsom’s undulating ground will play its part.  Golden Horn’s owner Sir Anthony Oppenheimer is fairly insistent that his colt should head for Chantilly for the French Derby over a mile two furlongs. Personally speaking I am very disappointed that Coolmore feels that Gleneagles won’t get a mile and a half. Perhaps there could be a change of heart before too long.

With the General Election now a week behind us, it is interesting to note some of the inspired appointments made by PM David Cameron. One can understand why Lord Francis Maude has been appointed as Minister of State at BIS & Foreign Office in support of Sajid Javid. Lord Maude’s political durability as a tough negotiator is taken as read when dealing with EU renegotiations. However Lord Livingstone’s prowess as a salesman will be sadly missed.  He would have been the icing on the cake for UK PLC.

Keep an eye on Greg Hands, the new Treasury Secretary, Greg Clark as Secretary of State for Communities and Local Government and Amber Rudd, Secretary of State for Energy & Climate. Delighted by their appointments and they could be the stars of this administration.

As rising European bond yields continued to cause havoc in many portfolios, with the possibility of a liquidity crisis in the offing, many investment managers on the Street of Dreams decided to comfort themselves with negative PPI data, with the prospect of the FED taking a very relaxed attitude towards an interest rate hike. They also conveniently chose to forget the rather disturbing drop in initial jobless claims, whilst enjoying a weaker Dollar on a temporary basis! These nuggets of data encouraged them to put their buying boots on. So the S&P it another record day, adding 1.08% with the DOW adding 1.06% and the NASDAQ 1.39%. A spooky unsubstantiated bid for Avon kept the market amused. Shares went up 20% but pulled back at the end of the day. Early activity in New York triggered a rally to what looked like a negative session in London – the FTSE was won 50 pints at 9.00am and ended the session up 23 points at 6973.

There was some joyous news for 3i, Restaurant Group and TalkTalk. I was very impressed with ITV’S 14% rise in revenues.  The market thought ITV had ‘travelled and arrived.’ Hats off to Archie Norman, chairman and Adam Crozier, the CEO, who have orchestrated ITV’S renaissance and its share price rally from 52p to 257p in 5 years. This company was dead and buried 5 years ago, with seemingly nowhere to go! Lord Blackwell, the chairman of Lloyds Banking Group, a person not known for making wild assignations, believes that this bank could be out of bondage by the end of the year. With its share at circa 86p, well above 73.8p break even could prove a sufficiently attractive spring board to unload the remaining 9 million shares (19%) with possibly 5 million going to retail investors possibly at a 5% discount.

BP have appointed a spook – Sir John Sawyer – to its board, presumably to assist with Russian negotiations. TalkTalk’s Dido Harding believes that all the frenetic M&A activity within the telecom sector – BT buying EE for £12 m and Hutchison Whampoa buying Telefonica’s 02 for $10.3 bn – will raise costs for all customers! Not sure about that as post-merger costs will eventually be cut to meet competition prices. True to form Greece Yannis Varoufakis is still being as tricky and truculent as ever in agreeing terms with EU/IMF to meet the criteria for the €7 billion bailout cash.  South Africa’s Brait has acquired 90% of New Look. Finally it looks as though Coop Group’s chairman Alan Leighton is close to agreeing a deal with rebel independent cooperatives, when the main board refused board representation for their three nominees. With his experience at ASDA, the Royal Mail and the likes of Leeds United, Alan Leighton is the perfect trouble shooter to get the Coop, after a loss of £2.5 billion, back on the straight and narrow.

US companies posting interim results – 19th May – WALMART, HOME DEPOT, 20th May – TARGET


David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Thursday 14th May 2015


We stood by a pond that winter day,

And the sun was white, as though chidden of God,

And a few leaves lay on the starving sod, —

They had fallen from an ash, and were gray.

Your eyes on me were as eyes that rove

Over tedious riddles solved years ago;

And some words played between us to and fro–

On which lost the more by our love.


The smile on your mouth was the deadest thing

Alive enough to have strength to die;

And a grin of bitterness swept thereby

Like an ominous bird a-wing….

Since then, keen lessons that love deceives,

And wrings with wrong, have shaped to me

Your face, and the God-curst sun, and a tree

And a pond edged with grayish leaves.”


Thomas Hardy – poet & author – 1840-1928


I commend you all to the FT’s ‘Lombard’ Jonathan Guthrie’s superb analogy of Bob Diamond’s shareholder revolt to an Alexander McCall Smith mystery story – Journalism at its most imaginative!


I wondered how long it would take before the ’right’ and ‘left’ started to fragment the party. I must say for a fellow colleague, Patrick O’Flynn, the former political editor of Daily Express, to describe Nigel Farage as a ‘snarling, thin-skinned, aggressive man who is turning UKIP into a personality cult’ as rather more visceral than necessary. With friends like that who needs enemies?


Whilst most investors were ruminating and analysing the damage the fall-out in the bond market was having on equities, as well as the improved GDP data coming out of the EU, with the exception of Germany whose +0.3%, which was disappointing, it was the content of the BOE Quarterly Inflation Report that grabbed most people’s imagination yesterday. The BOE has been obliged to be mute for 6 weeks, ahead of the General Election, Governor Mark Carney and his BOE colleagues set out the UK’s economic stall.


Not surprisingly the BOE reduced GDP forecasts for the next 3 years – 2015 and 2016 from 2.9% to 2.6% and 2017 from 2.7% to 2.5%. Though Mr Carney believes that the UK economy is solid and robust, he did express concern about the lack of wage inflation (1.9% in the last year and just 0.2% last month), stating that immigrant workers – maybe as many as 942k from Poland and the Eastern block – may well have blunted wage growth. At the manual Labour level, I am sure he is right. However there is a dichotomy here, as most economists are convinced that quality immigrants have contributed substantially to growth in recent times. Unemployment continues to come down – now at 5.5%. Inflation is not an issue. We may even have a negative number in June; so rates not expected to rise until January 2016.


It was interesting to note that France’s GDP performance was far better than expected – +0.6%. The EU as a whole grew at 0.5%. Despite the better than expected growth data investors in Germany and France had no appetite for risk yesterday. The DAX fell by 1.05% and the CAC by 0.26%. Concern over Greece debt still hangs over the EU like the sword of Damocles. However the FTSE ended the day in positive territory – up 15 points at 6949. Market observers must be mindful of the fact that a significant amount of funds have been withdrawn from equities in recent weeks. The P/E ratios of many indices have started to look quite rich; so some risk has been taken off the table. There are still a number of global imponderable, which don’t appear to have obvious solutions – falling growth, oil prices, debt and geopolitical issues such as Ukraine and IS!


Yesterday in London did not seem to be a very eventful, though comments from various companies created ripples of interest. Admiral’s CEO Henry Englehardt is to step down as CEO of Admiral Group next year. Premier Oil and Wood Group confirmed that as a result of the dramatic drop in oil prices, exploration and investment has been cut in the Falklands, but also in the Far East and in general across the board as far as Wood Group is concerned. Barratt’s Mike Clare having pleased the market with its sales for the year, up from 14800 house units to 16k, warned about the lack of bricklayers and skilful builders, whilst at the same time asking the government to get the ‘lead out’ out over releasing land for building. SAB Miller seems to have relied on the sale of soft drinks – up 8% – to bolster their numbers.


Inertia seemed to set in on the Street of Dreams yesterday with retail sale coming in very flat and uninspiring. The DOW closed down 0.04%, the S&P 500 was easier by 0.03% and the NASDAQ just popped its head above the Plimsoll line at +0.11%. In Asia this morning, investors seem to be waiting for more guidance of stimulus packages, resulting in a fairly uneventful session, apart from Japan which was down all but 1% on a strong Yen – Hang Seng +0.14%, Shanghai -0.39%.


Dealers in London seemed to arrive at the work with a monkey on their back this morning. They took the FTSE 100 down 50 points but in recent minutes it has rallied 40 points. Markets are likely to remain very volatile whilst this uncertainty prevails – particularly the concern over rising European bond yield. There have been a slew of earnings this morning. ITV with a 14% increase in revenues will have pleased its acolytes, but was a case of travelled and arrived -1.4%. Dido Harding’s TalkTalk was +2% having been down 2.7%. British Land, Aggreko and Old Mutual put in solid efforts.



US companies posting interim results – Thursday – APPLIED MATERIALS, NORDSTROM

19th May – WALMART, HOME DEPOT, 20th May – TARGET


David Buik – market commentator


Panmure Gordon & Co


TODAY’S FAYRE – Tuesday 12th May 2015



Under the blue skies of her native land

She languished and began to fade. . .

Until surely there flew without a sound

Above me, her young shade.

But there stretches between us an uncross able line;

In vain my feelings I tried to awaken.

The lips that brought the news were made of stone,

And I listened like a stone, unshaken.

So this is she for whom my soul once burned

In the tense and heavy fire,

Obsessed, exhausted, driven out of my mind

By tenderness and desire!

Where are the torments? Where is love? Alas!

For the unreturning days’

Sweet memory and for the poor credulous

Shade, I find no lament, no tears.”


Alexander Pushkin – poet & author – 1799-1837


KP’s innings of 355 not out against Leicestershire was always going to be in vain, once it became clear that Andrew Strauss was going to be the ECB’S cricket supremo. How could Straussy welcome KP back in the fold immediately in the wake of the South African maverick’s duplicitous and uncomplimentary book? Straussy would have looked like a weak chump to immediately have allowed him back in to the fold.

Such a pity that the whole England management infrastructure in recent years has been so weak! Good and resolute management would never have allowed Pietersen to have been such a free and disruptive spirit. The door may not be slammed, but I doubt that there is enough time for it to be a great healer. Pietersen’s tirade in the Telegraph this morning will not have helped KP’s cause. He now returns to India for the rest of the IPL season.



Yesterday stock market luminaries experienced a very difficult day in the EU and the UK, as did bond acolytes. As bond yields continued rising, due to a compendium of reasons from Greece to credit fears and liquidity inflicting wheels of pain right across spectrum, the stench of fear permeated in to equity portfolios, resulting in sharp reversals in value. The fact that Nymex Crude oil bounced above the $60 a barrel threshold marginally exacerbated the market’s discomfort. The FTSE 100 eased by 96 points to 6933, having at one point been down by 135 points mid-morning. Losses were incurred across the board with tobacco, banks, pharmas, resources, utilities and media all suffering the slings and arrows of outrageous fortune. As chronicled yesterday EasyJet suffered more than most, thanks to a horrendous April which included a potential loss of £25 million courtesy of French air traffic control strikes, which come annually with monotonous regularity – shares were down 9.8%. The DAX fell by 1.7% and the CAC by 1.1%. So to the Street of Dreams. There wasn’t much news to light its fire. Few in the way of big hitting results. However late on Verizon posted a bid of $4.4 billion for AOL to beef up its mobile and video content. Some of you may have forgotten that just before the ‘TMT’ bubble burst in 2000 AOL bought Time Warner for $164 billion, valuing the joint new company at the time at $350 billion – just madness! Reality has returned! However Wall Street was suffering a little from pre-prandial neurosis and closed as follows – DOW -0.20%, S&P 500 -0.29% and the NASDAQ -0.35%



Today is an important one for economic data. China posted disappointing retail sales for last month – up 10% when 10.5% was expected and industrial output only grew by 5.9% when 6% was the estimate. True to form the Shanghai Composite rallied a tad knowing that stimulus packages are always in the background. At 6.30am France posted better than expected quarter 1 GDP at 0.6% when 0.5% was on the cards. Germany’s effort was very disappointing – just 0.3% with an estimate of just +1% for the year! EU GDP is expected to come in later in the morning at +0.5%, with improved efforts from Italy and Spain.


Having been mute for 6 weeks because of the General Election the BOE quarterly Inflation Report is eagerly awaited at 10.30am. Governor Mark Carney, Andy Haldane the Chief Economist and members of the MPC will post their thoughts on growth, thought to be subject to a downgrade for 2015 to 2.4%. Its views on inflation, currently at zero, employment prospects and wage inflation will all be key in gaging when rates will be increased. Many believe that January/February 2016 is the likely target.


Just after 7.00am there were decent results posted by SAB MILLER, BARRATT DEVELOPMENT and COMPASS GROUP



US companies posting interim results –  Wednesday – RALPH LAUREN, CISCO SYSTEMS, JC PENNEY, Thursday – APPLIED MATERIALS, NORSTROM 19th May – WALMART, HOME DEPOT, 20th May – TARGET



David Buik – market commentator


Panmure Gordon & Co

Market update – equity markets feel uncomfortable

The boys and girls in equity markets had an uncomfortable feeling in their water this morning. New York found little joy yesterday. Bond yields in Europe were creating turmoil. No one believes a word Greece or the EU says on the Hellenic crisis. After Friday’s relief rally, with valuations starting to look a little rich, something had to give. …….And it did. We’ve had a bit of a shake out this morning with the FTSE losing 1.6% at 1.55am – down 112 points at 6917. The DAX has eased by 2% and the CAC by 1.7%.


It seems as though blood has been running down Threadneedle Street and Canary Wharf. There is hardly any blue. Selling has not been visceral; it just that sentiment has gone negative and hardly a sector has been immune for sledging!


Even IMPS and BATS are down 2.5%. Shell is 1% easier. The following have received some tap this morning – BP -0.7%, Barclays -1%, ITV -2%, GSK -2.5%, Astra -2.8%, Shire -1.5%, Vodafone -2%, BT -1%, Sky -2.5%, Centrica -2.5%, United Utilities -2.5%, M&S -0.7% and Next -1.75%. Of those companies that have reported results all but easyJET -10%!!, have done OK – Enterprise +1%, Just Retirement flat and Experian +1%


TODAY’S FAYRE – Tuesday 12th May 2015


“Half a league half a league,

Half a league onward,

All in the valley of Death

Rode the six hundred: ‘Forward, the Light Brigade!

Charge for the guns’ he said:

Into the valley of Death

Rode the six hundred.


‘Forward, the Light Brigade!’

Was there a man dismay’d ?

Not tho’ the soldier knew

Some one had blunder’d:

Theirs not to make reply,

Theirs not to reason why,

Theirs but to do & die,

Into the valley of Death

Rode the six hundred.


Cannon to right of them,

Cannon to left of them,

Cannon in front of them

Volley’d & thunder’d;

Storm’d at with shot and shell,

Boldly they rode and well,

Into the jaws of Death,

Into the mouth of Hell

Rode the six hundred.


Flash’d all their sabres bare,

Flash’d as they turn’d in air

Sabring the gunners there,

Charging an army while

All the world wonder’d:

Plunged in the battery-smoke

Right thro’ the line they broke;

Cossack & Russian

Reel’d from the sabre-stroke,

Shatter’d & sunder’d.


Then they rode back, but not

Not the six hundred.

Cannon to right of them,

Cannon to left of them, Cannon behind them

Volley’d and thunder’d;

Storm’d at with shot and shell,

While horse & hero fell,

They that had fought so well

Came thro’ the jaws of Death,

Back from the mouth of Hell,

All that was left of them,

Left of six hundred.


When can their glory fade?

O the wild charge they made!

All the world wonder’d.

Honour the charge they made!

Honour the Light Brigade,

Noble six hundred!”


 Alfred. Lord Tennyson – poet – 1809-1892


 “Spooks” was a favourite TV programme of mine. So I required little encouragement to go and see the feature film, released last week. I wondered why I was amongst six other people in the cinema. Was the dye cast? The reason quickly became obvious – trite nonsense with a truly awful script, which gave the film no credibility. I felt sorry for Peter Firth – good actor!


Sky’s Ian King wrote a very well-balanced valedictory piece in the Times yesterday, extolling the hereto unheralded virtues of Dr Vince Cable as BIS Secretary. Ian insisted that Dr Cable was a free marketer and had done more to promote business than many would have given him credit for. These sentiments were endorsed by the CBI’S John Cridland. Dr Cable should, of course, take credit for his apprenticeship scheme. However had he not been so much of a banker basher and had he travelled a bit more, promoting UK PLC, perhaps he wouldn’t unreasonably have been labelled as anti-business by the City and commerce.


As was chronicled in the media, Sajid Javid was appointed BIS Secretary. Mr Javid is clearly a rising ministerial star, having enjoyed a productive career as a banker at Chase Manhattan and Deutsche Bank. So he has a business background and therefore should be simpatico with what is required to broaden the UK’s market base with the rest of the world, without relying on the EU for a disproportionate amount of our trade. Francis Maude’s knowledge of the corridors of political power will mean he is a key player in renegotiating terms with the EU for the Foreign Office and the BIS. I see no mention to date of Lord Ian Livingston, whose boundless enthusiasm and energy whilst at Ministry of Trade until the election, was such a key player. Francis Maude and Lord Livingston would make an exciting, powerful and intoxicating cocktail.


Having seen a decent relief rally on Friday, it would surely have been unreasonable to expect the same momentum yesterday. It wasn’t to be. Frankly the FTSE did well to just lose 16 points to 7029. There was little news to titivate market protagonists. China dropped rates for the 3rd time in 6 months to 5.1%, as a stimulus measure. Mining stocks such as RIO and Anglo-American temporarily picked up the cudgel in adding a few pennies. Apart from that Royal Mail added nearly 5% on news that its competitor, Whistl, was cutting back its postal services, with 2000 redundancies. The fact that Barclays and RBS are due for some hefty fines for FX manipulation, which could total close to £4 billion, it seemed a matter of wholesale indifference to shareholders. Barclays lost 2 pence and RBS added 5p! The FTSE 100 has enjoyed an uncomfortable ride this morning – down 70 at 6955. The turmoil in the European bond market and the relative strength of the Euro could trigger an uncomfortable shake out.


Yesterday was the 74th successive month of no change in base rate – 0.5%. With inflation at zero and no promise that it won’t drop to -0.1% temporarily say in June, there seems little likelihood of a hike until February 2016. Sterling firmed again yesterday to $1.5540 on improved political sentiment. Perhaps tomorrow’s BOE inflation Report, presented by Mark Carney and his very able chief economist, Andy Haldane, will provide us some pointers as to whether the economy is picking up again, growth targets and forward guidance on interest rates, which since implementation nearly 2 years ago, seem to change like the weather.


HMT has reduced its holdings in Lloyds Banking Group by 1% to 19.93% – share price 86.99p – breakeven circa 73p – the sale is going well, if surreptitiously ! There was a massive merger between DTZ, currently owned by TPG, and Cushman Wakefield, owned by the Fiat family Agnelli for £1.3 billion. This joint venture makes up the third large commercial estate agent. Some of you will recognise that DTZ was formerly Healey & Baker and then Debenhams & Tewson. The other two large moguls in this sector are CBRE, which used to be Richard Ellis and JLL, known as Jones Laing & Wootton. DTZ/Cushman & Wakefield will employ 43,000 people in 250 offices around the world.


There were good numbers from Experian, Enterprise Inns and Just Retirement. easJet’s numbers superficially were decent with load factor up 0.7% to 89.7% whilst capacity grew to 32.2 million seats. However the French Air traffic control strike may have damaged the bottom line in terms of £25m revenue being temporarily lost and the booking going forward are good, but not exceptional – shares were routed rather unkindly down 8%!



US companies posting interim results – Monday – GAP! SOTHEBYS, Wednesday – RALPH LAUREN, CISCO SYSTEMS, JC PENNEY, Thursday – APPLIED MATERIALS, NORSTROM 19th May – WALMART, HOME DEPOT, 20th May – TARGET

Economic dates – Wednesday – BOE INFLATION REPORT.



David Buik – market commentator


Panmure Gordon & Co