TODAY’S FAYRE – Sunday 14th June 2015


Men of England, wherefore plough

For the lords who lay ye low?

Wherefore weave with toil and care

The rich robes your tyrants wear?

Wherefore feed and clothe and save,

From the cradle to the grave,

Those ungrateful drones who would

Drain your sweat — nay, drink your blood?

Wherefore, Bees of England, forge

Many a weapon, chain, and scourge,

That these stingless drones may spoil

The forced produce of your toil?

Have ye leisure, comfort, calm,

Shelter, food, love’s gentle balm?

Or what is it ye buy so dear

With your pain and with your fear?


The seed ye sow another reaps;

The wealth ye find another keeps;

The robes ye weave another wears;

The arms ye forge another bears.

Sow seed, — but let no tyrant reap;

Find wealth, — let no imposter heap;

Weave robes, — let not the idle wear;

Forge arms, in your defence to bear.

Shrink to your cellars, holes, and cells;


In halls ye deck another dwells.

Why shake the chains ye wrought?

Ye see The steel ye tempered glance on ye.

With plough and spade and hoe and loom,

Trace your grave, and build your tomb,

And weave your winding-sheet, till fair

England be your sepulchre!


Percy Bysshe Shelley – poet – 1792-1822


There were two pieces of very sad Thespian news this week – the deaths of Ron Moody and Christopher Lee.  Both had good innings and lived to be over 90! With deference to Sir Alec Guinness, Ron Moody must have been the definitive ‘Fagin’ even though his interpretation was put to music, written by the incredible Lionel Bart in ‘Oliver.’ He starred in it both on the stage as well as keeping the role when the film was made rather than surrendering this gloriously English part to Hollywood! As for Christopher Lee – He will always be the quintessential Dracula from the ‘Hammer’ film days, when playing opposite Peter Cushing or, of course, as a ‘Bond Baddie’ – Thank you both for your immeasurable talent. RIP

Congratulations to Ed Balls who will have enjoyed his first ‘Bilderberg Weekend’ – the shadowy club of the good and the great who put the world to right or not as the case maybe!

What an ODI at the Oval on Friday with over 760 runs scored. The game has taken on a new dimension and a fresh culture of ‘hung-ho, fixed bayonets and over the top!’ It goes without saying that good wickets, where batsmen could play blind-folded with a bamboo-shute as a bat and get runs is a pre-requisite!

I find the comments made by S&P resulting in the UK’S credit rating being put on negative watch, threatening a downgrade from its ‘AAA’ status, if the UK withdraws from the EU, frankly an impertinence of the highest degree. How dare a rating agency attempt to influence the political and democratic process? To suggest that BREXIT could adversely affect trade ties and the deficit, resulting in a rise in borrowing costs is presumptuous in the extreme. Rating agencies come with very mixed reputations in the wake of the credit crisis in 2008. They are, like house insurance – necessary, but regrettable services. If these rating agencies should not attempt to influence the democratic process- that will be the perception – a process, which is in my humble opinion, totally unacceptable.


There was so much in the way of news on the banking sector last week following the wake of management changes at Deutsche Bank the week before, concerning RBS, Lloyds Banking Group and HSBC, regarding to the sale of shares as well as repatriation issues, it seemed all consuming to the media, with little room for other headlines to digest. To add to the complexity of these banking conundrums, we were reminded in the Sunday Telegraph this morning that RBS still has to pay the Treasury £1.2 billion before the year is out, prior to considering a share buy back as an alternative to a dividend, which would not dilute the taxpayer’s holding, before any ‘sell-back.’ Governor Mark Carney’s comments at the Lord Mayor’s Mansion House dinner last Wednesday on taking draconian and punitive measures towards City transgressors was very well received. In all fairness until custodial sentences are imposed, this type of reprehensible behaviour won’t stop.


In London every other piece of news seemed incidental – even the shambolic negotiations between Merkel, the IMF, Yannis Varoufakis and Greece, in any order anyone wants to consider them. Varoufakis gave a brilliant interview to BBC’s John Humphries on Friday, suggesting that he was the only realistic contributor to the argument. In other words what was being demanded by creditors and the EU was not deliverable. Consequently Grexit is a real option, though at the 11th hour a fudged deal may well be agreed. If the world’s banking sector has not made contingency provisions for Greece’s possible departure after all the notice it has been served, I have little sympathy for them. After all, Greece’s economy is only 2% of EU GDP. It is also interesting to note that inflation peaked at 4.7% in 2010 and has subsequently slumped in to measurable deflation.


On a more optimistic note, there were signs of an improving economy in the US post the encouraging payroll data last Friday. Also here in Old Blighty despite marginally discouraging construction data last month – down 0.2% against +1.1% in March, there was sufficient good news about for the ONS to divvy up GDP from 0.3% to 0.4% in the last quarter, suggesting it would be 2.9% for the year rather than 2.8%. Conversely China is going to struggle maintaining 7% GDP for this year. However in terms of stimulus packages the authorities seem to be throwing the kitchen sink at the problem, resulting in the Shanghai Composite having put on the best part of 140% in the last year – quite staggering. The thought of a bubble eventually bursting in China seems a little under-cooked – The ‘bursting’ of a balloon seems a more accurate analogy. In recent days something of the order of $7.1 billion has been withdrawn from China funds by investors, amid Dollar pressure.


Last week really was rather a nebulous trading period with the S&P 500 gaining 0.15% on the week. The FTSE 100 lost 0.29%, European stocks were relatively flat – Greece or no Greece – and the Nikkei eased by a parsimonious 0.26%. The most interesting news on the Street of Dreams was the demise of Dick Costolo, the CEO of Twitter after 5 years of no profits, which has seen the share price half in 18 months and fall 30% in the last 6 months, prior to a 7% gain after the news that Costolo would be replaced pro-tem by the founder – Jack Dorsey. Twitter has failed to add sufficient contributors – just 14% in the last year and advertising revenues seem insufficient to generate meaningful profits.


Here in Old Blighty mining stocks were under the cosh, but all in all it was rather a lack-lustre week. It looks as though Tesco will need to raise £5 billion to bolster its balance sheet according to Moody’s?? Tesco has debts of £22 billion. There was some great PR for the ‘IN’ campaign from large Fund managers, who threaten to quit London, if the UK votes to leave the EU. This is down to the EU regulation preventing them from selling investment products in to the EU economic block unless the European headquarter are in a member state – RASPBERRY! Just bully-boy jingoistic tactics!


Finally Sanpower, the Chinese Conglomerate that owns House of Fraser is apparently considering a bid for Hamleys. Hamleys globally has over 100 stores. Profits rose 15% last year to £62 million; so it won’t be a snip! Ted Baker has got off to a flying start in North America after 4 months. Retail sales in the group across the spectrum grew by 19%.



US companies posting interim results – Monday – COMVERSE, Tuesday – LA-Z-BOY, ADOBE SYSTEMS, Wednesday – ORACLE, Thursday – RITE AID, RED HAT, SMITH & WESSON



Economic data –         Tuesday – UK INFLATION & HOUSING STARTS, Wednesday – EU INFLATION, US FOMC, Thursday – US INFLATION, Friday – UK PUBLIC SECTOR FINANCE.



David Buik – market commentator


Panmure Gordon & Co




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