TODAY’S FAYRE – Sunday 21st June 2015


“Call it a good marriage –

For no one ever questioned

Her warmth, his masculinity,

Their interlocking views;

Except one stray graphologist

Who frowned in speculation

At her h’s and her s’s,

His p’s and w’s.

Though few would still subscribe

To the monogamic axiom

That strife below the hip-bones

Need not estrange the heart,

Call it a good marriage:

More drew those two together,

Despite a lack of children,

Than pulled them apart.


Call it a good marriage:

They never fought in public,

They acted circumspectly

And faced the world with pride;

Thus the hazards of their love-bed

Were none of our damned business –

Till as jurymen we sat on

Two deaths by suicide.”


Robert Graves – poet – 1895-1985


Grange Park Opera’s production of La Boheme is as good as any that has emanated during the halcyon days of John Copley’s production at the Royal Opera House, which started in 1976 and finishes this month.  There may not have been a Domingo or a Pavarotti, but my world all the singers fired off six cylinders throughout the performance. There is no holding back by Gianluca Terranova as Rodolfo, Brett Pelegato as Marcello or Susana Gaspar as Mimi. Kelebole Besong’s interpretation of Musetta steals the show for me – as good as anything Judith Blegen ever did in the ’70s and ’80s – full of emotions, humour and remorse. The evening was an absolute triumph and don’t be surprised if any these singers perform at Coventry Garden before too long! They were outstanding. Stephen Barlow conducted the orchestra with great gusto, though I am amazed that he could see the score such was the length and thickness of his grey locks!

Being supercilious can often be an unattractive trait. However sometimes it is unavoidable. The Greek tragedy, currently being played out on the international stages of politics and economics, is the immediate case in mind! Though the ramifications of failure are potentially very damaging for the reputation of the ‘EU Dream’, which is fast turning in to a nightmare, the City at large, hopefully having seen its banks and fund managers make contingency plans against GREXIT months ago, were, frankly, rather more interested as to whether Ryan Moore could ride ten winners at Royal Ascot, or see Andy Murray win Queen’s or England’s ODI warriors polish off New Zealand at Chester-le-Street!


Meantime PM Tsipras and Finance Minister Varoufakis continue to scribe out more chapters of desolation than Sophocles or Euripides did in the 6th century BC! After fruitless meetings last week between the Greek negotiators and the EU, the ECB’S ‘loot wagon’ rolled in to Athens with €1.75 billion worth of extra emergency funding to add to the €85.9 billion already doled out. The Greeks apparently asked for €3.5 billion, but the request was trimmed back despite the fact that there had been a further run on Greek bank deposits of €5 billion in recent weeks. There was some trite comments made by PM Tsipras to Chancellor Merkel to the effect that Greece was hoping to be able to accommodate the EU’s requests in order to remain in the EU.  These rumoured comments were sufficient to allow the yield on Greek 10-year bonds to fall by 80 basis points last week to just under 13% – still an eye-watering level, which hardly instil confidence or stability! So further meetings will be held today and on Monday, preceded by phone calls between Tsipras, the European Commission and Germany.


Many like me will be amazed if there is any meaningful resolution. And so the fable goes on gathering momentum, whilst at the same time the remnants of credibility continue to fly out of the window. This is not really a financial issue; it is political. Merkel and her cronies know what they have to do. If the EU is not prepared to accommodate Greece’ inability to service debt, let alone repay it, the ramifications are as clear as the nose on the end of my ugly face. It is the beginning of the end of that beautiful EU dream. In passing UK companies and individuals are in to the Greek banks to the tune of a couple of hundred million quid, which is hardly earth shattering in comparison to the crisis of 2008. UK banks have had plenty of time to hedge their positions in the last couple of years. Little sympathy will be accorded to them if contingency plans have not been implemented.


Despite Greece’s weeping sore continuing to ooze concern, equity markets on the whole chose to give the problem a wide berth last week. The fact that the FED gave notice to increase rates within the next few months very gradually helped calm the waters of fearful investors. Clearly FED chairman Janet Yellen will approach the task sensitively, taking external economic problems in to account as much as the robustness of the US’S economy. So only moderate losses were incurred in Europe with US markets remaining above the Plimsoll line. The S&P added 0.75% last week with the FTSE easing by 1.1%, European stocks by an average of 0.95% and the NIKKEI by 1.14%


On the Street of Dreams house building results gave cause for optimism with Toll Brothers and Pulte making measurable gains. Hershey seem to be running in to difficulties on the confectionary front. Jobs were being shed and the shares slipped by 3.5%. After a torrid start to the week, Twitter’s CEO Dick Costolo resigned and the development of a journalistic messaging platform saw its shares add nearly 10% throughout the week. It was a relatively quiet week here in Old Blighty. Fidelity served notice to take Colt Telecoms private at about 190p, which represented about a 20% premium. Hilkma posted encouraging numbers. Card Factory has enjoyed a good year since its IPO, but the sale of management shares last week saw the shares ease by 7.7% in value.


After just 6 years as CEO Standard Life’s David Nish handed over the baton to Keith Skeoch, the chief investment director. Standard Life is much more focused on fund management than it had been; hence the change in management culture. Despite reassuring comments, one suspects that Mr Nish was less than enamoured with the decision to remove him. It is also possible that Steve Holliday will stand down as CEO of National Grid. Andrew Bonfield is favourite to replace him. Canada’s Borealis Infrastructure is weighing up a possible £5 billion bid for Severn Trent. Now that James Murdoch has been installed as CEO of 21st Century FOX, do not be surprised if he flexes his muscles in the direction of a full takeover of Sky, having rebuffed overtures from Vivendi and Vodafone for its 39% stake. Vodafone are currently in amicable talks with Liberty Global. Tesco may have had a setback when it announces a trading statement on Friday. Like for like sales may have dropped by between 2% and 2.5% in the last 3 month trading period.




US companies posting results – Tuesday – BLACKBERRY, Wednesday, BED, BATH & BEYOND, MONSANTO, Thursday – BARNES & NOBLE, NIKE, ACCENTURE






David Buik – market commentator


Panmure Gordon & Co



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