Monthly Archives: September 2015




TODAY’S FAYRE – Sunday, 27th September 2015


When Beauty and Beauty meet

All naked, fair to fair,

The earth is crying-sweet,

And scattering-bright the air,

Eddying, dizzying, closing round,

With soft and drunken laughter;

Veiling all that may befall

After — after —


Where Beauty and Beauty met,

Earth’s still a-tremble there,

And winds are scented yet,

And memory-soft the air,

Bosoming, folding glints of light,

And shreds of shadowy laughter;

Not the tears that fill the years

After — after –“


Rupert Brooke – poet & soldier – 1887-1915


100th Anniversary of Battle of Loos – 25th Septeber-19th October 1915




“Financial struggle is often the direct result of people working all their lives for someone else” – Robert Kiyosaki- US businessman & commentator – 1947- ‏


I must confess to being rather excited, if not too exuberant, at the prospect of Sepp Blatter being asked by the Swiss Authorities to account for his and FIFA’S unorthodox behaviour – allegedly criminal activities – over the past 18 years. Maybe the ‘Whitewashing’ of this skulduggery will soon be brought to a satisfactory conclusion, but I shall not be holding my breath.

The despicably ‘ill-conceived’ gutter exposure of some of the PM’s supposed student antics really highlights what is happening to politics around the world. Everyone understands the need for probity and exemplary behaviour to aspire for high office and to govern. However there is little doubt in my mind that the power of social media is such that only robots, zoids and clones will move in to the higher echelons of domestic and international politics. Social media will almost certainly expose every single aspirants’ warts, whelks and bubicles’ to the world at large from pre-puberty onwards. Few will want to lay themselves open to derision for the trivial actions of their innocent youth. Whatever will happen to those personalities and characters that have provided the leadership qualities so desperately needed to set them aside as leadership material? They will be mindful and


I have no idea whether to call last week’s seismic market movements erotic, neurotic or hysterical; perhaps it was a combination of all three. From the previous week markets were left in a state of hiatus with unanswered questions over US interest rates and growth in China. When you look at the closing losses on the week of a few of the international indices, without having detailed knowledge of the economic and financial background, you would be forgiven for thinking it was just a quiet week after the annual holiday period. The S&P 500 closed down 0.6% on the week with the FTSE easier by 0.08%, European stocks by an average down by 1,52% and the NIKKEI by 0.18%, though Tokyo was closed for three days for public holidays. In point of fact the FTSE was as ‘low’ as 5935 and as ‘high’ as 6175, which just goes to illustrate the level of uncertainty.


We are all bored to distraction by the level of prevarication by the FED, which was exacerbated by ‘off-piste’ comments made by Lockhart and Bullard, suggesting they were in favour of a rate hike sooner rather than later. Whether these comments galvanised FED Chairman Yellen to indicate a rate rise in December was on the cards regardless of external economic pressures, one can only speculate. Anyway her comments, made apparently when she was a little dehydrated, were initially taken positively in New York and Europe, though on the Street of Dreams some financial luminaries were having second thoughts, as two of the three main indices closed flat, with the NASDAQ shedding 1%. Since the May ‘Highs’ the FTSE has surrendered 15% thanks in the main to mining and energy stocks, whereas the S&P is down by 9.4%. Apart from equity gyrations yields on Treasuries rallied and Greenback flexed its muscles. Crude oil was a smidgen firmer and gold perked up to $1147 an ounce.


China remains an enigma. How wonderful it would be get the truth about growth, manufacturing etc. Many believe annual growth is no more than 2-3%. Manufacturing data in China for August is the worst it has been for over 6 years.


On the Street of Dreams the fact that Caterpillar’s sales were down 9.6% provided a sufficient litmus test that manufacturing and industrial production in China was slumping. The S&P industrial sector surrendered 2% in value last week. Also Democrat Presidential aspirant Hillary Clinton put the mockers on the biotech and drug sector last week. The Biotech sector was off 13% last week with health shares falling 5.8% thanks to comments she made about drug price gouging for prescription drugs and how she would take the pharmaceutical industry on in her Presidency. Fidelity’s Tom Stevenson, in the Telegraph pointed out that ‘companies operating in highly regulated and political sectors can be exposed. ‘There was also good news from operations such as Nike which shone strongly through the eatery autumn sunshine with strong sales.

However it was to the FED’s Janet Yellen that the market was looking for financial guidance rather than pastoral guidance, as she should readily admit she is a poor apostle for the ‘Almighty.’ The market desperately needs to know that the U.S. economy is off life support and a hike in interest rates would be a strong indicator that the show was back on the road.

Over here in Old Blighty it was the mining sector, drugs and energy stocks that put the FTSE 100 under serious duress. Glencore’s share price drifted down to 97p from an issue price of 300p four years ago. The recent capital injection has failed to do the trick as investors concerned themselves with the significant level of debt in a company that was on the back foot with demand for minerals appearing to drop like a stone. A graph of its credit default swaps does not look pretty; nor does the Petrobras’s.

Most of last week’s headlines were grabbed by VW and the fact that the company had been telling ‘porkies’ in regard to the level of emissions of one of its Diesel engines. It shares fell by more than 30% last week. Apparently the EU and UK’S had been warned of the possibility. The CEO Martin Winterkorn was quite rightly hosed – he clearly was not on top of his game. Restoring the company’s brand and credibility will take some doing particularly as the US’s litigious prowess will be seen at its most virulent in the months to come, with the UK, EU and Far East no doubt jumping on the bandwagon. VW appears to be an incestuous company with Porsche, the Worker’s Council and Lower Saxony being the main shareholders of this Wolfsburg dominated business. Therefore appointing Mattheas Meuller from Porsche as CEO, however brilliant he may be, strikes me as injudicious and frankly corporate insanity. The public is not being treated to the respect it deserves with an appointment that cannot be perceived as fully transparent. Two comments made to by friends seem very apt – ‘It’s like using sticking plaster to avoid surgery’ or ‘asking Michael Platini to clean up FIFA!’ In passing this VW scandal would appear to have cost the Qatar’s sovereign wealth fund the best part of £3.3 billion.

The Chinese billionaire Wang Jianli is rumoured to be interested in buying Odeon Cinema’s 2000 screen outlets from Guy Hands’s Terra Firma, who attempted to sell this disappointing investment for £1.2 billion 4 years ago. India’s Milestone Resources in conjunction with Schroders and Old Mutual are heading the shareholders rebellion against Debenhams, aided and abetted by Cenkos. The Sunday Times tells us that AB InBev could table a £70 billion bid for SAB Miller. There is still life in corporate finance!








David Buik – market commentator



Panmure Gordon & Co





TODAY’S FAYRE – Friday, 25th September 2015


“If I should die, think only this of me:

That there’s some corner of a foreign field

That is for ever England.

There shall be

In that rich earth a richer dust concealed;

A dust whom England bore, shaped, made aware,

Gave, once, her flowers to love, her ways to roam,

A body of England’s, breathing English air,

Washed by the rivers, blest by suns of home.


And think, this heart, all evil shed away,

A pulse in the eternal mind, no less

Gives somewhere back the thoughts by England given;

Her sights and sounds; dreams happy as her day;

And laughter, learnt of friends; and gentleness,

In hearts at peace, under an English heaven.”



Rupert Brooke – poet & soldier – 1887-1915



100th Anniversary of Battle of Loos – 25th Septeber-19th October 1915







David Buik – market commentator



Panmure Gordon & Co




TODAY’S FAYRE – Thursday, 24th September 2015


“Dark Spirit of the desart rude

That o’er this awful solitude,

Each tangled and untrodden wood,

Each dark and silent glen below,

Where sunlight’s gleamings never glow,

Whilst jetty, musical and still,

In darkness speeds the mountain rill;

That o’er yon broken peaks sublime,

Wild shapes that mock the scythe of time,

And the pure Ellan’s foamy course,

Wavest thy wand of magic force;

Art thou yon sooty and fearful fowl

That flaps its wing o’er the leafless oak

That o’er the dismal scene doth scowl

And mocketh music with its croak?


I’ve sought thee where day’s beams decay

On the peak of the lonely hill,

I’ve sought thee where they melt away

By the wave of the pebbly rill;

I’ve strained to catch thy murky form

Bestride the rapid and gloomy storm;

Thy red and sullen eyeball’s glare

Has shot, in a dream, thro’ the midnight air

But never did thy shape express

Such an emphatic gloominess.”


Percy Bysshe Shelley – poet – 1792-1822


Lightening rarely strikes twice and that was the case at Kingsholm, Gloucester yesterday, where Scotland clinically put Scotland to the sword 45-10. If England does not win the World Cup, I can cope with Scotland doing so in the unlikely event of that happening, as long as M/S Sturgeon is not within 10-miles of Twickenham gloating at England’s expense.  In recent times, rarely have I seen a cleverer or more divisive domestic politician than Scotland’s First Minister. I have total sympathy with Kelvin McKenzie, when referring to her as PM of “Jockistan”, was roundly and viscerally criticised for his supposed tasteless comments.


I think European bourses had soothing comments by Mario Draghi to the effect that the ECB’s barrels are full of QE gunpowder in the event of deflation and falling growth, to thank for yesterday’s equity market resurgence. Could it be a false dawn? I cannot help looking at some of Bloomberg’s graphs on equity activity, which illustrate and endorse the fact that ‘selling’ in recent sessions has been ‘gargantuan.’ A colleague also pointed a frightening graph on Petrobas, which not long ago issued a $15 billion 100—year bond, which matures in 2115 with a 6.85%% yield, which was gobbled up by investors, who went all ‘google-eyed’ at the prospect of such protracted franked income. What a great deal for Petrobas! It’s total debt is $95 billion. The graph concerns CDS – it’s almost perpendicular in shape! This graph makes Glencore’s current uncomfortable plight look like a walk in the park.


Anyway, I digress. The Draghi Factor triggered the FTSE adding 1.6%, the DAX 0.44% (damaged by auto stocks) and CAC +1.13% despite initial setbacks with Peugeot Citroen and Renault on the back of VW’s unenviable plight. Here in Old Blighty oil stocks stepped up to plate for a rare decent performance. Not surprisingly IAG (+4.8%) and easyJet (+3.5%) were popular thanks capitalising on to lower fuel hedging. Unfortunately the Street of Dreams did not enjoy the same level of ebullience. There was still consternation over the indecisive approach by the FED towards rate hikes; hence the session was relatively sepulchral. The DOW was down 0.31%, the S&P 500 by 0.20% and the NASDAQ by 0.08% – a mere bagatelle. Today, once there has been a chance to digest comments on Xi Jinping’s visit to the US and the focused adulation towards Pope Francis, maybe the New York exchanges will provide greater input than they did yesterday. Perhaps data on Durable Goods and New Home Sales could be the litmus test of the day! In Asia, Japan returned to work after a three day holiday and was subject to a downward 2.76% adjustment. The Shanghai Composite was 0.67% to the good after lunch and the Hang Seng was 1.01% under water. The ASX ended the day up 1.67%. Thos Cook posted numbers in line with expectation – +4% its shares having been trashed in recent sessions. DMGT’s efforts were satisfactory – +0.8% and Poundland was the recipient of rather harsh treatment as a result of its £50 million placing – down 5%!


Anyway, it’s all about VW these days and the skulduggery over false data on emissions from ONE of their diesel engines. No one is attempting to condone this unacceptable behaviour. However the reaction initially was very violent. Yes there are potentially 11 million cars potentially involved. The situation is of course exacerbated by the fact that VW have fallen foul of the US authorities. We must remember that the law in the US is the greatest business on earth and litigation will be rife – hence the hysteria. There will of course be ramifications in the UK and the EU as well and one suspects that China, who receives 40% of VW’S exports, will have things to say. VW have made provisions for £4.2 billion in terms of fines and payments. The shares fell 35% in the first two days (€18 billion loss in value) but recovered by 6% in the hope that CEO Martin Winterkorn would bite the dust and another 6% this morning in expectation that other heads, responsible for this heinous misdemeanour, would role. They have to be exposed by the new CEO sooner rather than later for VW to have any chance of restoring the standing of its tarred brand quickly. We hear Friday is D-Day!


Who are in the vanguard to take over? Only two names to date – Matteus Mueller – CEO of Porsche one of 3 major shareholders (the others being the Workers Council in Wolsburg and the Lower Saxony Government) and Herbert Diess (formerly with BMW) have been flagged up. The latter surely would be seen as a more transparent appointment? Corporate governance in Germany is a little like Japan – very incestuous. There appears to be no real transparency. Information rarely comes out of a very tight drum – hardly surprising when unions and government are omnipotent in corporate affairs as dominant shareholders. When one thinks about it NO MAJOR German operation has ever been acquired by an overseas predator apart from Mannesmann, which was acquired by Vodafone for €220 billion back in 2000! That price was madness and there was no government ownership.


This VW scandal has all the hallmarks of the ‘BP Saga’ and the vilification that befell Phillip Morris in the US. VW will be aware of this and need to act quickly to avoid an unnecessary fall-out that ends up being financial carnage. VW need to adopt the attitude – “We’ll be damned if we are going to allow the US to destroy our company!” As auto engineers Germans are peerless! VW must have the drains up NOW!


UK companies posting results –   Thursday – THOS COOK, EUROMONEY, SVG CAPITAL, DMGT, WS ATKINS, Friday – MJ GLEESON

US companies – Thursday – JABIL CIRCUITS, NIKE





David Buik – market commentator



Panmure Gordon & Co




TODAY’S FAYRE – Wednesday, 23rd September 2015



“In autumn moonlight, when the white air wan 

Is fragrant in the wake of summer hence, 

‘Tis sweet to sit entranced, and muse thereon 

In melancholy and godlike indolence: 


When the proud spirit, lull’d by mortal prime 

To fond pretence of immortality, 

Vieweth all moments from the birth of time, 

All things whate’er have been or yet shall be. 


And like the garden, where the year is spent, 

The ruin of old life is full of yearning, 

Mingling poetic rapture of lament 

With flowers and sunshine of spring’s sure returning; 

Only in visions of the white air wan 

By godlike fancy seized and dwelt upon.”


Robert Bridges – poet laureate – 1844-1930


They say that revenge is a dish best served up cold! Many a true word spoken in jest, but the rather grubby and caustic revelations published in the Ashcroft and Oakeshott book ‘Call Me Dave” is a classic example of how not to ‘cross’ an influential person unless you have every angle covered. Frankly the idea – true or false – of a tax exile over many years, holding high office in the UK, is at best remote. It looks as though the PM will rue the day he and Lord Hague ever accepted donations totalling £8 million for the Conservative party. This is a ghastly, trite, nasty and contemptable book, which I won’t be reading and normally I am a mug for political books. However I am sure the rejuvenated young members of the Labour party will have an insatiable appetite for its content.


There was plenty of comment from BT’s Gavin Patterson on the company’s plans for improving broadband in the future in the hope of escaping from the pressures to break up the company. Considering the amount on money consumers pay for mobile and internet reception, may I be bold enough to say that, outside metropolitan areas, the reception and service is pretty poor. All telecom operators need to sharpen up. These facilities are essential for the furtherance of business and education. Maybe the government is preventing booster masts from being introduced to improve the overall quality of service. All I know is that the service is patchy at best. This is 2015 and not 1950!


Yesterday equity markets felt like the aftermath of a mediaeval battle – total carnage. Though Asia, excluding Japan, which continues to be closed for public holidays, in isolation did not suffer too badly, investors in London vented their spleen on both FTSE 100 and 250, thanks to issues highlighted by BHP’s future requirements, the price of copper falling (20% in recent weeks) and UBS downgrading the mining sector. Consequently the mining sector was put to the sword, yet again, with drugs and oil companies also licking their wounds for most of the session.


Confidence in equities is non-existent and sentiment is at rock bottom levels. The FTSE 100 lost 172 points down to 5835. The DAX and CAC suffered even more with losses of 3.8% and 3.4% respectively on the day. Needless to say the parlous state of VW put the auto sector under the cosh, which exacerbated the pressure markets came under. These emission issues are likely to have ramifications with other car manufacturers. Having lost 19% on Monday, VW lost a similar amount of value yesterday – close to £15 billion in overall value. 11 million VW cars are potentially under scrutiny and so far 50 class action lawsuits have been drawn up in the US against VW. Volumes were slightly above average yesterday, though large amounts of mining stocks were sold off. Glencore were taken down nearly 10% to 106p, having sunk as low as 99.9p at about 1.25pm BST.


The atmosphere on the Street of Dreams was even worse. The DOW lost 1.09%, the S&P 500 1.23% and the NASDAQ 1.50%. Energy and resource stocks were hit hard, as the FED’s Lockhart and Bullard continued to argue the case for higher US interest rates. On the tech front, Yahoo!, Google, Twitter, Apple and IBM all lost around 2% during the session.


This morning HSBC’s PMI readings and factory gauge data made dispiriting reading – down at their lowest level for 6.5 years. Not surprisingly Asian markets were underwhelmed with the news! The ASX closed down 1.97%, with the Hang Seng easier by 2.9% close to lunch and the Shanghai Composite down 1.67%. Again there has been some tiny relief in the last hour. Japan’s Nikkei remains closed. European markets are expected to open just in negative territory this morning. Diageo, down 5.3% this year, posted an encouraging trading statement. Not so Smiths Industries with their outlook looking a little discouraging. There was also news that their highly regarded CEO Philip Bowman will be retiring. He was previously highly influential at Allied Domecq, before the drinks titan was sold to Pernod Ricard and Fortune Brands, and Scottish Power.


So far this year it is interesting to note that the main global indices have performed at follows since the start of the year – It feels much worse than that because of the rally up until May!


DOW -9.2%, S&P 500 -6.5%, NASDAQ -0.4%


FTSE – -9.6% – down 16.4% since May 2015

DAX -2.4%

CAC +3.6%


NIKKEI +3.5%



UK companies posting results –   Wednesday – SMITHS GROUP, UNITED UTILITIES, Thursday – THOS COOK, EUROMONEY, SVG CAPITAL, DMGT, WS ATKINS, Friday – MJ GLEESON

US companies – Thursday – JABIL CIRCUITS, NIKE






David Buik – market commentator



Panmure Gordon & Co


Well there was blood running down Threadneedle Street and Canary Wharf today. Dealers and analysts were at their wits end. Markets makers were rudderless and they were running around like headless chickens. Volumes have been slightly better than average as they were seen dodging business on the way down. However volumes in the mining sector have been gargantuan


After steady sessions in New York yesterday and Asia this morning, where dealers felt that it might be constructive to take a parochial view on their respective indices, these markets made a bold showing. However it was not to be in dear Old Blighty, where European dealers were distracted by negative news on a few issues. Analysts still feel that that stock valuations look a bit rich. Also it did not help that BHP fed the market with an uncomfortable feeling that it might need a bond issue. Then the situation was exacerbated when Credit Suisse downgraded the mining sector, which sent out distress signals. Dealers and traders picked in Glencore, which fell by 13% to 98.5p before rallying to down being 11% down at 105p. Anglos were also trolleyed – down 7% with Rio just losing 3%, though they were down nearly 5% at one time. With Glencore not involved in coal and iron ore, the future recovery does not seem that close at hand. However CEO Ivan Glasenberg must never be underestimated.


Oils had a torrid time with BP easing by 2.5%. There was zero appetite for risk. Drugs came under the cosh with GSK losing 2.75% and Astra Zeneca 3.5% partly thanks to inflammatory comments made by Hillary Clinton on biotech companies yesterday. Banks were down 2% and media stocks by an average of 1%. Of those companies reporting numbers or trading statements today, IG was up 2.5%, Card Factory was down 0.75% having been up 1.5%. Close Brothers and PZ Cussons were near enough flat. AA lost 8.5%. Its sales were down as it struggled with its insurance business. Mitchell and Butlers replaced its CEO with Phil Urban. The trading update did not pass muster – shares down 5.8% at 3.10pm. The FTSE 100 was down 118 points at 5990 and The Street of Dreams was on the back foot with the DOW down 193 points.



TODAY’S FAYRE – Tuesday, 22nd September 2015


 “So sweet love seemed that April morn,

When first we kissed beside the thorn,

So strangely sweet, it was not strange

We thought that love could never change.

 But I can tell–let truth be told–

That love will change in growing old;

Though day by day is naught to see,

So delicate his motions be.

 And in the end ’twill come to pass

Quite to forget what once he was,

Nor even in fancy to recall

The pleasure that was all in all.

 His little spring, that sweet we found,

So deep in summer floods is drowned,

I wonder, bathed in joy complete,

How love so young could be so sweet.” 


Robert Bridges – poet laureate – 1844-1930


We have had such a feast of sport in recent weeks, which puts the UK’S national game – football – well and truly in the shade for a few weeks! The start of the Rugby World Cup has been electric, spear-headed by Japan’s exhilarating and totally unexpected though deserved win over South Africa. No doubt there will be further upsets as the tournament progresses.  What an eclectic bunch the Japanese team was – Japanese, English, Kiwi, Samoan and Tongan! – Great stuff.  Though ‘lawners’ is not really my bag, we have to doff our ‘titfers’ to the Murray Brothers and the rest of the UK’S Davis Cup team for beating Australia, thus reaching the final for the first time since 1976 – an incredible achievement considering the talent of many other countries.  Beating Belgium in the final must be within the UK team’s grasp.


The Fed understandably feels that was caught between a ‘rock and a dark place.’ Yes, it has the IMF and the world at large pleading with it not to raise rates to prevent unnecessary damage for other debtors, who borrowed excessively, using dollars to save money. The Fed is also caught between domestic policy objectives that dictate they MUST raise rates of they will bankrupt countless pension funds and international operations, where emerging markets will go into default because commodities have collapsed and they have no way of paying off this debt that has risen to about 50% of the US national debt. The real problem markets have at present is getting the balance between genuine growth and asset bubbles.  The latter have exploded disproportionately in the past 5 years.


That conundrum probably has greater connotations than assessing the decline of growth in China. There is certainly dissent in the FED camp, highlighted by FED member James Bullard being unequivocal in say he felt rates should have started their ascent last week on US economic strength rather than be influenced by international anomalies. Lockhart also joined in the conversation suggested a symbolic increase of 25 basis points by the end of the year.


I smiled wryly at Tsipras’s and Syriza’s victory – though I suspect a Pyrrhic one.  That’s what we call in amateur football a ‘hospital pass.’ I just cannot see Greece delivering austerity in spades. Surely it is only a question of months before we revisit the bail-out route yet again.  I am amazed that in a matter of a few months the yield on 10 year Greek bonds has fallen from 13% to 7.9%. Amazing how influential and well as misleading ECB access can have and be!


Yesterday the Street of Dreams attempted to focus on the positive aspects of US economy rather than the FED’s indecisiveness on an interest rate hike. Consequently the DOW was up 0.77%, S&P +0.46% and the NASDAQ +0.04%. Time Warner’s shareholders approved the $55 billion takeover of Charter Communications. FTSE 100 took a knock courtesy of the Zurich Insurance pulling the plug on acquiring RSA, causing the UK insurer to fall 20% in value. The FTSE ended the session up 4 points at 6108, with the DAX up 0.3% and the CAC 1%. Asian investors started thinking China’s economy not as brittle as some think. This attitude resulted in the ASX adding 0.55%, The Shanghai Composite and the Hang Seng were up 1.2% at lunchtime. The Nikkei remains closed today for a public holiday.


On the domestic front UK manufacturing data may post some encouraging numbers. Also we should reflect on Chancellor George Osborne’s visit to China. He is absolutely ‘spot on the money’ to make up for lost time by setting down the UK’S trading and business stall for the future to court Chinese business. So the Government may well be underwriting a huge loan – a £2 billion, in isolation probably too much, to China – for its investment in a new nuclear plant at Hinckley in Somerset, but there will be method in Osborne’s madness. China will, going forward, be hopefully disposed to getting involved in other business initiatives such as a possible tie-up between the Shanghai Stock Exchange and the LSE. Now that would be a humungous deal with potentially brilliant benefits. For the LSE to be able to trade a growing number of Chinese stocks here in London, could only have a positive outcome. One obvious added benefit would be China’s need to expand their banking operations in London to complement its expanding presence in corporate finance.


 Yesterday’s news that Zurich Insurance had been forced to pull out of its £5.6 billion acquisition of RSA, due to disaster liabilities in China in the City of Tjanjin, which have affected Zurich balance sheet which could results in a loss this year of $275 million. RSA’s shares fell 20% and that fall was not the only potential shock wave. RSA CEO Stephen Hester was rumoured to be under consideration for the Barclays CEO job. If offered it, Hester may well take up the challenge, leaving RSA looking for a tough, talented and uncompromising successor.


Moving on; VW’S ‘emissions-fixing scandal’ which have come to light in the US, two days ago. These misdemeanours could cost the German operator $18 billion in fines etc. Two observations – firstly VW only exports 3.2% of its cars to the US.  China could be a worry – 40% of exports go to China.  There could also be ramifications for VW in Europe and the UK.  Secondly this scandal could extend to other companies and countries. VW’S shares fell 19% yesterday.


This morning there were excellent numbers from Card Factory and IG Group.  AA’s results failed to pass muster and fell 8%.  M&B are losing its CEO Alistair Darby and he will be replaced by Phil Urban.  The market was not impressed and shares fell by 3%.  At 9.30am the FTSE 100 was down 87 points at 6020. Credit Suisse downgraded the mining sector and BHP’s possible need of a bond issue may have exacerbated the situation. Glencore was down 9% at 108p on 31 million shares. Volumes in the market have been derisory.







David Buik – market commentator



Panmure Gordon & Co


TODAY’S FAYRE – Sunday, 20th September 2015


 Perfect little body, without fault or stain on thee,

With promise of strength and manhood full and fair!

Though cold and stark and bare,

The bloom and the charm of life doth awhile remain on thee.


Thy mother’s treasure wert thou;—alas! no longer

To visit her heart with wondrous joy; to be

Thy father’s pride:—ah, he

Must gather his faith together, and his strength make stronger.


To me, as I move thee now in the last duty,

Dost thou with a turn or gesture anon respond;

Startling my fancy fond

With a chance attitude of the head, a freak of beauty.


Thy hand clasps, as ’twas wont, my finger, and holds it:

But the grasp is the clasp of Death, heartbreaking and stiff;

Yet feels to my hand as if

‘Twas still thy will, thy pleasure and trust that enfolds it.


So I lay thee there, thy sunken eyelids closing,—

Go lie thou there in thy coffin, thy last little bed!—

Propping thy wise, sad head,

Thy firm, pale hands across thy chest disposing.


So quiet! doth the change content thee?—

Death, whither hath he taken thee?

To a world, do I think, that rights the disaster of this?

The vision of which I miss,

Who weep for the body, and wish but to warm thee and awaken thee?


Ah! little at best can all our hopes avail us

To lift this sorrow, or cheer us, when in the dark,

Unwilling, alone we embark,

And the things we have seen and have known and have heard of, fail us.”


Robert Bridges – poet laureate – 1844-1930


‘Gratitude belongs to history not to politics!’ – The Times 1945


Though I am a huge fan of Nick Mullins as a rugby commentator, I was very disappointed with ITV’S presentation of the actual inaugural match at Twickenham. I thought that the camera work was shoddy failing to give viewers a decent perspective of the game. As to the game itself; if Fiji had produced a half decent kicker, England might well have been made to struggle rather more than the shoreline suggests.  I suspect Wales and Australia will have seen little to frighten them yesterday evening.

It is amazing how all these retired political luminaries pick up ‘plum’ non-executive directorships.  It did not take Lord William Hague to get in to the groove. Word on the Street has it that he has been appointed a director of ICE/NYSE with emoluments and bonuses totalling £300k. I suspects he knows as much about, markets, securities and banking as I know about non- ferrous welding! That’s life!

Last week’s escapades and headlines were dominated and grabbed by two people in the main – Janet Yellen and Jeremy Corbyn – with eye catching, though spear carrying cameo parts, played by Mark Carney, Andy Haldane and the Chinese Premier, though not in name or for that matter by way of a ‘nom de plume!’

We can deal with Jeremy Corbyn in about two sentences.  The New Labour leader together with his shadow Chancellor, John McDonnell, have promulgated economic policies that would be a classic recipe for eternal financial damnation. Corbyn enjoyed a very undistinguished first week as opposition leader and if the truth be told I don’t think Corbyn aspires to be PM. He just wants to swing Labour’s agenda away from austerity, not that there is much evidence of it, whilst at the same racking up the UK’S borrowing requirement to finance increased and irresponsible welfare.

Janet Yellen didn’t exactly play the damsel in distress when she announced on Thursday evening that the FED had decided to keep any hike of interest rates on hold, due to fairly powerful evidence that the World’s economy and particularly China’s was perhaps not in as rood health as had been predicted. However, though she gave a very lucid explanation as to why the FED had adopted a cautious outlook, in the same breath, she frustrated her audience with excessive indecision and further vacillation on ‘to hike or not to hike!’ On both sides of the Pond ‘Forward Guidance’ is beginning to give industry, commerce, markets and economists a severe dose of the ‘pip.’

Central banks have been at this ‘forward guidance’ game for the best part of 18 months and their readings of the world’s economies has been rather out of kilter. In fact their prognoses have been wrong. ‘F-G’ has created tsunami levels of volatility within markets, particularly emerging market economies, which have been unnecessary and damaging, purely because ‘F-G’ has prevailed for too long and expectations have been supremely high.

I think it would be churlish to be over critical. We can all understand the reasoning behind ‘F-G’ but there comes a time when there is too much teasing and ‘egging-on’ resulting in the policy having negative connotations. Therefore it would probably have been best to ‘put up or shut up!’ We are surely at that stage? The lack of inflation, fairly benign wage inflation, low oil costs and the strong Dollar also brought influence to bear in the decision making process. Many now think that the first 25 basis point symbolic hike will take place in December. I have my doubts that any rate increase will be effected before the first quarter of 2016, with so many countries threatening deflation or little in the way of measurable growth. There is a school of thought that to have raised rates by 25 basis points on Friday would have been accepted as rational, had it been accompanied with a statement saying ‘that’s it folks for the time being and if the FED is wrong we will be happy to cut again.’ No such luck, which leaves everyone in a state of flux – damaging and unhealthy. Most are sympathetic to the FED’S wishes to ween business and the consumer back on to commercial levels of borrowing.

The third matinee idol, though rather less conspicuous, was China. Last week China posted more and more disappointing data almost on a daily basis, from trade to manufacturing. However the market always felt that the authorities had a trick or two up their sleeve – whether they did have remains to be see.



What about the EU and the ECB? Though their role last week was no more than a supporting one, it was interesting to note that the ECB’S balance sheet may have increased by 30% since September 2014 and there may be another 20% on the upside in the months to come, particularly if countries like Greece fail to respond in time to supposed austerity. The outcome of this weekend’s Greek General Election, with Tsipras’s Syriza party slightly in the lead according to recent polls, is unlikely to be financially conclusive. Greece’s bond yields have fallen measurably in the last couple of months with the 10- year down from about 12% to 8.3%, but Greece still looks ungovernable.

The messages from the BOE on rates last week were very mixed. Governor Carney seemed less concerned about the damage China might have on the UK’S economy than other luminaries and if a push came to a shove one suspects that he, aided and abetted by Kirsten Forbes and Ian McCafferty, would be happy to see rates start to slowly rise in January 2016. They believe the UK’S economy is robust enough to cope. The BOE’S chief economist Andy Haldane posted more radical views in a speech in Northern Ireland, offering a greater degree of flexibility than others. Mr Haldane believes that though cash is here to stay, it could eventually be replaced by digital facilities, thus providing the Bank with more flexibility in the event of another downturn. Also he did not did not rule out the possibility of negative interest rates, which in certain circumstances could enable the authorities to deal aggressively with a further sharp slowdown – Controversial ideas but food for thought!

Last week equity markets started off promisingly but when it became clear that faltering global growth was a concern and that it was not going to go away, they, in many places gave up the ghost with the S&P finishing just 0.22% above the Plimsoll line, though the FTSE fell by the same amount, European stocks by an average of 0.25% and the Nikkei by 1.06%. The Dollar surrendered value and Gold added $30 an ounce on the week to $1137. Brent crude fell by 2%.



Despite the turmoil there was still plenty of corporate news with more than just a smattering of M&A and IPO activity. Glencore announced controversial initiatives to raise capital and cut debt in what appears to be an unresponsive commodity marketplace. Poundland posted a 134% increase in annual profits. WorldPay, which was sold privately out of RBS for about £1.3 billion four years ago may be brought to the market with a £6 billion price tag. WorldPay will be raising just over £850 million. Notice was also served on behalf of Hastings Direct of its intentions to float. The fact that steel factories in Redcar are in danger of being closed down with a possible loss of 4000 jobs, just illustrates what a precarious position commodities, metals and coal industries are in. Stockbrokers Cenkos, never averse to a good battle, are rumoured to be at the centre of a coup to oust Chairman Nigel Northridge and CEO Michael Sharp from under-performing Debenhams. They are purported to have the support of Neil Woodford.



Last week’s blockbuster deal was the proposed merger of AB InBev (Budweisser, Stella Artois, Carona etc) and SAB Miller (Miller, Peroni, Grolsch) in a £180 million deal. The merged operation could account for 30% of the world’s brewing market, if the regulatory authorities allow it to go through. Also if the deal were to take months to go through, it could severely damage an operation of this nature. At present AB Inbev accounts for 20.8% of the market, SAB Miller for 9.7%, Heineken 9.1% and Carlsberg 6.1%. No doubt both operations will have to sell some of their breweries or brand names to comply with the regulators rules. Altria, the US tobacco giant is also mulling over selling its 27% stake in SAB Miller and will be consulting with Credit Suisse. There are also potential tax benefits to be gained, if for instance SAB Miller were to leave Belgium. There will be more M&A activity initiated to deliver greater shareholder value in many sectors, with probably drugs and media leading the charge.








David Buik – market commentator



Panmure Gordon & Co


TODAY’S FAYRE – Sunday, 13th September 2015


“Now mind is clear

as a cloudless sky.

Time then to make a

home in wilderness.

What have I done but

wander with my eyes

in the trees? So I

will build: wife,

family, and seek

for neighbors.

Or I

perish of lonesomeness

or want of food or

lightning or the bear

(must tame the hart

and wear the bear).

And maybe make an image

of my wandering, a little

image—shrine by the

roadside to signify

to traveler that I live

here in the wilderness

awake and at home.


Allen Ginsberg – poet – 1926-1997


I remember a fascinating conversation a few years ago when Roy Hattersley told John Humphrys in a Radio 4 interview that UK politics were only fun when it was ‘Right’ v ‘Left.’ Then its unequivocal; none of this wishy-washy’ centre ground nonsense. It is all about conviction politics. For the avoidance of doubt not a hair’s breadth of ambiguity! I think he was right. In the wake of Sadiq Khan’s clinical destruction of Dame Tessa Jowell’s aspirations to become Mayor of London, came a unanimous endorsement for Jeremy Corbyn (59.5% of votes cast!) to lead Labour towards the next General Election.


If a push comes to a shove, I think Jeremy Corbyn may not really want to become a Labour PM. I think he just wants to change Labour’s agenda – more nationalisation, state control, less influence from America and a total redistribution of wealth. Oh yes and he wants the cost of climate change to head off the ‘Richter scale’ and for the UK to take in hundreds of thousands of refugees! All laudable policies, but they won’t work though it will be fun watching his manifesto unfold. In the event of achieving his goal of changing Labour’s culture, I think Corbyn will hand over to someone like David Miliband, who could water down such draconian policies, which are far from pragmatic, and perhaps lead Labour in to an election with some plausible policies. We shall see!


I was enormously grateful to Panmure’s CEO, Phillip Wale for allowing me to accept an invitation to BGC’S Charity day. I was totally overwhelmed by the warm reception I received.  It is marvellous how over the past 14 years the day has changed from one of mourning, reflection and help to a day of celebration for those people and their charities that are less fortunate than most of us. Whatever the detractors, cynics and critics say, the City of London is an immensely generous place. Thank you to those trading in banks for lightening the burden of those who suffer! Of course those that perished in the World Trade Center will never be forgotten.

Last week was yet another one of frustrating indecision and seismic volatility. Most major indices ended the week above the Plimsoll line even the Shanghai Composite burst through – up 1.3% on the week, with policy makers pledging further stimulus measures if required. Considering all the imponderables mentioned, it was somewhat surprising that the S&P was up 2.07%, the FTSE by 1.45%, European stocks by an average of 0.61% and the Nikkei by 2.65% – the latter’s rally was down to a 7.71% burst on Wednesday triggered by another wave of enigmatic and nonsense Abenomics and a 3.3% cut in corporation tax.

Until the outcome of next Thursday’s FOMC meeting, markets are likely to remain on ‘high-alert’ or in ‘high dudgeon.’ A decision on rates remains 50-50. Certainly the U.S. Labor data provides Janet Yellen’s committee members with more than a little encouragement to make that 25 basis point symbolic jump in to the unknown. However international issues suggest further reflection and that playing a waiting game might be more prudent. Anyway let’s not forget that a year’s vacillation by the FED and to a lesser degree the MPC has damaged the confidence of emerging nations strengthening the Dollar unnecessarily as well as allowing China to fill its boots with ludicrously cheap dollars (in terms of cost) which its banks have lent indiscriminately, often to buy equities, making them vulnerable in terms of a possible credit crisis. The supporters of ‘forward guidance’ are certainly diminishing, with many believing that the process is counter-productive.

In the UK on Thursday the MPC committee left rates at 0.5% for the 6th year and 5 months running, with just Ian McCafferty the only dissenting voice. He has wanted for some time to put rates up. The dissenting numbers are likely to swell their ranks before too long with Kirstin Forbes and Martin Weale likely to jump from the ‘No Change Ship!’ Mark Carney’ comments were more hawkish than many had expected, since the BOE has dropped GDP targets for the 3rd quarter from 0.7% to 0.6% and also manufacturing output was very disappointing as was the construction data. Governor Carney expects the trigger to be pulled early in 2016.

In the U.S. It wasn’t a significant week for earnings though on Friday the supermarket Kroger posted great numbers, triggering a 5.3% rise in its share price. This long-overdue global equity correction if that is what it is, has not dampened the enthusiasm there is for M&A activity, though IPO deals may be less prevalent until sentiment gets on the front foot. Actelion and ZS Pharma are in talks across the pond to merge their operations and there was a surprising deal confirmed in London by AMLIN that the Lloyd’s Insurance operator had agreed to be taken over by Mitsubishi Sumitomo Insurance for £3.5 billion – 670p a 35% premium. The UK’S Worldplay looks as though it might escape the clutches of Germany’ Wirecard and France’s Ingenico, by being brought to the market by Goldman, Morgan Stanley and BOAM in a £6.6 billion IPO – about £4 billion above the price RBS sold it off. The Sunday Times also informs us that Ibstock and CMC are also waiting in the wings for conditions to improve.

It was a big week for UK retail operators with Carphone Warehouse and Next producing great numbers. The same cannot be said particularly of Wm Morrison and of John Lewis/ Waitrose, who is the past have set the bar fairly high with high standards and great appeal to middle-England. NEXT, John Lewis and JD Wetherspoon expressed their concern about the ‘living-wage.’ Their respective costs will go up. Over 5 years it may cost NEXT £27 million, which will be passed on to the consumer. However Waitrose, as will other supermarkets, will be looking over their shoulder at Lidl and Aldi. Lidl intends to open 251 outlets within the M25 ASAP and both German retail juggernauts have aspirations to have 1500 outlets in the UK over the next 5 years. Retail war has been declared.

The long awaited resurgence of Williams & Glyn as a bank from the ashes of the Coop’s abortive deal to buy 314 branches from RBS/NatWest may take place as an IPO in the 2nd half of next year in £1.5 billion float on the arm of BOAM. CEO Jim Brown and CFO Leigh Bartlett have just taken up their appointment. This bank will have 1.4 million retail customers and about 200k small businesses. The bank will employ about 4000 people. In September 2013 the Corsair Consortium, led by Standard Chartered Bank’s former chairman and Labour minister, Lord Mervyn Davies, agreed to by the 314 branches, beating a Andy Higginson consortium to the punch to the surprise of many onlookers. RBS was forced by the EU to sell these branches in 2008, as was Lloyd’s Banking Group forced to create TSB, which was recently bought by Banco Sabadell.




US companies posting results this week – Wednesday – ORACLE




David Buik – market commentator



Panmure Gordon & Co

Market update

In so many ways equity activity was predictable today! Uncertainty triggered by Central bank vacillation and prevarication, concern about Chinese economic data, stock valuations and oil prices – what a toxic cocktail. So once Asian markets followed New York in taking their pound of flesh out of the proceedings, punters basically were left with no alternative but to say ‘YOURS!’ So at the death the FTSE 100 was down 71 points at 6157. Oils were flat for much of the day, but as the price of crude eased, so did stock values – down an average of 1.5% with BP down 2%. Mining stocks had to take it on the chin again as their flags were lowered by between 3.5% and 4%. Drugs were up 0.5% with Astra Zeneca the strongest performer. Banks were friendless in the ring with HSBC, Lloyds and Standard Chartered down an average of 2%.


It was a big day for retail. Why so many would want to report on the same day escapes me. Dunelm did well with their numbers but they have had a run on the rails so they eased by 0.5%. Home Retail is struggling to keep up with the pace – -3%. Wm Morrison failed to impress shareholders for reasons discussed in Today’s Fayre – shares down 2.84%. Dixon Carphone (+2%) with sales up 10% and profits by 7.1% and NEXT (+1.7%) were the stars. Despite of the last two months turmoil, NEXT is the only company which maintained its value – 7400 to 7784p – quite amazing – up 12% on the year! Barratt Development also added another 4%. Sage disappointed -2.5%.


Aldi and LIDL declared war in Middle England – in villages and in Waitrose country such as Notting Hill, Highgate, Chelsea and even Mayfair. With news that John Lewis’s Waitrose efforts were not quite so ebullient with sales dropping 1.3%, Lidl announced that it is looking to open up 281 stores around M25 and something like 1500 outlets are being considered in the long terms. At the time of writing, the DOW was up 35 points and markets seemed without inspiration. Mark Carney and the MPC left rates unchanged after 6 years 5 months. The Labour data will now be of concern, as will issues beyond these shores and so will the lack if inflation and poor manufacturing data. When at all possible and the sooner the better a decision must be made on rates – no more hopes and dreams. As Joe Friday in ‘Dragnet’ said all those years ago ‘Just the facts Ma’am, just the facts!’


Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape. 

 He will be remembered as having cultivated such valuable lessons as:


 –  Knowing when to come in out of the rain;

–  Why the early bird gets the worm;

–  Life isn’t always fair;

–  And maybe it was my fault.


 Common Sense lived by simple, sound financial policies (don’t spend more than you can earn) and reliable strategies (adults, not children, are in charge).


 His health began to deteriorate rapidly when well-intentioned but overbearing regulations were set in place. Reports of a 6-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.


 Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children.


 It declined even further when schools were required to get parental consent to administer sun lotion or an aspirin to a student; but could not inform parents when a student became pregnant and wanted to have an abortion.


 Common Sense lost the will to live as the churches became businesses; and criminals received better treatment than their victims.


 Common Sense took a beating when you couldn’t defend yourself from a burglar in your own home and the burglar could sue you for assault.


 Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement.


 Common Sense was preceded in death:


–  by his parents, Truth and Trust,

–  by his wife, Discretion,

–  by his daughter, Responsibility,

–  and by his son, Reason.


He is survived by his five stepbrothers:


–  I Know My Rights

–  I Want It Now

–  Someone Else Is To Blame

–  I’m A Victim

–  Pay me for Doing Nothing


Not many attended his funeral because so few realized he was gone.


If you still remember him, pass this on.  If not, join the majority and do nothing.