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


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