TODAY’S FAYRE – Tuesday, 13th October 2015


“To-morrow, and to-morrow, and to-morrow,

Creeps in this petty pace from day to day,

To the last syllable of recorded time;

And all our yesterdays have lighted fools

The way to dusty death. Out, out, brief candle!

Life’s but a walking shadow, a poor player,

That struts and frets his hour upon the stage,

And then is heard no more. It is a tale T

old by an idiot, full of sound and fury,

Signifying nothing.”


“Macbeth” William Shakespeare – poet & playwright – 1564-1616


I had heard so much about the film ‘Everest’; I couldn’t wait to see it! It is bound to win ‘Oscars’ and ‘BAFTAS’ for special effects.  The filming and the sets were amazing. Apart from the fact that it was the story of a terrible tragedy – The 1996 expedition up Everest, which experienced the second largest loss of life climbing this formidable peak, the story lacked content. The only three well-known stars – Keira Knightley, Jake Gyllenhaal and Emily Watson, had ‘spear carrying’ roles.  They were all interesting but tiny cameo roles with little or no substance. I was terribly disappointed.

Justin Kerzel’s direction of the film ‘Macbeth’, starring Michael Fassbender and Marion Cottilard, produced a brilliant film based on Shakespeare’s epic play, though it never fully stayed on message. Macbeth was portrayed by Fassbender as evil and mad, whereas Lady Macbeth was acted as an accessory after the fact. Michael Fassbender’s acting was off the Richter scale. His Scottish accent was all but faultless. Marion Cottilard’s performance was undercooked but wonderfully dramatic. Again the filming was astounding with exquisite misty views of Glencoe and the coastal area around Bamburgh Castle in Northumberland, accompanied by haunting music, dominated by what sounded like an orchestra of cellos!  This film is a must for students of Shakespeare to those who just enjoy top-class drama.


Well Lord Rose certainly came out with all guns blazing as chairman of the ‘IN’ brigade.  Those of us who want out are, in his words, ‘quitters!’ I am rather insulted by that suggestion.  Maybe we just want the best for UK PLC! It is ironic that Lord Rose could not get M&S out Europe fast enough and I find it astonishing that the former ‘King of Gowns & Blouses’ is happy for the UK to stay ‘in the EU’, come ‘hell or high water.’ I sincerely hope he does not get sucked in with all the bogus financial data to justify his stance.  Anyone can produce figures to endorse their cause. The fact remains the EU is not working and never will.  It is impossible for 27 countries to have a common cause and sing from the same financial hymn sheet.  Why should the UK pay for financially innumerate and economically illiterate countries, which cannot get their act together and never will? Some of us also don’t care for federalism.


Yesterday’s market machinations felt rather like the calm after the storm. Investors and observers were waiting for a raft of Chinese data due later in the week. Also it was Columbus Day in the US; so activity threatened to be minimal. Oil fell sharply and mining stocks saw profit takers in the ring. There were three highlights to the day. Dell Computers, which its founder Michael Dell took back into private ownership last November, succeeded in sweeping up EMC, a cloud styled computer operator majoring in storing data, in a gargantuan $67 billion deal. This acquisition will give the desk-top computer titan more arrows to its bow than perhaps Hewlett-Packard could hope to emulate. HWP and IBM have been divesting themselves of superfluous assets and clearly both do not have the luxury of freedom of movement that a private company has.


Then AB InBev’s Carlos Brito inevitably upped the ante for SAB Miller from £42.25 a share to £44.00 – £68 billion and it is thought that this improved effort has persuade Peroni, Altria and the Santa Domingo family to acquiesce and accept the offer. Friday was D-Day – ‘Put up or shut up day!’ Mr Brito had not rule out the possibility of going hostile if needs had been a must. This brewing merger would mean that one in every three pints downed would have AB InBev/SAB Miller’s dabs on it! This deal looks to me like a regulatory minefield. Many will be not surprised if it is not consummated. However the fact that professional advisory fees could top $3 billion will be a massive incentive! Well done to Morgan Stanley, JP Morgan et all advising SAB Miller and to Lazard, Buckhaus Deringer and Freshfields and others advising AB InBev! SAB Millers shares were up 10% at the opening at 3950p. Number 3 was the confirmed news that Glencore would be selling mines in Australia and Chile, valued at circa $1 billion assuming a price of $6200 a ton for copper. The market feels this is probably not enough and the shares this morning are down 4.3% to 115p.


This morning there was bad news from China with imports down a humungous amount in September -20.4% and exports down 3.7%. Both these numbers were amazingly, better than expected. It is now easy to understand why oil and commodity prices dipped yesterday. The ASX closed down 0.57% and the NIKKEI was down 1.11% at the close. At lunch Chinese markets had paired down losses – Shanghai -2.65% and the Hang Seng -0.82%. This morning there were great numbers from Bellway – profits +44% shares up 3%. Michael Page saw profits up 10% but for foreign exchange vagaries it would have been more. Hastings Insurance brought to the market at 170p a share by Barclays, HSBC, Goldman and Credit Suisse, experienced a disappointing debut with shares falling to 162p. The irony is at that price the company is valued at 1066!! – ie £1.066bn!


Finally, as they say – save the best until last! The rumour that Barclays were about to appoint James (Jes to his mates) Staley, the 58 year old former senior executive at JP Morgan came as a bit of a surprise in terms of timing. We were all thinking that John MacFarlane was feeling very comfortable with both hats on! – Chairman and CEO. However he has supposedly unveiled Mr Staley who was with JPM for 30 years responsible in the end for risk management prior to leaving in 2013 to join Blue Mountain Capital. Two ironies in one day! – Blue Mountain took JPM’S the ‘Whale’ on in a property derivative battle which cost JPM $7.6 billion and made Blue Mountain a purported $30 million.


One thing has become clear, if this deal is ratified, and that is Barclays is reluctant to ‘bin’ investment banking and intends to throw caution to the wind. And who can blame MacFarlane and his cohorts. Expedited properly, investment banking is very lucrative, particularly from a profitable springboard, such as Barclays has in New York. Historically UK bank’s performance except Barclays under Bob Diamond has been lamentable. We have just picked up the crumbs from Lazarus’s table and left the tasty morsels to US, Germany and Switzerland. This appointment is a bold move, though George Osborne may cock his eyebrows. Poor Antony Jenkins – he ploughed a lonely furrow in high street and corporate banking, all to little avail!


US – JOHNSON & JOHNSON, JP MORGAN CHASE, CSX, INTEL post interim results today


David Buik

Panmure Gordon & Co

Market Commentator.


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