TODAY’S FAYRE – Thursday, 20th October 2015


“The eye can hardly pick them out

From the cold shade they shelter in,

Till wind distresses tail and main;

Then one crops grass, and moves about –

The other seeming to look on – And stands anonymous again


Yet fifteen years ago, perhaps

Two dozen distances surficed

To fable them : faint afternoons

Of Cups and Stakes and Handicaps,

Whereby their names were artificed

To inlay faded, classic Junes –


Silks at the start : against the sky

Numbers and parasols : outside,

Squadrons of empty cars, and heat,

And littered grass : then the long cry

Hanging unhushed till it subside

To stop-press columns on the street.


Do memories plague their ears like flies?

They shake their heads.

Dusk brims the shadows.

Summer by summer all stole away,

The starting-gates, the crowd and cries –

All but the unmolesting meadows.


Almanacked, their names live; they

Have slipped their names, and stand at ease,

Or gallop for what must be joy,

And not a fieldglass sees them home,

Or curious stop-watch prophesies :

Only the grooms, and the grooms boy,

With bridles in the evening come.”


Philip Larkin – poet – 1922-1985


I embarrassingly omitted to mention that the most celebrated mourner/reveller at Sir Peter O’Sullevan’s Memorial Service was one LK Piggott. Lester, who will be 80 years old next week, looked as fit as a butcher’s dog. Hugh McIlvanney revealed that the two friends had a frustrating final meeting this year. When asked how the meeting had gone, Sir Peter said – ‘Bloody awful!’ We’re both as deaf as posts and had no idea what we were saying to each other! This comment was no doubt followed by a chortle or two!


So much for James Bond and “Spector!” A massive disappointment, with huge sense of deja-vous! Aficionados of Bond movies will feel there is nothing new. Even the car chases were slightly disappointing and the story line was very weak. However Ben Wishaw as “Q” put in a masterful cameo performance! It is time Daniel Craig moved on! He’ll forget that he is a very good actor!


So the same old level of platitudes and drivel were trotted out in the FOMC minutes last night. Maybe in will be December as the barometer moved from 34% hike to 43% hike. The investment world and the teenaged scribblers are still none the wiser. Chairman Yellen says the US economy is enjoying a moderate level of expansion and that a rate hike is back on the agenda for December, though inflation remains well short of the 2% guideline. I suspect that Labour data is the key to any decision. Many believe that there are sufficient weak fissures in the economic cycle to warrant consideration before March 2016. However Panmure’s Chief Economist Simon French believes that the FED must make a statement implement a symbolic hike of 25 basis points and then ‘sit on their hands’ for a year!


The Street of Dreams purred yesterday with contentment, not so much on the FED statement, but more the fact that the FED was confident about the outlook for the economy. Energy stocks were in demand on the back of oil inventories. Apple shares were up 4.1% on the back of Tuesday’s numbers. The gains though seemed to be a general sentiment rally, but conviction has yet to return unequivocally. The DOW added 1.13%, the S&P 500 1.18% and the NASDAQ by 1.30%. This followed a positive and workmanlike session in London, where the FTSE added 1.1% to 6437. Oil stocks shone in the watery sunshine and BT on news of the EE acquisition added nearly 3%. Investors vented their spleens in disappointment in Lloyds Banking Group’s very average results and the fact that the PPI provision claim was increased by £500m to £13.9m BATS was popular adding 2.6% on good sales numbers – down 4.6%.


Though the quality of the earnings on both sides of the pond remains mixed, though on the whole the US has passed muster, there is still plenty of M&A activity as well as gossip. Yesterday the market’s enthusiasm for BWIN Party ventures to suggest that GVC will eventually win the day. There was also interest in Intercontinental Hotels on the back of merger chat between Hyatt and Starwood. Overnight the rumour mongers massed their troops about the possibility of Pfizer and Allergan pooling their resources in a $300 billion + mega merger, which would side-line GSK from Pfizer’s affections. Shire, after a decent ‘run on the rails’, eased by 2% this morning. I suspect that Smith & Nephew’s poor results, which saw its shares initially down by 7% before settling down 5% did not help the cause of the drug sector in the UK today.


Aviva and BT pleased their acolytes though this anorak was slightly disappointed by the fact that BT sports had only attracted 200,000 new subscribers – shares were flat at 10.30am. I suspect most were concentrating of the £12.5 billion acquisition of EE. Royal Dutch Shell’s results were to the layman almost incomprehensible. I think the Bletchley Park Code Book was probably required. Shell shares yield almost 7%. Surely that cannot be maintained with current performances. A loss of $6.1 billion was incurred due to certain one off charges with a trading profit of $1.8 billion down from $5.8 billion last time. Deutsche CEO John Cryan posted a loss of €6 billion after specific right-offs. Reorganisation programmes are being implemented. Tier One capital came in at 11.5%.


And so to Barclays! The market was underwhelmed with their quarterly numbers. Even the prospect of a new CEO – Jas Staley – did not placate the market. The shares were down 5% at 10.30am. I think he is an inspired appointment but this is a task of Herculean proportions including making thousands of redundancies (30k rumoured). It was the small print in Barclays’ statement that gave cause for concern! – Provisions of £270m for mortgage claims, £500m to a total of £1.07bn for foreign exchange litigation and £290m for customer FX claims. 4% growth with a pre-tax profit of £5.156 billion in isolation looks OK. However it is time John McFarlane stopped assuming the mantle of Charles Atlas and implemented responsibility of running the ‘Bald Eagle’ on a day to day basis to Mr Staley PDQ. The focus in investment banking will probably centre on New York, but there is massive room for improvement in their high street and SME activities.


Panmure’s chief economist, Simon French makes the following salient comments on UK interest rates – Another signal that the BoE may need to gently push the brake pedal early next year: BoE Bank Stats have net mortgage lending at their highest since April 2008 and unsecured lending up 8.0% YoY. Added to ONS data this AM that has real rents growing at 2.7% – highest real rate of growth since the data series began. The interesting thing over the next 6 weeks will be whether the Bank uses the Nov 5 Inflation Report to signal interest rates are going up next year or whether they use macro-prudential intervention at the 1 December Financial Stability Report to defuse the flow of funds into what is now a clear property bubble in the UK – with Help to Buy, IHT changes and Pensions Freedoms key culprits. I think Messrs Weale and Forbes would like to use rates whilst Messrs Shafik and Cunliffe would like to use macro-pru. This makes Carney and Broadbent the ones to watch.



This morning most of yesterday’s gains have been surrendered. Mining drugs and energy have been off their grub – FTSE 100 is down 60 points at 6375. The commitment to the cause is flaky at best.








David Buik – market commentator



Panmure Gordon & Co​


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