Monthly Archives: November 2015


TODAY’S FAYRE – Sunday, 29th November 2015


Love and fortune and my mind, rememberer

Of that that is now, with that that hath been,

Do torment me so that I very often

Envy them beyond all measure.

Love slayeth mine heart; fortune is depriver

Of all my comfort; the foolish mind then

Burneth and plaineth, as one that seldom

Liveth in rest, still in displeasure.

My pleasant days they fleet away and pass,

But daily yet the ill doth change into the worse,

And more than the half is run of my course.

Alas, not of steel, but of brickle glass,

I see that from mine hand falleth my trust,

And all my thoughts are dashed into dust.


Sonnet 17


William Shakespeare – poet & playwright – 1564-1616


The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway – author – 1899-1961



When there is a scandal within a political party, I simply don’t understand why the decks are not cleared. Also anyone else involved or on the peripheries of the management of that party should resign or be sacked forthwith, allowing that party to get on with the business of the day unencumbered!


On Friday there was a very well-researched article by the Evening Standard’s Jonathan Prynn on the ramifications concerning the UK’S banking sector, if this country was to vote to leave the EU. Mr Prynn painted a fearful picture, courtesy of an August banking contact, who ventured to suggest that the sector could be decimated and the loss of 100,000 jobs could not be ruled out. Luxembourg, Frankfurt, Paris, Madrid and Amsterdam would be euphorically jumping up and down in picking up the spoils left behind on London’s high table

First and foremost I both like and admire Jonathan Prynn; he’s a fine journalist, but the information he was given was jingoistic ‘scare-mongering’ twaddle!  I have on this occasion not got my ‘vote leave!’ hat on, but let’s be clear on a number of issues.

Firstly London is the centre of the time zone. English is the international business language of the world. With respect the German or French languages do not have the same resonance as English does! Then of course this nonsense ‘transaction tax’ and the EU anti-investment banking rhetoric would just mean that banks will head east and west and not to the EU. FINALLY there is no finer market place for raising capital and financing of foreign trade than the wonderful City of London. We have the ability and the track record! International businesses find it conducive to business here with relative ease.

Much of last week in London was spent formulating an opinion on the leaked or well chronicled contents of George Osborne’s Autumn Statement and analysing it. The ‘U’ turn on tax credits was dismissed by the Chancellor as almost irrelevant. More than a little good luck in terms of the performance of the UK’S economy (growth of 2.4% in the next two years) is required to prevent the Government going back to the drawing board, such was the importance attached to the amazing and unexpected windfall of £27 billion that conveniently fell in to the Treasury’s coffers, thus preventing any serious austerity, yet again! Property and house building attracted significant comment.

Though observes could understand politically the importance of 400,000 new affordable homes, more than a few property aficionados told me unequivocally that the Government’s policy of penal stamp duty on expensive houses is preventing the necessary downsizing happening – so necessary to stop prices at the lower end rising indecently quickly. I challenged this perception, but was told that the level of activity in houses costing more than £2 million has come to a grinding halt. Surely thought I, if you can afford a house costing £5 million, you can afford stamp duty of £250k – a mere bagatelle. Not so, I was told! It is a psychologically barrier and the same applies to a house costing just over £2 million, when £100,000 is required.

Equity and bond markets had much to consider last week. The week started badly for equities. The threat of a hike in US rates loomed threateningly on the horizon, which allowed the Greenback to nudge towards a 6-year high. December 15/16 cannot (FOMC) come fast enough. Investors are deeply frustrated by the level of indecision. BOE Governor and the MPC are also feeling heat from the level of persecution, created by forward guidance, which many believe is a hindrance rather than guidance. Gold fell to a 12- year low of $1057 an ounce and there were sharp reverses in nickel and copper. Towards the end of the week, the Shanghai Composite shed 5.5%, in the wake of allegations that brokerages were the subject of regulatory investigations, which shook the rafters of Asian markets.

By the end of the week, despite an increase level of global geopolitical issues, US and European equity markets managed to keep their poise. The S&P 500 ended the week up 0.05%, probably aided and abetted by Thanksgiving falling on Thursday and Friday. The FTSE was 0.6% to the good with European bourses rallying by an average of 0.5%. The Nikkei finished just above the Plimsoll line – up 0.02%.

Though the week was flat media stocks had a torrid time with Disney losing 3%, Viacom 3.3% and 21st Century 1.2%. Pfizer confirmed its merger with Allergan in $160 billion deal, much to the chagrin of the US government, which could lose several billion Dollars of taxation. In the UK mining stocks struggled against the tide of falling prices. Oil saw a 0.8% rebound on the week, which allowed the likes of BP and Shell to stay calm. Betfair was the star of the week ahead of its merger with Paddy Power. Its shares have risen from £7 in 2011 to £36! SuperGroup also added 5% on Friday. However despite many bulls still raging European equities feel heavy to me. Yes we could see more stimulus packages from the ECB, but….

And so to sales for Black Friday and Thanksgiving. In the US traffic was down 1.5% on last year and shop spend was down by 1.4%. It appears that Thursday and Friday yielded sales totalling $12.1 billion of which $4.45 billion were on line. Black Friday in the UK proved a bit of a damp squib on the high street with retail park sales down 8.9% and the number of shoppers down 6.5%. On- line trading was a winner with sales supposedly rising by an average of 28%. We shall have to wait until Tuesday to get further analysed data.

Banking was an easy headline grabber last week. Barclays was there in neon-lights with a £72 million fine over sloppy controls of a few ‘elephant deals’ totalling £1.88 billion with top of the range customers. The Bank of England’s forthcoming stress tests ventures to suggest that Lloyds Banking Group may well have to rein its dividend aspirations. Much to everyone’s joy banks could be cutting bonus pools by 60% due to falling profits on trading and M&A, though one ventures to suggest this may not be the case in the US where M&A has been buoyant. Shell & BG expect to receive green light messages from Asian regulators over its proposed £55 billion takeover. In order to consummate its purchase of SAB Miller in a £177 billion deal, AB InBev will be putting Grolsch and Peroni up for sale, having already agreed to sell its 58% stake in Molson Coors. Chinese investors may cast the ruler over IHG after Starwood falls to Marriott.

UK companies posting results – ABERDEEN ASSET MANAGEMENT, IG (TS), Tuesday – TOPPS TILES, COLLOGEN, Wednesday – BREWIN DOLPHIN, ZOOPLA, GREENE KING, Thursday – GW PHARMACEUTICAL, DS SMITH, Friday – BERKELEY GROUP, EASYJET (TS) US companies posting interim results – Tuesday – FORD (sales), Wednesday – AMERICAN EAGLE, AEROPOSTALE, Thursday – KROGER, DOLLSR GENERAL, BARNES & NOBLE, Friday – BIG LOTS Economic data – Monday – UK Consumer Credit & mortgage applications, Tuesday – UK PMI manufacturing, Wednesday – US Beige Book, UK Construction, Thursday – ECB meeting, Friday – US balance of trade.


David Buik


Market Commentator – Panmure Gordon & Co

MARKET UPDATE – equities appear rudderless ahead of Thanksgiving!

I dislike keep saying it, but the level of inertia in the London equity markets seems to know no bounds – Excruciatingly boring! – Mind blowing and dispiriting stuff. At 3.30pm the FTSE was up 40 points at 6377.  Where the momentum came from the ‘good Lord’ only knows!’ Thanks to the machinations from the brain-dead’ anti-aircraft Turkish gunner, tensions have risen in Turkey and Syria whilst Putin considers his undersized navel in response to an act of totally irresponsible madness, which has sent oil prices north pro-tem, with the major oil companies in the UK seeing their values up by an average of 1%. Mining, despite the threat of lower mineral prices, have bounced out of the traps today – probably just a bear squeeze rally. Anglo American was down 7% yesterday – up 3% so far today. Most miners are up an average of 3%, apart from BHP Billiton which was the subject of a downgrade from JP Morgan – down 2.5%.


Ahead of Black Friday Tesco is flat as is M&S. Next is up 1%, Home Retail is up 1.9% and Dixon Carphone is up 2%. New York is closed; so Amazon, Walmart, Target, Abercrombie & Fitch, JC Penney and Nordstrom remain somnolent.

Of those companies posting numbers today Severn Trent was up just 0.5% having been up 2% just after the opening. PayPoint did not pass muster – -5%. Marston’s was enjoying a decent run on the rails – +3%.  DMGT and RPC Group fought out the ‘Yellow Jersey’ – both up 4.5%, but lost out to SPP Group (makers of Upper Crust) – up 6%, despite having opened up down 2% in early skirmishes. Trading tomorrow until we know more about Black Friday and Thanksgiving is likely to be very tedious and without direction.


TODAY’S FAYRE – Thursday, 26th November 2015


“Now entertain conjecture of a time

When creeping murmur and the poring dark

Fills the wide vessel of the universe.

From camp to camp, through the foul womb of night,

The hum of either army stilly sounds,

That the fixed sentinels almost receive

The secret whispers of each other’s watch.

Fire answers fire, and through their paly flames

Each battle sees the other’s umbered face.

Steed threatens steed, in high and boastful neighs

Piercing the night’s dull ear; and from the tents

The armorers, accomplishing the knights,

With busy hammers closing rivets up,

Give dreadful note of preparation.

The country cocks do crow, the clocks do toll,

And, the third hour of drowsy morning named,

Proud of their numbers and secure in soul,

The confident and overlusty French

Do the low-rated English play at dice

And chide the cripple, tardy-gaited night,

Who like a foul and ugly witch doth limp

So tediously away. The poor condemnèd English,

Like sacrifices, by their watchful fires

Sit patiently and inly ruminate

The morning’s danger; and their gesture sad,

Investing lank-lean cheeks and war-worn coats,

Presenteth them unto the gazing moon

So many horrid ghosts.”


William Shakespeare – poet & playwright – 1564-1616


It was a brilliantly presented Autumn Report, which George Osborne delivered by the seat of his pants, underwritten by Robert Chote and the OBR, who were 50% certain that the economy would grow by 2.4% in the next couple of years.  My word it was helpful and convenient that the OBR found a spare £27 billion in the coffers, thanks in the main to unexpected higher taxation receipts, which gave the Chancellor a little room to manoeuvre himself out of a tricky jam.  This he did with a degree of dexterity, which is becoming his stock in trade as he swivelled on a huge ‘U-turn’ by leaving the tax credit issue resolved pro-tem – no change in its status.  Worry not! The Chancellor will have his way – come hell or high water. The deficit will be cut by £20 billion and the overall deficit will be reduced from £74 billion to a surplus of £10 billion by 2020. There will be a saving of £12 billion from welfare benefits cuts. Housing benefits will be curtailed for a start.


There was no real ‘give away’ in this statement. Swingeing cuts will be made in transport 37% though there will be an increase in capital expenditure. Even the NHS, despite expenditure being raised from £101 billion this year to £121 billion in 2020, will be asked to find savings on waste totalling £22 billion! If Labour had introduced an apprentice tax of 0.5% on companies with a £3 million payroll or larger there would have been howls of anger and derision. This is an ‘ouch’ tax on medium sized companies, which will raise £3.1 billion in 2015. A similar amount will be raised from local government taxation over the same period, but it is sensible that councils can keep proceeds from assets and property sold. No further culling of the police service was a sensible and necessary political interjection in the current climate. The building of 400,000 affordable homes at a cost of £7 billion circa makes huge sense – even more for those in London, who could receive help, provided a 5% deposit can be made. The sale of government assets such as the Land Registry, MOD land and 49% of NATS (air traffic service) for circa £5 billion was understandable though controversial in the case of NATS. It is hoped that a sale of £25 billion worth of shares in RBS will be completed by the end of this Parliament.


In Budgets and Autumn Statement the devil is often in the detail. No doubt Paul Johnson and his cronies in the IFS will make mincemeat of the proposals. The only observation I would make would be to say that if GDP falls to say 2.1%, it will be back to the drawing board come the spring Budget, leaving the autumn statement in tatters!


It was an understandably sepulchral session on the Street of Dreams yesterday, with the DOW closing up 0.1%, the S&P 500 down by 0.1% and the NASDAQ 0.26% to the good. Why so quiet? It’s Thanksgiving today! Turkey beckons followed by pecan pie, all washed down with a decent Cabernet or Chardonnay. Even decent durable goods orders for October failed to titivate investors’ taste buds; nor were they put off by rather bland consumer spending last month. There is definitely sufficient positive data for the FED to make their long-awaited symbolic rate increase on 16th December 2015. There was a little interest in NASDAQ stocks, with many keeping a watching brief on Amazon – up 0.62% yesterday. This stock has rallied from $500 3 month ago to $675 yesterday. eBay was somnolent yesterday but this stock has risen from $26.20 to $29 in the same period. Needless to say we wait with bated breath for these sales numbers as a reasonable barometer of the US economy. Total online sales in the US over this weekend are expected to come in at $89 billion. Panmure’s Michael Stewart makes the following observations about this forthcoming Black Friday activity here in UK –


Black Friday is set to be bigger and better than ever before. We predict that UK consumers will splash out almost £1.1bn tomorrow, a circa 30% increase year-on-year, with retail participation and awareness complementing a backdrop of support macroeconomic conditions. Approximately 65% of shoppers will shop solely online, we believe, with the majority of expenditure focussed on electrical goods and apparel and footwear. Retailers must be well prepared for the strains tomorrow will place on their IT and logistics capabilities with a fully functional mobile site and app viewed as an imperative as sales via smartphone and tablet devices grow by circa 55%.”



Yesterday the FTSE 100 put on 1%, much of it down to relief and qualified Euphoria over the ‘Autumn Statement.’ House builders initially took off, but tapered their gains by the end of the session – up 1.5% to 3%. It was good to see Thos Cook gain 10% in value after better than expected numbers including a profit! In Asia the mood was modestly positive with the ASX closing up 0.33% and the NIKKEI +0.49%. However the climate in China was not quite so bright with the Shanghai Composite heading south after lunch -0.59% and the Hang Seng -0.29%.



London’s FTSE 100 was up 0.4% at 6363 in very quiet trading conditions. The company results, though on the whole positive, apart from PayPoint, were not going to move the earth on its axis.


With just a month to go before the year is up, M&A activity blows away the all-time annual record of $4.1 trillion set in 2007, according to Thomson Reuters. US-targeted M&A activity, which accounts for nearly half of global M&A, has soared 55% from 2014 and exceeds $2 trillion for the first time ever.


Pfizer’s deal pushes global healthcare M&A to $649 billion, more than 2013 and 2014 combined! No other industry comes even close. Tech M&A, though it has more than doubled from 2014, is in distant second place. And Pfizer’s deal pushed pharma M&A to $416 billion, more than 2014, 2013, and 2012 combined.


Big Pharma is getting bigger. And Pfizer is the M&A queen among them: it engineered the largest two pharma deals ever, the Allergan deal and the $89-billion acquisition of Warner-Lambert in 1999. According to Thomson Reuters, six of the largest 20 pharma deals ever involved Pfizer.


UK companies posting results – Thursday – SEVERN TRENT, PAYPOINT, LONDONMETRIC, SSP, MARSTON’S, Friday – SVG CAPITAL, PENNON




David Buik


Market Commentator – Panmure Gordon & Co ​


TODAY’S FAYRE – Wednesday, 25th November 2015


“What is it to grow old?

Is it to lose the glory of the form,

The lustre of the eye?

Is it for beauty to forego her wreath?


Yes, but not for this alone.

Is it to feel our strength –

Not our bloom only, but our strength -decay?

Is it to feel each limb Grow stiffer, every function less exact,

Each nerve more weakly strung?


Yes, this, and more! but not,

Ah, ’tis not what in youth we dreamed ‘twould be!

‘Tis not to have our life Mellowed and softened as with sunset-glow,

A golden day’s decline! ‘Tis not to see the world

As from a height, with rapt prophetic eyes,


And heart profoundly stirred;

And weep, and feel the fulness of the past,

The years that are no more! It is to spend long days

And not once feel that we were ever young.

It is to add, immured In the hot prison of the present, month

To month with weary pain. It is to suffer this,

And feel but half, and feebly, what we feel:


Deep in our hidden heart Festers the dull remembrance of a change,

But no emotion -none. It is -last stage of all –

When we are frozen up within, and quite The phantom of ourselves,

To hear the world applaud the hollow ghost

Which blamed the living man.


Matthew Arnold – poet – 1822-1888


“In times of change learners inherit the earth; while the learned find themselves beautifully equipped to deal with a world that no longer exists.”- Eric Hoffer – US philosopher – 1898-1983


“I don’t make jokes. I just watch the government and report the facts.” – Will Rogers – US humourist, cowboy and actor – 1879-1935


Done! Finished! Mission accomplished! What? – All six series of “The Good Wife.” There’s nothing like a bit of decadence in one’s life, such as slobbing in front of the television, enjoying an unrealistic world of fantasy and that’s what we’ve been doing in spades in the last two months and we have relished every minute of it. This TV series, which is about a Chicago based law firm with plenty of political nuances and tricky personal relationships really ‘floated our boat!’ Series seven starts on Netflix in early January – Cannot wait!


Turkey’s air space may well have been invaded by Russian fighters with monotonous regularity – of that I have little doubt. Russia invades our airspace here in the UK not infrequently. However surely there is no need for one of Turkey’s F16 fighters to shoot down a Russian military jet? What the hell was Turkey thinking of? Turkey and Russia are both UN members and Turkey is hugely reliant on Russia for energy. President Putin may well be a despot, but that was an act of total madness, which could well damage cooperation with the West against ISIS and Syria.


The Budget and the Autumn Statement are not what they were 20-50 years ago when we used to wait to see what joys and ‘goodies’ Messrs Callaghan, Healey, Jenkins, Howe, Lawson, Lamont and even Clarke had in that grubby little red box. We used to wait with awe, trepidation and excitement at not only the delivery of their respective speeches, but also the public reaction. Now, the content is so professionally and surreptitiously leaked to the media, it is often hard to raise more than a modicum of enthusiasm.


We are led to believe that there will be few ‘sweeties’ in the Chancellor’s battle scarred red box. To attract positive comment away from necessary austerity and continued cuts in the budget deficit (£20 billion), which George Osborne understandably is committed to, the bone he has thrown to the ‘madding crowd’ is likely to be greater access to affordable housing. He is hopeful that the Government’s offering of a £6.9 billion programme to build 400,000 new homes will placate the public’s outrage to the £4.4 billion raid on tax credits, particularly the lower-paid and the ‘needy.’ A few scragg-ends totalling about £500m will be offered to various rail and transport networks.


However rest assured the Chancellor is unlikely overall to be in a charitable mood. The books need to be balanced. Terrorist attacks have necessitated an increase in spending for defence and police protection. This has to be paid for. So housing benefits may well come under siege. Budgets for BIS, Department of Justice, HMRC, Environment and the Home Office are likely to face an average 27% cut in their respective budgets! This will be a draconian statement. Though infrastructure expenditure likely to rise sharply it is hard to justify the massive long term £90 billion HS2 project. How can that be priority?


Yesterday in the wake of Turkey’s irrational behaviour, geopolitical issues went to the top of the agenda. Oil prices rose by about 3%, which benefitted the likes of BP, Shell, Eni and Total. However airlines such as IAG, Ryanair and easyJet and travel companies (Tui, Thos Cook and Carnival) suffered the slings and arrows of outrageous fortune. Hotels were also on the back foot. Consequently the FTSE put in an unremarkable performance losing 27 points at 6277. On the Street of Dreams all three major indices finished the session just above the Plimsoll line thanks to energy and oil, but inertia soon set in. Delta and other airlines fell by an average of 3%. Asia response was ruefully neutral. The ASX closed down 0.63% and the NIKKEI’s colours were lowered by 0.39%. Chinese markets were enjoying mixed fortunes – Shanghai Composite +0.74% and the Hang Seng was down 0.40% just after lunch.


In his testimony to the Treasury Select Committee, Governor Mark Carney was rather more circumspect about interest rates and the prospect for a rise. Significant global data will be posted by 17th December, hopefully allowing a logical decision to prevail. A lack of inflation is not helping the cause of a rate hike.  However, a strong pound and wage inflation should help to push inflation from -0.1% to 1% by the summer of 2016. He also expressed concern at the alarming expansion level of consumer loans and it is possible that greater capital requirements for banks will be implemented to stop the flow.


Rolls Royce posted its structural plans yesterday with about £200 million of cost cuts and 3600 redundancies. Panmure’s Sanjay Jha is of the opinion that CEO Warren East’s view on the management structure has yet to be completed; hence there appears to be insufficient data about the company’s future in the next 2 years. It is possible that a cash call of between £2-3 billion may be required.


This morning there was another slew of results with good efforts from Thos Cook, Betfair, Britvic and RPC Group. United Utilities and Hogg Robinson’s efforts were adequate. At 8.40am the FTSE 100 was up 35 points at 6310




US companies posting results this week – Wednesday – DONALDSON




David Buik


Market Commentator – Panmure Gordon & Co


TODAY’S FAYRE – Tuesday, 24th November 2015


“Was it a dream? We sail’d, I thought we sail’d,

Martin and I, down the green Alpine stream,

Border’d, each bank, with pines; the morning sun,

On the wet umbrage of their glossy tops,

On the red pinings of their forest-floor,

Drew a warm scent abroad; behind the pines

The mountain-skirts, with all their sylvan change

Of bright-leaf’d chestnuts and moss’d walnut-trees

And the frail scarlet-berried ash, began.

Swiss chalets glitter’d on the dewy slopes,

And from some swarded shelf, high up, there came

Notes of wild pastoral music–over all

Ranged, diamond-bright, the eternal wall of snow.

Upon the mossy rocks at the stream’s edge,

Back’d by the pines, a plank-built cottage stood,

Bright in the sun; the climbing gourd-plant’s leaves

Muffled its walls, and on the stone-strewn roof

Lay the warm golden gourds; golden, within,

Under the eaves, peer’d rows of Indian corn.

We shot beneath the cottage with the stream.

On the brown, rude-carved balcony, two forms

Came forth–Olivia’s, Marguerite! and thine.

Clad were they both in white, flowers in their breast;

Straw hats bedeck’d their heads, with ribbons blue,

Which danced, and on their shoulders, fluttering, play’d.

They saw us, they conferred; their bosoms heaved,

And more than mortal impulse fill’d their eyes.

Their lips moved; their white arms, waved eagerly,

Flash’d once, like falling streams; we rose, we gazed.

One moment, on the rapid’s top, our boat

Hung poised–and then the darting river of

Life (Such now, methought, it was), the river of Life,

Loud thundering, bore us by; swift, swift it foam’d,

Black under cliffs it raced, round headlands shone.

Soon the plank’d cottage by the sun-warm’d pines

Faded–the moss–the rocks; us burning plains,

Bristled with cities, us the sea received.


Matthew Arnold – poet – 1822-1888


I would love to have been a ‘fly-on-the-wall’ at the Oxford Union Debate last night when Nigel Farage, who with Sir Bill Cash, took on his old adversaries J-M Barroso and Nick Clegg over the ‘EU referendum! University students tend to be pro-Europe, as well as marginally ‘left of centre’, so the going was always going to be tough. Nick Clegg’s political fall from grace seemed to invigorate him as he entered the fray so familiar to him. Mr Clegg and his European bureaucrat ally trounced Farage and Cash – 283 votes to 73. However the UKIP leader was in good form comparing the UK’s relationship with the EU to that of a loveless marriage.


He said: “They fell in love and got married in their late teens. 40 years they’ve been together. In the early days it was pretty good, but it’s been getting increasingly rotten over the last 35 years. All the people say to her ‘You must stay with him. Oh I know he’s a terrible bully! I know he makes all the rules and the laws in the house! I know he forbids you from making your own friends but surely it is better that you stay together?’ There are some perhaps who tended towards her side and vex themselves with the question: ‘Could she cope on her own? Was she really up to it? Could she manage her own shopping basket and run her own life?’


To have witnessed Roger Federer, at the age of 34, play wonderful graceful tennis, despite losing the final of the Barclays ATP Final at the O2 to the indominatable Novak Djokovic, was a real privilege. – Not sure about the beard? Well, everyone seems to have one these days, apart from me!


Sky’s Ian King wrote a brilliant well-reasoned and impassioned piece in the Times yesterday on Andy Hornby, the former CEO of HBOS, who has come in for some visceral treatment in last week’s Sir Andrew Green, QC’S report. Ian’s point that he made no money, lost everything including his marriage is in many ways punishment enough. Also Mr Hornby seems to have done an exemplary job at Gala-Coral. However he was CEO when the walls of HBOS came tumbling down and let’s face it, the buck sits at the top. Perhaps just banning him from working in a bank would satisfy most ardent critics.


Nothing else seems to matter these days apart from the content of Chancellor Osborne’s Autumn Statement and the nuances as to how he is going to ‘rob Peter to pay Paul!’ The Chancellor is happy to listen to all the ‘bleeding hearts’ over austerity, policing and tax credits, but at the end of the day he is going to balance the books and cut the deficit by circa £20 billion. The Government has sailed temporarily on to the rocks over its borrowing requirement and may have over-shot the target by £10 billion to nearly £80 billion for the year.  Most of the cuts are likely to come from BIS, Defence, Home Office and Justice. However with the PM announcing a £10 billion increase in defence spending on mainly aircraft and ships which won’t be delivered until 2023/5, this money will have to come from elsewhere as will the bill for the increase in security requirements against terrorism. I suspect that the MOD’s administrative staff might be the recipient of some tough cuts and redundancies. We shall see – all will be revealed at 12.30pm tomorrow. My colleague at Panmure, Simon French, will be providing comprehensive and informed comment in the next few days.



The CBI’S Carolyn Fairbairn seems very keen to make a splash, in replacing John Cridland as Director General. She has already shown her colours as a feisty supporter of EU membership. However she struck me as being very over confident that HSBC will stay domiciled here in the UK. Maybe she has direct knowledge on the subject, but there are still investors like Standard Life and Aberdeen Asset Management who think the ‘local’ bank is being put at a competitive disadvantage with tougher regulatory requirements and perhaps not enough concessions on bank levy charges. HSBC and Standard Chartered Bank may still require convincing and some TLC from the government, the BOE and the FPA.



Yesterday was a dreary non-plus day on equity markets, with little to get excited about in a morass of indifference. Mining and oils shares dipped, responding to prices. Supermarkets remained out of fashion, with ‘shorts’ still out there on Tesco, Sainsbury and Morrison. Few believe that they can thwart the Aldi/Lidl bandwagon as we head towards Christmas with little sign of food inflation. Defence based shares such as BAE Systems, Qinetiq and Cobham added the odd penny on the back of the PM’S comments. The FTSE 100 eased by 29 points to 6305. Activity was fairly muted on the Street of Dreams as investors worried about a very strong Greenback and the damaging effect it might have on exports and the effect a modest hike in rates could have in early December. Let’s hope Thanksgiving and Black Friday can supply some much needed relief with perhaps a little Christmas joy!



Hillary Rodham-Clinton vented her spleen in a vituperative speech last night, slamming Ian Read, CEO of Pfizer for the decision to merge with Allergan in a $160 billion deal, which has very attractive tax connotations. Corporate tax in the US is 35% circa. In Dublin it is 12.5%, where Allergan is domiciled. It make sense for head office to be in Dublin. Pfizer alone would save $2.1 billion a year. Stop whinging Mrs C – get Congress to change the law! The joint company will employ 40,000 people and suffice to say there is great synergy between the two and good cost saving opportunities. Within Pfizer’s portfolio sits Lipitor (cholesterols), oncology drugs, cardiology drugs, diabetes and of course Viagra. Allergan has Botox, testosterone drugs, ophthalmic solutions, skin care and glaucoma amongst its treatments.



Rolls Royce’s Warren East announced his strategic plans this morning with running costs to be cut by £200 million. There were also some encouraging results this morning from AO World, having been horribly out of sorts for the last 6 months, Compass Group with a 10.9% increase in dividend, Drax and Pets-at-Home. Kingfisher’s efforts were slightly neutral with Q3 sales of £2.7 billion, +2.6% L-F-L and retail profit of £223 million, up 0.4%.



US companies posting interim results –Tuesday – CHICO’S FAS, HORMEL FOODS, FRED’S, TIFFANY’S, DOLLAR TREE, Wednesday – DONALDSON




David Buik


Market Commentator – Panmure Gordon & Co


TODAY’S FAYRE – Sunday, 22nd November 2015


“When I have fears that I may cease to be

Before my pen has glean’d my teeming brain,

Before high-piled books, in charactery,

Hold like rich garners the full ripen’d grain;

When I behold, upon the night’s starr’d face,

Huge cloudy symbols of a high romance,

And think that I may never live to trace

Their shadows, with the magic hand of chance;

And when I feel, fair creature of an hour,

That I shall never look upon thee more,

Never have relish in the faery power

Of unreflecting love;–then on the shore

Of the wide world I stand alone, and think

Till love and fame to nothingness do sink.”


John Keats – poet – 1795-1821


Baroness Thatcher resigned as Prime Minister 25 years ago to the day.


I was very distressed to hear that at the age of 87, ‘Jungle Jimmy Hill’ was suffering so severely from Alzheimer’s. You would probably have to be 50 years of age to appreciate what this very moderate inside forward, who played most of his football at Fulham in ’50s and ’60s, did for the players of his era. As chairman of the PFA in 1959 he introduced the fist £100 a week wage, which his colleague at Fulham, Johnny Haynes, was one of the first beneficiaries. He then put Coventry City on the map as a force in 1st division football by 1967, having taken the ‘Sky Blues’ from 3rd division in 1963. He, then for many years became a highly respected football pundit on BBC’S MOTD!


Much as I have been a huge admirer of Ian Bell over the years and still am, as one of England’s best and most graceful batsmen, Trevor Bayliss, England’s chief coach and the selectors were right to omit him from the forthcoming tour of South Africa. Why? Simply because he does not make the number of runs he used to in the past. The game is about confidence and application. They will return to a player of his undoubted class. When the sun is high over the yard arm in the ‘merry month of May’ 2016, Ian Bell will be there or thereabouts!


Jim Slater, one of the great entrepreneurs and merchant bankers of the ‘60s & ‘70s until Slater Walker folded in 1977, died aged 86 last Thursday. I remember one apocryphal story told by his land agent, when Jim started to get very excited about property and land. Jim expressed an interest to buy a great deal of land just south of his home which, I think at the time was near Cranleigh. When asked how far he should go in increasing his portfolio, Slater suggested it might be time to stop when the sea was reached! – RIP


Last week’s activity in global markets, particularly in equities, seemed too surreal to me. The significant rally in equity valuations seems more based on emotional reactions to the barbarous attacks on the delightful people of Paris by ISIS, rather than economic or business based reality. ‘Go to hell seems to be the cry! You’ll never knock democracy over!’ Yes, there were modest signs of improving economic conditions in China, though Abenomics has still having very little positive effect on Japan’s economy. Global growth seems to be showing some minuscule green shoots of recovery – why I use that idiom, I do not know, as I dislike it intensely. I accept that the FED is almost ‘gung-ho’ about rasping rates in December unless November’s non-farm payroll numbers are disappointing and that I doubt. The ECB’S Mario Draghi seems to be preparing to get his big bazooka out in terms of more ‘QE’ on 3rd December, which I suppose gives succour to equity values. 



Despite all these little nuggets of encouragement, the lack of inflation plus narrowing margins is surely affecting corporate profits. Hence all these gargantuan mergers to maintain shareholder value with greater market penetration coupled with a consistent flow of share buy-backs, which are so necessary to keep momentum for equities on the move. Personally I am concerned about the very mixed messages the US retail sector is sending us. Yes Wal-Mart’s numbers last Wednesday were encouraging, but Target, Macy’s and Nordstrom were way short of the mark. ‘Thanksgiving’ is next weekend; easily the most important weekend in the US retail calendar as well as being the main barometer as to the robustness of the US economy, will be key, as will Black Friday be for the UK. Michael Stewart, Panmure’s talented retail analysts understands that Google Search believes that volumes could be 3.4 times what they were in 2014. One suspects that the likes of Amazon may well be the real barometer of activity rather than any single retailer.


It should not be forgotten, though rarely mentioned in dispatches, concern is building up over the lack of liquidity in the bond market, including gilts and few fixed interest technicians like the idea of interest rate spreads turning negative. Anyway the summation of all these idiosyncrasies, some of them less than positive, which have been manifesting themselves last week resulted in most global indices making measurable gains, few of them down to great corporate results or particularly upbeat company news. The S&P 500 rallied by 3.35% last week, with the FTSE 100 eclipsing that gain – up 3.54%. European stocks rose by an average of 3.23%, with the NIKKEI putting in a solid rather than spectacular performance – +1.44%.


On the Street of Dreams Nike’s shares jumped 4% – the best performing DOW stock last week. Having complained about the US retail sector there were some outstanding performances on Friday – Ross Stores +10%, Foot Locker +7% and Abercrombie & Fitch up a gargantuan 20%. Square made a glitter IPO debut adding 45% on the first days’ trading.


In London, the rally was across the spectrum with oil and mining stocks recovering particularly well, despite there being little evidence of any pick up in raw material prices. Johnson Matthey added 9% thanks to a special dividend. On Thursday Poundland eased by 20% thanks to terrible numbers and Royal Mail, despite profits falling 30% saw its shares add 5% in value thanks to good cost controls and aspirations for a good Christmas. After the terrorist attacks in Paris investors were reluctant to support airlines and the travel sector. As the week progressed easyJet cracked on, thanks to decent numbers. The Sunday Times tells us that there may be predators for the owners of Argos and Homebase – Home a Retail for circa £1 billion.

The banking sector enjoyed a macabre week. In Holland ABN-AMRO roselike the Phoenix from the ashes in an IPO, where the government raised €3 billion by selling of 20% of the bank (28 million shares) at €17.75 per share and took a loss. Many will recall that RBS bought the investment banking operation for €23 billion, whilst the rest of the operation was sold to Fortis Bank and Santander.

On Thursday, after seven years, Sir Andrew Green QC’s report on HBOS was finally posted – about 4 years too late. Though 10 senior HBOS officials, including Lord Stevenson, James Crosby and Andy Hornby may eventually be precluded from being employed in financial employment, few including the government or regulators come out of this debacle with even a modicum of credit. Despite a £5 billion rights issue in the summer of 2008, this irresponsibly led bank was bedded down in Lloyds Bank with indecent haste, which resulted in the merged operation being bailed out by the taxpayer for £25 billion. HBOS’S eventual total loss was £52.6 billion of which £44 billion was credit related and the rest was securities, equity holdings and trading. At that time KPMG were alleged to have been asked to ‘go easy’ on some impairment charges. Also I am gobsmacked the the FSA and HBOS’s board were still talking about acquiring Bradford & Bingley at the end of September 2008 – 2 weeks after Lehman Bros went down. That is a terrible indictment. Thank goodness the FSA today bears no resemblance to the inadequate regulator it was then.

Finally to Wednesday’s Autumn statement, look to Panmure’s Simon French in the early part of next week for his assessment of Chancellor Osborne’s plans. I suspect that the Chancellor will want to cut the deficit by maybe as much as £20 billion, which could include 50k civil service jobs, maybe even some tax breaks for manufacturers and entrepreneurs. The borrowing for the year may overshoot by £10 billion. The figure was supposed to be £69.5 billion but could end up being £80 billion. With health, pensions, income tax and NI ring fenced, the cuts are likely to come from BIS, Defence, Home Office and Justice. We shall see – all will be revealed.



US companies posting interim results – TYSON FOODS, Tuesday – CHICO’S FAS, HORMEL FOODS, FRED’S, TIFFANY’S, DOLLAR TREE, Wednesday – DONALDSON




David Buik


Market Commentator – Panmure Gordon & Co


As I understand it from the 600 page report hot-off the press 10 former executives at HBOS could face bans – from Chairman Lord Denis Stevenson, to James Crosby to Andy Hornby and so on.  Paul Cummings, the then head of corporate lending, is the only executive brought to book for incompetence – banned and fined £500k. As with other people, I believe this report is a witch hunt that came 4 years too late!  Why has it taken so long? Sir Andrew Green QC, representing the BOE and the FCA suggests that Andrew Bailey and the PRA should consider proceedings against some of the HBOS executives. OK, but the whole episode is an absolute can of worms from top to bottom.  No one comes out smelling of violets. Before I start sounding off, the FCA/FSA were two very different animals than what they are today.  Too easy to blame BOE.  Gordon Brown was very keen to differentiate the two – Hence Lord Adair Turner and Hector Sants were given responsibility for bank regulation. I think they did a very average job, if I am going to be blunt.  I am very defensive towards and therefore supportive of Lord King and Sir Paul Tucker.


Gordon Brown would have played a better game in midfield for Raith Rovers than he supposedly did, when attempting to  oversee the necessary banking machinations at the time of the credit crisis. Was Sir Victor Blank bullied by the PM to pick up the tab for HBOS, which had a £5 billion rights issue in June to avoid another embarrassing bail-out? The whole bail-out cost to the taxpayer including Lloyds must have cost close to £25 billion. Were Alastair Darling and Lord Paul Myners even consulted? Being an old cynic, I have my doubts.


So let’s cast our minds back – Geriatrics like me who used to visit Halifax Building Building Society 2/3 times a year to nurture relationships with the likes of Mike Ellis and very occasionally Mike Blackburn, the then CEO, knew for certain that you could not find a more conservative institution than the Hali. Jon Foulds the chairman was out of the same mould. James Crosby, later to become Sir, was a man from the Pru, and the Halifax Life, then found himself CEO in 2001, before the merger with HBOS.  He then became overall CEO with Lord Stevenson as chairman.  He appointed Andy Hornby, a marketing man from ASDA, to the board grooming him to take over as CEO after 2006. He knew as much about banking as I knew about non-ferrous welding.  HBOS just lent money in grillions indiscriminately to all-comers, including property developers in their droves. Just a an example many would like to hear, though we never will, from a few entrepreneurs of the day, just how easy it was to have access to loans for business propositions.  Highly imaginative and street wise entrepreneurs knew exactly how to use the system to gain full value – nothing at all wrong with that. As it transpired, HBOS put together a loan book of chronic magnitude – £213 billion – without adequate credit analysis.  The rest is history.


There is a huge difference between incompetence and negligence and criminal fraud.  Surely this whole episode is all about incompetence, ambition and greed.   If 10 bankers/executives are brought to book, other dramatis personae should hang their heads in embarrassment.



TODAY’S FAYRE – Thursday, 19th November 2015


“Earth has not anything to show more fair:

Dull would he be of soul who could pass by

A sight so touching in its majesty:

This City now doth like a garment wear

The beauty of the morning; silent, bare,

Ships, towers, domes, theatres, and temples lie

Open unto the fields, and to the sky;

All bright and glittering in the smokeless air.

Never did sun more beautifully steep

In his first splendour valley, rock, or hill;

Ne’er saw I, never felt, a calm so deep!

The river glideth at his own sweet will:

Dear God! the very houses seem asleep;

And all that mighty heart is lying still!”


William Wordsworth – poet – 1770-1850


I understand that Paul Moore, the initial whistle blower on HBOS was apparently in very good voice on the Today programme this morning. He let HBOS’S management ‘have it’ and seemed more than a little frustrated that he had to wait 7 years before this investigation will finally be made public! He felt the unexplained debacle had left his life in tatters!


To date only Paul Cummings has been brought to book by the authorities – banned from working in a position of authority and fined £500,000 – surely the scapegoat! Lord Denis Stevenson, the chairman, James Crosby – now less his ‘gong’ and Andy Hornby, who succeeded James Crosby as CEO, have to date got away ‘Scott-free!’ In fact Hornby has already had very lucrative jobs at Boots and Gala-Coral. Gala Coral are due to merge with Ladbrokes.


It will be interesting to hear the final judgement. 7 years after the merger between Bank of Scotland and Halifax it transpired that the gap between loans and deposits reached a staggering £213 billion. Where were the regulators in the sector’s hour of need? – Too much soft regulation? How much influence did Gordon Brown bring to bear in making Lloyds Bank acquire HBOS with indecent haste? This transpired after a £5 billion rights issue. Were Alastair Darling and Lord Paul Myners even consulted? Did Sir Victor Blank have his arm twisted? Did Eric Daniels insist on proper due diligence? The market will be very interested in hearing what Sir Philip Green and Tom Hunter, two of HBOS’S more revered customers have to say.

The post Paris atrocity rally continued to gather some momentum yesterday, though Europe’s contribution was very muted, with the FTSE the only main European indices to close in positive territory – up 10 points up at 6278. It was mining stocks that rallied to the cause, with Hikma Pharmaceuticals staying up with the pace – +4.9%. IAG and IHG eased by about 1.5%, thanks to further terrorist tension in St Denis, Paris.


The FOMC seemed relatively comfortable to signal a symbolic 25 basis point increase in the FED rate in December. I think consensus tell us that the FED have teased and toyed with the market long enough. So if a degree of credibility is to be maintained, it would be best for all if rates went up a quarter and then the FED could be allowed to go to sleep for a year, if the occasion warrants it! Anyway the Street of Dreams seemed happy with the FED’s gobbledygook and all markets went quite a bit better – The DOW closed +1.42%, the S&P +1.62% and the NASDAQ +1.79%. Apple led the tech charge adding over 3%. Target’s numbers did not pass muster – down 4.3% and Qualcomm saw its shares larruped – down 9%. Square, the electronics payment company, has had to lower its sights by issuing 27 million shares at $9 for its forthcoming IPO. The initial range was $11-13. Clearly at the higher levels the demand was not there, which would have made the underwriters nervous.


Asia hung on to US coattails, with the Japan’s NIKKEI continuing to drown in much needed QE! Official Japanese exports fell 2% on last year. This morning European bourses opened buoyantly. The ASX closed up 2.13% and the Nikkei finished 1.07% to the good. Just after lunch the Shanghai Composite was up 1.36% and the Hang Seng up 1.38%.


At 8.30am the FTSE 100 was up 70 points at 6345, with mining and oils blazing the trail. Rio was up 2% and BHP was 3.3% to the good. Shell/BG was pleased to have its 3rd regulatory approval box ticked. BG shares were 2% to the good. Mothercare pleased its acolytes – +3%; so did John son Matthey with a special dividend – +5%. Royal Mail beat expectations though profits were down 30%. Cost cutting has been very affective – +4.5%, with Christmas to come. Barclays confirmed $150 million fine by NYDFS making a total of $685m for FX manipulation was like water off a duck’s back – shares up 0.5%. Poundland was the only fly in the ointment. The increase in sales was poor and market protagonists took the shares down 15% in early trading.




US companies posting interim results –Thursday – BEST BUY, ROSS STORES, MATCH, SQUARE (IPO), Friday – FOOT LOCKER, ABERCROMBIE & FITCH



David Buik


Market Commentator – Panmure Gordon & Co 


TODAY’S FAYRE – Wednesday, 18th November 2015


All Thoughts, all Passions, all Delights,

  Whatever stirs this mortal Frame,   

All are but Ministers of Love,     

And feed his sacred flame.


  Oft in my waking dreams do I   

Live o’er again that happy hour,   

When midway on the Mount I lay     

Beside the Ruin’d Tower.


  The Moonshine stealing o’er the scene   

Had blended with the Lights of Eve;   

And she was there, my Hope, my Joy,     

My own dear Genevieve!


  She lean’d against the Armed Man,   

The Statue of the Armed Knight:   

She stood and listen’d to my Harp     

Amid the ling’ring Light.


Few Sorrows hath she of her own,   

My Hope, my Joy, my Genevieve!   

She loves me best, whene’er I sing     

The Songs, that make her grieve.”


William Wordsworth – poet – 1770-1850


One didn’t have to be remotely interested in football to have been deeply moved by the solidarity shown by fans from England and France against terrorism, at Wembley last night. It was a very emotional occasion with a rousing rendition of ‘La Marseillaise’ lustily sung by 70,000 respectful fans, led by the President of FA, the Duke of Cambridge and PM Cameron before the start of the game. The fact that England won 2-0 was entirely incidental. Horrific to hear that it has all ‘gone off’ in St Denis again last night, though localised, with 3 people killed.


Many will have been slightly unnerved that two Air France passenger planes had to make diverted landings in Salt Lake City and Halifax, Nova Scotia on their way to Paris yesterday, due to bomb threats. One suspects that there will be continued interruptions of this nature for many months to come as the world attempts to get on top of terrorism threats.


Desperately sad news to hear that at the tender age of 40, Jonah Lomu, the All-Black winger – probably the outstanding ‘back’ of his era, tragically died yesterday from a debilitating disease he had been fighting for some years. He was a legend of his time – the unbelievably physical strong specimen of his time, who was also hugely talented. Who will ever forget his performance against England in the World Cup in South Africa in 1995?


Yesterday’s performance by the three main European bourses beggared belief. Surely it had little to do with economic and financial issues. So commodity prices rose reticently, which gave mining and oil stocks a bit of a fillip. Smiths Group added 10% in value thanks to cutting pension contributions, which frees up an extra £36 million of cash. ASOS rallied by 4% thanks to an upgrade and C&W added 8% thanks to a virtually confirmed takeover by US’S Liberty Global. However there was nothing I could find that should have ignited such an explosion of goodwill that caused the FTSE 100 to add 1.99%, the DAX 2.41% and the CAC 2.77% yesterday apart from resolution and defiance to terrorism. Yes, EasyJet’s numbers were well received allowing the shares, initially down by 2% to rally by 3% at the close. Anyway I am pleased for the people of France and old gits (pensioners) such as me! Inflation in the UK – or lack of it! – -0.1% was posted for the second month running. Not helpful for the MPC aspirations to get rates up in the UK. However inflation should be 1% by June 2016 with wage inflation and a strong pound aiding the cause and oil unlikely to fall another 40% in the next year.


The Street of Dreams put its best foot forward, aided and abetted by surprisingly good numbers from Wal-Mart and Home Depot. To date retail performances have been very poor with the likes of shareholders from Macy’s and Nordstrom being the recipients of a good hiding. However the jet diversions and a little unrest over the content of today’s FOMC minutes plus falling oil prices brought an abrupt halt to any euphoric sentiment. The 3 main indices closed fairly flat – DOW +0.4%, the S&P 500 -0.13% and the NASDAQ +0.03%. Consumer Prices rose by 0.2% giving a tiny bit of added credence to the FED’S quest to raise rates by 25 basis points in December.


One easily forgets how big Wal-Mart is! 3rd quarter sales were up 2.8% at $122 billion – like for like sales up 1.5%. Revenues came in at $117 billion ($119 billion last year). Profits were down 11% at $3.3 billion. 1.7% more people visited Walmart than did this time last year. Up until yesterday Walmart’s shares had fallen 31%. CEO David McMillon said conditions remain challenging. International business was doing well. Sadly it was not the case with ASDA in UK, where sales were down 4.5%, following the 4.7% last quarter. It is interesting to note that Aldi and Lidl after 3 years have 10% of supermarket business, just eclipsing Waitrose. Shares in Wal-Mart rose by 3.5% yesterday and Home Depot had a good set of numbers – shares up 4.2%. Dick’s Sporting Goods and Urban Outfitters did nor fair quite so well – shares down 9.4% and 3.8% respectively.


House prices rose in China for the first time in 14 months – just 0.1%. However this news may just be the catalyst for those who believe the worst is over for the Chinese economic pullback. The ASX closed up 0.29%, with the NIKKEI likely to close up about 0.1%. The Shanghai Composite was down 0.54% at lunch and the Hang Seng was easier by 0.13%. The UK will have a quieter day in terms of results and the FTSE 100 according to IG is expected to open down 17 points at the open. There may be some evidence of profit taking after yesterday’s stellar efforts. Tomorrow is a major date for banker bashers. The report on HBOS and the management’s deficiencies will be made public after 6 years. Lord Stevenson, James Crosby and Andy Hornby may find the contents uncomfortable.



US companies posting interim results – Wednesday – TARGET, Thursday – BEST BUY, ROSS STORES, MATCH, SQUARE (IPO), Friday – FOOT LOCKER, ABERCROMBIE & FITCH



David Buik


Market Commentator – Panmure Gordon & Co


TODAY’S FAYRE – Tuesday, 17th November 2015



Allons enfants de la patrie,

Le jour de gloire est arrivé!

Contre nous de la tyrannie

L’etendard sanglant est levé! (bis)

Entendez-vous dans les campagnes,

Mugir ces féroces soldats? I

ls viennent jusque dans nos bras

Égorger nos fils, nos compagnes!


Amour sacré de la patrie,

Conduis, soutiens nos bras vengeurs!

Liberté, Liberté cherie,

Combats avec tes défenseurs! (bis)

Sous nos drapeaux, que la victoire

Accoure à tes mâles accents!

Que tes ennemis expirants

Voient ton triomphe et notre gloire!


Nous entrerons dans la carrière

Quand nos aînés n’y seront plus;

Nous y trouverons leur poussière

Et la trace de leurs vertus.

Bien moins jaloux de leur survivre

Que de partager leur cercueil,

Nous aurons le sublime orgueil

De les venger ou de les suivre!


Aux armes, citoyens!

Formez vos bataillons! Marchons! Marchons!

Qu’un sang impur Abreuve nos sillons!


As life in Paris attempts to get back to normal, my revered colleague David McCreadie makes the following observation –


“The son of a friend was at the Bataclan concert in Paris on Friday night and thankfully, made it out with his friend. 80 others didn’t and many more are left with life threatening and life changing injuries. Those young people saw things that evening that most soldiers don’t see in a career. Just as their lives have changed, so has life for us all. The attack which security services in Europe expected but dreaded manifested itself in a brutal slaughter of the innocent on a medieval scale. It is an unfortunate irony that many of those kids who were perhaps living life to the full, brimming with optimism and idealism would have been the very constituency who supported mass migration from Syria, Africa and the Middle East this year. I described it at the time as possibly the biggest ‘Trojan Horse’ in history. The full ramifications of unfettered migration over many months from war zones, is yet to be fully felt. Many senior commentators have been very sensitive so as not to cross-reference migration and terrorism. However some of the media have been at the forefront in creating political pressure to open the doors, but the fact remains that mainland Europe does not know what internal security risks it has created as a result of its liberal approach to the problem.’


PM Cameron is going to have to get all his ducks in a row in the House of Commons if he wants to an aggressive approach to Syria and ISIS.  It would be folly to expect any constructive help from Jeremy Corbyn, who seems more in the mood to ‘hug a terrorist’ than attempting to flush them out, neutralise them and eventually destroy them


It was great to hear Nick Robinson back on Radio 4’s Today Programme. His insightful comments are worth a ‘guinea-a-minute!’ He is a brave and stoical individual. I just hope that his voice can stand up to the rigours of a 3 hour show!


You couldn’t have written the script for yesterday’s market activity, if you had tried! Without accounting for any possible ‘fall-out’ from the atrocities, which took place in Paris on Friday evening, there was every chance that equity markets would have continued their negative trend yesterday, thanks to unappetising data, growth forecasts, the threat of higher rates in the US come December, faltering US retails sales and rich share valuations. But no it was not to be! It was a question of ‘two fingers’ to terrorism! We’re fixing our bayonets and we’re going over the top. The FTSE ended the up 28 points, having started the day down 40 points at 6146. The CAC, bless its cotton socks, completed the session just below the Plimsoll line – down 0.08% – amazing! Investors were having none of it.


Initially airlines, hotels and holiday companies suffered. Early on easyJet’s shares fell 3% as 115 of its flights go to Paris, whereas only 4% of Ryanair’s do. easyJet’s shares recovered to close down only 0.39%, whereas Ryanair’s closed easier by 1.4%. IAG, from an international perspective, lost 3% on the day. Hotels such as IHG took some stick as did Carnival, which was totally understandable.


The Street of Dreams really picked up the cudgel in what seemed like a gesture of total solidarity. ‘We’re not giving in to terrorism under any circumstances’ was the cry. On the back of higher oil prices, Chevron and Exxon Mobil both added 3%. We wait with bated breath for results from Walmart and Home Depot. They are very important barometers for the US retail base and consequently growth. It looks as though Starwood Hotels are to crawl in to the sack with Marriott. M&A keeps plunging on! – Drugs, breweries, media, hotels! – What next? Whether this current ‘upbeat’ mood can be maintained on economic and financial logic, remains to be seen. Certainly Asian stocks adopted a similar stance to the Street of Dreams with the ASX closing up 2.29% and the NIKKEI up 1.22% thanks to a weak Yen. A very strong Dollar prevails right across the spectrum. Chinese markets have seen a pull-back in the last couple of hours and after lunch the Shanghai Composite is down a smidgen by 0.06% and the Hang Seng had retreated from being up over 2% to just hanging on up 1% near to the close.


The FTSE was expected to open up with an excess of ebullience and it did not disappoint. Currently at 8.37am it is up 100 points at 6245. Oil stocks and the mining sector have led the charge – up an average of 2%. There have been a slew of earnings this morning. easyJet’s numbers looked a tad light but passenger levels were up 3.5% to 75 million passengers with profits up 18% on the year. Enterprise Inns, despite a right down of £145 million pleased its acolytes – up 4% as British Land – up 2.25%. Paddy Power’s numbers were in line and the merged operations with Betfair are to be known as Paddy Power Betfair – that’s very imaginative!!


At 9.30am this morning UK inflation for October will be posted. The rate is likely to remain unchanged at -0.1%. However with oil prices unlikely to drop much from these levels and a very Strong Pound with wage inflation growing, 1% is very probably by June 2016. 



US companies posting interim results – Tuesday – WALMART, HOME DEPOT, DICK’S SPORTING GOODS, TJX, Wednesday – TARGET, Thursday – BEST BUY, ROSS STORES, MATCH, SQUARE (IPO), Friday – FOOT LOCKER, ABERCROMBIE & FITCH



David Buik


Market Commentator – Panmure Gordon & Co