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 


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