TODAY’S FAYRE – VW to Glencore to Sports Direct to Whitbread


TODAY’S FAYRE – Thursday, 10th December 2015


“A woman waits for me–she contains all, nothing is lacking,

Yet all were lacking, if sex were lacking, or if the moisture of the right man were lacking.

Sex contains all, Bodies,

Souls, meanings, proofs, purities, delicacies, results, promulgations,

Songs, commands, health, pride, the maternal mystery, the seminal milk;

All hopes, benefactions, bestowals,

All the passions, loves, beauties, delights of the earth,

All the governments, judges, gods, follow’d persons of the earth,


These are contain’d in sex, as parts of itself, and justifications of itself.

Without shame the man I like knows and avows the deliciousness of his sex, 10

Without shame the woman I like knows and avows hers.

Now I will dismiss myself from impassive women,

I will go stay with her who waits for me, and with those women that are warm-blooded and sufficient for me;

I see that they understand me, and do not deny me;

I see that they are worthy of me–

I will be the robust husband of those women.”


Walt Whitman – poet – 1819-1892


I am amazed that most people don’t think as I do, when it comes to using the NHS as a political football. We should all be sick and tired of the way whistle blowers or ‘snitches’ try and tear this potential world class service apart. One crusade follows another in an attempt to discredit the whole service. Unfortunately the NHS is ring-fenced financially. Even the government can’t have the drains up to expose its inefficiencies and inadequacies – too much of a political ‘hot potato. A five-year term in government is insufficient time to do what is required. I had great hopes that Lord Rose would ruthlessly expose the services’ shortcomings, but the silence has been deafening. Perhaps no one wants to listen.

What is ironic is that everyone knows what needs to be done. It is hopelessly top heavy with expensive management – hundreds of people earning between £100k and £500k. One could be forgiven that thinking a staff on 1.7 million could deliver a reasonable service. The department is over-staffed administratively and under-staffed medically. The situation is classic example of how to play the blame game. Everyone says that the ‘head honcho’ Simon Steven is a top drawer administrator, but it strikes the that the individual trust directors and Unions are closing ranks preventing the implementation of radical changes, with the Secretary of State, Jeremy Hunt, up the creek without a paddle. Frankly it is a national disgrace what is happening. All political parties come out of this issue with little credit. The NHS should no longer be ring fenced and should be exposed to comprehensible public scrutiny.


Foreign exchange grabbed many headlines yesterday as the Yen increased in value mainly to the detriment of the Greenback. Also it appears that the Chinese authorities seem to be manipulating the Yuan in a southerly direction, to help exports and trade, much to the consternation of the US. It appears that the Yen has been dancing to the same tune as the Yuan, by heading north – Cable $1.5176, €/$1.1009 and $/Y121.67. It looks as though the FED will move to hike rates by 0.25% next week 15/16th December. If the US Central bank bottles it, it could create avoidable market turmoil. As for today’s MPC Meeting, Panmure’s chief economist, Simon French believes its ‘Casablanca’ all over again – ‘Play it again, Sam! – vote 8-1 no change for the 82nd month running. Let me add a little rider by saying the wretched ‘forward guidance’ may suggest a spring increase – nothing new about that message!


Yesterday, the Street of Dreams was in no mood to start any sort of a Christmas rally. Despite the announcement of another huge merger, likely to be confirmed today between DOW Chemical and DuPont – both shares up 10% yesterday, investors shunned the opportunity of getting involved. As for the rest of it, falling oil prices and a gloomy outlook on commodities, despite an upbeat comment by Anglo-American on its cash flow situation, the mood was somnolent. Profit takers in Apple -2.2% and Amazon -1.85% were in evidence as the NASDAQ eased by 1.85%. The DOW closed down 0.43% and the S&P 500 down by 0.77%. The only other incident of note was Visa raising $16 billion from a bond issue – the 4th largest of the year.


In Asia the mood was again cautious in the wake of commodities, oil and a stronger Yen, with the ASX closing down 0.84% and the NIKKEI by 1.32%. Just after lunch the Shanghai Composite was easier by 0.49% and the Hang Seng by 0.89%.

There was a slew of earning this morning, though let me deal with two issues beforehand. Since the news of VW duplicitous behaviour over diesel engine controls broke, its share price has fallen 20%. However VW seem to have been quite dismissive as to the damage caused to the company. They announced that it was unlikely that it will need to use a €2 billion provision, which it had set aside. The shares rallied 3.38% on the back of this news. Glencore posted a statement at 8.30am which read quite positively, according to Panmure’s Kieron Hodgson. Ivan Glasenberg the CEO set out plans for cutting its debt and employment requirements quite succinctly. There are also plans to sell assets. However in a seller’s market the prices may be depressed and achieving that goal may prove challenging. The market liked the statement and shares rallied by 8% to 89.9p at 8.31am.


This morning there were tolerable efforts from John Wood, Photo-Me, Centrica and Micro-Focus and Go-Head. The same cannot be said of Sports Direct and its Machiavellian CEO Mike Ashley. He seems to have his own set of rules about employment terms and taking stakes in other companies, coupled by the fact that he is not the greatest communicator with analysts or the media. He has incurred the wrath this morning of The Guardian’s Simon Goodley. Sports Direct’s results were fairly average by their standards with revenues up 2.5% and profit by 5.2%. Investors treated this compendium of news viscerally – shares down 5%. Christmas will be a key period going forward.


Finally let’s take a look at Whitbread. Panmure’s Anna Barnfather has got this company spot on. She flagged up a ‘sell’ notice in March. Shares have fallen by 16% to yesterday. They were off another 3% this morning after slightly lack lustre trading statement, particularly in the wake of the Ruby World Cup. Total like for like sales were up 3.5% when 4-5% was estimated. Premier Inns’ sales were up 3.6% which was considered weak and Costa Coffee only up 2.5%. Andy Harrison the CEO who hands over to Alison Brittain in January – ex Lloyds Banking – assures the market that the company is on course to achieve its goals.

UK companies posting results this week – Thursday – Sports Direct, Micro-Focus, John Wood Group, Centrica, Photo-Me, Marshalls, Darty, Whitbread (TS), Ocado (TS), Go-Ahead (TS), Tui Travel (TS), Friday – Bellway (TS), MJ Gleeson (TS).


Economic Data – Thursday – BOE MPC meeting US trade Data


David Buik


Market Commentator – Panmure Gordon & Co 


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