TODAY’S FAYRE – Tuesday, 23rd February 2016


You did not walk with me

Of late to the hill-top tree

As in earlier days,

By the gated ways:

You were weak and lame,

So you never came,

And I went alone, and I did not mind,

Not thinking of you as left behind.


I walked up there to-day

Just in the former way:

Surveyed around The familiar ground

By myself again: What difference, then?

Only that underlying sense

Of the look of a room on returning thence.


 Thomas Hardy – author & poet – 1840 – 1928


It really is a great shame that tempers should be frayed so early on in the EU referendum campaign. Surely it is not necessary. Passion is one thing; bad manners and personal attacks are rife and there is still 4 months to go. The icing on the cake yesterday came from Sadiq Khan in suggesting that 500,000 Europeans would have to leave London in the event of BREXIT – absolute twaddle! If Europeans living in London bring something to our economic party, they must be made welcome to stay! These scaremonger tactics are too immature for words.


Wonderful headline by Dr Gerard Lyons in the Daily Telegraph today – “EU is like the Titanic! We need to jump off before it sinks!”


Happy to attach a little credence to the IMF’s comments on the threat of a housing ‘bubble’ in the UK damaging growth in the UK, but its views on the uncertainty about the UK’s continuing membership of the EU is of no consequence whatsoever.


Unfortunately the price of oil seems the only lead indicator for markets to measure performance these days. Certainly yesterday the FTSE 100 (-75 points) washed away much of Tuesday’s gains, attributed to falling crude oil prices and the declining value of the Pound. I don’t buy blame BREXIT threat on the dropping Pound. The Dollar is a strong currency against all but the Yen. The ‘usual suspects’ in the form of Anglo-American, BHP, BP, Shell and Standard Chartered plus a few other banks surrendered much of the ground they made up on Tuesday. Sentiment was slightly negative on the Street of Dreams yesterday but there was a measurable bounce late in the session, when oil made a pop and the DOW closed up 0.32%, the S&P 500 was 0.44% to the good and the NASDAQ grabbed hold of 0.88% in value.

In Asia Chinese markets may well report the worst single month in recent times with the Shanghai Composite getting a good hiding today down 6.5% with just an a hour to go! The Hang Seng only lost 1.5%. The ASX closed just in positive territory, with the NIKKEI adding 1.5%, thanks to a slightly weaker Yen. Foxconn confirmed its acquisition of 70% of Sharp with a $5.9 billion bid. South32, the hive off operation of BHP posted less of a loss than expected ($1.7bn) – shares were up 3.54%.


This morning it was all change – oil, I’m told, was again the catalyst as the FTSE 100 added 100 points to 5965 by 8.40am.  I am beginning to think that 2 men in white coats should come and take me away. This makes no sense to me at all – insanity personified. It was a huge earnings day today, set out below. Greater minds than mine will assess their performances. RSA added 6% at the opening which was a surprise. Yes the profit was there, but surely the likes of Aviva and St James’s Place offer better long term value from that sector. Capita +3%, Bodycote +2.9% and UBM +3% captured investors’ imagination. Merlin initially displeased its acolytes with shares down 4%, though the outlook is good with 4 new theme parks in the pipeline – shares rallied to +4.37%.


It was rumoured in the Sunday press that Lloyds Banking Group would pay a dividend, when it posted results today, even though it might be perceived controversial, in view of the fact that 9% of Lloyds shares remain in UKFI (taxpayers) control. Chairman Lord Blackwell and Antonio Horta Osorio fixed bayonets and ‘cocked-a-snook at public opinion and paid out £1.6 billion plus a special dividend of £400k. Punters loved it and took the stock up, up and away adding 9.32% to 67.98 – still 5p below breakeven, but a big improvement from last Monday, when the shares were well and truly under water at 61.7p. In fairness, Panmure’s Simon French recommended that Lloyds may adopt this stance towards dividends on 22nd January to boost the share price and help to precipitate the final 9% sale, which George Osborne and the Treasury are keen to see completed. Sadly ANOTHER £2.1 billion provision for PPI was made, making a total of £4 million this year (£15 billion in total). The underlying profit for the year was up 5% to £8.1bn; the statutory profit before tax was £1.6bn.  Tier One Capital was strong at 13.9%. The bonus pool of £353.7 million was down from £369.5m in 2014, with an average of £4,600.00 going to each employee.


Finally hats off to BATS – solid as a rock in the last year with share up 3% in that period and still paying decent dividends as have IMPS – top effort.


U.K. Companies posting results this week – Thursday – Bodycote, Lloyds Banking Group, Coats, Countrywide, Kaz Minerals, STV Group, Mondi, RSA, Merlin Entertainment, Serco, BATS, Rentokil, UBM, Reed Elsevier, Premier Oil  – Friday – IAG, Rightmove, RBS, William Hill, Pearson

US companies posting interim results – Thursday – GAP, Friday – JC Penney

  ECONOMIC DATA – Thursday – UK GDP estimates, US Initial Jobless Claims

  David Buik

Market Commentator – Panmure Gordon & Co

D +44 (0)20 7886 2775

Mobile – 0044 7788 144 877

Panmure Gordon & Co

One New Change | London | EC4M 9AF | United Kingdom


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