Monthly Archives: March 2016

TODAY’S FAYRE – Thursday 31st March 2016


“The stars, a jolly company,

I envied, straying late and lonely;

And cried upon their revelry:

“O white companionship!

You only In love, in faith unbroken dwell,

Friends radiant and inseparable!”


Light-heart and glad they seemed to me And merry comrades





But I, remembering, pitied well And loved them,

who, with lonely light, In empty infinite spaces dwell,

Disconsolate. For, all the night, I heard the thin gnat-voices cry,

Star to faint star, across the sky.”


 Rupert Brooke – soldier & poet – 1887 – 1915    


T-20 final, England made it! – Certainly Jason Roy, Joe Root and Jos Buttler made England’s passage to the final in Kolkata on Sunday look sublimely easy! Will their opponents be Australia or the hosts, India?


I see that Denise Gough is a very warm order with Ladbrokes to carry off the Olivier award for the best performance by an actress on the stage this year for ‘People, Places & Things.’


For racing aficionados I strongly recommend a very short book on perhaps the greatest period for wholesale gambling in horseracing – ‘The Druid’s Lodge Confederacy.’ The plans for these great coups are laid out and hatched at the turn of the twentieth century by a small select group of landed gentry at a purpose built stable on Salisbury Plain – The Druid’s Lodge – now the domain of the Hannon operations today. Those were days and the behaviour was deliciously outrageous. A sublime read!

Janet Yellen’s soothing wand was still being waved down most streets in the Wall Street area and all-over beautiful downtown Manhattan yesterday, which kept the equities embers smouldering away. In fact the DOW is now in positive territory for the year – +1.7% and the S&P 500 is 1% to the good in 2106. With inflation unlikely to nudge 2% in the foreseeable future and despite decent ADP numbers (+200k for private sector employment) posted yesterday, it seems unlikely that rates will be raised before June, if at all then. With so many international imponderables, the FED is understandably circumspect and cautious. Equities have regained their poise, but it would not take much to knock them off their pedestal again – oil prices, geopolitical pressures such as US Presidential election and BREXIT and most important of all the increasing concern about many banks – both in the US and here in ‘Old Blighty.’ How rude is their health? How onerous are the capital requirements? Are some of these gargantuan loans to the energy sector going to be perhaps a straw that breaks a few camels’ backs? Also I hear PPI claims are up another 6% likely to take the grand total of claims to in excess of £30 billion!


It was a good day for insurers on the Street of Dreams. It is slowly becoming apparent that many are now losing the unnecessary tag of ‘too big to fail.’ Metlife was up 5% and the likes of Prudential Financial and AIG rose by an average of 2%. Banks have been out of sorts in recent sessions. However, yesterday some stability prevailed for the sector, though Bank of America was under the cosh – down 4.5%. Apple, with new toys on the shelves and Google seem to be the standard bearers for the resurgence for the tech sector. In London yesterday markets put behind ‘chamber of horror’ period in January and February behind it by nudging in to positive territory. The FTSE added 1.57% to 6203. Miners and oils were in good fettle. It is terrifying seeing a stock like Anglo bouncing around in double digits in a day’s trading. Oils were strong with RDS, BP and Tullow performing with aplomb. Despite the nervous start to the New Year Carnival posted decent numbers. I suppose my age group keep cruising, come hell or high water. Premier Foods is starting to convey the impression that it will eventually do a deal with McCormick of the US though above the £1.5 billion already on the table.


There has been well-chronicled and devastating news on Tata’s steel operations in the UK. Tata believes they are worthless which makes attracting a buyer in the future very difficult, if not impossible. Attempting to prevent 20,000 from possibly losing their jobs is devastating and redeploying them in to other trades will take time. The writing has been on the wall for steel demand with falling prices for at least 3 years. Even Archelor Mittal is struggling. I have to say the performance or influence of the EU in terms of protecting member countries from excessively cheap steel imports from China with sensible quotas has been lamentable. In the immortal words of Many Rice-Davies (RIP) – ‘You would say that wouldn’t you! In fairness the problems that the UK and EU have with steel, however horrific the human story is pales in to insignificance in comparison with China’s acute concerns. It is possible that 6 MILLION will need to be laid off in China. At 9.30pm 4th quarter UK GDP will be posted. It is expected to come in at +0.5%. Manufacturing has been a little weak – hence the tentative number. Consumer confidence in the UK was posted as flat. There has been a degree of exaggeration in terms of deep concern.


It was interesting to note comment in the FT that IPOS in the US for the first quarter were down to pre-crisis 2009 levels with 21 IPOS valued at in excess of $3 billion had been shelved. Only 9 companies valued at $1.2 billion made listings. There has been a marked ‘pick-up’ in activity since the market ‘low’ of 11th February 2016.


Oil prices were lower and inevitably inertia set in Asia, apart from Australia, where mining stocks enjoyed a bit of a run on the rails – ASX closing up 1.4%. The NIKKEI was easier by 0.7% and the Shanghai Composite was up 0.1% with the Hang Seng closing close to being -0.36%. It was confirmed this morning that Taiwan’s Foxconn confirmed it has bought one of Japan’s great brand names – Sharp – for a knocked down price of $3.5 billion.





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​



TODAY’S FAYRE – Wednesday, 30th March 2016


The damned ship lurched and slithered. Quiet and quick
My cold gorge rose; the long sea rolled; I knew
I must think hard of something, or be sick;
And could think hard of only one thing — YOU!
You, you alone could hold my fancy ever!
And with you memories come, sharp pain, and dole.
Now there’s a choice — heartache or tortured liver!
A sea-sick body, or a you-sick soul!

Do I forget you? Retchings twist and tie me,
Old meat, good meals, brown gobbets, up I throw.
Do I remember? Acrid return and slimy,
The sobs and slobber of a last years woe.
And still the sick ship rolls. ‘Tis hard, I tell ye,
To choose ‘twixt love and nausea, heart and belly.”


 Rupert Brooke – soldier & poet – 1887 – 1915


Though England played well with guts and a smidgen of flair to beat Germany over the weekend, with the media starting to hype the team up with superlatives that weren’t quite warranted, there was a reality check at Wembley last night! Holland, who have not enjoyed the greatest success since the Brazil World Cup, beat England 1-2 in a dull affair. Mr Hodgson, there is much work to be done, for England to really perform at Euro 2016!


Now for England’s T-20 semi-final against New Zealand in Delhi – 2.30pm GMT today!  Have Eoin Morgan’s side approved sufficiently to make a real fist of beating the ‘Kiwis?’ Is England’s batting too brittle? Will Rashid and Moeen get hammered?  All will be revealed – Good luck!


Yesterday there was a prevailing feeling that markets behaved irrationally in Europe. They seemed rudderless, with investors just going through the motions on the back of Easter blues. There was a marginally adverse reaction by FTSE traders once it became clear that the BOE’s FPC was tightening Tier One capital ratios by 0.5% to try and keep the lid on rampant bank lending and ‘buy-to-let’ mortgages. It is becoming increasingly costly for banks to do business in the UK and conditions are unlikely to improve.  Suffice to say that our banks’ tier one capital requirements are mainly and already in excess of the expressed criteria.   However that negative sentiment soon petered out.  Also there was an attempt by the media to put words in to the mouth of the BOE to the effect that the Central Bank was warning against the dangers of BREXIT and was in support of ‘remaining in’.   This was not the case. The Bank just reiterated its concern that prolonged uncertainty, post a BREXIT vote, could damage financial stability.  The FTSE finished the session just below the Plimsoll line – down 0.58 of a point at 6105. Stocks had bobbed around like corks in a bath to very little effect with the oil and banking sector suffering more than most. Sports Direct, despite its woes stepped up its efforts to buy the mail order operation Findel. BAE Systems won a second contract this week with the Swedish army. Premier Foods have all to play for as it decides its destiny either with McCormick at a higher price or beds down modestly with Nissin as a minor partner. The saddest news of the day is that Tata wants out of steel manufacturing in the UK, putting thousands of jobs at risk. The decline of steel in the UK has been evident for decades.  However one cannot help feeling that the EU in all its glory has been useless protecting the UK’s interest.


Conversely across the Atlantic, there was a modest degree of post prandial neurosis on the Street of Dreams until Janet Yellen had delivered her speech in New York. It was covered from head to toe in dovish comments and messages. She appeared to be more concerned about the downside risks, particularly those affecting other parts of the globe. Though the employment data looks robust (of course awaiting confirmation from NFP on Friday), she expressed a little disappointment about US manufacturing and exports as well as to alluding to the fact that Consumer Spending was only modest.  So those hawkish economist expecting a couple of hikes in rates in 2016, don’t hold your breath, though it could still happen. At the close the DOW had added 0.56% taking this index to a high point so far this year. The S&P 500 was 0.88% to the good.  Lennar the house builder posted good numbers – +3%. On talk of flirtatious behaviour by Microsoft towards Yahoo! – the latter’s shares also rose 3%.  The NASDAQ gained 1.67% with measurable contributions from Apple – +2.3% and Alphabet +1.5%.

 This morning in Asia, equity markets responded positively to the Yellen’s dovish tones apart from the NIKKEI, which was down at the time of writing by 0.75% due to a stronger Yen.  The ASX was up 0.12%, with the Shanghai Composite up 1.56% and the Hang Seng by 1.31%.  This morning we saw the first major IPO from China this year – a $1.7 billion effort from Zoomlion. The FTSE is expected to open up 50 points at 6155.



US companies posting interim results – Wednesday MICRON TECHNOLOGY




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


Market update

It seems as though I have been doing this job since Noah left the Arc and still I haven’t a clue what I am doing or what I am ‘talking about’, nor for that matter do some of the traders interpret correctly the market’s mood.


We bounced out of the traps this morning full of the joys of Easter – don’t ask me why – probably a relief rally after such an uninspiring week before our religious holiday – FTSE down 1.7% last week. The FTSE opened illogically up 48 points. Initially oils, banks and pharmas all put their best foot forward. Then everyone realised there was no reason for these sectors to make any gains of consequence. So, oils gave up the ghost with BP ending the session close to being 2.5% down. Miners were reeking with fear – down 4-5%. Banks , having been up about 2%, are now down 2% for two reasons – firstly a +0.5% increase in capital requirements implemented by the BOE in an attempt to curb ‘buy to let lending’ and comments made by the FPC to the effect that prolonged uncertainty post BREXIT could be damaging for financial stability. It did NOT officially warn against BREXIT, though no prizes for guessing how Mark Carney would like the referendum to pan out!


Towards the close the DAX was up 27 points and the CAC just 11 points. The Street of Dreams got off to a very neutral start – DOW -35 points at 4.30pm. The FTSE 100 was down 5 points with a few minutes trading to go!



Company 6/11/15 1/1/16 29/3/16 % gain/loss since 1/116
M&S 542p 446p 401p -10.01%
NEXT 7940p 7190p 5675p -21.07%
KINGFISHER 354p 330p 377p -14.24%
SPORTS DIRECT 702p 577p 354p -38.64%
AB FOODS 3429p 3342p 3332p -0.01%
TESCO 183p 149p 191p +28.18%
J SAINSBURY 274.5p 261.7p 276.1p +4.25%
WM MORRISON 169p 148p 199p +34.45%
HOME RETAIL # 107p 99p 167p +68.68%
TED BAKER 3320p 2988p 2785p -6.79%
DARTY 108p 103p 131p +27.18%
DIXONS CARPHONE 457p 500p 475p -5.00%
GREGGS 1187p 1314p 1083p -17.57%
JUST  EAT 449p 494p 375p -24.08%
ASOS 3311p 3451p 3105p -10.02%
AO WORLD 159p 156p 168p +8.33%
DEBENHAMS 89p 73p 74p +1.36%
DUNELM 963p 943p 931p -1.27%
POUNDLAND 280p 213p 160p -24.88%


There is little doubt that supermarkets have made a measurable recovery in terms of their respective share prices since the turn of the year, even though any increase in sales has been far from spectacular.  Anyone who dismisses the threat of Lidl and Aldi as only a passing aberration does so at their peril. Both German retail juggernauts have over 900 outlets in Europe each and can well afford to drop a few hundred million Euros to infiltrate the UK market by opening several more shops in the UK as temporary lost causes.


Apart from technical situations such as manifest themselves at Home Retail (Argos) being taken over by J Sainsbury and improved efforts from Darty and AO World, the general outlook for retail looks rather unappetising. On Friday, NEXT, the most conservative of operators sent sound shocks through the market, suggesting trading conditions might be as bad as they were in 2008 (shares fell 15.9% last Friday). However NEXT is not alone.  Most of the other retail operators have failed to pass muster. This news does not augur well for growth going forward. The consumer seems to have less disposable income at his/her disposal. Few will be surprised if UK GDP for 2016 actually makes 2% – 1.8% sound nearer the mark.


TODAY’S FAYRE – Tuesday, 29th March 2016


“When George’s Grandmamma was told

That George had been as good as gold,

She promised in the afternoon

To buy him an Immense BALLOON.

And so she did; but when it came,

It got into the candle flame, And

being of a dangerous sort

Exploded with a loud report!

The lights went out!

The windows broke!

The room was filled with reeking smoke.


And in the darkness shrieks and yells

Were mingled with electric bells,

And falling masonry and groans,

And crunching, as of broken bones,

And dreadful shrieks, when, worst of all,

The house itself began to fall!

It tottered, shuddering to and fro,

Then crashed into the street below-

Which happened to be Savile Row.


When help arrived, among the dead

Were Cousin Mary, Little Fred,

The Footmen (both of them), the Groom,

The man that cleaned the Billiard-Room,

The Chaplain, and the Still-Room Maid.


And I am dreadfully afraid

That Monsieur Champignon, the Chef,

Will now be permanently deaf-

And both his aides are much the same;

While George, who was in part to blame,

Received, you will regret to hear,

A nasty lump behind the ear. Moral:

The moral is that little boys

Should not be given dangerous toys. 



 Hilaire Belloc – author & poet – 1870 – 1953



I am reading a book anyone over the age of 50 should thoroughly enjoy if they are intrigued with the law and the mystique of court room dramas. It is written by Thomas Grant, on the ‘Case Histories of Lord Jeremy Hutchinson QC’, who as 101 years old yesterday. Amongst the people he represented in court were ‘George Blake’ and ‘John Vassall’ – both spies, tried and convicted in the ‘60s. Christine Keeler, Penguin books’ defence of Lady Chatterley’s Lover, Mayflower books’ defence of ‘Fanny Hill’, Kempton Bunton for the theft of Goya’s painting of the Duke of Wellington from the National Gallery, Tom Keating for forging great works of art and United Artists for ‘The Last Tango in Paris’ were amongst the notorious legal battles he built his brilliant and indefatigable reputation on with unparalleled powers of oratory as well as always being the epitome of charm.  


So the European Bank holiday came and went. The Street of Dreams experienced a choppy session yesterday in very quiet sepulchral trading conditions.  Initially shares dropped on falling oil and energy prices. However nondescript consumer spending data, virtually unchanged from the month before, took the wind out of the sails of the continuing threat of higher rates being implemented in the US, come June. In fact this uninspiring data ventures to suggest that 1st quarter US GDP may be no more than +0.9%. Notwithstanding that the prognosis for Friday’s Non-Farm Payroll data is expected to include confirmation of about 213k jobs having been created in February, despite the tough winter. If true, the FED’s Janet Yellen and her cohorts have another difficult conundrum on interest rate policy to decipher!


So despite some M&A activity, which included Hong Kong’s Anbang raising its price for Starwood Hotels to $82.75 a share, NTT buying Dell’s IT service units for $3.05 billion and more froth on gossip that Microsoft is still running the ruler over Yahoo!, the three main US bourses closed on a relatively flat note – DOW +0.11%, S&P 500 +0.05% and the NASDAQ easier by -0.14%.


Yesterday China’s industrial profits rose at the fastest rate since 2014.  However the effect of Asian equities on a net basis over 2 days has been negligible.  At the close the NIKKEO closed down -0.18% and the ASX was 1.57% easier. Just after lunch the Shanghai Composite was down 1.35 and the Hang Seng was near enough flat.


Bank holiday papers are often short of copy and this weekend was probably no different. The Sunday Times speculated that Shell was giving due consideration to the sale of North Sea assets post the acquisition of BG Group.  Shell’s CEO Ben van Beurden let it be known that all assets were under consideration or assessment – not just those assets in the North Sea. There was talk that Glaxo Smithkline was looking at its overall taxation position as well as attempting to provide easier access to cancer drugs to poorer nations. The LSE/Deutsche Boerse deal is far from being put to bed. Objections as to domicile as well as sovereignty are now being raised in Germany as well as here in the UK. We expect ICE to come in today and spoil the party with a higher bid. No doubt ICE will be encouraged by these developments as will those supporting ‘no deal.’ It is hardly surprising that the UK’s largest banks have vigorously encouraged the new challenger banks to pay their share of the £2.5 billion bank levy. At 11.00am this morning many are expecting the BOE to announce stricter and tighter criteria for Buy to let’ lending. Today is a quiet day for corporate results.  AG Barr the owners of Irn Bru, Tizer and Orangina, posted results this morning. Results were in line with expectation – profits up 7% and a 10% increase in dividend. Shares were virtually unchanged at the opening.  With 2 years notice being given to many companies in regards to sugar content in drinks, contingency plans including greater exports could result in little tax being raised. The it would be ‘job done!’


The FTSE surprisingly opening up 46 points 6153, despite the hijacking of an Egyptian aircraft which was forced to head for Larnaka in Cyprus. Drugs, banks oil and mining were all better.


 UK companies posting results – Tuesday – AG BARR, Wednesday – CARNIVAL PLC, Thursday – BOOKER, Thursday – HILTON FOODS, WIRELESS GROUP, JAMES HALSTEAD, CHESNARA, CMC MARKETS, and TUI TRAVEL


US companies posting interim results –Tuesday – SONIC, LENNAR – Wednesday MICRON TECHNOLOGY





  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



TODAY’S FAYRE – Sunday, 27th March 2016


O the valley in the summer where I and my John
Beside the deep river would walk on and on
While the flowers at our feet and the birds up above
Argued so sweetly on reciprocal love,
And I leaned on his shoulder; ‘O Johnny, let’s play’:
But he frowned like thunder and he went away.

O that Friday near Christmas as I well recall
When we went to the Charity Matinee Ball,
The floor was so smooth and the band was so loud
And Johnny so handsome I felt so proud;
‘Squeeze me tighter, dear Johnny, let’s dance till it’s day’:
But he frowned like thunder and he went away.

Shall I ever forget at the Grand Opera
When music poured out of each wonderful star?
Diamonds and pearls they hung dazzling down
Over each silver and golden silk gown;
‘O John I’m in heaven,’ I whispered to say:
But he frowned like thunder and he went away.

O but he was fair as a garden in flower,
As slender and tall as the great Eiffel Tower,
When the waltz throbbed out on the long promenade
O his eyes and his smile they went straight to my heart;
‘O marry me, Johnny, I’ll love and obey’:
But he frowned like thunder and he went away.

O last night I dreamed of you, Johnny, my lover,
You’d the sun on one arm and the moon on the other,
The sea it was blue and the grass it was green,
Every star rattled a round tambourine;
Ten thousand miles deep in a pit there I lay:
But you frowned like thunder and you went away.”


 WH Auden – poet – 1907 – 1973


“If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States.” – Henry A. Wallace, 33rd Vice President of the United States


“All that is gold does not glitter. Not all those who wander are lost. The old that is strong does not wither, deep roots are not reached by the frost.” – J.R.R. Tolkien – author – 1892-1973


I find it staggering that a country with a population of 314 million finds it hard to attract two candidates that can tick most of the boxes to be considered viably acceptable candidates to become President of the United States. The Roosevelt and Bush dynasties have come and gone and in the case of the Clintons the electorate is taking its time to erase them from the forefront of US political life. Thanks to the GOP being incapable of choosing a more acceptable candidate than Donald Trump, assuming that Cruz or some unknown candidate does not come out of the clouds, Hillary Rodham Clinton will become the 45th President of the US in November. Though he was put in a robust performance, Bernie Sanders is unlikely to upset the applecart.


It is, of course, as well to remember that this Presidential election is none of our business as to whom the US electorate chooses to be their President. Clearly there are an increasing number of political factions gaining traction in the US as well as in our beloved ‘Dear Old Blighty!’ Many may not care for the cut of Donald Trump’s jib and the far-reaching and controversial views and ideas he has on life, particularly foreign policy, but away from the coast the US is basically Bible-thumping right wing red necks. 83% have no passports and have no intention of leaving the US. As far as they are concerned the US is the only country of consequence and their political views are very radical to say the least. Those who expect ‘good sense to prevail’ in November, please don’t hold your breath! 


On Friday I saw one of the most powerful theatre dramas for some considerable time – “People, Places and Things” by Duncan Macmillan and the Wyndhams Theatre. This play is based in a ‘re-hab’ centre! Emma, brilliantly acted by Denise Gough was having the time of her life. Then her life, thanks to booze and drugs, went in to free-fall. Her first step should have been to admit that she has a problem. But the problem isn’t with Emma, it’s with everything else. She needs to tell the truth. Initially she is incapable of doing so. This play deals with her life in ruins; her relationship with her parents virtually non-existent. Can she survive these desperate ordeals? Book now to avoid disappointment!


How sad it was to hear of the untimely death of Johan Cruyff from cancer of the lung at the age of 68. In the ‘70s and ‘80s, as a player he was virtually in a league of his own whilst playing for Ajax, Barcelona and Holland.  Not only was he wonderfully talented as a player, he also was a visionary of the game, combining skill with charm and the ability to communicate lucidly. He gave football acolytes boundless pleasure – RIP!


Though I was 1500 miles away, it was good to hear news of Boris Johnson giving an excellent account of himself on the subject of BREXIT in front of the Treasury Select Committee. The Mayor of London refused to be bullied by the sarcastically irascible TSC chairman Andrew Tyrie. The fact that the member for Chichester was rather flummoxed by Boris’ bludgeoning approach brought a wry smile to my face. Mr Tyrie is very good at dishing it out but seems to resent his own medicine being administered to him. On Saturday I chortled at Sir Mike Rake, who was dressed in ‘mufti’ when interviewed on Sky, not for his lack of sartorial elegance, but for his assumption that in his capacity as chairman of BT, he spoke unequivocally for big business’ support of remaining ‘in.’ Frankly he’s wrong; He may well speak for FTSE 100 Chairmen & CEOS but no way does he speak with unanimity for their employees – many of whom have probably been gagged.


I was also rather bemused at comments made by BBA’S Anthony Browne that banks in the city had no stomach or appetite for BREXIT. I’m not sure I agree with his assessment. Of course, CEOS of these venerable institutions probably feel vulnerable. Also the BOE has been very cautious and guarded in its comments – well sort of!  However, If Jamie Dimon & Lloyd Blankfein want to lead their respective troops up the gangway and turn left in to first class, before flying off to Paris; so be it! But they’ll soon be back! Why? The U.K. is the best centre in the world for raising capital. London is the time centre of the world with English THE trading language adopted by the majority of participants. London is also the legal and accounting capital of the world. International bankers and business are not comfortable conducting trade in German or French. Also there are so many Europeans happily pedalling their wares in our great capital. The Bank of England/FCA provide top class regulation. The U.K. has developed a decent regulatory environment and does not need the EU to stand judge & jury over our banks’ international destiny.


US markets and investors will be comforted by the fact that 4th quarter GDP for 2015 came in at 1.4%. However oil prices fell steadily last week coupled with the fact there is a strongly held view that the FED will raise rates in June. Consequently with the exception of the NIKKEI which rose 1.7% due to a continuing weak Yen, most global indices came off the boil last week. The FTSE lost 1.3%, the S&P 0.7% and European bourses by an average of 1.9%. One issue that has concerned me from a distance is the poor performance of many retail operators, which either posted poor results or the sales vibes were discouraging. On Friday NEXT shed 15.9%.  Lord Wolfson was of the opinion that trading conditions were verging on being as bad as 2008. M&S fell 4.9% in value, Debenhams by 3.8% and AB Foods by 5.6%.  Even Restaurant Group has taken a heavy hit – the shares have fallen from 542 to 383p in a month – 29%.  Normally when life is good people got out and “eat drink and be merry!” I mention these worrying idiosyncrasies as retail is a major contributor to growth in the UK – about 60%. So one should be forgiven for worrying that UK GDP could fall below 2% in 2016. Equities, in some places, are starting to look richly valued.



Also, look at Sports Direct.  These shares have fallen from 922p in April 2014 to 350p on Friday – down 62%. Since Sports Direct’s IPO in 2007 CEO Mile Ashley has always been confrontational towards corporate governance issues.  He is currently at loggerheads with the BIS Committee under chairmanship of Ian Wright MP, who want to interview Mr Ashley about the minimum wage or lack of it.  It goes without saying that in 2013 2000 staff at Sports Direct earned £70,000 – most of it bonuses.  So though Mr Ashley seems to be a law unto himself, his model has worked for a fair few people. Now Mr Ashley has suggested that profits will come in at the bottom end of expectation. So last week these shares look a fair old larruping.  Don’t be surprised if attempts are made by the beleaguered Mike Ashley to take this company private again.  It looks as though BHS has found a ‘get-out-of-jail’ card in selling its Oxford Street flagship store for £55 million to Lancer Property Asset Management.


The hand in marriage for the LSE is now ‘hotting’ up.  Not only are City luminaries concerned at the prospect of any takeover but so are some German executives, as pointed out in The Sunday Telegraph. The other most worrying aspect concerning any deal – Deutsche Boerse or ICE – is the regulation of the clearing of derivatives. The derivative business will be gargantuan in size. Do the clearing houses have sufficient capital to make this operation safe in times of financial turmoil?


It is generally recognised that he level of M&A activity has dropped to what was experienced back in first quarter of 2008. Investment banking fees are supposedly down by over 36% on last year’s heady numbers in the first quarter – down from $20 billion to $12.8 billion, with UK accounting for 27% of the revenues. There is no doubt that investors are not quite as confident in large ticket deals in such volatile market conditions, as perhaps many thought.  The appetite for small transactions remains quite voracious in comparison. How ironic that Premier Foods, (Mr Kipling amongst other brands) should turn down a bid from McCormick & Co in the US in favour of Japanese Noodle maker Nissin.




UK companies posting results – Tuesday – AG BARR, Wednesday – CARNIVAL PLC, Thursday – BOOKER, Thursday – HILTON FOODS, WIRELESS GROUP, JAMES HALSTEAD, CHESNARA, CMC MARKETS, and TUI TRAVEL


US companies posting interim results –Tuesday – SONIC, LENNAR – Wednesday MICRON TECHNOLOGY


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




I was pleased with the 16/1 “Empire of the Dirt” but yesterday was a tough day! Today looks like a minefield. One’s heart would want ‘Cue Card’ to win the Gold Cup, but I am not convinced that Prestbury Park, with all its undulations is his track! We shall see.  Brian Cooper, Gigginstown’s jockey has chosen ‘Don Cossack’, whom AP won at Aintree last year. Ruby is on ‘Djakadam’ – second last year (I think Ricci was furious, despite winning the Ryanair, ‘Vautour’ is not lining up).  However I am sticking with ‘DON POLI’, last year’s RSA winner with Davy Russell in the plate!


1.30pm – ZUBAYR 9/2 – CLAN DES OBEAUX 16/1


2.10pm – GREAT FIELDS 7/1 – EW ALL YOURS 10/1


2.50pm – BARTER’S HILL 11/4


3.30pm – DON POLI


4.10pm – PAINT THE CLOUDS 4/1


4.50pm – SQUOUATEUR 9/2 – MR MIX 14/1



Cheltenham Fayre

Comment – a man out of form yesterday tentatively suggests –


1.30pm – OUTLANDER 4/1


2.10pm LEAVE AT DAWN – 6/1 – EW OSCAR SAM 14/1


2.50pm – I am bemused that Vatour 8/11 is running here not in tomorrow’s Gold Cup – won’t he stay or is he not fully wound up? So I am going to take a chance on ROAD TO RICHES at 7/1 – I could be so wrong!


3.30pm – THISTLECRACK – EVENS – SAPHIR DU RHEU at 8/1 – if you can get the price – good each way bet


4.10pm – EMPIRE OF DIRT EW 12/1 – FULL SHIFT EW 12/1


4.50pm – LIMINI 8/11 – CHOCCA WOCCA EW 12/1


5.30pm – SAMBREMONT – EW 8/1


TODAY’S FAYRE – Wednesday, 16th March 2016


He was found by the Bureau of Statistics to be

One against whom there was no official complaint,

And all the reports on his conduct agree

That, in the modern sense of an old-fashioned word, he was a


For in everything he did he served the Greater Community.

Except for the War till the day he retired

He worked in a factory and never got fired,

But satisfied his employers, Fudge Motors Inc.

Yet he wasn’t a scab or odd in his views,

For his Union reports that he paid his dues,

(Our report on his Union shows it was sound)

And our Social Psychology workers found

That he was popular with his mates and liked a drink.

The Press are convinced that he bought a paper every day

And that his reactions to advertisements were normal in every way.

Policies taken out in his name prove that he was fully insured,

And his Health-card shows he was once in hospital but left it cured.

Both Producers Research and High-Grade Living declare

He was fully sensible to the advantages of the Instalment Plan

And had everything necessary to the Modern Man,

A phonograph, a radio, a car and a frigidaire.

Our researchers into Public Opinion are content

That he held the proper opinions for the time of year;

When there was peace, he was for peace:  when there was war, he went.

He was married and added five children to the population,

Which our Eugenist says was the right number for a parent of his


And our teachers report that he never interfered with their


Was he free? Was he happy? The question is absurd:

Had anything been wrong, we should certainly have heard.


 WH Auden – poet – 1907 – 1973


They say great steeplechasers never come back to their former glories after injury or illness. How absolutely wonderful that “Sprinter Sacre” proved to be a rare exception to the rule, as he galloped up the hill to win the Queen Mother Champion Chase. This fabulous looking gelding virtually took the new Grandstand’s roof off with the crowd’s roar, in vanquishing the ‘jolly’ ‘Un de Sceaux’s’ challenge with more than a little in hand. There was hardly a dry eye on the course. ‘Hats off!’ to Caroline Mould who never wavered in her support of her steed; to Nicky Henderson and Nico de Boinville for their total commitment and talent. Also spare a thought for Raymond Mould who gave so much to racing – RIP.


It is astonishing that in 5 weeks we have seen the FTSE 100 rally by 10.7%, partly thanks to the fact that the market was probably a tad oversold, oil prices rallying by 25% and a modest improvement in commodity prices. However there are no doubts that Central banks’ QE packages and the adoption of some negative interest rate policies have been the main contributors to global equity rallies. The icing on the cake probably came last night when FED Chairman Janet Yellen confirmed that the US economy was growing relatively robustly with some encouraging economic data, particularly employment numbers. However concern was expressed by Yellen that global growth may now be on the back foot. Consequently the FED was in no mood to implement 4 rate hikes in 2016. In fact in attempting to read the tea leaves the FED might contemplate two hikes this year. I would not be surprised if there were none. The Street of Dreams replied appropriately by maintaining its poise. The DOW closed up 0.43%, with the S&P adding 0.56% and the NASDAQ closing flat on the day. Oil prices rallied taking US crude to $39.10 a barrel, which gave comfort to energy and oil stocks.


I have no intellectual or economic input worthy of comment on yesterday’s UK Budget – the eighth delivered by George Osborne with no less than 77 pieces of legislation to reach the statue book. For comment read the excellent Simon French! For business and the City I thought it was an excellent budget! Why? For small businesses the tax threshold was raised from £6k to £15k, 600k small businesses will pay no business rates. Capital gains tax will be lowered from 28% to 20%, Corporation tax will come down to 17% in a year. Income tax thresholds will be increased – basic rate to £11,500 and higher rate to £45k. The public will be delighted that the banks will be clobbered for another £3.5 billion levy. Chancellor Osborne may well have been wrong footed by the fact that bank shares collapsed in January, thus making any sale of RBS impractical. Some say RBS will incur a permanent loss of £17 billion. I am not so pessimistic – but any sale cannot be calculated realistically in this parliament. Cutting debt has proved a problem and many now believe it will be a miracle if George Osborne can achieve a £10 billion surplus by 2020. So much has been pushed forward in the hope that the economy will improve. The OBR dropped GDP from 2.4% to 2%. Such forecasting is a ‘nonsense’, anyway. As matters stand £7.6 billion of spending cuts will need to be made in 2019 including £3.5 billion from Whitehall! That is a big call. That is the equivalent of a 14% increase in corporation tax revenues and only a 1.92% increase in public expenditure.


This morning in Asia the ASX closed up 1%, the NIKKEI down 0.25% with the Shanghai Composite and the Hang Seng both up 1.2%. At 8.54am the FTSE was up 35 at 6210. Sir Andrew Witty of Glaxo served notice that he will go in March 2107 and Rio’s Sam Walsh will retire soon.


UK companies posting results – Thursday – Premier Farnell, OneSavings Bank, International Game Technology, Ted Baker SOCO, Kier Group, Friday – Investec, Berkeley Group 


US companies posting interim results – Thursday – Adobe Systems



Economic Data – Thursday – MPC minutes, Friday – BOE quarterly bulletin and US Phili-Fed.


  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


TODAY’S FAYRE – Wednesday, 16th March 2016


“Looking up at the stars, I know quite well

That, for all they care, I can go to hell,

But on earth indifference is the least

We have to dread from man or beast. 


How should we like it were stars to burn

With a passion for us we could not return?

If equal affection cannot be,

Let the more loving one be me. 


Admirer as I think I am

Of stars that do not give a damn,

I cannot, now I see them, say

I missed one terribly all day. 


Were all stars to disappear or die,

I should learn to look at an empty sky

And feel its total dark sublime,

Though this might take me a little time.” 


 WH Auden – poet – 1907 – 1973


The revamped racecourse at Cheltenham looked a picture for the start of the festival yesterday, as 50,000 racing acolytes roared their heads off as the tapes went up for the SkyBet Supreme Novices Hurdle.  It was a Mullins/Ricci/Walsh barnstorming show, with ‘Annie Power’ of the three winners they had, looking a very high class act in the Champion hurdle – the first mare to win it since ‘Dawn Run’s’ effort in 1984. Could this 8-year old daughter of ‘Anno Luce’ win the RSA next year and the Gold cup in 2018? I suspect she may be a bit long in the tooth at 10 years of age and I would imagine Rich Ricci will want to breed from her!  


The general news flow is rather quiet today though there are three very large issues on the agenda – starting with a sort of peace offering from China form Premier Xi guaranteeing growth estimates for 2016 in attempt to get approval for his 5 year economic plan. I hasten to add there are probably a few cynics out there. Then, of course, there are the contents of the FOMC statement tonight. The FED is likely to resist the opportunity of hiking rates in March, though many will be surprised if it is not a distinct possibility in June, subject to the data continuing to improve, particularly employment data and wage inflation. The Dollar seems to have strengthened on the back of that possibility. The froth has come off crude oil prices, which may be responsible for investors skimming back some of their recent slew of profits. Yesterday proved to be rather an enigmatic session on the Street of Dreams, following in the wake of a very flat session in London, where the FTSE 100 eased by 34 points to 6139. The only news of interest was Canada’s Valeant losing over 51% in value, having failed to deliver satisfactory progress. Investors seem to have lost their appetite for risk or maybe it’s just good old fashioned ‘bottle’ with so many economic and political imponderables prevailing. Sainsbury didn’t have any news about Argos with its improved trading statement (like-for-like sales in the last quarter up 0.1%). Asian markets were very lack-lustre despite the Chinese PM’s reassurances. The ASX closed +0.1%, with the NIKKEI lower by 0.8% and the Shanghai Composite up 0.25% and the Hang Seng down 0.1%.


This morning there was confirmation of an agreed merger between the LSE and Deutsche Boerse. If there has to be a deal, this is the right one. The synergy is very good – cost cutting, derivatives and regulation plus making the joint venture a global operation, offering an appetising service for IPOS and corporate finance. If ICE mounts a higher bid, this would not be good news, as in time the LSE might be swept aside in to meaningless ignominy. ICE appears to be all about cost cutting and power. However, taking it as read that there is no such thing as a merger of equals I find it very hard to get my head around the fact that Frankfurt could ever be a more influential financial centre than London. So why couldn’t the LSE be the senior partner? Though Donald Brydon, aged 70, the former chairman of Royal Mail, who is doubtless the pillar of financial society, has agreed to remain NON-EXECUTIVE chairman for 3 years, what a classic springboard to blow UK influence aside for ever and a day, once he has gone. The UK will have lost its power base. Xavier Rollet has been a brilliant CEO of the LSE and fully deserves to walk off in to the sunset with £14 million. Since he joined in 2008 the share price is up from £6 to £29. We know he has political aspirations and may even dreams of becoming French President one day, but is this merger really necessary?


And finally to today’s Budget, to which I confess I bring little to the party, apart from a few comments and other people’s ideas which I fully support. Firstly it strikes me as folly to continue with long range forecasts on growth. Everyone’s guesses are inevitably wrong! When they are wrong the government dilutes any possibility of being flexible both with austerity and tax cuts. Why nail your flag to the mast when you don’t have to? I will leave the analysis of the detail to Panmure’s excellent economist Simon French.

On the way back from Cheltenham yesterday he threw me a couple of curve balls at me, which captured by imagination. He felt it must now be time for the Government to press forward with completing a single infrastructure (IT, Shared Services, Property Management, Financial Reporting, HR, Data Sharing) to service all government departments. Already conceived under the Government as a Platform program, this would enable several ministries to merge – and create super-ministries for International Services (FCO & DfID), Home Affairs (MoJ and HO) and Financial Transactions (HMRC & DWP) – or be abolished completely in the case of BIS or DCMS, thus making significant savings. Finally some real initiatives for SMES should be introduced such as a digital bureau that offers ‘start-ups’ a real tangible infrastructure for banking, regulation, exports and corporate governance with tax breaks to go with it. The modern day Enterprise Zone is virtual rather than physical. Hope springs eternal.  Chancellor put some on the table!


UK companies posting results – Wednesday – Hikma, Smiths Group, Thursday – Premier Farnell, OneSavings Bank, International Game Technology, SOCO, Kier Group, Friday – Investec, Berkeley Group 


US companies posting interim results – Wednesday – JABIL Circuits, Thursday – Adobe Systems



Economic Data – Wednesday – UK Budget, FOMC statement, Thursday – MPC minutes, Friday – BOE quarterly bulletin and US Phili-Fed.


  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