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


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