TODAY’S FAYRE – Wednesday, 8th June 2016


“Hope’ is the thing with feathers—

That perches in the soul—

And sings the tune without the words—

And never stops—at all—

And sweetest—in the Gale—is heard—


And sore must be the storm—

That could abash the little Bird

That kept so many warm—

I’ve heard it in the chillest land—

And on the strangest Sea— Y

et, never, in Extremity,

It asked a crumb—of Me,”  


Emily Dickinson – poet – 1830-1886


I know I am going to have to raise my game in support of Euro 2016, which starts for England supporters at 8.00pm on Friday 10th June 2016 against Russia, but so far I am wholly underwhelmed at the prospect. The competition is fierce with the test match starting Thursday at Lord’s against Sri Lanka, followed by the mouth-watering prospect of ‘Trooping the Colour’ and Street parties on Saturday to say nothing of the excitement of Royal Ascot next week.


I suppose coming in to the tournament with zero expectations, any achievement will be heralded as a huge success.


Chancellor Osborne endorsed his concern that there was evidence that investors are shifting billions of pounds out of British assets is just a “taste of things to come” if we vote to leave the EU. His comments come after Sky News’ Ed Conway discovered some £65bn either left the UK or was converted into other currencies in March and April – the fastest rate since the financial crisis in early 2009.

The figures, published by the Bank of England in its monthly register of banking statistics, represent the first evidence of capital flight from the UK – where money rapidly flows out of a country or out of that country’s assets in response to concerns over economic instability. If I may be so bold as to say this kind of flow ahead of such a momentous vote is but a mere bagatelle.  You would expect a combination of spivs and shrewd operators hedging their bets, knowing that if BREXIT occurs they can buy the assets back significantly cheaper.  The time to worry is in July and August.  Now if the floodgates open, then the UK has a problem.  I do not think that will be the case – certainly not in an alarming manner. Some people think that if BREXIT occurs the UK’s economy will just die on its feet!  Not so our economy is more robust than given credit for, even though some froth seems to have been removed from growth, which may end up being no more than 1.8% for the entire year. It should not be forgotten that pre the last General election something like £250 billion of assets were sold.


Yesterday’s session was outstandingly boring in London, yet again with the FTSE just closing above the Plimsoll line.  However there were fun and games at the BIS select committee when Mike Ashley eventually agreed to a showdown with Ian Wright’s troops.  I was great surprised how deferential and courteous the Committee were to Mr Ashley, who was brash, vulgar and very truthful.  What came out of the session was that for some time Mike Ashley has clearly lost day to day control of Sports Direct.  He may well have the vision for the broad picture and expansion plans but his attention to detail with his staff seems to have been abysmal.  I was more encouraged than the Guardian about his wish to comply and sort out his minimum wage issues plus human resources issues and outstanding problems with HMRC and short term contracts.


I better say something about Sainsbury’s trading statement before going on to the really meaty subject of Dominic Chappell’s visit to the Parliamentary Select Committee, which has been quite a stormy affair. In the first quarter to the 4th June retail sales rose a parsimonious amount of 0.3% with like for like sales down 0.8% in the same period. Mike Coupe, the CEO seemed to think this was a solid start but war has been declared on prices by ASDA and Aldi and Lidl won’t be far behind. On line sales were up 13% which was encouraging. 7 convenient stores were also opened in the period. The market liked the news – shares up 2.5% initially settling at 1.3% to the good.


The initial exchanges between the main dramatis personae from BHS Dominic Chappell and the CEO Darren Topp were hostile – both at each other’s throat. The word liar was surprisingly used. Darren Topp told the committee that when he challenged Chappell as what happened to the £1.5 million that may have been squirreled to Sweden, Chappell threatened to kill him!  Chappell – full of bravado, chat and authority – frankly was never qualified to do the job and frequently complained that Sir Philip Green was uncooperative almost from day one.  We must await comments from Sir Philip this time next week. I still believe that the professional advisors on both sides were neglectful in even contemplating the consummation of BHS by Retail Acquisition. It should never have happened. Chappell complained that BHS had been struggling from a lack of investment for years.  That’s why he got it for a quid!!


UK companies posting numbers – Wednesday – Sainsbury (TS), Workspace, Boohoo, WH Smith (TS), CMC Markets, Thursday – Auto Trader, Flybe, Wincanton, Home Retail, Friday – Fuller, Smith & Turner

  US companies posting interim results – Wednesday – Brown-Forman, Thursday – H&R Block

  Economic calendar -Thursday – UK goods trade balance, US initial Jobless Claims, Friday – Consumer inflation expectations.

    David Buik

Market Commentator – Panmure Gordon & Co

+44 (0)20 7886 2775

Mobile – 0044 7788 144 87

Panmure Gordon & Co

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


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