TODAY’S FAYRE – Wednesday 17th August 2016


“I sit in the top of the wood, my eyes closed.

Inaction, no falsifying dream

Between my hooked head and hooked feet:

Or in sleep rehearse perfect kills and eat.


The convenience of the high trees!

The air’s buoyancy and the sun’s ray

Are of advantage to me;

And the earth’s face upward for my inspection.


My feet are locked upon the rough bark.

It took the whole of Creation

To produce my foot, my each feather:

Now I hold Creation in my foot


Or fly up, and revolve it all slowly –

I kill where I please because it is all mine.

There is no sophistry in my body:

My manners are tearing off heads –

The allotment of death.


For the one path of my flight is direct

Through the bones of the living.

No arguments assert my right:

The sun is behind me.


Nothing has changed since I began.

My eye has permitted no change.

I am going to keep things like this.”


Ted Hughes – poet Laureate – 1930-1998

 Everyone watching television last night at about 10.10pm must have had their heart in their mouth after the first of the false starts to the ‘Keirin’ in the Velodrome. Was Jason Kenny’s quest to win his 6th gold medal, equalling Sir Chris Hoy’s haul going to be blown away by the officials’ bureaucracy? Good sense prevailed and Kenny duly mugged his competitors on the line! What a night to remember with Laura Trott’s gold, Rebecca James’s silver and Katy Marchant’s bronze in the sprint! GB competitors and supporters must have been very sad to hear the carping, sniping and unfounded innuendos!


Apart from BHP Billiton’s horrendous loss of $6.3 billion much of it due to the San Marco disaster, the oil asset write-downs and CEO Andrew Mackenzie’s embarrassing level of remuneration, there was little corporate news out there yesterday to titivate investors’ taste-buds. The increase in CPI to 0.6% in July may have contributed to a rather lack-lustre session experienced by the FTSE 100, which lost 43 points to 6893. However there was some excellent copy in the papers with comment from the FT’s Elaine Moore on the Bank of England’s second bight at the cherry – to buy-in long term gilts in concert with their policy to encourage banks to lend and cushion the inevitably catastrophic economic slowdown forecasted by our Central bank, post-BREXIT and without the benefit of increased stimulus packages.


£3 billion worth of long-dated gilts were offered to the BOE yesterday comfortably surpassing the targeted amount of £1.7 billion, thanks to yields rising measurably. The yield on 10-year gilts was pushed up to 0.58%. It is hard for your scribe not to be sarcastic in tone about this nebulous yield, as he is still amongst many who believe this aggressive monetary policy package is probably precipitous. This was a bold move by the authorities after only one month’s dodgy data. I suppose the BOE could say damned if you do and damned if you don’t! The FT also had an interesting piece on the possibility of European banks hoarding bank notes – billions of Euros – as a hedge to the possibility of negative central bank interest rates! The mind boggles as to how much can be SAFELY stored!!


Then there is The Daily Mail’s Ruth Sunderland’s very colourful interview with the former British Chamber of Commerce’s John Longworth, who refers rather disparagingly to “the Bank of England bosses as being either fools or knaves!” as a result of their leading role as the ‘prophet of doom’ in the event of BREXIT – it was suggested that some of its prognosis may have been marginally economical in terms of reality. Admittedly Mr Longworth has an axe to grind being shown the door by his very influential trade association, having declared his hand as being a strong supporter of BREXIT. I suppose he might have adopted a degree of neutrality, But I admire him for his forthright commitment to the cause.


The world’s largest offshore ‘wind-farm’, Hornsea Project Two has received development consent from Business and Energy Secretary Greg Clark. When complete, the ‘wind-farm’ will deliver low carbon electricity to around 1.8 million UK homes. The ‘wind-farm’ would create up to 1,960 construction jobs and 580 operational and maintenance jobs. If built to the full capacity, the investment would total around £6bn providing a great opportunity for economic growth in the Humber region and beyond. I dislike wind farms intensely.  They are far too expensive, though cheaper than Hinckley Point.  I still believe the government should pursue a gas policy – clean and cheap – however there are political issues as to access; many of the pipes through Europe being controlled by Russia!


Eventually bankers, lawyers, accountants and PR companies will return from the long hot summer days on the Cote D’Azur. The shekels eventually run out! So with Sterling now down some 17% since November 2015 against the Greenback and 14% since BREXIT, maybe some of the cheap UK’s companies may cause predators and investment bankers alike to salivate at the chops at the prospect of triggering some M&A activity. Certainly there are mutterings in the bars and coffee shops in the City and Canary Wharf that the likes of BT, Intercontinental Hotels, ITV, GKN and even the great booze god Diageo could be vulnerable. This will put PM May and Business Secretary Clark on their metal to prevent any unnecessary corporate rape!


Yesterday though the FTSE 100 fell by 43 points it was a rather uninteresting session.  M&S took a bit of tap losing 3.2% and Antofagasta surprised with better than expected results – up 7%+.  In the US the three main indices fell by an average of 0.5%, mainly due to rather hawkish comments on interest rates by the FED’S Dudley. Urban Outfitters was the outstanding stock adding 10%.  Conversely TJX eased by 5.8%.  This morning Asian bourses experienced a rather nondescript session with the ASX closing down 0.04% and the NIKKEI up 0.9% with the YEN no longer threatening to strengthen – at least today!  At the time of writing the Hang Seng is up 0.19% and the Shanghai Composite is easier by 0.24%.


Balfour Beatty posted good numbers – +5.75% aided and abetted by the US rail contract. Lookers +2.25% made steady progress. Admiral -0.25% were in line and Gem Diamonds saw some profit taking -2%. UK employment data will be posted at 9.30am.  These numbers in isolation may be valueless (unemployment rate at 4.9% may be unchanged), as it concerns mainly June data pre BREXIT.  HOWEVER keep an eye on JOBS SEEKERS ALLOWANCES?  DID THEY START TO RISE?


   UK companies posting results this week – Wednesday – Gem Diamonds, Lookers, Admiral, CLS Holdings, Thursday – Evraz, Rank Organisation, Kaz Minerals, Premier Oil, Kingfisher

 US companies posting interim results this week – Wednesday – Target, American Eagle, Staples, L-Brands, Thursday – Walmart, Hormel Foods, Applied Materials, America’s Car-Mart, Ross Stores, Gap, Friday – Foot Locker   Economic data being posted this week – Wednesday – UK employment data, US FOMC Minutes, Thursday – UK retail sales, US Initial Jobless Claims, US Phili-Fed, Friday – UK Public Sector Borrowing  

David Buik

Market Commentator – Panmure Gordon & Co

+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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