TODAY’S FAYRE – Monday, 29th August 2016


Deaf Ted, Danoota, ( and me)………………accompanied by a picture of three on horseback:


Thorg hilly grove and burly ive,

Big daleys grass and tree

We clobber ever gallup

Deaf Ted, Danoota, and me.


Never shall we partly stray,

Fast stirrup all we three

Fight the battle mighty sword

Deaf Ted, Danoota, and me.


With faithfull frog beside us,

Big mighty club are we

The battle scab and frisky dyke

Deaf Ted, Danoota, and me.


We fight the baddy baddies,

For colour, race and cree

For Negro, Jew and Bernie

Deaf Ted, Danoota, and me.


Thorg Billy grows and Burnley ten,

And Aston Villa three

We clobber ever gallup

Deaf Ted, Danoota and me.


So if you hear a wondrous sight,

Am blutter or at sea,

Remember whom the mighty say

Deaf Ted, Danoota, and me-



John Lennon – singer & lyricist – 1940-1980


Lord’s, again, looked a picture on Saturday for the 2nd ODI against Pakistan, which England won with a little bit in hand. However it was the sight of Mr and Mrs Mike Brearley walking through the Grace Gates that brought back fond memories for me as an ardent supporter of Middlesex and England. JM Brearley is 74 and looked as chipper and fit as ever. In my life time he was easily the best tactical captain England ever had. Perhaps DR Jardine – he of body line fame – was King in his time in 1933/4. However I think the great Sir Ian Botham would agree about JMB. Talking of Sir Ian & David Gower, I think I am right in saying that was the last official international match that they will be commentating on for Sky at Lord’s, prior to retirement. Gentlemen, thank you for your wisdom and knowledge. 


Many will return from having offered their torsos to the rays on the beaches of the Cote D’Azur, or Formentor or Rock! It’s back to work to confront the vagaries of BREXIT, the robustness/weaknesses of the U.K. economy, the threat of higher rates in the US probably in December, which will influence the shape of their portfolios and their respective investment agendas. 


PM May is back at No: 10 and has already set down part of her policy stall, clearly wanting some action from Messrs Johnson, Davis & Fox, supported by all Cabinet members to come up with a plan for BREXIT and the implementation of Article 50 sooner rather than later. Many found Lord O’Donnell’s rather tiresome comments that negotiations could take 10 years resulting in a watered-down continued membership of the EU, which also seemed to encourage certain parts of the media into thinking  re-renegotiations were a definite option. Does democracy mean nothing to these people? There would be all hell to pay if that assessment by the former Cabinet enforcer transpired! Also until a policy has seen formulated we require no assistance generously offered by Germany and we could do without a basin-full of threats from EU until a policy has been formulated. We also need final resolutions from PM May on Hinckley Point and a new airport runway sooner rather than later.


Hedge funds will be having a pop at Sterling in the weeks to come, supposedly not believing for one minute that the worst is over. The recent recovery of Sterling to $1.3250 may be short-lived, as the hob-nailed boot brigade hope to take the rate down to $1.2750 in double quick time. Despite the fact that last week there was some decent economic data particularly GDP and retail activity, industrial production and construction data due next week may show signs of weakness and cynics believe that the current improved performance in these sectors could be short-lived.


It was not a great week for global equities as the Yellen syndrome made markets wobble. Coupled with the Dollar’s new found strength, investors seemed encouraged to take a little risk off the table. Last week the S&P eased by 0.83%, the FTSE 100 by 0.30%, and the NIKKEI by 1.12%. European bourses bucked the trend by adding a modest 0.45%. Brent Crude eased by 2.7% on the week and gold shed a score to $1320 an ounce. After a buzzed up speech in Jackson Hole by FED Chairman Yellen’s standard, there is a 53% chance of rates being hiked by 25 basis points in December. I still think one needs a Bletchley Park code book to decipher the FED’s policy. I know I am not the brightest pin in the box, but I am all over the place with FED talk. I think Mrs Yellen implied that the US economy was robust enough to cope with a rate rise. Healthcare stocks hit the buffers on both sides of the Atlantic courtesy of Clinton’s jingoistic rhetoric on iniquitous drug prices. On the Street of Dreams gold stocks in the form of Barrick Gold and Newmont Mining both added a short 4%. In London BAE Systems stood out adding 3.2% on Friday with new MOD and Saudi contracts. See there is life after putting too many eggs in the EU basket! In recent weeks the FTSE has retreated from the 7000 threshold and one suspects that when the market’s ‘spivs & Vagabonds’ return from holiday, they might just test investors’ resolve, though were the £ to come under further pressure Dollar earnings may come in to play. However political uncertainty over BREXIT could play the matinee idol’s role in initially taking markets lower.


The Sir Philip Green saga has been fizzing all weekend as the final 22 stores out of the total of 164 BHS outlets finally closed yesterday.  Some employees will get jobs if some of these outlets are bought by other retailers.  However in essence 11000 people are no longer employees of BHS and Mr Chappell and 20,000 pensioners look as though they might not get their full entitlement.


I suspect the ‘King of Gowns & Blouses’ and his advisors have spent a bit more time on this £570 million ‘Black Hole’ pensions issue than many give them credit for, despite Sir Philip appearing to never leaves his wonderful new toy parked in the harbour of Monaco, after a few sorties around the Greek islands. You may not care for Sir Philip’s moral approach to BHS’S abject failure and the fact that he may well not have ploughed sufficient money back in to the business to keep it refreshed, but I am very confident he has done nothing wrong legally. We must remember that BHS was a PRIVATE company; therefore Sir Philip and Lady Tina were entitled to pay themselves whatever they felt fit, whilst complying with legal obligations. I am sure he regrets selling BHS to Dominic Chappell, who was, in hindsight a very unsuitable steward of a large retailer. But the £1 for sale sign was up for all to see! It’s not rocket science to realise all was not well in the Marylebone Road and if I may be sold bold as to suggest some of the professional advice was way short of the required standard.


The nub of the problem is the pension scheme. The former and current directors of BHS are not responsible for the pension scheme.  That is the responsibility of the trustees and Sir Philip, in his day, was never a trustee. The CEO and directors of a company are responsible to the shareholders and sadly not the pension fund.  The pension shortfall is ONLY a moral issue for Sir Philip & Lady Tina – not a legal obligation – so I am told.  Did the trustees make sufficient noise about the ‘Black Hole?’ No doubt we shall find out. Frank Field, his colleagues and the public can spit blood at Sir Philip’s perceived behaviour. He has already offered £80 million, which has been rejected out of hand. If the rumours are accurate Sir Philip may well come up with an amount around £250-£300 million. I wonder if he will offer that amount in full and final settlement. Legally he is entitled to say – ‘take it or leave it!’ If the powers that be take his knighthood away, so be it.  It will be on moral grounds and the perceived ‘unacceptable face of capitalism’ – not for any legal impropriety.  The pensioners deserve all the sympathy in the world; they have been shabbily treated. However business is a raw science and its dog eat dog out there.  It’s no philanthropic society. On the face of it, the Trustees have much to answer for.  All will be revealed in the next few months.


UK companies posting results this week – Tuesday – Bunzl, Petrofac, Nordgold, BATM, Wednesday – Chesnara, James Fisher, Diploma, Grafton Group, HSS Hire, 888 Holdings, Punch Taverns, Thursday – Hays, Stylo International, Friday – Go-Ahead Group


US companies posting results this week – Tuesday – Christopher & Banks, Abercrombie & Fitch, Fred’s, H&R Block, Wednesday – Brown-Forman, Chico’s FAS, Thursday – Ford (sales), Ciena, Smith & Wesson


Economic data due this week – Monday – US Personal Spending & PCE Price Index, Tuesday – UK money supply, US Consumer Confidence, Wednesday – UK Gfk Consumer Confidence, US ADP employment Index, Thursday – UK PMI manufacturing, US PMI manufacturing & construction spending, Friday – UK PMI Construction Spending, US Trade Balance, US Non-farm payrolls & employment data




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


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: