TODAY’S FAYRE – Tuesday 15th November 2016

“My son, so young, is led to you.
Single digits. A free man.
You pin-on his first poppy.
I’ll make sure he understands-
That you fluttered with  the paras
To save him, and all our  lands.

Moved were you, helping us look through
Our modern souless ways,
To the lost lives, now and always  true,
Of living-Blighty’s finest days.

Your generation’s sacrifice can never be re-met
Save by your own long-modesty.
Can education save us yet?

But I will settle, silently, on behalf of both my kids
For a semblance of understanding
Of all it was that you all did.

And more, a realisation —
That because you saved the world–
Like you, the rest of all of us,

Can choose to keep the flags tight-furled.”






“The life that I have 
Is all that I have
And the life that I have
Is yours

The love that I have
Of the life that I have
Is yours and yours and yours.

A sleep I shall have
A rest I shall have
Yet death will be but a pause
For the peace of my years
In the long green grass
Will be yours and yours and yours.” 



Poem by Leo Marks – poet – 1920-200

Written for Violette Szabo, executed in 1944


Much as I have no doubt that last night’s Guildhall banquet was a glittering occasion for the privileged 500 who attended and I am sure that the new Lord Mayor, Dr Andrew Parmley, was exceptionally gracious, the occasion is an anachronism. Why? These banquets are not inclusive and remain occasions for the elite. Invitations need to go out to people from all walks of business life. Politics in the Western world are altering dramatically. BREXIT and Donald Trump’s resounding victory last week are confirmation of a change in culture. The establishment is not popular; hence it must present its credentials in a different manner. 


PM May appeared to make a solid if predictable speech warning guests to heed the change that voters were demanding across the divide, post BREXIT and the Trump victory. Unexpected results they may have been, but the signs of resentment were there for all to see. So those who ignore Mme Marine Le Pen’s credentials in April do so at their peril.


There seems only one game in town – guessing the names of the main dramatis personae of Donald Trump’s administration. We have the pawns in place on his chess board, but who are the ‘bishops’, ‘rooks’ and ‘castles.’ Figuratively speaking I suppose Mike Pence is the ‘Queen’ but we need to know more – Secretary of State, Treasury Secretary, Defence etc. There’s plenty of media but little in the way of depth in policy. Equities remain indecently comfortable.  Risk seems to be back on the table as the DOW maintains record levels. The cream has been taken away from the tech sector, but component stocks may just be pausing for reflection. The virulence of upward movement for yields at the long end of the bond market are clearly hurting some investors as they attempt to pre-empt the size of bonds issuances that may be required to meet the Trump infrastructure needs.  What we do not know is whether bond dealers are over reacting. Officially interest rates’ scope for increasing are limited.  So to see the yield on 10-year Treasuries go up from 1.50% 6 weeks ago to 2.22% is a dramatic percentage move.   There is no doubt that some blood is running down Wall Street and Threadneedle Street. There was a degree of understandable inertia on Wall Street with the main bourses putting in very neutral performances – DOW +0.11%, S&P 500 -0.01% and the NASDAQ showing little of its old glitter down by 0.36%, thanks mainly to Apple easing by 2.51%,Alphabet by 2.4% and Facebook by 3.9% during the session. It was interesting to note that Warren Buffett has taken stakes in the main US airlines – especially United and Delta. Interesting! Needless to say these shares bounced.


In London yesterday the FTSE 100 bounced out of the traps and initially grabbed 65 points.  But this index was unable to maintain that level of unbridled enthusiasm and eventually it closed up just 22 points on the day to 6753. There was concern about whether OPEC would be able to agree any policy on production and crude oil drifted by 2,5% affecting the main oil companies a tad (RDS -0.95%) with some miners shedding some value.  The recent sharp drop in gold continued to affect companies like Randgold (-2.66%). William Hill’s share price bounced by nearly 4% but ended the day up 1.48%. CEO Philip Bowcock, the new CEO seems to have sorted the technological problems out, which may have resulted in no deal being done with Amaya, the Canadian online poker titan. In fact David Baazov, the former CEO of Amaya and Co-founder, is looking to take Amaya private in $6.7bn deal. Wm Hill also had to fend off approaches in the last year from 888 holdings and Rank. The appointment of bookie veteran John O’Reilly to Hill’s board could prove inspiring after a distinguished career at Ladbrokes and Coral.


Yesterday there was a surprisingly huge deal in the offing in Korea where Samsung has agreed to buy the car electronics company Harman for $8bn (£6.4bn); the biggest acquisition in this mobile titan’s history and a bold move into automotive industry. The deal marks an attempt by Samsung to move on from the crisis that has surrounded it since it was forced to recall millions of potentially dangerous smartphones last month. These defective handsets rocked Samsung back on its feet and could have handed the initiative in Asia back to Apple. Samsung’s share price has fallen 13% since the end of September.


Dollar strength and the prospect of higher US rates on 8th December (+0.25%) left Asia ruminating on life.  At the time of writing the ASX was looking to close shortly -0.36%, with the NIKKEI easier by just -0.03%.  The Hang Seng was up 0.24% and the Shanghai Composite was down 0.31%.


Vodafone posted very bland half year numbers. Shares have fallen 15% in the last 3 months.  Vodafone seems to lack ideas and ambition.  No media acquisitions.  This company’s share capital valued at £55 billion may now be a takeover target unless CEO Colao sharpens up with some ideas, like involvement in media.  Regular mobile business has seen margins narrow.  A loss of £5.39 billion was posted on revenues of £27.05 billion. The share yield 6%, but a dividend is not everything.  Investors need an explanation.


      Carolyn McCall Ceo of EasyJet posted annual results today.  A record number of passengers at 73.1 million, up 6.6% year on year with record load factor at 91.6% (2015: 91.5%).  Capacity grew by 6.5% in the period to 80 million seats, as easyJet strengthened its leadership positions in selected market. Total revenue of £4,669 million (a decline of 0.4%) and revenue per seat of £58.46 (a decline of 6.4%, and of 6.9% at constant currency1) reflecting the impact of external events. Return on capital employed2 at 14.6% remains significantly above easyJet’s cost of capital. easyJet’s results demonstrate resilient underlying performance, delivered in spite of unprecedented external events which have impacted profit before tax by an estimated £150 million3 and net foreign exchange headwinds of £88 million. Profit before tax in the period was £495 million (2015: £686m). A dividend was declared of 53.8 pence per share (2015: 55.2 pence), in line with the Company’s increased payout policy of 50% of profit after tax.


      Inflation data will be posted at 9.30am. It may rise to 0.7%/0.8% from 0.6% but next year 2.7% to maybe 3.5%!


UK companies posting numbers this week – Tuesday – EasyJet, Enterprise Inns, McCarthy & Stone,  Land Securities, TalkTalk, Meggitt, Card Factory, Vodafone, First Group, Premier Foods, Amec Foster, Crest Nicholson, Wednesday – British Land, Barratt Development, ICAP, Fenner, Speedy Hire, Aggreko, Thursday – Majestic Wines, Royal Mail, Investec, WS Atkins, Johnson Matthey, Manchester United, Friday – Electrocomponents


US Companies posting interim results today – Tuesday – Beazer, Dick’s Sporting Goods, TJX, Wednesday – Target, L-Brands, Cisco Systems, Thursday – Staples, Best Buy, Ross Stores, Gap, 



Economic data this week – Tuesday – UK CPI & PPI, Wednesday – UK Employment data, US Industrial production, Thursday – UK Retail Sales, ECB Meeting


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


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