TODAY’S FAYRE – Wednesday 16th November 2016


“MITHRAS, God of the Morning, our trumpets waken the Wall! 

‘ Rome is above the Nations, but Thou art over all!’ 

Now as the names are answered, and the guards are marched away,

Mithras, also a soldier, give us strength for the day!

Mithras, God of the Noontide, the heather swims in the heat,

Our helmets scorch our foreheads ; our sandals burn our feet.


Now in the ungirt hour; now ere we blink and drowse,

Mithras, also a soldier, keep us true to our vows !

Mithras, God of the Sunset, low on the Western main,

Thou descending immortal, immortal to rise again ! 

Now when the watch is ended, now when the wine is drawn,

Mithras, also a soldier, keep us pure till the dawn!


Mithras, God of the Midnight, here where the great bull dies,

Look on Thy children in darkness. Oh take our sacrifice !

Many roads Thou hast fashioned: all of them lead to the Light,

Mithras, also a soldier, teach us to die aright!”  


Rudyard Kipling – poet & author – 1920-2000


I must confess that I have not been stalking Mayor Khan since his landslide victory in May, but I cannot remember him smiling with unbridled joy on many occasions. Even his meeting yesterday with Google’s CEO Sundar Pichai only produced a ‘Giaconda’ effort – one normally associated with the Mona Lisa. Perhaps the fact that BREXIT may not be all bad news sat uncomfortably with him. Google is to open a major presence in the King’s Cross area, which could cost £1 billion and may generate another 3,000 jobs on top of the existing 4000. This is massive news! London is a great place to do business – Brexit or no Brexit!

Despite uncomfortable exchanges between Governor Mark Carney and the Treasury Select Committee yesterday, Mr Carney reiterated for financial operations to hold off contingency plans to leave the City until more is known. A decision to leave could be precipitous.

I notice that all the ‘REMAIN’ supporting media are hell-bent on giving the Government an uncomfortable ride over BREXIT policy or lack of it. In the circumstances I defy any political party, ‘think tank’ or ‘Eminence Grise’ to come up with a ‘full-on’, ‘well-thought-out’ cohesive policy plan in the time that it has been allowed – impossible! Pointless in asking folk and commentators to be patient or fair! Understandably, they have no intention of being so!


Good Old EU and its Brussels bureaucrats already chucking their weight about potentially demanding $60 billion divorce settlement from UK post BREXIT. Dream on! These negotiators/diplomats/pen-pushers are so incredibly aggressive and acrid in their tone and stance. If it all goes ‘pear-shaped’ in Italy next month and then Marine Le Pen wins the French election in April, I wonder if there might be a change in their attitude. Even Pascal Lamy is showing shades of unnecessary arrogance towards Donald Trump and I doubt he has even met him!


Most of yesterday’s financial headlines were grabbed by the impending implosion of the international bond market or so many luminaries on the subject would have us believe! Certainly losses on the long end of the bond market are supposed to have totalled $1 trillion – this is no small beer and will have given many a bloody nose to fund managers, ‘hedgies’ and Governments alike. All have been licking wounds since President-Elect Trump announced his ambitious infrastructure spending spree. Yesterday yield increases were not quite so virulent. However going forward world debt feels like it is getting out of hand and may eventually be unsustainable. So these increases in yield are unlikely to abate. Global growth is currently fragile and there is a limit as to how much interest rates can go up. However the FED is expected to move symbolically in early December (25 basis points).


As to equities on the Street of Dreams yesterday there was an autumn spring in the market’s heel with the DOW adding 0.29% and the S&P 0.75%. The NASDAQ has been out of sorts in the past week, with investors spurning these stocks, based on adverse comments made by Trump over Silicon Valley. Yesterday this tech index surged up 1.1%! Home Depot slightly disappointed with numbers as did KB Homes – both down 1.5%.


In London the opening skirmishes looked very positive and by the end of the session FTSE 100 had added 0.59% to 6792. easyJet +5.3%, Hikma +6%, Morrison +4% and Tesco, with increased UK supermarket market share to 28.6% added another 2.2%. But for dispiriting performances from miners such as Antofagasta, Anglo-American, Kaz and Vedanta the overall gains will have been greater – most losing 5% +.

This morning the Pru posted a very upbeat trading statement and I was surprised that the share only added 1.5% at 8.30am. The insurance titan released a Q3 trading update ahead of its annual investor conference that takes place today. Sales came in at £4550m APE (+16% or +8% at CRE) and new business profit at £1970m (+19% or +9% at CRE). The Pru has clarified its dividend policy from a rather vague 2x cover to growth of 5.0% per annum with potential additional distributions as/when appropriate.


Barratt Development also posted an update. Overall housing market conditions remain healthy, with the Group trading well since the start of the new financial year. A sales rate of 0.74% (2015: 0.71%) for net private reservations per active outlet per average week was achieved by the builder. Total forward sales (including joint ventures (‘JVs’)) increased by 4.3% to £2,654.3m (2015: £2,544.6m), with wholly owned forward sales up strongly by 19.5% to £2,466.1m (2015: £2,062.9m). As previously announced the Board has proposed a record dividend payment of £248m payable on 21 November 2016.



Having lost 39% in shareholder value in the last 3 years, I am pleased that Rolls Royce under the guidance of the EX ARM boss Warren East is finally on the road to recovery having shaken all the accounting skeletons out of the cupboard.  This industrial and aeronautical titan has a very full order book going forward and we know of its lucrative prowess from servicing aircraft.  Hopefully Mr East in an open meeting today, ahead of next week’s numbers will confirm that the company will be cash generative next year. The FTSE 100 is virtually unchanged at 6790 in quiet trading conditions at 9.00am.


UK companies posting numbers this week –  Wednesday – Prudential, 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 –  Wednesday – Target, L-Brands, Cisco Systems, Thursday – Wal-Mart, Staples, Best Buy, Ross Stores, Gap, 

    Economic data this week – 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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