TODAY’S FAYRE – Wednesday 23rd November 2016
Between us now and here –    

Two thrown together

Who are not wont to wear    

Life’s flushest feather –

Who see the scenes slide past,

The daytimes dimming fast,

Let there be truth at last,    Even if despair.


So thoroughly and long    

Have you now known me,

So real in faith and strong    

Have I now shown me,

That nothing needs disguise

Further in any wise,

Or asks or justifies    A guarded tongue.


Face unto face, then, say,    

Eyes mine own meeting,

Is your heart far away,    

Or with mine beating?

When false things are brought low,

And swift things have grown slow,

Feigning like froth shall go,    

Faith be for aye.”     


Thomas Hardy – poet & author – 1865-1936  
Well on the diplomatic front it looks like it is handbags at 10 paces! Not only do we have a spat emerging between No: 10 and Nigel Farage and a far reaching issue for the Government; accommodating the Trump regime to our benefit, without being seen to just roll over and see Mrs May having her tummy tickled by ‘The Donald.’

Regardless of political persuasion, Nigel Farage presents himself as an articulate politician rather better than anyone else and understandably he has a huge personal following. Yes he has foibles that many find unattractive, but he is influential. It is such a pity that he always has to call a spade a shovel in adopting such a confrontational approach to his political foes. I suppose he has such strident views on sensitive issues. The world of political thinking has changed. The ‘establishment’ is now on the back foot. I think PM May has recognised that. I agree that Nigel Farage cannot possibly be accommodated in her regime whilst the level of mutual hostility prevails. It would be obdurate in the extreme for Mrs May to hose out Sir Kim Darroch at the whim of the US President-Elect. However changes in attitudes and electorates’ views are manifesting themselves. I suspect and expect Messrs Renzi and Le Pen to continue the trend in changing the political landscape in the months to come.

The so called pre-negotiations on BREXIT involving David Davis and Dr Liam Fox were never going to be a bed of roses. With Michel Barnier at the head of affairs – no friend of UK PLC aided and abetted by the pugnaciously eccentric Guy Herhofstadt – many will not be that optimistic that this liaison could be a marriage made in Heaven. Maybe when Le Pen takes France out of the EU and further cracks appear in other countries these two political pugilists might adopt a slightly more conciliatory attitude and tone to the negotiations.


It was another record day in beautiful downtown Manhattan with all 4 major indices maintaining their recent ability to breach further record levels. These indices added between0.25 to 0.3% with the DOW poking its head through the 19k threshold. This year to date the DOW is +9.18%, the NASDAQ: +0.33% +7.57% and the S&P 500 +7.78%. Energy stocks maintained a little momentum. Oil prices remain firm as consensus thinking believes that OPEC will shortly peg production levels.  Hewlett Packard turned in a solid performance but the shares eased by 0.31% on the day.  Urban Outfitters beat expectations, pleasing their acolytes, which pushed their shares ahead by 4.95% by the end of the session.


In London yesterday the FTSE added 41 points at 6819. Mining stocks led the charge with banks not that far behind.  A few individual companies captured the imagination. It was good to see Safeway being reintroduced as a brand after 11 years since the disastrously handled takeover of Safeway by Sir Ken Morrison’s Bradford based outfit in 2005.  The Competition Commission almost wrecked the whole enterprise by taking 11 months to approve the deal – an absolute disgrace whatever the mitigating circumstances were. Having sold 140 convenient stores as to Greybull Capital by the then CEO Dalton Phillips for £25 million in 2012 under the brand of ‘My Local’, sadly this venture failed and went into liquidation, Morrison’s CEO Dave Potts had decided to have another ‘pop’ at it using the Safeway Brand.  As Morrison recovers under his management, I think this initiative has every chance of working.



Entertainment One saw 12% wiped off its value yesterday as profits dipped by 80% to £3.7 million due to faltering sales of DVDS, despite overall sales of the group rising by 19% to £401 million. The flagship star ‘Peppa Pig’ did well with sales up 16% to £38 million.  The Group has yet to see the benefit of the film BFG, which grossed £142 million at the box office.  Many think this is a temporary blip.  This morning a few results hit the wires with Thos Cook’s easily the most impressive. Despite issues in Turkey and N Africa, the order book looks to be in good shape. It was not so much the great numbers that impressed investors it was the fact that the company had been well managed through troubled waters. Shares rallied by 6.4% by 9.15am



Today it’s all eyes on Chancellor Hammond and his ‘Autumn Statement’. It will be no give-away statement.  His hands are tied. This country’s overall debt stands at £1.64 trillion – the equivalent of £25k per person!! With debt rising and the possibility of a £25 billion back hole in the borrowing requirement next year and the press’s obsession that it will be £100 million over 5 years, if he insists on fiscal discipline, there will be rich pickings. It will be all bout stimulating business and jobs. The drop in Corporation Tax to 17% next year is likely to be confirmed.



We know about infrastructure spending of up to £1.4 billion and £2 billion to be invested in scientific research, broadband and robots etc. £1.4 billion on 40k affordable homes is on the cards.  To fund this I suspect the government will just borrow more at these low levels of interest rates. In the years to come inflation will help with Treasury revenues. Mr Hammond may serve notice on the Triple Lock on Pensions and tax relief on pensions at the higher rate.  He should do this!  Not a vote winner but the government has 4 years for voters to get over it.  Also changing rules on overseas corporation taxation may be implemented in the years to come. Taxing companies on revenues globally rather than profits seems a possibility.  


UK companies posting numbers this week –  Wednesday – Thos Cook, United Utilities  Thursday – Countrywide, PayPoint, Caledonia Investments, Marston’s, Severn Trent, Pets at Home, HSS Hire, Mothercare, Friday – Pennon 


US Companies posting interim results today – 

    Economic data this week –  Wednesday – FOMC Meeting, ECB Financial Stability Review, Thursday – Gfk UK Consumer Confidence, US Initial Jobless Claims, Friday – University of Michigan Consumer Confidence.


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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