TODAY’S FAYRE – Tuesday, 3rd January 2017


“Love is enough: though the World be a-waning,

And the woods have no voice but the voice of complaining,

Though the sky be too dark for dim eyes to discover

The gold-cups and daisies fair blooming thereunder,

Though the hills be held shadows, and the sea a dark wonder

And this day draw a veil over all deeds pass’d over,

Yet their hands shall not tremble, their feet shall not falter;

The void shall not weary, the fear shall not alter

These lips and these eyes of the loved and the lover.”    


William Morris – poet – 1834-1896      


“The grey sea and the long black land;

And the yellow half-moon large and low;

And the startled little waves that leap

In fiery ringlets from their sleep,

As I gain the cove with pushing prow,

And quench its speed i’ the slushy sand.    


Then a mile of warm sea-scented beach;

Three fields to cross till a farm appears;

A tap at the pane, the quick sharp scratch

And blue spurt of a lighted match,

And a voice less loud, thro’ its joys and fears,

Than the two hearts beating each to each!”    


Robert Browning – poet – 1812-1889    


There is a Providence that protects idiots, drunkards, children and the United States of America” — Otto von Bismarck – Prussian statesman – 1815-1898


It is ironic, comforting and reassuring to at last see the main business and trade associations – IOD, CBI, BCC and FSE – at last showing some evidence of wanting to pull together and make BREXIT an unqualified success. Even Mark Boleat of the City of London Corporation believes that the City of London could thrive outside the shackles of the EU. Hopefully Messrs May, Johnson, Davis and Fox will soon provide some clarity on how the UK will move on post Article 50 being invoked.


I believe the UK has less to fear than it thinks. The EU’s ‘Ride to Valhalla’ looks more precarious as the days go by. The weekend’s atrocities in Istanbul will have enhanced Holland’s ‘right’ of making an impact in March’s election and Marine Le Pen’s chances of winning the French Presidential Election in April, though my French contacts tell me ‘hell has a better chance of freezing over’ than Le Pen beating Fillon.  I must say I would not back him with stolen money. I was fascinated to see that no French bank would bank role her campaign, resulting in her father having to lend her €6 million. Also though still a skinny priced favourite Angela Merkel is no ‘shoo-in’ in October, with her intransigent attitude over immigration. Also Greece remains a ticking time bomb such is the level of political instability.


Like thousands of others I have been dogged by a deep-seated chest infection and a rasping cough over the New Year holiday period, which means I have hardly met a living soul since Boxing Day.  This gave me an opportunity of taking a look at NETFLIX’S production of “The Crown” with Clare Foy as HM The Queen, Matt Smith as the Duke of Edinburgh, Jared Harris as George V1 and Victoria Hamilton as the Queen Mother.  There are two fantastic cameo roles – Eileen Atkins as ‘Queen Mary’ and Pip Torrens as breathtakingly pompous, odious and self-opinionated Private Secretary – Tommy Lascelles.  I have little doubt that there is some poetic licence in the way these characters have been developed but it is great entertainment.  Clare Foy will surely get nominated/win a ‘Golden Globe!’  Great viewing when incapacitated lying in bed, feeling very sorry for oneself.


The DAX and the CAC set down their stalls yesterday with gains of 1% and 0.4% respectively as if they did not have a care in the world. The rally was almost certainly driven by the best manufacturing PMI data seen for 68 months. Yes both indices only have 30 and 40 stocks respectively and most of them have an international flavour, but notwithstanding that fact, Germany and France have huge challenges, with mainly political connotations, hanging over them. So, one should expect London to respond positively to yesterday’s opening salvos for the year, this morning. That positive sentiment should rub positively off on the FTSE 100 and 250. The UK also posts PMI Manufacturing data this morning and it should read as well as the EU’S on a pro-rata data.


This morning Asia enjoyed a reasonably bright start thanks to some decent Chinese PMI data. The ASX and the NIKKEI closed up 1.2% and down 0.15% respectively. Heading towards the close the Hang Seng was 1% to the good and the Shanghai Composite was 0.5% better. The FTSE 100 at 8.20am was about to breach the 7200 threshold. Clearly sentiment is unbowed. IHG was up 4% and Hargreaves Lansdown was 2.5% better with NEXT down 2%. The banking sector was up 1.5% on Friday’s close. Conversely Italian banks are easier by 1.5%.


Pension Select Parliamentary Chairman Frank Field’s protestations over Trinity Mirror intention to distribute £10 million back to shareholders instead of paying off some of the £426 million pension black hole will not be the last we hear of this kind of problems. There are far too many companies from the huge BT with a £5 billion black hole to the tiresome BHS (£531 million), who are not dealing responsibly enough with these issues in many opinions. I quickly hasten to add Sir Philip Green has done nothing wrong. This is a case of morals and ethics. This is where change is required. More legal responsibility to deal with financial shortfalls of this nature needs to be become a legal requirement. I think Mr Field was right to criticise the 13-year breathing space allotted to Trinity Mirror. Yes Trinity Mirror’s share price has halved in the last 2 years and a £10 million distribution would have been very acceptable, but that pension black hole is not going away.


Other pieces of news to capture investors’ imagination were the prospect of another IPO for 02, currently owned by Telefonica of Spain – maybe by the end of the first quarter. There was also news that the LSE had moved slowly closer to its £21 billion merger with Deutsche Boerse, now that its European Clearing arm had be sold to Euronext for €500 million. The best news to me was the fact that the Church of England has made 105k acres of land available for affordable housing. Let’s hope this is a meaningful deal and not just a platitude. The possibilities for the future are really encouraging.


UK companies posting interim results this week – Wednesday – NEXT, Friday – Topps Tiles


US companies posting interim results – Wednesday – FORD (Sales) – Thursday – Costco, Fred’s (Sales), Walgreen Boots Alliance. Monsanto, Constellation Brands, L-Brands, GAP (sales)


Economic data posted this week – Tuesday – UK PMI Manufacturing, Wednesday – UK PMI Construction, Friday – Non-Farm Payrolls and 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


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: