TODAY’S FAYRE – Thursday, 19th January 2017


“They shuddered to think that the chase might fail,

And the Beaver, excited at last,

Went bounding along on the tip of its tail,

For the daylight was nearly past.


‘There is Thingumbob shouting!’ the Bellman said.

‘He is shouting like mad, only hark!

He is waving his hands, he is wagging his head,

He has certainly found a Snark!’


They gazed in delight, while the Butcher exclaimed,

‘He was always a desperate wag!’

They beheld – their Baker – their hero unnamed-

On the top of a neighbouring crag,


Erect and sublime, for one moment of time,

In the next, that wild figure they saw

(As if stung by a spasm) plunge into a chasm,

While they waited and listened in awe.


‘It’s a Snark!’ was the sound that first came to their ears,

And seemed almost too good to be true,

There followed a torrent of laughter and cheers:

Then the ominous words, ‘It’s a Boo…’


Then silence. Some fancied they heard in the air

A weary and wandering sigh

That sounded like ‘…jum!’ but the others declare

It was only  a breeze that went by.


They hunted till darkness came on, but they found

Not a button, or feather, or mark,

By which they could tell that they stood on the ground

Where the Baker had met with the Snark.


In the midst of the word he was trying to say,

In the midst of his laughter and glee,

He had softly and suddenly vanished away-

For the Snark WAS a Boojum, you see.”





Lewis Carroll – poet, mathematician & Anglican deacon – 1832-1898



I have tried to avoid any coverage of Davos, but it is almost impossible to avoid it. TV and the papers are full of it. I think it is the detachment between the good and the great, affectionately known as the establishment and we, the common urchins, known as ‘populism’, that I find so offensive. It’s the inability of the establishment attending this jamboree, to communicate anything that would be beneficial to society. I am sure the delegates, who pay £22,000 to attend, will tell us constructive the whole forum is, but there is like evidence to justify taxpayers and shareholders money.  I did enjoy China’s President Xi’s comments on global trade and the damage disengagement could do to world growth – a veiled threat aimed at President Elect Trump.



I was irritated that HSBC, which does 20% of its business with Europe, announced at Davos that staff will be shifted to the hinterland of Europe.  I understand contingency plans, but this announcement seems too precipitous to me.  There’s 2 years to go and probably six months before we know that the financial services agenda will look like. Also Mr Gulliver knows only too well that the expertise and infrastructure is in London and the cost of moving experienced staff to Frankfurt and Paris will cost an arm and a leg.  I also let me repeat myself; Bankers don’t want to work in Paris – taxation and regulatory controls and Frankfurt is too small.  Gulliver says coming out of the single market means HSBC needs to protect 20% of its European based business which will necessitate moving 1000 highly paid staff probably to Paris and UBS, which employs 5000 in London, will probably move 1000 for similarly strategic reasons to Frankfurt. Lloyd Blankfein also indicated that the great foot print of Goldman would find its way to the hinterland of Europe, with 1000 voracious bankers said to be on their way. Que sera, sera as they say in Spain – So be it here!  The real action, they will find, will remain in London!



Though the FTSE 100 closed up 27 points at 7227, it was a shocking day for three companies – Pearson (-23.9%), Premier Foods (-11.9%) and Mitie (-4.7%, having at one time been down 13%) – all three metaphorically had the skin ripped from their respective faces.  Pearson was well run in the past by Dame Marjorie Scardino. She and her predecessor changed the culture of the company, selling off Chateau Latour, Madame Tussaud and Lazard Bros, determined to focus on education books in the US.  It was working well for a few years. However under John Fallon, progress has been stunted. Pearson sold off the FT to the NIKKEI for $1.3 billion. Then the education business has come under the cosh, as students have found Amazon and hiring books cheaper. Today’s profit warning may affect profits for 2 years.  Pearson may be forced to sell its remaining stake in publisher Randon House, which owns Penguin books for $1.3 billion, possibly to Bertelsmann to help the recovery.  Almost £2 billion was wiped off the value of Pearson.  It is generally understood that Fallon has no intention of resigning. As for Premier Foods, it suffered the slings and arrows of outrageous fortune with higher prices for basic food and sluggish sales, courtesy of a weak Pound. A three year cost cutting programme will be implemented for the makers of Oxo, Mr Kipling, Amrosia, Bird’s and Angel’s Delight. Many will recall that Premier rebuffed an approach from McCormick of the US – mmmm!


Yesterday on the Street of Dreams, though activity was limited ahead of tomorrow’s inauguration of President Trump as the 45th President of the USA, there was a consistent theme on bank earnings. Goldman and Citibank stepped up to the plate with strong revenue growth, which saw profit takers pushing their share prices down by 1.24%% and 1.70% respectively, but let’s not forget the 20% most banks have gained in value in the past two months. Netflix did not disappoint its acolytes with its Q4 earnings for 2016, Netflix picked up over 7 million subscribers. That’s a significant spike from the 5.59 million the company did the year prior. Of the 7.04 million, over 72-percent—or 5.12 million—was the result of international growth. This translates into Netflix reeling in more revenue that last year with 2.48 billion or a 36% bump. The shares price climbed 7.9% to $143.80 – an all-time high. At the end of the session the DOW was -0.11%, S&P +0.18%, NASDAQ +0.31%. In Asia the main corporate news was the Samsung scandal appears to have dissipated with no arrest made. The ASX closed +0.2% with the Nikkei, on a weaker Yen, up 0.94%.


There are a slew of earnings today. Royal Mail has disappointed and the shares may be easier by 4% at the opening. The FTSE is expected to open -4 at 7243.


UK companies posting interim results this week – Thursday – Royal Mail Group, Workspace, NCC Group, Pets at Home, British Land, Moneysupermarket, Acacia Mining, Chemring, Fusionex, Halfords, Friday – Character Group, Bonmarche, Close Brothers


US companies posting interim results – Thursday – Bank of New York Mellon, HB Fuller, American Express, Friday – Citizens Financial, Schlumberger


Economic data posted this week – US Phili-Fed, ECB Press Conference, Friday – EU Retail Sales & Consumer Confidence – inauguration day


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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