TODAY’S FAYRE – Tuesday, 14th February 2017


There is pleasure in the wet, wet clay

When the artist’s hand is  potting it.

There is pleasure in the wet, wet lay —

When the poet’s pad is blotting it.

There is pleasure in the shine of your picture on the line

At the Royal Acade-my;

But the pleasure felt in these is as chalk to Cheddar cheese

When it comes to a well-made Lie–


To a quite unwreckable Lie,

To a most impeccable Lie!

To  a water-right,  fire-proof,  angle-iron,  sunk-hinge,  time-lock,

steel-faced Lie!

Not a private handsome Lie,

But a pair-and-brougham Lie,

Not a little-place-at-Tooting, but a country-house-with-shooting

And a ring-fence-deer-park Lie.


Rudyard Kipling – poet – 1865-1936


I must have been daft to think that Ken Loach would behave himself when receiving the BAFTA for best British film – ‘I Daniel’ – which I am told he deserved. However he had to come out with all that bitter ‘left wing’ vitriol he has been associated with since making ‘Cathy Come Home!’ and ‘Kes’ – totally uncalled for! It was an unnecessary and a pathetic gesture for an octogenarian, when most people had come to the Royal Albert Hall to pay homage to great artists and technicians in the film world. One only had to see the film to know that there was a social message in it and why not! But that was surely enough.  Film buffs do not need a lecture from Loach, whom I am told is absolutely loaded. We just wanted to enjoy this glittering occasion.  What is even more galling is the fact that he used public funds to make many of his films.  This is hypocrisy personified! Mr Loach is entitled to air his political beliefs – love them or hate them – but there is a time and a place! The BAFTA awards ceremony is not one of them!


Emma Stone is a vivacious breath of spring air and her performance in ‘La La Land’ was delightful. But best actress?  You jest. She just exuded a really lovely ‘feel-good-factor’; acting?  Never! In my opinion Emily Blunt – the star of ‘The Girl on a Train’ was far more deserving of this coveted award. 


Like many others I was incandescent with rage at Speaker Bercow’s castigation of President Trump and the fact that, as far as he was concerned, he’d be unwelcome to give an address from the Palace of Westminster – bang out of order!  However ‘off the cuff’ remarks about how he voted in the EU Referendum and why to students at Reading University, is I think, no reason to call for his resignation. Strip out the arrogance and his insatiable appetite to play to the gallery like some ‘Diva’ or Prima Donna, I think he’s a very good ‘Speaker!’


Tax reform promises, part of the Trump election manifesto which actually may end up being at odds with the EU in terms of trade, buoyed US equity markets to new record levels and for the first time the market capital value of the S&P 500 breached through the $20 trillion level. The main US indices finished as follows with YTD data as well – DOW: 20,412 +0.7% +3.29%, S&P: 2,328 +0.52% +3.9%, NASDAQ: 5,256 +0.58% +8.08%.  The US Treasury market remained somnolent, with yield reflecting two increases this year. Oil still bounces around uncomfortable between $52 and $56 a barrel. From a corporate perspective there was little to get one’s teeth into, though interesting to note that the telecoms took a modest dive based on competition issues thrown up by Verizon. There were falls varying between Verizon -0.9% and T-Mobile -3%.



Here in Old Blighty the FTSE 100 was up 0.3% at 7278 with miners very much in the vanguard; the sector gaining by an average of 3%. However mid-cap and small cap companies hit record levels. AB Foods had a little run on the rails – up 1.6% on news that sales at Primark had been quite buoyant. Today Rolls Royce posted an expected ‘kitchen sink’ set of numbers with an eye-watering £4.4 billion loss for the year; the operating profit was down 49% at £813 million. Rolls Royce shares are down 42% in the last 3 years but are up 20% in the last year. Warren East is proving to be a very strong CEO, having previously done a stunning job at ARM Holdings, which last year was sold for £24 billion to SoftBank of Japan. From an investors’ perspective I think we would like to have known more about the £671 million fine for bribery and corruption but perhaps the SFO have not finished their deliberations. In hindsight I suspect Sir John Rose’s 12 year tenure at CEO was too long, resulting in John Rishden collecting a ‘hospital pass’, before handing over to Warren East – shares down 0.25% at 8.30am. in the last 3 years Rolls Royce shares have fallen 42%, but are up 20% in the last year.   Tui posted adequate numbers – shares +2%.


Asian markets performed as follows today and on a YTD basis – DOW: 20,412 +0.7% +3.29%, S&P: 2,328 +0.52% +3.9%, NASDAQ: 5,256 +0.58% +8.08%. Toshiba’s chairman stood down today as its shares plunged 20% as a result of a request to delay its multi-billion loss. Maybe the UK’s nuclear power initiative is in danger? We shall see.



Finally today, the vagaries of the Cooperative Bank; It looks as though post the disastrous acquisition of Britannia Building Society which created a £1.5 billion black hole in its balance sheet, the abortive attempt to buy 631 branches from Lloyds Banking Group and the doubtful qualities of Rev Flowers as chairman, this bank seems unlikely to meet the Bank of England’s capital requirements. This has resulted in the bank being put up for sale. The two main Hedge Funds, which own most of the 80% – Aurelius Capital Management and Silver Point Capital -, will not want to take a loss.  There are few if any natural buyers who will want to buy the whole shooting match.  The ethical tag will have some appeal to a few. Strip out Virgin Money and Clydesdale – the latter being a possibility if its quest to buy Williams & Glyn fails – and the cupboard look quite bare. BREXIT may restrict the number of predators – European banks may be reluctant to get involved.  The Spivs, vagabonds, asset stripper and challenger banks will be there to cherry-pick. I doubt the main shareholders will countenance the idea.  One Savings and maybe Aldermore could be to the fore.  I doubt private equity will have much of an appetite to get in to the fray. Depositors and those with loans are safe, but jobs, whatever happens, will go.


Inflation data will be posted at 9.30am this morning – estimate +1.9%


UK companies posting interim results this week –  Tuesday – Acacia Mining, Rolls Royce, Tui Travel, Wednesday – Qinetiq, NEX, Thursday – DRAX, Coca-Cola HB, Shire Pharmaceuticals, Friday – Millennium Copthorne, Kingspan, Segro, Essentra


US companies posting interim results – Tuesday – Molson Coors, Dr Pepper Snapples, AIG, Wednesday – PepsiCo, Marriott, Kraft Heinz, AMAT, Groupon, Thursday – MGM Resorts, Wendy’s Dean Foods


Economic data posted this week – Tuesday – BRC Retail Sales Monitor, UL CPI & RPI, Germany’s ZEW, Wednesday – UK Employment data, UK Average Earnings, US Retail Sales, US Empire State Index, US CPI, Thursday – Phili-Fed Index, Initial Claims, Friday – UK PSBR, UK Retail sales M/O/M



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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