TODAY’S FAYRE – Sunday, 19th February 2017



“Bright star, would I were steadfast as thou art-

Not in lone splendour hung aloft the night,

And watching, with eternal lids apart,

Like Nature’s patient sleepless Eremite,

The moving waters at their priest-like task

Of pure ablution round earth’s human shores,

Or gazing on the new soft-fallen mask

Of snow upon the mountains and the moors-

No- yet still steadfast, still unchangeable,

Pillowed upon my fair love’s ripening breast,

To feel for ever its soft fall and swell,

Awake for ever in a sweet unrest,

Still, still to hear her tender-taken breath,

And so live ever- or else swoon to death.”


John Keats – poet – 1795-1821


“There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new order of things. … Whenever his enemies have occasion to attack the innovator they do so with the passion of partisans, while the others defend him sluggishly so that the innovator and his party alike are vulnerable.” –  Niccolo Machiavelli – Philosopher – 1469-1527


If you are a blind and passionate ‘Remainer’ and regardless as to whether you think Tony Blair is a toxic ‘busted flush’, it was an excellent speech the former PM gave, when preaching to the converted, at Bloomberg on Friday. Even though Mr Blair has plenty of ‘previous’, his passion and the delivery of his powerful rhetoric had to be admired. The problem was there was absolutely no balance in his speech. Listening to him one could be forgiven for thinking that everything in the EU garden was rosy.  Who would guess that the EU has political cracks appearing on every part of its veneer – both economic and political? Holland, Greece, France and the impregnable Germany could all have different administrations by the end of October. Where was he last April, May and June?  That was the time to say his bit, with his considerable powers of oratory.  The people have made their decision.  There is no turning back.  It is also unreasonable to suggest that PM May and her Government will deliver Brexit at any cost.


‘Cue Card’ was back to his ebullient best in winning the ‘Betfair Ascot Chase yesterday, doing hand springs. Colin Tizzard’s exuberant staying chaser won by nearly 20 lengths over 2 miles 5 furlongs.  I still don’t think that ‘Cue Card’ will get 3 miles 2 furlongs in the Gold Cup. However it is astonishing to think that Tizzard has THREE live contenders entered in this race – ‘Native River’ my idea of the winner, ‘Thistlecrack’ and ‘Cue Card.’


GM’s proposed disposal of Vauxhall to Peugeot/Opel has certainly put the cat amongst the pigeons for the 4500 car workers at Ellesmere Port and Luton. The nerves of these employees and their union representatives will certainly be out to the test.  Not only has it triggered Industry Secretary Greg Clark to shuttle himself between London and Paris to see the CEO of GM and his political counterpart in the French capital, but it will also see PM May intervene with conversations with GM next week, which hopefully will have been reassuring, with perhaps some guarantees, similar to those offered to Nissan.


However France & Germany are not exactly enamoured with UK re BREXIT, which makes a cordial and sympathetic approach to negotiations unlikely. It should not be forgotten that Peugeot/Opel have 24 manufacturing units/factories in Europe – 22 in France 8 in EU and 2 in UK (Ellesmere Port & Luton) employing 4,500.  Also it costs a great deal more to make French workers redundant! If you were Peugeot/Opel – what would you do without a significant sweetener! Finally the fact that the Pound has fallen 12% against the Euro and 18% against the Dollar in the last 8 months is not helpful in terms of the competitive pricing of vehicles. An unhappy outcome to this deal could rattle the cage of workers and Unions at BMW (Mini) and Rolls Royce.


 With so much political turmoil manifesting itself on either side of the Atlantic, the last thing many people in the City expected last Friday was the prospect of £205 billion deal involving Kraft Heinz bidding for the hand in marriage of Unilever! Unilever’s Paul Polson and his board have turned the offer down out of hand, believing that it grossly undervalues the Anglo-Dutch conglomerate. Kraft Heinz is reputed to have bid £105 billion or £40 a share. Considering Unilever’s share price rose 13.4% on Friday with Heinz Kraft rallying by 7% suggests this deal still has smouldering embers, with KH likely to raise its bid, perhaps in a hostile manner, with the backing of Warren Buffett and 3-G Capital. Were this deal to come off, it would probably be the largest deal involving a European company since Vodafone bought Mannesmann for E220 billion in 2000. This deal could run for some weeks. Unfortunately the drop in the Pound makes Unilever look cheap to KH.


There is synergy with these two household goods titans with Unilever perhaps providing that little bit extra in terms of non-food products.  In Unilever’s portfolio are Marmite, Dove, Dermologica, Flora, Ben & Jerry’s, Hellman’s, Knorr and for Kraft cheese, spaghetti, Ketchup, beans etc!! Kraft CEO Bernard Hees is every bit as robust as Unilever’s Paul Polson. What is unnerving is the jobs factor with Unilever in UK and Ireland employing 7000 workers. The cost saving possibilities must be colossal.


This week sees the main 5 UK banks post their results. Apart from RBS, we should see their profits jump substantially. Starting on Tuesday with HSBC, which has just appointed Ian Stuart as head of UK Banking, the ‘local’ bank may see profits up from $10 billion to $13.2 billion for the year. On Wednesday Lloyds Banking Group is expected to raise its profits to £4.7 billion from £1.6 billion, though the CEO Antonio Horta-Osorio’s pay will drop from £8.8 million to a mere £6 million.  The taxpayers’ stake is down to 4.99% and the PPI claims which reached £16 billion are quietly abating. Barclays Bank steps up to the plate on Thursday with Jon Macfarlane Jes Staley likely to up profits from £1.1 billion to £3.75 billion.


On Friday RBS will be shaking all the skeletons out of the cupboard in posting its ninth loss running – maybe as much as £6 billion including fines from the US, PPI and non-performing loans. It is hard to see the taxpayer getting his money back for another 5 years. However one potentially interesting and good piece of news may transpire. RBS could abandon the sale of its Williams & Glyn unit, under government plans, after struggling to offload the small-business lender. Eight years ago RBS had been ordered by the European Union to sell 300 odd branches with 1.8 million customers by the end of 2017 to address competition concerns. The bank failed to sell the business to Santander last year and talks with Clydesdale Bank also stalled. These branches are now likely to remain in RBS’S portfolio.  The quid pro quo is that about £750 million will be made available by RBS to assist challenger banks lend money to SMES. This exercise at the behest of the EU, which no one ever understood, was part and parcel of bail-out terms, which as far as I know never affected the EU.  Anyway RBS has wasted hundreds of millions of pounds in an abortive and unnecessary attempts to sell perfectly valid profit making branches. No doubt CEO Ross McEwan will clarify matters later next week.


Despite the vagaries of ‘Trumpism’ equities kept hold of their poise last week, though towards the end of the week sentiment turned negative in the Eurozone. I must say it does look like a political and economic minefield. The S&P 500 added 1.18%, the FTSE +0.57%, European Stocks by an average of +0.8% with Tokyo after a bright start to the week saw the NIKKEI ease by 0.74% on the week.


UK companies posting interim results this week –  Monday – Gemfields, Hammerson, Bovis Homes, Vedanta Resources, Tuesday – Inter Continental Hotels Group, Vernales, HSBC, Anglo America, BHP Billiton, Galliford, Wednesday –Lloyds Banking Group, Barratt Development, Weir, Serco, Barratt Development, Hays, McBride, Metro Bank, Thursday – Barclays, Intu, Rathbones, Monetise, Howden Joinery, BAE Systems, BATS, Glencore, National Express, Centrica, RSA, Kaz Minerals, Friday – Standard Life, Pearson, Wm Hill, Standard Chartered Bank, RBS, Jupiter Fund Management, Rightmove



US companies posting interim results – Monday – American Car-Mart, Tuesday – Macy’s La-Z-Boy, Wal-Mart, Wednesday – Toll Bros, TJX, L-Brands, Tesla, Thursday – Kohl’s, BJ Restaurants, Dynergy, Nordstrom, Friday – JC Penney, Foot Locker,




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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