TODAY’S FAYRE



TODAY’S FAYRE – Thursday, 9th March 2017

 

My Soul, there is a country

Afar beyond the stars,

Where stands a winged sentry

All skillful in the wars;

There, above noise and danger

Sweet Peace sits, crown’d with smiles,

And One born in a manger

Commands the beauteous files.

He is thy gracious friend

And (O my Soul awake!)

Did in pure love descend,

To die here for thy sake.

If thou canst get but thither,

There grows the flow’r of peace,

The rose that cannot wither,

Thy fortress, and thy ease.

Leave then thy foolish ranges,

For none can thee secure,

But One, who never changes,

Thy God, thy life, thy cure.”

 

Henry Vaughan – poet – 1621-1695

 

Some of you must have watched the last pulsating test match in Bangalore which India won by 75 runs to draw the series to date with one to play.  In a moment of madness Aussie skipper Steve Smith looked to his dressing room for assistance on a DRS review until Umpire Nigel Long and Indian players protested. Some would describe his behaviour as ‘sharp practice.’ He and Australia’s management were indignant at the suggestion he might be guilty of wayward behaviour. I don’t know why.  Personally I will never forgive him for insisting Ben Stokes be given out when Starc hurled the ball at Stokes like a missile at the last Ashes encounter at Lord’s.  Was that dismissal legal? Yes! Was it sharp practice? Absolutely!

 

So the Budget came and went.  It was well presented by Chancellor Hammond with a clear vision about the future.  There was less short-termism than a normal Budget statement. He looked like a sophisticated edition of Gordon Brown, with plenty of ‘prudence’ on offer.  The UK debt is humungous so not surprisingly our ‘Chief Bean Counter’, despite many good initiatives for education, business and average ones on social care, kept his powder dry for a rainy day.  The presentation was definitely upbeat, though a small pocket of uncertainty called ‘BREXIT’, though never mentioned by name, was part of the Chancellor’s calculations. The only comment I have to make is whoever suggested the idea that NIC contributions for self-employed should be increased or that the threshold for dividend tax relief should be decreased from £5k to £2k must be ‘brain-dead’ – if not they are mean-spirited.  Small business are the backbone of growth and must be given every consideration and help over the next few years. This proposed piece of legislation must be reversed! It is NOT Conservative philosophy or anyone’s for that matter!

 

Market in London were unmoved by the Budget with the FTSE hardly ever moving from within a 10 point range.  It closed down 4 points at 7334.  Premier Oil on help from the government re oil in Scotland rallied 3.3% ahead of their numbers today and house builders were a smidgen better though housing was surprisingly never mentioned in dispatches in the Budget!

 

Activity on the Street of Dreams wasn’t that inspiring either.  A 5% drop in oil prices hit the likes of Exxon and Chevron, which saw their valuations fall by a short 2%. Having lost 10% on Tuesday Snap Inc bounced out of the traps gathering in 6% in value to $22.81, which helped keep the NASDAQ just above the waterline – up 0.06%. US markets closed as follows with YTD performances DOW: 20,855 -0.33% +5.53% S&P: 2,362 -0.23% +5.54% NASDAQ: 5,359 +0.16% +10.20% VIX: 11.86 +3.58% -15.53%. Asia was concerned with the highest Chinese inflation number seen since 2008.  Markets were in the doldrums apart fro Japan, which saw the NIKKEI respond to a weaker Yen – NIKKEI: 19,318 +0.34% +1.07%, HANG SENG: 23,465 -1.30% +6.82%, CHINA: 3,418 -0.87% +3.3%, ASX: 5,741 -0.32%   +1.33%.

 

This morning there were a slew of earnings and interesting corporate news. Royal Dutch Shell sold its oil sands business in Alberta to Canadian Natural Resources for $7.25 billion.  This news is synergistic with the £47 billion acquisition of BG Group last year.  Business expansion obviously revolves around natural gas for the time being. It was announced, not unexpectedly that Jan Du Plessis, until recently chairman of Rio Tinto, was appointed chairman of BT Group.  That appointment will keep CEO Gavin Patterson on his metal – less football more broadband please! Liam Coleman CEO of the Coop Bank, which has just declared a loss of £477.1 million sais he was pleased at the number of prospective buyers of the bank.  It seems that the Coop will be unable to make its capital requirements once it has repaid the £400 million loan.  One assumes that the US hedge fund majority owners are in agreement with the plans for the Coop Bank’s disposal.

 

Aviva grabbed the yellow jersey this morning with a great set of numbers, a share buyback and a 12% increase in dividend plus a great performance from M&G up 30%. Operating profits were also up 12% to £3.01 billion and the net profit for the year came in at £703 million. Mark Wilson, CEO since the days of Andrew Moss in December 2013 said that general insurance had seen the best returns for 11 years, helped by the acquisition of business from RBC.  The share rallied by 6% in early trading and 48% since July 2016. Wm Morrison today posted like for like sales for the year ex-fuel/ex-VAT up 1.7%, positive in all four quarters and 2.5% in Q4 four quarters and 2.5% in Q4 £16.1bn) despite store closures. Reported PBT was up 49.8% to £325m (2015/16: £217m). Clearly relationships with Ocado and Amazon are going to provide momentum going forward.  Morrison shares have rallied by 77% since December 2015 until the numbers. Shares fell 4% – travelled and arrived   with a smidgen of disappointment on final numbers. At 8.55am the FTSE 100 was down 37 points 7297.

 

 

UK companies posting interim results this week – Thursday – Aviva, Wm Morrison, Aldermore, Old Mutual, Premier Oil, Countryside, DS Smith, Domino Pizza, International Game Technology, Cineworld, Friday – eSure,

 

US companies posting numbers this week – Thursday – Staples

 

Economic data this week – US initial Jobless Claims, Friday – RICS housing data, UK manufacturing production & Consumer Inflation expectations , US 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​

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