TODAY’S FAYRE

TODAY’S FAYRE – Tuesday, 8th August 2017

“Let me not to the marriage of true minds

Admit impediments. Love is not love

Which alters when it alteration finds,

Or bends with the remover to remove.

O no! it is an ever-fixed mark

That looks on tempests and is never shaken;

It is the star to every wand’ring bark,

Whose worth’s unknown, although his height be taken.

Love’s not Time’s fool, though rosy lips and cheeks

Within his bending sickle’s compass come;

Love alters not with his brief hours and weeks,

But bears it out even to the edge of doom.

If this be error and upon me prov’d,

I never writ, nor no man ever lov’d.”

 

William Shakespeare – poet & playwright – 1564-1616

 

 

“I think women are foolish to pretend they are equal to men. They are far superior and always have been. Whatever you give a woman, she will make greater. If you give her sperm, she’ll give you a baby. If you give her a house, she’ll give you a home. If you give her groceries, she’ll give you a meal. If you give her a smile, she’ll give you her heart. She multiplies and enlarges what is given to her. So, if you give her any crap, be prepared to receive a ton of shit!

 

William Golding – author – 1911-1993

We paid a visit to the latest Matisse Exhibition at the Royal Academy. I accept that I am not the brightest intellectual pin in the box, but I really do have a problem with artistic interpretation. This exhibition was all about Matisse using an article – a jug, a table, a chair etc – in copious different paintings.  OK fine, but what does it mean?  The paintings were very colourful, but as my imagination is limited, the message flew ten leagues over my head!

 

Last week I felt I let the impressive results by the London Stock Exchange go by without flagging up the considerable achievement of its CEO Xavier Rolet, who took over from a rather battle scarred Dame Clara Furse in 2009.  Dame Clara spent much of her tenure between 2001 and 2009 fighting off predators for this much coveted business, rather than taking London to the rest of the world or bringing the rest of the world to London. During this period the LSE lost market share.  However, M Rolet has rebuilt the operation into one of the most powerful and respected bourses in the world, adding numerous facilities to the operation. The LSE’S share price has rallied from circa £10 in 2009 to £38 pounds and change.  Though the deal to merge with Deutsche Boerse was aborted, Xavier Rolet is pressing on regardless having missed out on a £14 million pay day.  The LSE is in a strong position and I doubt it will be merged or taken over unless the counterparty is a perfect synergistic fit, such as CME, which offers complimentary derivative business and most would be against such an alliance.

 

There was a very good piece in CityAM yesterday setting out the major incidents that culminated in the banking sector going in to meltdown with much of the world falling in to recession.  I think it is worth mentioning that in 2003 HSBC bought Household for $14.3 billion. However give credit where it is due. In 2006, eighteen months ahead of the Bear Stearns crisis, HSBC flagged up the fact that ‘sub-prime’ lending was going to be a real global problem, as it proved to be by 2008. In the end Household cost HSBC the best part of $50 billion in terms of write-offs!  

 

Yesterday’s New York session was a somewhat sepulchral affair. Tyson Foods after encouraging results had a little run on the rails adding 5% having surrendered 14% in the last year. Tesla, Elon Musk’s electric car titan is asking the bond market for $1.5 billion. Its shares dipped a smidgen (-0.3%). However Tesla has risen by 67% in the past year, valuing the company at $60 billion – bigger than GM! US credit card loans reached an all-time high in June – a tad over $1 trillion. The Street of Dreams closed as follows – Wall Street cautiously keeps its head above Plimsoll line – DOW new record with some tech momentum – DOW +0.12%, S&P +0.16%, NASDAQ +0.51%.

 

The FTSE 100 bumbled along yesterday adding 20 points to 7531. Corporate news was thin on the ground, but the floodgates will be reopened today. Paddy Power Betfair grabbed the headlines with news that CEO Breon Corcoran after many years with both operations is on his way. Its shares fell in sympathy – initially by 8% but closing 4.7% down on the day. BETFAIR in isolation from 2012 to 2016 (merger with Paddy Power) saw its shares rise from 739p to 4400p! However since the merger they have drifted from 9500p to 7500p. Peter Jackson – ex CEO of WorldPay will replace Corcoran and become the new CEO. This morning there was no respite for Paddy Power Betfair – down another 5%, despite reasonable numbers. The market was concerned about the outlook for the future. WorldPay numbers were OK but the market just wants to see the company bed down with Vantiv in a £7.7 billion takeover (unchanged). Standard Life put in a solid effort, but investors are waiting on the merger with Aberdeen Asset Management (Standard shares -2%).

 

I was interested to see that Tesco’s plastic bag policy, withdrawing 5p bags and just selling life-long bags for 10p, could save 25% of bag sales. To date since 2015 Tesco has handed out 1.5 billion bags. Cutting pollution is a must. RBS’S CEO Ross McEwan deeply offended many clients with his comments to the effect that customers had a duty of care when receiving or paying money to a counterparty that they were unfamiliar with. Criminal activity and money laundering must be cut out. Of course banks are responsible for staying on top of criminal activity, but the general public have no idea of the cost of regulation in the wake of mines meted out to HSBC ($1.9 billion & Standard Chartered £300 million in 2006). I think McEwan’s wording was unfortunate with RBS having lost £58 billion in the last 9 years, but he had a point! At 10.20am the FTSE 100 is down 12 points at 7520. Banks and oils remain robust.

 

 UK companies posting numbers this week – Tuesday – Intercontinental Hotel Group, Standard Life, Morgan Siddall, WorldPay, Paddy Power Betfair, TP Icap, Pets at Home, SIG Rotork, Wednesday – G4S, L&G, Interserve, Hastings Group, Mylan, Thursday – Card Factory, Coca-Cola EP, Prudential, Amec Foster Wheeler, Evraz, Cineworld, PageGroup – Friday – Old Mutual

 

 US companies posting results this week – Tuesday – Ralph Lauren, Dean Foods, Wednesday – Office Depot, Jack-In-The-Box, Eastman Kodak, Thursday – Macy’s, Nvidia, Nordstrom, Friday – JC Penney

 

Economic Data – Tuesday – BRC Retail sales, NEISR GDP, Thursday – RICS House Balance, UK Construction, Manufacturing output and Industrial production

 

 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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