TODAY’S FAYRE – Thursday, 21st December 2017



“In my sky at twilight you are like a cloud
and your form and colour are the way I love them.
You are mine, mine, woman with sweet lips
and in your life my infinite dreams live.

The lamp of my soul dyes your feet,
the sour wine is sweeter on your lips,
oh reaper of my evening song,
how solitary dreams believe you to be mine!

You are mine, mine, I go shouting it to the afternoon’s
wind, and the wind hauls on my widowed voice.
Huntress of the depth of my eyes, your plunder
stills your nocturnal regard as though it were water.

You are taken in the net of my music, my love,
and my nets of music are wide as the sky.
My soul is born on the shore of your eyes of mourning.
In your eyes of mourning the land of dreams begin.”



Pablo Neruda – poet – 1904-1973


Up until Tuesday morning, PM May had every right to be relatively satisfied with the EU negotiations, considering that the whole episode has been an absolute nightmare since the June General election, when the PM was virtually  politically “knee-capped” thanks to a truly inept campaign, which took away the Government’s overall majority. The PM, David Davis et all have taken the negotiations on to phase two, which was no mean achievement considering that dealing with Tusk, Verhofstadt, Juncker and Barnier is akin to attempting to pick up quicksilver. In fairness to Barnier, he is but a servant of his political leaders, though he is very duplicitously calculating.

So I was very disappointed to hear yet again that Barnier was briefing against the UK Government when stating the obvious that there would be no special deal for UK financial services, if the UK was not a member of the single market.  There is nothing new in that statement but it should be reiterated to David Davis and Sir Tim Barrow, not the Guardian or any other newspaper, assuming Barnier is interested in promoting goodwill and that is very much in doubt.

CityAM told us this morning that Britain has been crowned the best country in the world for business in 2018 for the first time ever, even in the face of uncertainties around Brexit, according to Forbes’ annual ranking. The UK took the top spot out of 153 nations and jumped up from fifth place last year, scoring particularly well on technological readiness (fourth) and the size and education of its workforce (third). The rankings were based on 15 different factors including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection.

The BBC’S Simon Jack has reported that banks offering wholesale finance – money and services provided to businesses and each other – would operate under existing rules. Mark Carney, BOE Governor, has quite rightly been clear that will be the case. Retribution would be counter-productive. These facilities would apply even in a “no deal” scenario.  It is thought the BOE will confirm these facilities today.

It means EU banks operating through branches can continue without creating subsidiaries – an expensive process. The difference between branches and subsidiaries is something all of us might have hoped not to care about ever but it is significant – so please bear with me. Branches offer an easy way for banks to move money around their international operations, but present the risk that in the event of a financial crisis, funds are quickly repatriated to the foreign bank’s headquarters – leaving customers of the UK branch out of pocket. Subsidiaries are forced to hold their own shock-absorbing capital and essentially become UK companies. Changing from a branch to a subsidiary could cost billions for a bank like Deutsche Bank, for example, which employs 9,000 people in the UK. Currently, banks based anywhere in the EU can sell services to anywhere else in the EU thanks to an instrument known a financial services passport.


Despite the DOW rallying by almost 40% since President Trump’s inauguration in November 2016, he has managed very little in the way of a change in legislation, though expectation for tax cuts, particularly corporation tax from 35% to 21% have been at fever-pitch.  This now looks like it may come to fruition before Christmas. This cut would boost overall earnings for S&P 500 companies by 9.1 percent, according to UBS equity strategists, lifting the prospects in particular for banks, telecoms, healthcare transport, tech and other industries that stand to gain the most from lower corporate tax rates. Banks pay the most prohibitive taxation of 27.5%. Tech is expected to benefit less than most other sectors from a drop in the corporate rate, with an earnings boost of 5.3 percent, according to UBS. Though semiconductors could lose 3% of their profits. Needless to say these overall tax arrangements are tied up with the repatriation of ‘one-time- taxation of overseas earnings to the US.



The news about Poundland’s owners Steinhoff, which has seen its share price collapse as the investigation in to accountancy irregularities gathers momentum, is not wholly discouraging for its 18,000 employees.  This retail operation looks to be in good shape and not doubt it could be sold, if Steinhoff fails to survive.  The same cannot be said for Toys 4 Us, whose 3,200 employees could lose their jobs as early as today, since the Pension regulator refuses to support a recovery programme, unless the £9 million pension contribution is met forthwith.  Finally the CMA has approved the £3.7 billion takeover of Booker by Tesco.  It sees no conflict of interest, nor does it see that prices will be falsely increased by its wholesale division.  There is plenty of wholesale competition to keep wraps on prices. Tesco share price has risen from 187 to 206p (+10%) in the last month, such was the confidence that the deal would be consummated. At 9.20am the FTSE is up 4 points at 7547.


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


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: