WEEKLY FAYRE – Monday, 22nd March 2021

March 22, 2021

“Now the leaves are falling fast,
Nurse's flowers will not last;

Nurses to the graves are gone,
And the prams go rolling on.

Whispering neighbours, left and right,
Pluck us from the real delight;
And the active hands must freeze
Lonely on the separate knees.

Dead in hundreds at the back
Follow wooden in our track,
Arms raised stiffly to reprove
In false attitudes of love.

Starving through the leafless wood
Trolls run scolding for their food;
And the nightingale is dumb,
And the angel will not come.

Cold, impossible, ahead
Lifts the mountain's lovely head
Whose white waterfall could bless
Travellers in their last distress.”


“Autumn Song”


WH Auden – Poet – 1907-1973


Republic of Ireland 23, UK 5 – that was the scoreboard at the close of the 2021 Cheltenham Festival. Why the gulf?  NH racing is a tremendous industry in Ireland. So many people breed horses of the highest quality. They also have the best horsemen and terrific prize money! Well done to the Emerald Isle. Special praise should be heaped on Henry de Bromhead for training the winner of the Champion Hurdle, Queen Mother Chase, and the Gold Cup; the first time it has ever been achieved. However, the star of the show was jockey Rachael Blackmore, who was crowned Champion jockey for the Festival with six winners. She was in a league of her own. 

All racing acolytes must ‘doff their titfers’ to ITV Racing and especially to the commentators and presenters - Messrs Chamberlin, Cumani, McCoy, Fitzgerald, Harvey, Chapman, Walsh, Plunkett, Bell & Hoiles for bringing so much joy and excitement from one of the great sporting arenas,  which was totally devoid of any atmosphere. They did a superb job!

On the rugby front, rarely has England played as badly as they did against Ireland on Saturday, who thoroughly deserved to win by 32-18. This was England’s worst 6-Nations championship since 1976. To cap the disappointment, France beat Wales 32-30 to thwart the Red Dragons from another Championship.




15th March 2021

19th  March 2021

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Last week the financial stage belonged to the main central banks. Investors waited with bated breath for fresh news on monetary policy and growth forecasts, in the same manner as Catholics’ expectations manifest themselves, when white smoke pours out of the Vatican, once a new Pope has been elected. The news from the FOMC last Wednesday was relatively encouraging, with FED Chairman Jay Powell insisting that rates would not go up until 2023, despite the threat of modest, though probably temporary inflation a few months down the line. The Fed upgraded its forecast for 2021 - GDP growth from 4.2% in December to 6.5% and beefed up the 2022 growth forecast from 3.2% to 3.3%. However, Powell said the route for better growth remained complex. US Initial Jobless Claims for state unemployment benefits came in at a seasonally adjusted 770,000 for the week to 13 March, the Labor Department reported. The week before new US jobless claims for those seeking benefits came in at 725,000.

At Thursday’s MPC and QE meeting, Governor Andrew Bailey made similar comments about the UK’s economy. He said the outlook was positive but with large doses of cautionary realism.’ He felt the speed of recovery was dependent on the vaccine roll-out, as well as a measurable bounce in consumer spending. Interest rates were left unchanged at 0.1% and the quantitative easing facility was unaltered at £895 billion. For the average observer it is difficult to quantify what Kuroda-san, Governor of the Bank of Japan, brought to the party as far as monetary policy is concerned. Little has changed in 20 years with interest rates close to zero and likely to remain so, which is just as well with the gargantuan level of Japanese borrowing. Talking of borrowing, the UK public sector borrowing ex- banks came in at £19.147 billion UK from April 2020-February 2021. In total the UK Government has borrowed Ex-banks £278.8 billion (EST £330 billion). The total debt is £2.131 trillion -  97.5% of GDP. 

On the domestic political front proposals to reduce the dominance of the "Big Four" accountancy firms and scrap the industry regulator have been unveiled by the Government. The aim is to improve regulatory standards after high profile corporate failures such as Carillion and BHS. The business of auditing companies' accounts, and ensuring they are a fair reflection of their financial health, is dominated by four accountancy firms: KPMG, Deloitte, PwC and EY. They could face a cap on the number of companies on the FTSE 350 index they may audit, if those improvements do not go far enough. On the international front Eurostar is urgently seeking financial help to the tune £60 million to remain a viable operation. Currently, only two trains a day go under the Channel each day and passenger use has fallen by 95%.

Last week trading conditions on global stock markets were quite volatile in a narrow range. Only Germany’s Dax and, ironically the Hang Seng, finished the week in positive territory. Investors spent the week ruminating over inflation, higher interest rates, valuations, and the threat of further lockdowns, especially in Europe. On Wednesday the NASDAQ surrendered 3% in value with shares in Apple and Amazon easing by 3% and Tesla by 6.9%. However, by the end of the week, this doughty index had regained some poise. Whilst the pandemic retains its vice-like grip on lives, technology is likely to be pre-eminent.  Rupert Murdoch’ News Corp agreed a three-year media deal on payment for news input with Facebook to add to the deal with Google. Walt Disney served notice to open its theme parks in California, adding to those already open in Florida and Beijing. Disney has seen its share price rally by 50% since September 2020. CEO Bob Chapek will be pleased to see this development to add to the success of Disney’s streaming, with 89 million subscribers as well as increased activity in its film studios. In five years, Irish brothers Patrick and John Collinson have the built the payment processor, Stripe, into the largest private company in Silicon Valley with a valuation of $95 billion, after its recent fund racing. Only ByteDance, the owner of Tik-Tok and Ant Group are larger. Mark Carney, the former Governor of the Bank of England joined the Board. 

Though corporate earnings were a little thin on the ground last week, the flow of business news remained buoyant. BT is being threatened with a strike by its 45,000 workforce over site closures and job cuts. BT’s shares also popped by 6%, as the telecom titan announced that the cost of its 5G licences would be £452 million rather than the estimated £824 million. BP’s CEO Bernard Looney announced the opening of a hydrogen plant on Teesside. This initiative is likely to bring thousands of new jobs to the region. National Grid announced its commitment to electricity in buying Western Power Distributor the in the US for $7.8 billion.  This acquisition will make National Grid the largest electricity distribution business and it plans to sell off its stake in National Grid Gas. Roger Burney, the successful CEO of ASDA served notice to leave to the ISSA brothers, who recently acquired the supermarket from Walmart in a £6.8 billion transaction. Mr Burney initially tried unsuccessfully with Sainsbury’s Mike Coupe to merge their respective supermarkets.

Last Monday, Provident Financial, the doorstep lending operation, which has 379,000 customers, saw it shares larupped by 27%, as it became evident that it is struggling to cope with the surge in complaints from customers in its consumer credit division, who were struggling to service or repay loans. Many will recall that two years ago, Provident successfully fought off a reverse takeover by NSF. Ford’s Dagenham plant as been chosen to make its new Transit engines – all of which should be electric by 2030. Capita, the outsourcer, has told 35,000 of its 55,00 workers that they can continue working at home until further notice. Adam Frisby’s fashion group Style experienced a very satisfactory IPO, with its shares trading at a 19% premium on Tuesday.

Ahead of its forthcoming IPO, DarkTrace the Cambridge based cyber activity detector has appointed Lord Willetts to its board. Some will further recall that it is thought that UBS may have withdrawn its support for the company’s IPO whilst Mike Lynch remains involved in the operation. Mr Lynch faces the threat of extradition to the US over the sale of Autonomy to Hewlett-Packard in 2011. Jeffries and Berenberg will lead the float. Unsurprisingly, lockdown has financially damaged many consumer businesses. Upper Crust owner SSP falls into that category. It is seeking a £475 million rights issue to finance the opening of 90 new venues. Dame Helena Morrissey, after brief but successful times with L&G investments and more recently St James’s Place, will become chairman of the very successful retail stockbroker AJ Bell in July. Greggs the bakery chain is to open 100 new shops in 2021, as it bets on a post-pandemic recovery. This is despite the chain reporting its first loss of £13.7 million for 36 years in 2020 after sales fell by a third amid coronavirus lockdown measures.

NatWest is to face criminal charges on allegations of money-laundering to the tune of £365 million (£264m in cash), attributed to Fowler Elafield, a jeweller in Bradford. NatWest is cooperating fully with the investigation by the FCA and the police. The taxpayer reduced its stake in NatWest by £1.1 billion taking its stake down from 61.7% to 59.8%. The original stake in 2009 was 82%, when RBS was bailed out for £46 billion.

Ocado saw revenues rise for 40% in the last quarter to £147 million. The company is still investing, this time in Ocado Zoom’s 30-minute delivery service starting with operations in West London. Consequently, Ocado posted another loss of £148 million. The company has been going for 21 years. It seems to mirror the image of Amazon. It would be great to see a profit soon.

So, it looks as though Greensill, the £5 billion supply chain banker will end up as ‘ashes to ashes and then dust to dust.’ Despite former PM David Cameron alleged intervention, in attempting to persuade Chancellor Sunak to help with a bailout.  Help would also have assisted Sanjeev Gupta’s Liberty Steel operation, where 5,000 jobs look vulnerable with Credit Suisse having withdrawn it lending facilities. There would also appear to be a conflict of interest with auditors, Grant Thornton, who have allegedly acted for Greensill’s collapse as well as for Sanjeev Gupta’s deals, according to the Sunday Times.

UK companies posting interim results this week – Monday – Centamin, Kingfisher, Tuesday – Alliance Pharma, Elementis, Old Mutual, YouGov, Wednesday – Pendragon, Bellway, Thursday – S4 Capital, SIG, Friday - Beazley

US Companies posting interim results this week – Tuesday – Adobe Systems, GameStop, Wednesday – HB Fuller, KB Homes, Jeffries Financial, Thursday – Darden Restaurants

Economic data to be posted this coming week – Monday – US FED Powell Speech, US Existing Home Sales, Tuesday – UK Employment Data (FEB 5.1%), UK CBI Industrial Trends, US New Home Sales, Wednesday – UK Inflation (EST: Feb Y/O/Y 0.7%, M/O/M -0.2%), UK PPI, RPI & CPI, ECB Meeting, EU PMI Composite, UK PMI Composite, US MBA Mortgage Applications, US Durable Goods, US PMI Composite, Thursday – UK Car Production (Feb), UK CBI Distributive Trades, US Initial Jobless Claims, US GDP (4th Quarter Final Estimate 3.7%), Friday – UK Retail Sales, Germany IFO, US Goods Trade Balance, US Univ of Michigan Consumer Confidence