Posts from Friday Apr 20 2012

High Noon, or firing blanks?

Do not Forseke me, oh my darling, as Frankie Lane might have sung, had he been an Alliance Trust shareholder.  That’ll be Karin Forseke, the new chairman, and next Friday is High Noon (GMT) as the outlaws from Laxey Partners renew their efforts to shoot their way into the Dundee citadel of Britain’s largest investment trust. Colin Kingsnorth and his gang have already spurred Alliance into a frenzy of activity, overturning the habit of several lifetimes and buying in shares for cancellation, but now the gang is demanding a “comprehensive review of the company”.

There is something to be said for this. Alliance has struggled to make its diversifications (including the excellent Alliance Trust Savings) into profit centres, and even if ATS finally does turn the corner, it will be years before it has any impact on Alliance’s net asset value, the measure by which investment trusts are judged. The suspicion remains that its moves away from managing the main fund are to give the executives under Katherine Garrett-Cox the prospect of growing the business. Read more


This week on FT Alphaville,

De-euroisation remained a problem. Read more

De-euroisation is (still) de problem

Or, imagine foreign holdings of eurozone sovereign debt turning back the clock some 15 years… to before there was a eurozone.

A few charts from Rabobank on Friday (click to enlarge): Read more

Could US natural gas run out of storage capacity?

We keep reading about how US natural gas prices are depressed because of the glut of supply and unseasonably warm weather, driving down demand. Hard to argue with this – gas production has boomed since 2009 and the winter in North America has been rather balmy.

But there is another, quite unique, aspect to the natural gas market that we wanted to drill (pun intended) into: capacity. Read more

What’s going on with PPR?

We don’t know. That’s the first thing to make clear.

In the hotel bars of Mayfair, not knowing what’s happening with PPR would appear to put us in the minority. Every quiet conversation of late has revolved around the Paris-based company, which owns Gucci Group along with a few retail and sportswear businesses that no-one seems to value much. Read more

Accounting for credit risk before the crisis – a case of a gateway drug?

“The question is,” said Alice, “whether you can make words mean so many different things.”

In a recent Alphaville post, I made the claim that if the monolines had been required to mark the credit risk that they had taken to market, they would not have played such a prominent role in the financial crisis. Here I want to provide some support for that claim. Read more

US Markets Live transcript 20 Apr 2012

Live markets commentary from 

US Markets Live! 10am New York time, 3pm London

Join Cardiff and Joseph at 10am New York time / 3pm London time for another US Markets Live session, as we review the week’s bank earnings… the news that three unions of American Airways support a merger with US Airways (see US Airways CEO letter here), and anything else that crosses the tape.

And of course, macro. Including (why not?) US income tax. Here’s a chart from BAML analysts regarding income tax take versus GDP to get you going… Read more

Goodwill in France, plus bonus data quality pop-quiz

On Friday morning when a report landed in FT Alphaville’s inbox with the headline “Lagging Corporate France… The French – at least their brands are popular”, our interest was piqued. It’s a one-pager from independent equity research firm AlphaValue. It contains interesting snippets about how French companies have a lot of goodwill booked on their balance sheets when compared to their European peers.

As Investopedia tells us: Read more

Markets Live transcript 20 Apr 2012

Live markets commentary from 

The (early) Lunch Wrap

Good morning, New York…


Peak oil goes mainstream (again)

Well, The Economist is talking about it in a non-sneery way.

Okay, perhaps that’s not fair — only in February the newspaper likened oil markets to a horror movie: with prices likely to stay high and tight capacity raising the risk of future price spikes. Read more

DEGRADED! Finance director reveals sorry truth behind index exit for publication immortalised by dead Beatle

The Daily Mail and General Trust’s two tiered stock voting structure has cost the newspaper company its place in the FTSE index series in Britain. Under new listing rules, DMGT’s `A’ shares will be classified as having a “standard” rather than a “premium” listing because they do not confer voting rights. So DMGT will no longer be a member of the FTSE Mid 250 indicator, London’s ranking of second tier companies. Read more

For Supergroup, adding up is hard to do

For a moment, we thought this was a spoof, but apparently not. From the Cheltenham-based producer of Superdry Japanese high street fashion:

Update Read more

Normalising subordination, in Portugal

Something you will never ever read in an IMF report on Greece…

 Read more

Further reading

Elsewhere on Friday,

– Quant on DemandRead more

Overnight markets: Down

Asian shares were lower and commodity-linked currencies declined after US unemployment claims fell less than expected, says Reuters.

Asian markets
Nikkei 225 down -36.31 (-0.38%) at 9,552
Topix down -2.90 (-0.36%) at 811.23
Hang Seng down -50.87 (-0.24%) at 20,944 Read more

The 6am Cut London

Microsoft’s quarterly results were better than expected due to firmer PC sales, reports Reuters. However its earnings were held back by poor Xbox sales, says the FT.

Michael Woodford appeared at an Olympus EGM on Friday in Tokyo, demanding to know whether his dismissal as CEO last year was legitimate. Meanwhile “investors peppered the management with angry questions on why they let the scandal occur on their watch”, reports the WSJRead more