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Markets live transcript 25 Jul 2008

Markets live chat transcript for the chat ending at 12:13 on 25 Jul 2008. Participants in this chat were: Bryce Elder (BE) Neil Hume (NH)

BE:

Hello - earlier than usual! - and welcome to Markets Live.

BE:

We’re still chasing things at the moment.

BE:

But, because of my technical hamfistedness, I started the session early.

BE:

So if you can hang tight for the next ten minutes, we’ll start properly at the usual time.

BE:

And feel free to post some questions for us to address later.

BE:

Ok - Neil’s logging on now.

BE:

Murphy is still away as its east Africa retreat

BE:

And, as posters have noted, I now have a picture.

BE:

Taken with a cameraphone at arm’s length.

BE:

Our snappers are all too busy hanging around outside the High Court to do a professional job on this kind of thing.

NH:

morning

BE:

Ah - there you are. So, bear market rally over then?

NH:

could be

NH:

US markets took a real battering last night

NH:

and it did not take much to trigger it

NH:

a tick up in the oil price and some scary comments on Washington Mutual

NH:

and Bill Gross at Pimco making the following the prediction

NH:

PIMCO estimates a total of 5 trillion dollars of mortgage loans are in risky asset categories and that nearly 1 trillion dollars of cumulative losses will finally mark the gravestone of this housing bubble.

NH:

and bang

NH:

the dow off 280 points

NH:

and this morning there is more bad news from the banking sector

NH:

but it seems people want to discuss the latest disaster at the Royal Ratcatcher

NH:

Rentokil

BE:

No longer by Royal Appointment, I thought …

NH:

(Jagger, you have been reading the Times haven’t you?)

NH:

is that so

NH:

they have lost the Royal Appointment tag

NH:

not surprised HRH is trying to distance herself

NH:

seen the stock price??

BE:

Down 34.5p at 67p. 34% drop.

NH:

profits expected to be £34m below management’s internal forecasts

BE:

Wow.

NH:

Integration/restructuring issues at washrooms and pest control, as
well as problems in Australia have continued throughout Q2.

NH:

apparently

NH:

also, trading conditions in textiles and washrooms have deteriorated

NH:

(Jagger, I think I know who is putting the story about and we are not that excited. Our M&A people distinctly cool on this)

NH:

Management expect the issues the business
is facing to persist for “at least the remainder of the year”.

NH:

and remember this is the new crack management team brought in from ICI

NH:

who are obviously finding things tougher than expected

NH:

and Rentokil a bidder mess than they thought

NH:

so what sort of downgrades are we talking about

BE:

This is from Merrill:

BE:

Rentokil has issued a profit warning this morning stating that trading has
deteriorated across many of the divisions into the second quarter of 2008. as a
result, management now expect PBT for 2008 to come in around £35m lower
than previous guidance given at the time of the Q1 trading update on 2 May.
Management’s new guidance would imply earnings downgrades in the region of
20-25% to our current PBT.
Trading has deteriorated in UK washroom and the European textiles services
businesses are also facing increased cost pressures. The Pest control business
is seeing slowing sales momentum in Q2 to an extent while Asia Pacific is facing
significantly lower levels of profitability across all sectors and geographies. City
Link’s restructuring is progressing to plan but revenue trends have worsened,
more an indication of general market weakness according to management.
Ambius (tropical plants) is also seeing weakening trading conditions in Q2, mainly
in North America.

BE:

This from Arbuthnot:

BE:

Rentokil Initial - Trading statement
Woeful statement….Last statement noted the difficulty in implementing change programmes which was impacting the performance of key businesses. City Link has made good progress in improving service levels although demand is generally weak across the division, problems with restructuring UK washrooms business has continued in Q2. Trading has also deteriorated in Textiles & Washrooms during the quarter and revenue has fallen sharply. It is unlikely that profitability will improve in 2008. These problems are mainly due to serious operational issues in the UK but businesses in Europe are also facing a number of cost or growth challenges and these will continue for at least the rest of the year. Pest Control is broadly in line although the slow down relating to poor weather and the weak UK economy will affect business H2. b PBT will be c.£35m lower than that at the time of the Q1. “challenges are considerable” going forward.

BE:

Investec keeps a “sell” …

BE:

Hard to break old habits
The group has come out with another profits warning, showing that the new
management team has inherited a business in much worse shape than they
can have imagined. The new team has a very good record and are
undoubtedly getting to grips with the problems, but market hopes of a
relatively quick turnaround in the business are kicked firmly into touch. We
will be reducing our forecasts substantially in line with guidance.

BE:

Trading update. In today’s trading update, Rentokil Initial has stated that,
although it had alluded to difficulties in the Q1 trading update in May, trading has
deteriorated since that time and the group’s internal forecast is now £35m lower.
􀂄 Trading. In the trading update in May, the group indicated that although a
number of businesses were growing turnover satisfactorily, some key
businesses were facing difficulties. Since then the problems have escalated,
resulting in today’s profits warning.
Under a new management team, losses at City Link have stabilised, although
the business is now being affected by slowing demand from the weakening UK
economy. The profitability of the UK washroom business has deteriorated in the
quarter, with customer retention rates an issue, revenue falling year-on-year and
customer receivables and associated provisions increasing sharply. The Pest
Control division has performed broadly in line with expectations, although there
was some slowdown in sales in both the UK and the US in the quarter. Initial
Facility Services is trading in line with budget, but Ambius (tropical plants) is
suffering in the US from the poor economy. Q2 results in Asia Pacific were
significantly lower than last year as a result of poor performance in Australia.
􀂄 Outlook. We have long believed that the business was in a poor shape and that
the market was factoring in too quick a recovery on the back of the new
management team, however good they are. Today’s trading update confirms
that view, but also indicates that some of the issues besetting the business are
worsening. Today’s statement will see the shares open much lower and in our
view they are likely to remain under pressure for some time.

BE:

NH:

OK, thanks for all of that. before we cut back to the banks, Bryce has a few words to say about Imperial Energy

BE:

Not that much to say, to be honest …

NH:

and then we will take a look at he insurers which are being hammered by the Munich RE warning

BE:

Heard yesterday that the due dilligence deadline for ONGC was midweek …

BE:

But this has been pushed back.

BE:

The shares, of course, remain at a hefty discount to the offer.

BE:

So people are making their own conclusions about the likelihood of the Russians and Indians agreeing to anything.

Imperial Energy Corp (IEC:LSE): Last: 1,025, down 23 (-2.19%), High: 1,047, Low: 1,016, Volume: 638.69k

NH:

NH:

right back to the banks

NH:

and the week long rally has come to halt this morning

NH:

and there is some particularly nasty news from down under

NH:

seen NAB?

BE:

Looks nasty.

BE:

Down 13.5% at 26.5 Aussie dollars.

BE:

What happened?

NH:

well, NAB, which is being linked with a bid for HBOS in another publication this morning, has stunned investors down under

NH:

by taking a $830m pre-tax provision for off-balance sheet vehicles

NH:

now, this is a huge jump on its previous provision of just $181m back in March

BE:

What on earth happened in the past six months then?

NH:

dunno, NAB woke up and smelt the coffee

NH:

news obviously takes a little long to reach Aus

NH:

NAB says it has suffered a 55% loss on US housing loans and has written of 90% of ABS CDO portfolio.

NH:

It is also saying that total industry losses from credit turmoil expected to be up to $1.3 trillion

BE:

It’s quite a feat to lose 90% of your money even in subprime.

NH:

certainly takes some beating

BE:

Do we know what is in these CDO’s?

NH:

well, NAB is saying that the contain US residential mortgages

NH:

but has not given any further details

NH:

of course, the UK banks have written down their CDO to around 70-80 in the dollar, with the mezzanine stuff completely written off

NH:

so this could raise fears about further write downs

BE:

Indeed - people are talking about Citi below …

NH:

now a lot of people thought these had passed

BE:

Indeed. And all we had to worry about now was the impact of a recession.

NH:

hang got a quick bit of analyst comment on the UK banks CDO exposure and some stuff on NAB

NH:

UK banks exposure to conduits - HBOS has brought their conduit £19bn back on balance sheet, and has written down (but not impaired) £4.6bn pre-tax, both through p&l and straight to equity. HSBA has bought their conduits back on b/s and made write downs, LLOY has £12bn conduit of which £8.3bn was ABS, but no exposure either directly to subprime. RBS £64bn of conduits including those previously with ABN and has written down £5.9bn on a group level. Barclays has £19bn of conduits.

NH:

UK banks results season starts next week with LLOY on 30th July. As the conduits are consolidated into group accounts, the accounting treatment and assumptions ought to be the same as the assets in the banking and trading books. Our initial reaction is that NAB has been late to write down what the UK banks have provisioned for – however it seems highly likely that we will see more losses from banks from their loan books if we have only seen half the $1.3trillion industry losses NAB forecasts. In any case – it looks unlikely that NAB will be counter bidding for AL/ (Neutral, TP 300p) which has traded well through the terms of Santander’s offer.

NH:

that’s from Bruce Packard at Pali International

NH:

of course

NH:

all of this raises doubts about the likelihood of a HBOS break up bid

NH:

which was in the Telegrapgh this morning

NH:

for those of you who missed it

NH:

JPMorgan has held talks with several interested parties about forming a consortium to break up HBOS, says the Telegraph, along the model of the ABN Amro breakup.

NH:

JPMorgan is said to be in touch with a large Australian bank, said to be NAB, as well as private equity; Santander might also be approached, sources say.

NH:

JPMorgan might finance a bid and take some assets, but is unlikely to want to take up any UK retail banking operations.

NH:

well, I think we can probably assume NAB is not interested

NH:

its CEO John Stewart will be too busy fighting to save his job

NH:

as for Santander

NH:

they are buying Alliance & Leicester

NH:

so they are not going to have a massive appetite for another deal

NH:

now, I don’t doubt for a minute that JPM has been trying to put something together

NH:

argubale HBOS is cheap

NH:

but I just struggle to see who is going to want to buy its main business

NH:

Halifax

NH:

most of the other UK lenders can’t, or would not be allowed to

NH:

one suggestion has been a sovereign wealth fund

NH:

buying UK mortgages at the bottom of the market

NH:

somehow, I just can’t see it

NH:

HBOS shares currently down 11.7p at 289.75p

NH:

that is to be fair a bit better than the rest of the sector

Royal Bank of Scotland Group (RBS:LSE): Last: 209.75, down 9.5 (-4.33%), High: 213.00, Low: 205.00, Volume: 58.62m

Lloyds TSB Group (LLOY:LSE): Last: 324.75, down 13.25 (-3.92%), High: 327.75, Low: 318.00, Volume: 19.90m

Barclays (BARC:LSE): Last: 341.50, down 6.5 (-1.87%), High: 342.75, Low: 327.25, Volume: 60.86m

NH:

and

NH:

as we noted earlier this week

NH:

next week is a HUGE one for the sector

NH:

as the half year reporting season gets underway with results from Britain’s most conservative bank, Lloyds on July 30th.

NH:

right, I think Bryce has dug up some comment on the NAB disaster and the HBOS break up bid

NH:

over to you

BE:

First, here’s a bit of comment on HBOS from Sandy Chen at Panmure, the world’s most bearish banking analyst …

BE:

HBOS
Break-up bid comment
These are tough conditions for a break-up bid – and the potential writedowns
on the structured credit book represent a large poison pill, in our view.
! The Telegraph reports that JP Morgan may be assembling a consortium of banks and
private equity firms to bid for HBOS, with the intention of breaking it up. NAB could be
interested in BankWest Australia and the Bank of Scotland corporate business, and
Santander could be interested in the UK retail business.
! It is perfectly reasonable to expect that break-up bids along the lines of last year’s ABN
break-up are being considered; that is, after all, what investment bankers do. Last year
was a long time ago, however. For many of the key HBOS assets – BankWest in
Australia, the 60% stake in St James Place, even the core assets of UK retail and
corporate banking and Insurance & Investments – sum-of-the-parts/break-up
comparable valuations have more than halved, and, although there are decent synergy
arguments for individual parts (eg NAB with BankWest and Bank of Scotland Corporate;
Santander with UK Retail), the acquiring banks would likely be paying in shares not cash,
leaving acquisition prices at the mercy of the markets.
! The elephant in the room, of course, is how the potential write-downs on the c£40bn
structured credit book would be divided (remember that an acquirer would need to
crystallise fair value/mark-to-market). Coincidentally, NAB has just announced a 90%
write-down (ie to 10 cents in the dollar) of its CDO book, and S&P has warned that
many banks face further write-downs and downgrades as macro deterioration both
broadens and deepens. In the ABN break-up, RBS was willing to swallow this poison pill
– with dire consequences for its share price. Potential bidders for HBOS, see paragraph
above.
! In this context, if HBOS shares do rally into this, we would maintain our Sell
recommendation into the strength.

BE:

And here’s Credit Suisse on NAB and the sector

BE:

A confidence shattering event for NAB. With the $1.2bn CDO
portfolio now c90% provisioned, NAB has negligible remaining US mortgage
exposure, but apparently has no material provisions against $4.5bn of other
purchased conduit assets (including both CLOs and CMBS). The asset
quality of these exposures remains opaque. We believe NAB may need to
make further provisions for conduits, but see less risk for bank sponsored
conduits elsewhere in the sector (NAB’s sizeable CDO exposure is unique).

BE:

Sector implications: downside risk remains
According to bank disclosures summaries below, NAB’s $1.2bn CDO exposure is the only
large CDO exposure within the sector. As such, in our view the direct read-across to the
sector from this announcement is limited. However, more broadly, NAB’s lead in
aggressively re-stocking provisions follows a similar initiative by ANZ at the 1H08 result –
and now creates a further precedent for others to similarly re-stock provisions (loan loss
provisions were run down continuously for nine years up until 2007). As such, we
continue to see downside risk to bank estimates from deteriorating asset quality.
We remain Underweight the banks sector overall, predicated on the uncertain macro
outlook, the impact of the ongoing liquidity crisis and the impact of inflationary pressures /
BIS II pro-cyclicality on bank capital.

NH:

any more??

BE:

That’ll probably do for the moment.

NH:

actually, Merrill have published a big note on the sector this morning

NH:

and there are some big downgrades in there

NH:

it looks at the potential losses from home loans

NH:

and concludes losses of £8.3bn are possible

NH:

here’s the note

NH:

Lower house prices, higher expected losses
We think that falling UK house prices could lead to an increase in expected losses
for the UK banks. If so, this could cause a sharp rise in provisioning over the next
12-24 months. Most estimates of future provisioning in the UK mortgage market
are based on historic experience. In this report we show a more granular
approach, and we demonstrate what we think expected loss would be in different
house price decline scenarios.

NH:

Using PD model and individual bank data to estimate losses
Expected loss on a loan is a function of the probability of default (PD) and the loss
given default (LGD). We used a model based on Fitch data to estimate PD; we
have taken the disclosed data from the banks and the BoE on the loan to value
(LTV) distribution of their mortgage books; and we stressed both PD and LGD
assumptions for different house price negative appreciation (HPA) scenarios. We
also split the mortgage books into prime, non prime, and buy-to-let.

NH:

Total expected loss of £8.3bn at -25% HPA
As house prices fall, both the PD and LGD on mortgages will rise. Using our
model, we estimate that were house prices to fall 25% from end 07 levels, the
total expected loss in the UK prime market would be £4.9bn, in non-prime £2.6bn,
and in buy-to-let £914m (Chart 1). We overlaid our PD model onto the banks’ own
mortgage portfolios to estimate the potential losses under different HPA
scenarios, and compared them to carrying reserves of the banks to see what
additional provisioning might be necessary to reflect negative HPA. Given that the
banks currently carry mortgage reserves of just 4-14bps, we think that the reserve
rebuild could have a significant impact on earnings.

NH:

Base case of -25% HPA leads to earnings downgrades
Our base case for UK HPA is now -25%. We assume that the incremental
reserving required will mostly take place between 2H08 and 1H10. This leads us
to cut numbers for the UK banks: the most impacted for 2009E are HBOS (11%
cut), Lloyds TSB (6% cut) and B&B, which we now think will lose money in 2009.

Caveats required
We note that the model we used only looks at increases in expected loss owing to
house price declines. It does not take into account the other variables which
impact PD. In addition, we assume that an increase in expected loss is charged
through the P&L during 2008-10E, but in reality the timeframe might be different,
changing the P&L impact. Also, we only used the LTVs disclosed by the banks
and the BoE, and we acknowledge that this data may not provide a complete
picture of LTV for the banks, nor may the disclosure be consistent across the
banks, which could lead to discrepancies.

NH:

NH:

wider market

BE:

Hang on - can we talk Streaky?

NH:

er, yes if you want to

NH:

not sure we can say very much

NH:

otherwise we could be in contempt of court

BE:

Didn’t stop The Times this morning …

NH:

and if readers want more detail on this case and what happened I would direct them to the Times website or the paper

NH:

but from the piece you can get a fair idea of what’s happened

NH:

however,

NH:

what we can put up is the statement issued by the FSA yesterday

NH:

FSA/PN/078/2008

24 July 2008

Insider dealing: Financial Services Authority prosecutes Mr Malcolm Calvert
Mr Malcolm Calvert of Cobham, Surrey, date of birth 13 October 1944, today appeared at the City of Westminster Magistrates’ Court, on charges of insider dealing contrary to section 52 of the Criminal Justice Act 1993.
Mr Calvert has been charged with the following offences:

NH:

1. Between the 23rd day of April 2003 and the 26th day of April 2003, having inside information which related to a proposed takeover of HP Bulmer plc, acquired 110,000 ordinary shares in HP Bulmer plc.

2. On the 18th day of June 2003, having inside information which related to a proposed management buyout of Macdonald Hotels plc, acquired 100,000 ordinary shares in Macdonald Hotels plc.

3. On the 15th day of July 2003, having inside information which related to a proposed management buyout of Macdonald Hotels plc, acquired 10,000 ordinary shares in Macdonald Hotels plc.

NH:

4. On the 17th day of July 2003, having inside information which related to a proposed management buyout of Macdonald Hotels plc, acquired 5,000 ordinary shares in Macdonald Hotels plc.
5. On the 18th day of July 2003, having inside information which related to a proposed management buyout of Macdonald Hotels plc, acquired 5,000 ordinary shares in Macdonald Hotels plc.

6. On the 21st day of July 2003, having inside information which related to a proposed management buyout of Macdonald Hotels plc, acquired 5,000 ordinary shares in Macdonald Hotels plc.

NH:

7. On the 24th day of June 2003, having inside information which related to a proposed merger between Vernalis plc and British Biotech plc, acquired 30,000
ordinary shares in Vernalis plc.

8. On the 26th day of June 2003, having inside information which related to a proposed merger between Vernalis plc and British Biotech plc, acquired 40,000 ordinary shares in Vernalis plc.

9. On the 23rd day of August 2004, having inside information which related to a proposed takeover of Johnston Group plc, acquired 50,000 ordinary shares in Johnston Group plc.

10. On the 18th day of October 2004, having inside information which related to a proposed takeover of South Staffordshire plc, acquired 3,000 ordinary shares in South Staffordshire plc.

11. On the 18th day of October 2004, having inside information which related to a proposed takeover of South Staffordshire plc, acquired 27,500 ordinary shares in South Staffordshire plc.

12. On the 8th day of March 2005, having inside information which related to a proposed takeover of RAC plc, acquired 40,000 ordinary shares in RAC plc.
Mr Calvert indicated a plea of not guilty. The court declined jurisdiction and held that the case was suitable for trial on indictment. Proceedings were adjourned until 11 September 2008 and Mr Calvert was remanded on conditional bail.

NH:

NOTES FOR EDITORS
1. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
2. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.

ENQUIRIES
Press: Joseph Eyre 020 7066 3232
Outside office hours 07795 351 956

Public: FSA Consumer Helpline 0845 606 1234 (call rates may vary)

BE:

Neil’s on the phone, so we can take a moment to digest that.

BE:

bickie

Reminder to readers - if you arrived late and want to stop the dialogue ‘jumping’ as you catch up, hit the ‘pause auto-scrolling’ tab at the bottom right hand corner

NH:

off now

NH:

dreary from a press office at one of the big investment banks

BE:

NH:

on Streaky we have a number of emails through from people who workded with him

NH:

by all accounts a great mentor for young traders

NH:

He played up to his barrow-boy amongst etonians at Caz

NH:

He was a great boss to the young traders, if at times pretty tough and moody. But he was a good guy

NH:

that’s just some of the stuff we have had through

NH:

but I must agree with Monkey the Waitrose carrier bag was an odd choice to take to court

NH:

NH:

right, wider market

BE:

FTSE 100 down 42.2 points at 5,320.1

BE:

being propped up by the miners

BE:

which have recovered some of yesterday’s losses

BE:

but the mood out there is not positive

BE:

the latest GDP reading makes for very depressing reading

BE:

recession looks to be on the way

BE:

GDP rose by just 0.2% quarter-on-quarter in the second quarter, which was the equal weakest performance (with Q1 2005) for seven years

NH:

er, that’s not good

BE:

Indeed. And as a result of that fall

BE:

annual GDP growth retreated to an equal 15-year (with Q2 2005) low of 1.6%, which was than half the peak rate of 3.3% seen in the second quarter of 2007

NH:

wow, things are slowing really quickly

BE:

Yep. Decelerating. Grinding to a halt. All ugly, no matter how you phrase it.

BE:

and that news is really weighing on the retail sector

BE:

marks and spencer

BE:

which has rallied sharply in the past week

BE:

is down 14.75p to 244.75p

NH:

and there are a number of other retailers under pressure

NH:

such as Kingfisher

NH:

and

Next (NXT:LSE): Last: 989.50, down 26.5 (-2.61%), High: 1,002, Low: 968.50, Volume: 827.66k

Kingfisher (KGF:LSE): Last: 117.90, down 6.4 (-5.15%), High: 121.90, Low: 117.60, Volume: 15.55m

BE:

of course that GDP reading following’s yesterday weak retail sales data

NH:

got any comment on the GDP reading??

BE:

This is from Howard Archer at Global Inisght

BE:

Service sector activity extended its recent marked slowdown in the second quarter, with business services and finance activity being hit by the credit crunch and financial market turmoil, as well as by the sharp housing market slowdown. Meanwhile industrial production and construction contracted significantly.

On the expenditure side, it is apparent that consumer spending slowed appreciably in the second quarter after surprisingly resilient expansion of 1.1% quarter-on-quarter in thefirst quarter. Growth in retail sales slowed to 0.6% in the second quarter from 1.7% in the first, while the Bank of England’s regional agents have reported that spending on consumer spending slowed sharply in June. In addition, survey evidence suggests that business investment is likely to have been muted in the second quarter.

BE:

We expect the economy to stagnate at best through the second half of 2008 and the early months of 2009 as consumers rein in their spending in the face of major headwinds and investment is pared back. While exports will be supported by a weaker pound, this will be countered by weaker domestic demand in key overseas markets. Indeed, mild recession is now looking highly possible, and we expect overall GDP growth to be limited to 1.4% in 2008 and 0.8% in 2009. GDP growth is seen as low as 0.5% year-on-year in the first quarter of 2009. Furthermore, we see significant downside risks to these projections, and are currently considering revising them down further, particularly the 2009 forecast.

We believe very weak economic activity will increasingly contain and then dilute underlying inflationary pressures. Consequently, we expect the Bank of England to hold off from raising interest rates further despite the more hawkish than expected minutes of the July MPC meeting, and that interest rates will stay at 5.00% for several months to come. We expect wage growth to remain muted as companies are under enormous pressure to contain their soaring costs, particularly as they face slowing demand. Furthermore, the rise in unemployment is picking up and this is likely to increasingly undermine workers’ bargaining power, particularly as companies may well threaten to offset higher wages by cutting their workforces. Meanwhile, we expect markedly slowing demand and intensifying completion to increasingly undermine companies’ pricing power.

However, given that inflation seems set to near 5.0% later this year and is likely to still be above 4.0% at the end of 2008, the Bank of England will probably be reluctant to cut interest rates before 2009 unless the economy really falls off a cliff over the coming weeks. The bank is likely to be particularly keen to see sustained evidence that wage moderation is continuing in the face of higher inflation levels and elevated inflation expectations. Further out, we expect interest rates to be cut significantly in 2009 and to come down to 4.00%, or even lower.

BE:

and this is from Unicredit

BE:

Following the disappointment after Q1 GDP, today’s sluggish GDP figure should have come as another negative surprise to the BoE. Therefore, even though inflation is stubbornly on the rise - beating the BoE forecast in the May - such a sluggish economic performance will likely keep the BoE on hold until the end of the year. We keep thinking that the probability of a rate hike is very low and we continue to expect that the next BoE move will be a cut. The easing is very likely to be resumed early next year, but should growth numbers continue to surprise the BoE on the downside, risks are skewed to the first cut being delivered earlier rather than later.

BE:

And there’s a big UK note out today from First Global’s chief strategist Devina Mehra

BE:

It’s epic, but here’s page one:

BE:

In recent years, the UK economy has witnessed the longest period of sustained economic growth,
lasting for over 150 years with growth recorded in each and
every quarter since 1992. However, the year 2008 began with
some bad economic news for the UK, with its GDP growing by
merely 0.3% sequentially in the first quarter of 2008 (Q1
2008), revised downwards from the previous estimate of 0.4%,
as against an increase of 0.6% in the fourth quarter of 2007 (Q4
2007).
From being one of the strongest economies in the European
Union (EU) in terms of inflation, interest rates, and unemployment, all of which have remained
relatively low in UK, the country has seen a decline in its position of late: its inflation rate reached
3.8% in June 2008, driven by increasing oil & food prices; the unemployment rate for the first three
months to May 2008 stood at 5.2% (unchanged over the previous quarter). The GDP growth
plummeted. In Q1 2008, the UK’s GDP growth rate was driven primarily by the growth of 1.1% in
the Household Consumption Expenditure (HCE), a decline in the current account deficit from £12.4
bn in Q4 2008 to £8.4 bn, and a slight contribution from government expenditure. However, the
decline in investments across all the sectors pulled down the GDP growth rate in Q1 2008.
We have carried out an in depth analysis of the UK’s national accounts and based on our findings,
we estimate the UK’s GDP to grow by –0.2% sequentially in Q2 2008 and record a much slower Yo-
Y growth of 1.2%, significantly lower than
expectations (consensus estimates are 1.9%
Y-o-Y growth). With the inflation and
unemployment rates scaling new highs, we
expect the HCE to also record a lower growth
in Q2 2008. More important, the HCE
situation is only likely to worsen in the
coming quarters as the lagged impact of lower
disposable incomes kicks in. It appears that
the consistent decline in household prices and
investor confidence will pull down
investments in Q2 2008 as well. While we
expect government consumption and the
current account to show some improvement in
Q2 2008, we believe these will still be
insufficient to drive a positive sequential
growth in the UK’s GDP.

BE:

NH:

OK, I think we should have a look at these insurers. sector is in tatters at the moment.

Standard Life (SL:LSE): Last: 215.25, down 12.75 (-5.59%), High: 225.25, Low: 213.00, Volume: 4.88m

RSA Insurance Group (RSA:LSE): Last: 127.20, down 8.1 (-5.99%), High: 133.60, Low: 127.00, Volume: 6.38m

Legal and General Group (LGEN:LSE): Last: 97.50, down 8.2 (-7.76%), High: 104.30, Low: 97.50, Volume: 14.04m

NH:

sorry that was so slow, having problems with the ticker system this morning

NH:

now, thoses losses are all down to events at Munich Re

NH:

its share currently off 11.4% at 103.13

NH:

company has issued a pretty stonking profit warning

NH:

saying profit will be below the previous range of 3-3.4bn

NH:

but above 2bn

NH:

they are blaming the turmoil in capital markets

NH:

what else

NH:

apparently that has led to an appreciable decline in the group’s investment results

NH:

so one has to ask, what have they been investinig in??

NH:

one peculiar feature of the credit crunch IMO

NH:

has been the fact that no insurance companies with the exception of AIG

NH:

have got into a real mess

NH:

one would have expected one of the big Euro insurers to have invested in something really toxic

NH:

what are the wires saying on this??

BE:

German reinsurer Munich Re issued a profit warning on Friday, saying turmoil in global markets would hurt its second-quarter earnings and result in a lower than forecast profit for the year as a whole.

“Against the background of steep falls in share and bond prices, Munich Re expects its profit for 2008 to be below the previously envisaged range of 3.0-3.4 billion euros ($4.7-5.3 billion), but still well above 2 billion euros,'’ the world’s second-biggest reinsurer said in a statement.

“The main reason for this is the turmoil on the capital markets, which has led to an appreciable reduction in the group’s investment result in the first half of 2008,” it added.

Munich Re’s shares plunged on the news and were 12.2 percent lower, leading decliners on the German DAX index of blue chips and weighing on the DJ Stoxx index of European insurers.

Smaller rival Hannover Re also sounded a cautious note on full-year earnings following Munich Re’s warning.

“If capital markets do not calm down, it will be difficult to reach our targets,” a spokesman said.

Its shares fell 18.4 percent.

Hannover Re so far has targeted earnings per share of 5 euros and a return on capital of over 15 percent. “The forecast was based on the assumption that capital markets will calm down. This has not happened,” the spokesman added.

Allianz, Europe’s largest insurer, declined to comment ahead of its second-quarter earnings statement scheduled for Aug. 7.

Major stock markets have fallen sharply this year following the U.S. subprime crisis, and volatility in both fixed-income and currency markets has risen.

Insurers are major holders of shares and worries over the impact of sliding markets has hit their own share prices as well.

“As an investor with assets of around 166 billion euros, the Munich Re group has naturally been hit by these developments,” the company said.

Munich Re said its longer-term goals were unaffected by Friday’s profit warning.

“This also applies to the medium-term target to increase earnings per share to more than 18 euros by 2010,” it said.

BE:

That was Reuters, by the way.

BE:

And, interestingly, Merrill Lynch downgraded Munich Re to “neutral” this morning.

NH:

who prescient

BE:

Downgrading to Neutral
Munich Re is a consensus defensive holding in the sector, and we have been a
big supporter of both the need to be defensively positioned, and the merits of
Munich Re itself. We still have a preference for being defensively positioned.
However, several elements of our Buy case have lost their potency in recent
weeks. A bigger buy-back is off the agenda for now, and our expectation of
reserve releases has cooled down. Our large estimate cuts and expectation of a
difficult Q2 also damage to some extent the perception of Munich Re’s
defensiveness. The stock is the best performing large-cap in the sector YTD and
the relative valuation call has also lost some appeal.
The toughest call is what to do with the money. The sector’s recent rally and our
expectation of poor Q2 results means that perhaps the best course of action is to
take money out of the sector altogether ahead of results.
Reducing estimates
We are reducing our 2008, 2009 and 2010 estimates by 23%, 21% and 7%,
respectively – a greater cut than we’d expected. We had been above consensus
and with our cuts are now falling to moderately below: about 15% for 2008 and
more importantly 5% for 2009.
Q2 preview
We expect a difficult quarter, similar to what we expect to see across the sector.
Net earnings will be aided by seasonally strong investment income but should still
be around the low Q1 level. We look for a 14% drop in book value in the quarter.

BE:

Best move on

BE:

NH:

yep, good idea

NH:

we have one for aficionados of the Takeover Panel

NH:

Inmarsat

BE:

Neil’s on the phone again …

BE:

Off now.

NH:

Back

NH:

getting a few call on St James’s Place Capital

NH:

apparently a few people buying them on the back of story in the Telegraph about a bid

NH:

very illquid stock given the HBOS shareholding and they have figures next week

NH:

right back to ISAT

NH:

on Monday its biggest shareholder, Harbinger

NH:

suspended takeover talks

NH:

and Inmarsat shares collapsed

NH:

fast forward to Friday

NH:

and Harbinger has bid

NH:

well, actually it’s not Harbinger

NH:

it’s US satellite company

NH:

that happens to be majority controlled by Harbinger

NH:

it’s called SkyeTerra

NH:

are you still with me bryce?

BE:

Sorry - was on another screen.

NH:

OK

NH:

so

NH:

SkyeTerra

NH:

is making an offer for Inmarsat

NH:

but with a twist

NH:

first there is no price

NH:

it will only bid if it gets the required regulatory approvals

NH:

and that could take 12-18 months

NH:

and if does get them and then bids

NH:

Inmarsat will be reversed into SkyeTerra by the looks of things

NH:

to create a bigger satellite company

NH:

and presumably one that will have a higher stock market rating, coz it will be listed in the US and not the UK, where we just don’t get tech apparently

NH:

now here’s where it gets interesting for Takeover Panel geeks

NH:

today’s offer

NH:

is not an offer under Rule 2.5 of the takeover code

NH:

which means in English, that SkyeTerra has not made a firm intention to bid

NH:

as such, Inmarsat will not be placed in an offer period

BE:

hang on a minute

BE:

someone is bidding

BE:

but the stock is not in an offer period

BE:

how does that work?

NH:

dunno

NH:

but both sides seem happy with the arrangement

NH:

Inmarsat shares not done much on the announcement

Inmarsat (ISAT:LSE): Last: 467.25, up 6.75 (+1.47%), High: 484.00, Low: 460.25, Volume: 1.48m

BE:

I am not surprised

BE:

given it could be 18 months before an offer is made

NH:

but what is interesting

NH:

it what harbinger is planning to do

BE:

Go on

NH:

well it is all about spectrum

NH:

Harbinger and its boss P Falcome

NH:

wants to put Inmarsat together with SkyeTerra and its other holdings to create a hybrid satellite/mobile phone network in the US

NH:

called ATC

NH:

Ancillary Terrestrial Component (ATC) is ground based infrastructure in a mobile satellite system to enhance the coverage of the satellite network

NH:

basically, where there’s a mobile signal that would be used

NH:

and where there isn’t the phone would switch to satellite

NH:

now, this makes sense in the US

NH:

where the mobile phone network is massively fragmented

NH:

and with Inmarsat, Mr Falcone has the spectrum to do it

NH:

that said, he will need to get in bed with a mobile operator to roll out that networl

NH:

who will probably need to spend something in the region of $7bn to build the mobile phone network

NH:

now, Mr Falcone was probably betting that one of the telecom players that missed out on the recent 700 MHz auction (an auction amongst wireless communication providers for spectrum in North America)

NH:

would approach him

NH:

they did not

NH:

so he will have to approach them

NH:

if his dream is to become a reality

BE:

sounds to me as if this is a fall back plan

NH:

(good comment Manic Miner. we will be on Tadpole Technology next)

BE:

I reckon

BE:

harbinger bought the stakes in ISAT and the others

BE:

because he thought the mobile phone auction would make them more valuable

BE:

and if you remember, there was all sorts of rumours that Google was going to bid for a license

BE:

and launch its own mobile network

NH:

so what you are saying is that one of the big mobile guys would have missed out

NH:

and in order to complete there network would have approach Harbinger with an offer or deal for their satellite investments

BE:

Yup - and brokers we have been talking to

BE:

reckon Harbinger are nursing some big losses on their satellite investments

BE:

around $500m

BE:

so he had to do something to shake up the portfolio

NH:

good points

NH:

one other thing on ISAT

NH:

: they have a big satellite launch next month

NH:

if it fails that will be bad news for the share price

NH:

and remember

NH:

one in ten launches fail

NH:

being launched in Kazahkstan

NH:

not sure what the failure figs are from there

NH:

and for those who are interested

NH:

here’s some background on the regulatory hurdles from today’s statement

NH:

Regulatory Approvals and Timetable
In order to effect the Proposed Offer it will be necessary for the Potential Offeror to obtain the following Regulatory Approvals: (i) approval of the FCC for transfer of control of the FCC licences held by MSV LLC and Inmarsat; (ii) FCC approval to increase Harbinger’s “foreign” ownership of SkyTerra up to 100%; (iii) FCC approval for transfer of control of the TVCC Lease which relates to the control of the 1.6 Spectrum, which is subject to an option agreement; (iv) HSR Act clearance by the DoJ and the FTC for acquisition of Inmarsat voting securities; (v) European Commission or national Member State antitrust approval for acquisition of Inmarsat; and (vi) such other antitrust, regulatory and governmental approvals that the Potential Offeror identifies that it considers necessary in order to be able to effect the Proposed Offer.

NH:

The Potential Offeror expects that each of the FCC and DoJ will undertake a substantive review of the consequence of the Proposed Offer and therefore it is likely to take approximately 12 to 18 months for the Potential Offeror to obtain those Regulatory Approvals. Given the time needed to obtain those Regulatory Approvals, the Potential Offeror intends to obtain a number of the required consents prior to any firm offer being made by the Potential Offeror for Inmarsat.

In a number of jurisdictions where Regulatory Approvals may be necessary or desirable, the relevant satellite, antitrust and/or governmental authorities may not permit filings on the basis of this announcement. It is the Potential Offeror’s expectation that such approvals can either be obtained within the normal offer timetable or would not impede the Potential Offeror’s ability to complete the acquisition of Inmarsat.

NH:

Assuming an acceptable conclusion to the Regulatory Approvals process, the Potential Offeror intends to enter into negotiations with the board of Inmarsat regarding the terms of an offer and endeavour to seek the recommendation of the Inmarsat board.

The Potential Offeror expects that any offer, if made, would be made to shareholders of Inmarsat in the second half of 2009 and that such an offer would be completed as quickly as possible thereafter.

A further announcement may be made, if and when appropriate.

NH:

NH:

Right, Bryce wants to cut back to the insurers

BE:

Earnings preview from Merrill for the UK sector

BE:

Pretty bearish.

BE:

Looking down into the creek – where are we now?
Trading conditions in the UK life market are the most challenging for several years
and positive catalysts are likely to remain elusive. Sales volumes are under
pressure and margins will likely follow.
We are again cutting our main earnings estimates for 2008-10 by 5-7%. The
range of cuts YTD is very wide between companies. At the net earnings level,
financial markets have had a massive effect on our current year estimates and we
think embedded values will be down by an average of 3% in 2008 versus 12%
and 11% YoY growth in 2006 and 2007 respectively.
We look at dividend paying ability and we stress our statutory capital models. We
do not expect to see any changes from stated dividend policy, at least in the short
term, but cite FP for possible dividend disappointment and Old Mutual for possible
upside surprise. The ‘domestic’ UK companies have fewest capital concerns or
sensitivities; Aviva and Pru carry the greatest sensitivities, in our opinion.
On valuations, we have cut our fair values by an average of 23% this year, which
justifies average share price moves. Stocks where the gap to our fair value has
widened are FP, OM and Pru; stocks where the gap has narrowed are L&G, SL
and SJP. Reflecting markets and lower asset management valuations, we are
cutting our POs on all stocks by an average of 4% (for new POs, see Table 11).
H1 results will mostly be poor or worse
In the main, we expect the results to be poor at the operating level, and even
worse at the net level due to financial market effects. Early consensus on some
stocks suggests that analysts are highly uncertain where figures will come in.
Outlook statements are unlikely to be perky, given the worsening UK economic
backdrop and tough comparatives from last year.
Sector strategy – at least have a paddle
It seems right to remain cautious on the UK domestic companies despite poor share
price performance and undemanding valuations. Cheap is not enough to rescue
share prices out of the current mire and newsflow will remain poor, in our opinion.
We look for companies that at least are armed with a paddle to steer their way out
of the creek – Prudential through more robust Asian growth and opportunity; Aviva
through restructuring. Old Mutual’s paddle is smaller, in our view, but the balance
sheet is robust, the valuation extreme, and has restructuring potential.

BE:

Looking down into the creek – where are we now?
Trading conditions in the UK life market are the most challenging for several years
and positive catalysts are likely to remain elusive. Sales volumes are under
pressure and margins will likely follow.
We are again cutting our main earnings estimates for 2008-10 by 5-7%. The
range of cuts YTD is very wide between companies. At the net earnings level,
financial markets have had a massive effect on our current year estimates and we
think embedded values will be down by an average of 3% in 2008 versus 12%
and 11% YoY growth in 2006 and 2007 respectively.
We look at dividend paying ability and we stress our statutory capital models. We
do not expect to see any changes from stated dividend policy, at least in the short
term, but cite FP for possible dividend disappointment and Old Mutual for possible
upside surprise. The ‘domestic’ UK companies have fewest capital concerns or
sensitivities; Aviva and Pru carry the greatest sensitivities, in our opinion.
On valuations, we have cut our fair values by an average of 23% this year, which
justifies average share price moves. Stocks where the gap to our fair value has
widened are FP, OM and Pru; stocks where the gap has narrowed are L&G, SL
and SJP. Reflecting markets and lower asset management valuations, we are
cutting our POs on all stocks by an average of 4% (for new POs, see Table 11).
H1 results will mostly be poor or worse
In the main, we expect the results to be poor at the operating level, and even
worse at the net level due to financial market effects. Early consensus on some
stocks suggests that analysts are highly uncertain where figures will come in.
Outlook statements are unlikely to be perky, given the worsening UK economic
backdrop and tough comparatives from last year.
Sector strategy – at least have a paddle
It seems right to remain cautious on the UK domestic companies despite poor share
price performance and undemanding valuations. Cheap is not enough to rescue
share prices out of the current mire and newsflow will remain poor, in our opinion.
We look for companies that at least are armed with a paddle to steer their way out
of the creek – Prudential through more robust Asian growth and opportunity; Aviva
through restructuring. Old Mutual’s paddle is smaller, in our view, but the balance
sheet is robust, the valuation extreme, and has restructuring potential.

BE:

Sorry - double post, the system’s a bit tempramental today.

BE:

NH:

right before we go, let’s have a quick look at a couple of media stocks that were propped up by rumours yesterday. Trinity Mirror and Mecom

NH:

here’s what UBS made of the Trinity Mirror bid rumour

NH:

Possible bid from Bennett Coleman
Reports on Reuters yesterday afternoon highlighted possible bid interest in Trinity Mirror from
Indian company Bennett Coleman (owner of the Times of India newspaper). Bennett Coleman
r.ecently acquired Virgin Radio in the UK. LBO numbers not yet supportive
Historic examples have demonstrated that wealthy individuals/families can sometimes take a
more strategic view than other investors on decisions to acquire newspapers (particularly
national titles). That said, we believe that the LBO analysis is not yet supportive of a potential
acquisition - if one assumed a potential requirement for further contributions into their pension
scheme, on our estimates, an LBO at an assumed 110p with 3x leverage would require
a.dditional cost savings of c£30m (4% of cost base) to achieve a c15% IRR.

NH:

Deteriorating macro environment prohibitive
With limited visibility on the extent of potential advertising declines near-term, limited scope to
remove additional costs given previous efficiency programmes and structural pressures longerterm,
we see a bid at even these levels as relatively unlikely at the moment given the
d.eteriorating conditions. Remain cautious, Sell, 70p DCF/SOTP-based PT
Trinity Mirror has fallen 70% YTD, leaving it trading on c3.5x 09E earnings. Whilst this does
appear cheap, with ongoing risk to cons earnings and the risk of further payments into their
pension scheme becoming necessary in 2009 given the size of the liabilities (c£1.5bn), we still
see the risk-reward to the downside.

NH:

and this is from Kaupthing on both Trinity and Mecom

NH:

Trinity Mirror (Sell) - “Bid story”
Yesterday Reuters flagged rumour of TNI bid by India’s Bennett Coleman & Co., acquirers of Virgin radio and owners of Times of India. While probably well within finance capability many will question the logic of buying into a business with a large pension obligation that would no doubt be even more difficult to deal with than most pension schemes given its troubled history. Another report from India suggests BC is in talks to with large shareholders to pick up stakes before launching a formal offer.

JPR deal a benchmark? Looking at the JPR/Usaha Tegas investment we note the following (i) JPR’s relative pension scheme size and deficit are much smaller, (ii) Usaha Tegas came in at the point of a heavily discounted (61%) rights issue. The latter deal structure (rather than bid) would clearly not be a positive for shareholders.

Valuation: Stock is now trading in line with our Target Price of 92p, valuation is 2009 5.0x EV/EBITDA and P/E 3.6x. Focus remains on various points (pension, dividend, trading and CAPEX) that may be covered alongside the interims results next week, at which point we will be better placed to review our rating. See preview below.

Mecom (Not Rated) - Sale of Danish business to shore up balance sheet?
With concerns about leverage and the effect of deteriorating European macro conditions on trading reports yesterday of an approach for Mecom’s Norwegian business Edda could help provide some further support for the stock. MEC rose 3.6% yesterday. Stock trades on 2008 P/E 4.5x 2008, EV/EBITDA 4.2x.

NH:

Mecom shares up 3.5p at 22.75p - a gain of 18%

NH:

Trinity Mirror down 5.75p at 86.5p

NH:

and I have just received a link to an article in Building Magazine

NH:

now these guys have moved prices in the sector recently

BE:

(Keep it civil down there please. Please understand that we always welcome questions, but only have so much airtime so can’t always cover everyone’s favourites.)

BE:

So what are they saying?

NH:

Taylor Wimpey cash shortage threatens lifeline deal with banks

NH:

Housebuilder’s debts mean it is ‘unlikely’ to get same reprieve as Barratt

BE:

Bit of an alarmist headline.

NH:

Taylor Wimpey is unlikely to strike a deal with its lenders to waive banking covenants without raising new cash first, according to sources close to the talks.

This week the housebuilder appointed NM Rothschild to persuade banks and bondholders to waive covenants that are likely to be triggered when it reaches its financial year end on 31 December.

The aim is to secure a similar deal to Barratt’s. Earlier this month its banks agreed to relax lending arrangements without requiring the housebuilder to raise fresh funds from either current investors or private equity funds.

Both options would dilute the share price and the private equity route would mean surrendering up to 30% of the business to an outsider.

The source close to the talks between Taylor Wimpey and its banks said: “The banks will wait to see Rothschild’s offer but it will have to be remarkable because there is a big hole to plug. All of the banks’ approval for covenant relaxation was contingent on fresh equity so it will be very tough to square that circle. The easiest answer for the company is to raise fresh cash.”

NH:

Taylor Wimpey’s £216m pension fund deficit is believed to be one of the stumbling blocks, which compares to a figure of £65m at Barratt. The complicated structure of its debt and the fact it is second in line behind its rival in trying to win such a concession from the banks will also make any deal harder to secure, according to analysts.

Taylor Wimpey has £1.7bn of debt, £825m of which is held by 12 bondholders. The rest is held by Lloyds, Barclays, HSBC and Royal Bank of Scotland.

It is understood no deal is due to be announced before Taylor Wimpey’s trading update on 27 August because of the complicated nature of the discussions with bondholders.

One analyst said: “It’s not like going to 12 people. It’s like going to 12 groups of people who all have disparate interests. The discussions will be complex, to say the least. That’s why they have had to get in Rothschild.”

Meanwhile, Taylor Wimpey is considering resuscitating the £500m share placement to investors that failed earlier this month, according to sources close to the company. It is also understood to be in parallel talks with four private equity groups about taking a 30% stake in the company.

BE:

Housebuilders are all weak again this morning.

NH:

they are, Goldman have downgraded a couple of names

BE:

Yup - wrote that in the paper this morning.

NH:

NH:

Microsoft rumours

NH:

the reason they went up yesterday

NH:

I think was because of rumouts that Microsoft was set to pounce and acquire a big stake

NH:

now I have not looked at the share register so I don’t know if that’s possible

NH:

but that was the rumour, the stake could be upwards of 20% apparently and acquired for a price above $30

NH:

right, I think that is it for another week.

NH:

thank you for all the comment below and sorry we have not been able to answer anything on internet gaming

NH:

not really a sector we know much about

NH:

much more plugged into satellite communications for some reason

NH:

which i sadly find quite interesting

NH:

anyway, have a good weekend everyone

NH:

we will see you on Monday

NH:

oh, just had another mail about St James Place

NH:

brokers convinced something is going on

NH:

last night it was worth GBP1.1bn

NH:

HBOS own 59%

NH:

one imagines they probably would sell out

NH:

we have no name as to who the bidder might be yet

BE:

OK - that’ll do for today. We’re way over deadline again.

BE:

Thanks for all the input, and hope to see you Monday.

NH:

see ya

This entry was posted by Bryce Elder on Friday, July 25th, 2008 at 10:40 and is filed under Uncategorised. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

1. Jul 25   15:41 Posted by Ehwotay [report]

   Bud Fox - brilliant

2. Jul 25   15:10 Posted by Hot money from Old Mumbai: Bid talk swirls around Trinity Mirror | Media Money [report]

   […] By contrast, the analysts at UBS did some sums. In a note quoted at FT Alphaville, UBS has this to say: […]

3. Jul 25   12:11 Posted by taxloss [report]

   steady on chaps/chapesses. Remember the group hug.

4. Jul 25   12:09 Posted by Bud Fox [report]

   Blue horse shoe loves anacot steel

5. Jul 25   12:08 Posted by Carlomagno [report]

   Some guy on Bloomberg TV talking over a banner reading “investmen,t opportunity in consumer stocks”! HUH?

6. Jul 25   12:08 Posted by rahodeb [report]

   Sure thing “darlin’” - haven’t you left 2 letters off the start of your name ck?

7. Jul 25   12:06 Posted by Anonymous [report]

   Good idea to all buy Party if it goes uop and we can hug each other. We would have all made money by now had we done it a week or two ago

8. Jul 25   12:06 Posted by ck1888 [report]

   fair enough, let’s call it quits and move on then darlin’

9. Jul 25   12:05 Posted by Alphaville Headmaster [report]

   Now now, you should enjoy the school holidays children!

10. Jul 25   12:05 Posted by rahodeb [report]

    Don’t assume I’m a fella

11. Jul 25   12:04 Posted by jack [report]

    re ISAT launch - Proton used to be a v reliable launcher, one of the best.

    Share price consequences of losing a satellite depend on the purpose the sat was going to be used for. A lot of the big ops have in-fleet backup which allows them to mitigate the operating impact for the period while the new sat is built. And they tend to be fully insured so you get all your $$$ back.

12. Jul 25   12:03 Posted by Manic Miner [report]

    Perhaps we should all buy some PRTY and RPT and have a group hug.

13. Jul 25   12:03 Posted by tg [report]

    Agree completely with Nately. It’s just dull and drowns out the more informative/interesting/amusing comments…

14. Jul 25   12:02 Posted by ck1888 [report]

    go and have a word with yourself fella

15. Jul 25   12:02 Posted by Monkey [report]

    No we dont … why can’t we all just get along? … sniff

16. Jul 25   12:02 Posted by VP [report]

    Sounds like the wedding list service “WrapIt” is the new Farepak.. How does a co that operates by taking payment, delivering goods, then paying for them & benefiting from the cashflow, manage to go under?

17. Jul 25   12:02 Posted by Anonymous [report]

    Getting tired of waiting so long on Informa. Surely the delay is not a great sign

18. Jul 25   12:01 Posted by rahodeb [report]

    well we do

19. Jul 25   12:01 Posted by rahodeb [report]

    Well said Nately - 100% behind you

20. Jul 25   12:01 Posted by ck1888 [report]

    sorry all, new here and didn’t realise you veterans get to moderate what people can and can’t ask

21. Jul 25   12:01 Posted by Monkey [report]

    Eutelsat is a good one to look at to see what might happen to ISAT

22. Jul 25   12:00 Posted by Carlomagno [report]

    Russian launchers are pretty much regular as clockwork.

23. Jul 25   12:00 Posted by Bohemia [report]

    what about Mecom?

24. Jul 25   11:58 Posted by YAWN [report]

    anything new on Informa

25. Jul 25   11:57 Posted by Nately [report]

    Sirius, PRTY is the 18th biggest riser today. What I’m objecting to is DAILY ramping on here of PRTY and RPT.

26. Jul 25   11:56 Posted by Sirius [report]

    Note that both their share prices are well up today for Regal and Partys- si its fair to ask whether you now have a view

27. Jul 25   11:56 Posted by rahodeb [report]

    Now all we need is someone to ask if there’s anything new on Informa - yawn ….

28. Jul 25   11:56 Posted by Manic Miner [report]

    Gets more like ADVFN every day……

29. Jul 25   11:54 Posted by Nately [report]

    Is “mentioning” of PRTY & RPT, in spite of nothing new on either, a daily event now? MarketsBookTalk?

30. Jul 25   11:54 Posted by Sirius [report]

    Partygaming up again today despite the market. looks like there was some good buying . Come down from over £3 in a few weeks. No views?

31. Jul 25   11:52 Posted by rahodeb [report]

    @Thomas - Yahoo will just move with the rumours and hearsay regarding Microsoft - not based on fundamentals any more (was it ever?)

32. Jul 25   11:50 Posted by taxloss [report]

    Monty (can’t spell it with out copy and paste) said yesterday that we wouldn’t hear anything before the end of the summer hols on Informa…

33. Jul 25   11:49 Posted by ck1888 [report]

    anything new on informa? interestting story on debtwire last night about staple financing being offered around, and DD meant to finish today…

34. Jul 25   11:48 Posted by Anonymous [report]

    Your thoughts on Regal please

35. Jul 25   11:48 Posted by Gregso [report]

    Yeh, Regal looking OK. Overdone probably with the Cadogan fiasco

36. Jul 25   11:47 Posted by Anonymous [report]

    Regal Petroleum rewcovering their poise- should doi guess after falling from £3 in about 5 weeks. Is is short covering , do you think. Are they oversold?

37. Jul 25   11:45 Posted by thomas [report]

    rahodeb - sorry , I meant strength through the trading session , it only tailed off at the close when the market sold off further.

38. Jul 25   11:42 Posted by rahodeb [report]

    Yahoo up 14c ??

39. Jul 25   11:41 Posted by thomas [report]

    Guys - any Idea why Yahoo was so strong last night ?

40. Jul 25   11:39 Posted by Carlomagno [report]

    “spending on consumer spending”

    Get that man an editor, quick!

41. Jul 25   11:37 Posted by Bohemia [report]

    Why on earth would Lehman upgrade Kingfisher?

42. Jul 25   11:36 Posted by Chrispy [report]

    The wife and eldest daughter were in Marks Marble Arch y’day……the bottom could be in.

43. Jul 25   11:34 Posted by rahodeb [report]

    @ Carlomagno - Careful I wouldn’t buy anything in this market !!

44. Jul 25   11:33 Posted by streaky [report]

    nothing wrong with an innocent punt now & again

45. Jul 25   11:32 Posted by Carlomagno [report]

    @rahodeb: I’ll buy that.

46. Jul 25   11:32 Posted by Monkey [report]

    blackheath_golddigger … it was a joke - I know it isn’t quoted - just a joke

47. Jul 25   11:31 Posted by PIOM [report]

    Whats happened to Aviva and Prudential over the last two days.

48. Jul 25   11:31 Posted by rahodeb [report]

    @Carlomagno - I think he means in Australasia

49. Jul 25   11:30 Posted by blackheath_golddigger [report]

    @monkey: waitrose share price??

50. Jul 25   11:30 Posted by jack [report]

    Re charge 1 - is this the first FSA case of ‘in-cider trading’?

51. Jul 25   11:29 Posted by Monkey [report]

    Liked the way Streaky tried to hide his face from photographers with a Waitrose bag … nice piece of free advertising. How is the stock doing?

52. Jul 25   11:29 Posted by Carlomagno [report]

    “NAB’s sizeable CDO exposure is unique.” How so?