Markets live chat transcript for the chat ending at 12:05 on 24 Jun 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH)
PM:
Okay
PM:
Hello
PM:
This is Markets Live
PM:
From FT Alphaville
PM:
Kicking myself this morning.
PM:
I forgot my sunglasses.
NH:
Oh, here we go.
NH:
Murphy has been going on about the fact that he’s at Wimbledon this afternoon since the moment he walked in this morning.
NH:
We were thinking of organising some sort of rain dance
PM:
Not just the tennis.
PM:
Got to go to lunch first.
PM:
Will have to sit in the back garden of San Lorenzo’s for a couple of hours first.
NH:
See what I mean?
PM:
Hat — sun (not tin)
PM:
Probably go for the CARPACCIO DI FILETTO to start, and then the usual.
NH:
Usual?
PM:
LINGUINE ALL’ARAGOSTA
PM:
Pasta with fresh scotch lobster, white wine and tomato
PM:
Washed down with a glass or two of Gavi di Gavi.
NH:
Bastard
PM:
Neil!
PM:
No profanities! Sets a bad example to our friends over on the right.
11:07AM
NH:
Guys
NH:
on IMG
NH:
that’s
Imagination Technologies Group (IMG:LSE): Last: 138.00, up 23.5 (+20.52%), High: 138.00, Low: 116.00, Volume: 266.72k
NH:
rumours that Apple is in the market buying stock
NH:
Intel increase to 16% yesterday
PM:
really?
NH:
Apple will get nervous about that
NH:
IMG’s IP being heavily uswed in the new iPhone 3G S
PM:
hmm
NH:
now
NH:
Saad have another chunk of stock
NH:
that could be on the market
NH:
around 7% I think
NH:
I can put up some analyst comment on the results later
NH:
IMG very interesting company
NH:
sort of mini ARm
PM:
indeed
NH:
in as much as its a chip designer
NH:
expertise in is graphics
NH:
we have a good piece in the paper earlier this week
NH:
magination’s graphic technology is regarded as being among the world’s most advanced and reliable for gadgets that rely on a high-quality video interface, such as smartphones, TVs and iPods.
Most graphics technology treat a screen as one piece of data, and as it becomes denser with more pixels, it requires more processing power and memory.
By contrast, Imagination’s technology in effect breaks down the screen into smaller pieces, which requires lower power and less memory.
More than 100 mobile handsets have incorporated Imagination’s technologies, including Nokia, Samsung, Sony Ericsson and Motorola, while Apple has taken the UK group’s designs for its iPods and the 3G iPhone will have Imagination-designed processors.
Intel is looking to break into mobile and TV markets. In the latter, Imagination expects to see a strong rise in royalty revenues this year after NEC, the Japanese group, deployed its licences in its global brand.
PM:
Arby — Apple do have a stake — but the speculation is that they will want a bigger one now that Intel have increased their interest…
NH:
Jeepers
NH:
IMG now up 30%
NH:
up 34.5p at 149p
PM:
Small cap corner arrived early today
PM:
But let’s come back to that
PM:
Hotairmail is telling us to close our short out
PM:
Eh?
PM:
NH:
No, that was Lehman Brothers selling yesterday
NH:
the admistrators in IMG
11:12AM
11:12AM
PM:
Come back to IMG
PM:
General market first
PM:
Rebooted the Reuters machine earlier cos we thought it was stuck.
PM:
Index hadn’t changed
PM:
Every one awaiting FOMC
NH:
FTSE 100 currently 7.5 points higher at 4,237
PM:
Where’s the recovery there?
PM:
Hotairmal, Pink Ted et al
PM:
This bear position is looking so so shrewd.
PM:
NH:
I know. I’m just glad we had nerves of steel.
PM:
The V recovery story has been abandoned.
PM:
Everyone is now talking about a “W”
NH:
But we’re for the lightening bolt.
NH:
Dug out the dshort.com chart earlier – Four Bad Bears
PM:
Worth pulling that up.
NH:
They map the 70s oil crisis and the tech crash – together with the current market – against the 30s depression.
NH:
You’ll see there that the recent delusional rally tripped us off the 30’s line and on to the 73 oil crisis line.
PM:
Neil’s looking for a year-end rally – but we are both agreed we are headed below 4000 first – even if we don’t retest the lows.
11:15AM
NH:
And welcome back Cityboy
NH:
good to have you back with us
NH:
again aplogies for the red card
NH:
that really should have gone to BullvsBears
11:16AM
NH:
some breaking news about the Toxic Pub Company
NH:
in spite of the cash call
NH:
the ratings agencies not impressed
NH:
RTRS-MOODY’S MAINTAINS PUNCH TAVERNS FINANCE B LIMITED RATINGS ON REVIEW FOR POSSIBLE DOWNGRADE
11:08 24Jun09 RTRS-Moody’s maintains Punch Taverns Finance B rtgs on review for cut
11:08 24Jun09 RTRS-Moody’s maintains Punch Taverns Finance B rtgs on review for cut
11:16AM
PM:
Other breaking news is this ECB funding line
PM:
unlimited one year money at 1%
PM:
The European Central Bank has pumped a record €442.2bn into the eurozone banking system in a first-ever offer of unlimited one-year funds as it battles continental Europe’s severe recession.
The results of the operation, part of ECB efforts to revive the eurozone economy by rejuvenating the financial system, highlighted expectations that liquidity will not be available again on such favourable conditions. The previous largest amount injected in a single ECB operation was €348.6bn in December 2007.
NH:
wow
PM:
Take up of 442bnm euros
NH:
442bn
PM:
That’s from the FT story
PM:
Actually, that fig is just and so towards the lower end of estimates
PM:
There were some wild suggestions that up to one trillion might have been requested
PM:
We’d better check libor later
NH:
(Taxloss, listen to TMS? Only thing I can suggest. No pics obviously)
NH:
and for those of you not bored with banks
NH:
some funny flashes coming over the Thomsonwire today
PM:
RTRS-UK TO PROPOSE BANKS SHOULD HAVE CAPITAL, LIQUIDITY REQUIREMENTS TO MATCH COMPLEXITY OF THEIR BUSINESS -SOURCE
PM:
RTRS-UK BANK CAPITAL, LIQUIDITY PROPOSALS TO COME NEXT WEEK -SOURCE
PM:
We assume those sources are the Treasury
PM:
Some sort of white or green paper out on July 1 i think
NH:
right
NH:
so that wasn’t from Pestowire
Top News from Top Sources. The BBC’s Business Editor, Robert Peston, has played in important role keeping the British public fully informed during these difficult times.
PM:
Nope
PM:
he’s writing on another topic today
NH:
yes, he has been talking to another of his top sources
NH:
see if you can guess who it is
NH:
The Bank of England would regain primary responsibility for regulating big banks and financial institutions of importance to the health of the economy under radical plans to overhaul financial regulation being drawn up by the Tories.
I’ve learned that the shadow chancellor, George Osborne, will overhaul in a fundamental way the Tripartite System created by Gordon Brown in 1997, which created the Financial Services Authority as the super-regulator for all financial institutions, with the Bank of England and the Treasury retaining a role in decisions affecting the stability of markets and the economy.
Mr Osborne believes the distribution of responsibilities between the three institutions has been blurred and inefficient. So as part his overhaul, the Bank of England would get back much of the regulatory and supervisory functions that Gordon Brown removed from it, when he was chancellor.
PM:
Been granted exclusive access to the Tory party or something
NH:
yes
NH:
could his source be er
NH:
Geroge Osbourne??
PM:
NH:
still interesting that he wants the Bank in charge
NH:
that will please Merv
NH:
right
NH:
I have the rest of that Reuters story now
NH:
LONDON, June 24 (Reuters) – Britain will next week propose more complicated banks should hold extra capital and liquidity to minimise the cost to the taxpayer if they go bust, a source familiar with a Treasury paper on the subject told Reuters.
The Treasury is expected to publish a paper next Wednesday setting out its thinking on the next steps in financial regulation following the worst international banking crisis in living memory, the source said.
The government has been forced to spend billions of pounds to bail out the country’s banks, making it the largest shareholder in a number of them.
Finance minister Alistair Darling said last week that something would have to change and banks could not go about their business as normal.
“The paper looks at the Special Resolution Regime and banks that are considered to big to fail,” the source told Reuters on Wednesday.
“Banks should have capital and liquidity requirements that match the complexity of the institution.”
The Treasury is expected to publish a paper next Wednesday setting out its thinking on the next steps in financial regulation following the worst international banking crisis in living memory, the source said.
The government has been forced to spend billions of pounds to bail out the country’s banks, making it the largest shareholder in a number of them.
Finance minister Alistair Darling said last week that something would have to change and banks could not go about their business as normal.
“The paper looks at the Special Resolution Regime and banks that are considered to big to fail,” the source told Reuters on Wednesday.
“Banks should have capital and liquidity requirements that match the complexity of the institution.”
NH:
so, one question springs to mind
PM:
what’s that?
NH:
how much capital will barclays have to hold?
NH:
it is a complex bank
NH:
about to get more complex thanks to the empire building activities of diamond bob
PM:
Brilliant expansion plans, you mean
NH:
sorry
NH:
not on message
Barclays PLC (BARC:LSE): Last: 270.00, up 10.95 (+4.23%), High: 272.15, Low: 261.00, Volume: 19.23m
PM:
Barc completely untouched by these regulatory noises
11:25AM
NH:
right more on IMG
NH:
hearing Apple have acquired stock at 150p via Goldmans
NH:
only a market rumour but still
11:25AM
PM:
so what’s moving out there?
NH:
at the risk of being abused by the readers
NH:
and told to try harder
NH:
pull our finger out etc
NH:
the answer is not much
PM:
NH:
the sun out is out
NH:
Wimbledon is on
NH:
and the market is going nowhere fast
PM:
yes, only the miners making any headway
PM:
especially Anglo
PM:
Anglo up 97 at 17.48
NH:
that’s interesting
NH:
because I am picking up some RAW
RAW is market chatter – information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.
PM:
NH:
well,
PM:
what you hearing
NH:
the talk is that Xstrata are going to make an announcement
NH:
to either increase their offer
NH:
which seems unlikely
NH:
or detail the terms of the offer that were turned down
NH:
and all their synergy projections
PM:
hmmm
PM:
a public bear hug then
NH:
yeah
NH:
put all of the detail out in the public arena
NH:
kick off a debate
NH:
and starting lobbying Anglo shareholders
PM:
Xstrata and Davis certainly need to do something
PM:
they look pretty flat footed at the moment
NH:
they do
NH:
and as we discussed yesterday
NH:
you have to think that Davis and his advisers have something else up their sleeve
PM:
such as an increased offer with a cash element from a friendly Chinese investor
NH:
11:29AM
NH:
Right readers want to talk about Addax
NH:
here’s what flashed up earlier
NH:
10:25 24Jun09 RTRS-ADDAX PETROLEUM ANNOUNCES C$52.80 PER SHARE CASH OFFER BY SINOPEC INTERNATIONAL PETROLEUM EXPLORATION AND PRODUCTION CORPORATION
10:27 24Jun09 RTRS-ADDAX PETROLEUM SAYS OFFER REPRESENTS A 47% PREMIUM TO THE CLOSING MARKET PRICE ON THE TSX OF THE ADDAX PETROLEUM COMMON SHARES
10:27 24Jun09 RTRS-ADDAX PETROLEUM CORP
AGREED TO PAY A BREAK-UP FEE OF C$300 MILLION
NH:
and here’s a bit more
NH:
on the deal
NH:
OG Holdings BV and Jean Claude Gandur, President and CEO of
Addax, have each entered into lock-up agreements with SIPC and have
agreed to tender their shares to the offer; Addax Petroleum’s other
senior officers and directors will also enter into lock-up agreements
Addax, have each entered into lock-up agreements with SIPC and have
agreed to tender their shares to the offer; Addax Petroleum’s other
senior officers and directors will also enter into lock-up agreements
NH:
* The total lock-up agreements represent approximately 38% of
outstanding Addax Petroleum common shares (on a fully-diluted basis)
* The total lock-up agreements represent approximately 38% of
outstanding Addax Petroleum common shares (on a fully-diluted basis)
NH:
Addax Petroleum’s President and CEO, Jean Claude Gandur: “We
are pleased that Sinopec has recognised the highly attractive asset
portfolio and exceptional team that we have assembled at Addax
Petroleum. The efforts and accomplishments that Addax Petroleum has
achieved thus far will be built on through increased investment in the
business and acceleration of development and exploration plans”
are pleased that Sinopec has recognised the highly attractive asset
portfolio and exceptional team that we have assembled at Addax
Petroleum. The efforts and accomplishments that Addax Petroleum has
achieved thus far will be built on through increased investment in the
business and acceleration of development and exploration plans”
NH:
If SIPC acquires not less than 66 2/3% of the outstanding
Addax Petroleum common shares under the Offer, SIPC will comply, or
cause Addax Petroleum to comply, with the terms of the 3.75% convertible
notes of Addax Petroleum due May 31, 2012
Addax Petroleum common shares under the Offer, SIPC will comply, or
cause Addax Petroleum to comply, with the terms of the 3.75% convertible
notes of Addax Petroleum due May 31, 2012
PM:
what’s the offer price in sterling
PM:
??
NH:
hang on
NH:
£27.86
NH:
by that’s a tourist rate
NH:
not sure what the spot rate is
PM:
NH:
shares trading at £26.30
NH:
at the moment
NH:
which is a little surprising
NH:
I thought there could be a bid battle for this
NH:
KNOC also said to be interested
NH:
they have hired Merrill Lynch
NH:
and have been in London working very hard
NH:
but
NH:
do they have the ammo to take on the Chinese?
PM:
hmm
PM:
(Taxloss — sadly Monkey is right. )
NH:
now, somewhat predictably that has got traders talking about some other deal situations in the sector
NH:
Namely that Centrica are set to offer 850p a share for Venture Production ahead of next month’s put-up or shut-up deadline
NH:
I must admit, I thought Centrica would shut up
NH:
disappear for six months or so and then come back and try and negotiate an agreed offer
NH:
but you never know
Venture Production (VPC:LSE): Last: 788.50, up 4 (+0.51%), High: 795.00, Low: 781.50, Volume: 223.58k
Centrica (CNA:LSE): Last: 224.75, down 5.5 (-2.39%), High: 230.75, Low: 224.75, Volume: 3.24m
NH:
Centrica are weak
NH:
so perhaps there is somethin gin this
PM:
okay — ta
11:35AM
NH:
right some people mentioned BAY
NH:
British Airways
NH:
some red RAW going around this morning
NH:
this is completed uncooked
NH:
still moooing
NH:
but here goes
NH:
rumours that they are working on a fund raisinig
NH:
cash call and convertible
PM:
This is simply on the back of the weekend stuff about the pension fund, surely
NH:
could be
NH:
but have a look at this
NH:
was sent it a little earlier
NH:
Been suggested that ..IBERIA / BA merger is a summer deal ..with a fundraising too .. Mkt would respond to that positively .. So I hear …
suggested to me from other HF’s that there are shorts out there .. BUT they maybe wrong .. generally people are nervous but all waiting to be LONG …A brave man buys some now ..look to add on any news or leakage .. clearly the mkt has been tested re a fundraising ..???
PM:
hmmm
PM:
very interesting
PM:
but would people back a BA rights issue when they still have no idea about the size of the hole in the pension fund??
NH:
fair point
NH:
but as I always say
NH:
investors gave Punch £375m
NH:
and if people are prepared to have a punt on a rank outsider like that
NH:
there’s hope for everyone
NH:
even Yell
NH:
and BA
PM:
BAY up 1p at 124.8 currently
NH:
right
NH:
one more bit of gossip
NH:
a bit of it was mentioned in the People Column this morning
NH:
but worth repeating
NH:
15 people have been sent home from icap with suspected swine flu. They’ve stepped things up there recently eg antibacterial soap all over the place etc!
NH:
David Cameron was in there today as well
NH:
that was yesterday obviously
NH:
apparently it was a temp with swine flu
PM:
NH:
come back from Mexico
NH:
now everyone at ICap has a face mask
PM:
So that will be an improvement
PM:
Scary dealing floor
NH:
money brokers
NH:
what was it you called them Paul
PM:
missing link in the financial system
NH:
very funny
NH:
11:41AM
PM:
what else
NH:
Credit Suisse – big call this morning
NH:
Buy UK commercial property.
NH:
And pay for that by selling UK retail.
NH:
You might think there is an inherent contradiction somewhere in that, but here’s are the arguments – from Andrew Garthwaite
PM:
Who is another one of our contributors to do rather well in the Extel awards last week.
NH:
Contributors?
PM:
Yeah, why not?
PM:
I didn’t say mr Garthwaite made his contributions willingly.
PM:
But he’s made them, none the less
NH:
In line with our real estate team.s view on the sector we raise our weighting on
UK commercial property (which in 2008 had been one of our biggest
underweights) from benchmark to overweight for the following reasons:
UK commercial property (which in 2008 had been one of our biggest
underweights) from benchmark to overweight for the following reasons:
NH:
We want to buy domestic UK. Economic momentum is better than any other
developed economy (in terms of PMI or the economic surprise indicator)
owing to more policy response (monetary/currency, banking, fiscal and QE).
■ Sterling is 11% cheap on PPP against the Euro and we think it could rally to
0.80 €/£.
developed economy (in terms of PMI or the economic surprise indicator)
owing to more policy response (monetary/currency, banking, fiscal and QE).
■ Sterling is 11% cheap on PPP against the Euro and we think it could rally to
0.80 €/£.
NH:
The gap between the index linked bond yield and the rental yield (IPD) is
close to an all time high at 6.3%. Commercial property is a real asset and
thus the appropriate risk free rate is indexed linked, not conventional gilts.
■ Commercial property is an inflation hedge and tends to be the best
performing sector if the cost of long-dated debt falls (debt is 60% of EV).
close to an all time high at 6.3%. Commercial property is a real asset and
thus the appropriate risk free rate is indexed linked, not conventional gilts.
■ Commercial property is an inflation hedge and tends to be the best
performing sector if the cost of long-dated debt falls (debt is 60% of EV).
NH:
The UK real estate sector has underperformed its US equivalent by 30%
since November 2008 and the price relative is close to its low.
■ Commercial property prices have already fallen 44% (and futures are pricing
in a further 13% decline) compared with a peak to trough decline of 27% in
the early 1990s. In euros, UK commercial property is already down 57%
from peak.
■ Property stocks are cheap on historic comparison (p/b and p/e relatives are
44% and 11% below their 20-year averages) though more neutral on our
models. We believe that the cap rate should be 3% to 3.5% above the gilt
yield (to reflect tenancy risk, obsolesce, SG&A less long term rental growth),
hence we target a cap rate of 7%. If rents fall another 10%, then stocks need
to trade in line with March 09 NAV to generate a 7% cap rate (in fact they
are on a 12% discount to March 09 NAV).
■ Our real estate team.s preferred plays are British Land and Hammerson.
since November 2008 and the price relative is close to its low.
■ Commercial property prices have already fallen 44% (and futures are pricing
in a further 13% decline) compared with a peak to trough decline of 27% in
the early 1990s. In euros, UK commercial property is already down 57%
from peak.
■ Property stocks are cheap on historic comparison (p/b and p/e relatives are
44% and 11% below their 20-year averages) though more neutral on our
models. We believe that the cap rate should be 3% to 3.5% above the gilt
yield (to reflect tenancy risk, obsolesce, SG&A less long term rental growth),
hence we target a cap rate of 7%. If rents fall another 10%, then stocks need
to trade in line with March 09 NAV to generate a 7% cap rate (in fact they
are on a 12% discount to March 09 NAV).
■ Our real estate team.s preferred plays are British Land and Hammerson.
PM:
And on retail?
NH:
hang on
NH:
We reduce weightings in UK retailing to pay for this. UK retailing is the only
sector to have outperformed prior to and since the market low in March. In the
early 1990s retailing outperformed by 30% as rates fell (this time it.s been 70%),
but the sector stopped outperforming once retail sales recovered! UK real
disposable income growth (4.6% in Q4) is set to slow, reflecting a sharp
slowdown in private sector wage growth, higher commodity prices, the end of
mortgage rate cuts, further declines in employment and only a half the required
adjustment in household savings. New floor space is still growing faster than
retail sales (1.6% versus 0.8%). Valuations are expensive on conventional
measures (P/E and DY relatives are one stdev expensive). We would rather
play the UK housing cycle (where starts are 40% below their average and
RICS buyers enquiries are close to an all-time high) via Barratt, Travis Perkins
and Kingfisher (DIY).
sector to have outperformed prior to and since the market low in March. In the
early 1990s retailing outperformed by 30% as rates fell (this time it.s been 70%),
but the sector stopped outperforming once retail sales recovered! UK real
disposable income growth (4.6% in Q4) is set to slow, reflecting a sharp
slowdown in private sector wage growth, higher commodity prices, the end of
mortgage rate cuts, further declines in employment and only a half the required
adjustment in household savings. New floor space is still growing faster than
retail sales (1.6% versus 0.8%). Valuations are expensive on conventional
measures (P/E and DY relatives are one stdev expensive). We would rather
play the UK housing cycle (where starts are 40% below their average and
RICS buyers enquiries are close to an all-time high) via Barratt, Travis Perkins
and Kingfisher (DIY).
PM:
brave man
NH:
yes
NH:
talking of retail
NH:
here’s a another brave call
NH:
I buyer of JJB
NH:
Citigroup
NH:
Rating raised to Buy (from Hold) — We argue that despite debt facility constraints,
execution risks and competitive pressure, the share price upside for success
outweighs the high risk. A recovered 7% EBIT margin could drive a share price four
times higher than today supported by a best-in-class management team.
execution risks and competitive pressure, the share price upside for success
outweighs the high risk. A recovered 7% EBIT margin could drive a share price four
times higher than today supported by a best-in-class management team.
NH:
We forecast a +20% LFL and +275bp gross margin recovery to Jan 2011 — With a return to normalised stock levels, higher quality merchandise, an assumed World
Cup 2010 LFL benefit of +5% and the new commercial strategy, we forecast a
+20% LFL and gross margin +275bp to Jan 2011.
Cup 2010 LFL benefit of +5% and the new commercial strategy, we forecast a
+20% LFL and gross margin +275bp to Jan 2011.
Investment requires strong belief in the skills of management — Management has a proven track record and experience in the areas where JJB needs the most
attention; initial comments suggest much of JJB’s systems & procedures are far
behind best practice and offer material cost saving upside risk.
NH:
Our central case is for additional debt or equity funding — The post August £25m
debt facility is undoubtedly a hurdle to overcome, but not insurmountable and we
believe extra funding (£10-20m) from either equity or extended debt facilities is
likely to provide the bridge to recovery.
debt facility is undoubtedly a hurdle to overcome, but not insurmountable and we
believe extra funding (£10-20m) from either equity or extended debt facilities is
likely to provide the bridge to recovery.
Valuation — Our 50p target price is based on a 2011E EV/sales multiple of 0.35x,
which equates to a 12.8x PE assuming a recovered 3.5% EBIT margin. With this
note we transfer coverage of JJB Sports Plc to Edward Wright.
11:45AM
NH:
Okay
NH:
we are going to do something we have not done for a while
NH:
and that’s look at Libor
NH:
after this ECB news
PM:
Euro LIBOR overnight zoomed from 0.68 to 1.275
PM:
That’s after the unlimited one year funding exercise earlier — at 1%
NH:
interesting move
PM:
Euro libor/OIS spread moved form 52 to 57
PM:
I find it quite strange tho. everyone knew that there was going to be heavy demand for this facility – and that it as being priced at 1% — so why hadnt that been priced into libor in advance?
PM:
I think we need specialist advice on this one
NH:
yeah
NH:
what about one of your money broker chums
NH:
they could help
NH:
they might be the missing link
NH:
but they know more than us
NH:
right
NH:
Izy has got some comment on the ECB news
NH:
from BarCap
NH:
The ECB’s one year refinancing, the first of its type, resulted in an allocation of €442bn. The ECB had of course pre-announced that all bids would be met, at the minimum bid rate of 1.0%. The bidding was on the high side of expectations (for example, a Reuters survey of dealers gave a median expectation of €300bn and a modal expectation of €400bn). Banks participating regularly in the ECB’s refinancing operations had to some degree anticipated today’s operation by bidding progressively less in prior weeks, but nonetheless today’s much larger than expected total bid has resulted in the banking sector having excess reserves of about €270bn
NH:
In turn this results from a record participation of banks in an LTRO – 1121 banks participated today (in contrast, the number of banks bidding in the weekly ops is generally in a range of 500-550, while in the longer-term refis the number of banks bidding is generally around just 100).
NH:
In turn this results from a record participation of banks in an LTRO – 1121 banks participated today (in contrast, the number of banks bidding in the weekly ops is generally in a range of 500-550, while in the longer-term refis the number of banks bidding is generally around just 100).
NH:
More likely, it will wait and see how much demand there is for next week MRO: the rate at the MRO is 1%, so naturally there should be a little bit less demand if EONIA trades much lower in the market (even if there is probably a core base of demand for the MRO). This would also have the benefit of leaving the market flush with liquidity at the half year-end. Over time the market will itself drain the reserves by bidding “negatively” at the ECB’s weekly and other longer term refinancing operations.
11:51AM
NH:
right
NH:
just been sent something truly disgusting
NH:
The Gigantor
PM:
this place
NH:
a challenge some City traders we know are taking on
NH:
Mario’s Cafe in Warren Street, London, do a big breakfast for £10.
Eat it all in 20 mins with no drink to wash it down with and you get it free.
Eat it all in 20 mins with no drink to wash it down with and you get it free.
It’s 10 eggs, 10 bacon, 10 sausage, 10 toast, 5 black puddings, tomatoes, beans and mushrooms.
No Chips
NH:
The breakfast packs in 5,000 calories – nearly twice the recommended daily in take for an average man..
A spokesman for the British Heart Foundation said: “Eating this amount in one sitting is not a good idea.”.
A spokesman for the British Heart Foundation said: “Eating this amount in one sitting is not a good idea.”.
PM:
Cant find a pic of that
PM:
But here’s an alternative
PM:
http://images.google.co.uk/imgres?imgurl=http://www.wuup.co.uk/wp-content/uploads/2009/01/dsc_0148.jpg&imgrefurl=http://www.wuup.co.uk/the-gigantor-wuup-version/&usg=__YWZUyXwTI22WmZBzyIOdHxtmceE=&h=432&w=645&sz=270&hl=en&start=1&um=1&tbnid=o8PbSW7kUtpFtM:&tbnh=92&tbnw=137&prev=/images%3Fq%3Dthe%2Bgigantor%26hl%3Den%26client%3Dfirefox-a%26rls%3Dorg.mozilla:en-GB:official%26sa%3DG%26um%3D1
PM:
sorry about that url
NH:
Fisty – don’t be so rude. some brokers we know are doing it. read before you comment
NH:
otherwise
NH:
you know what will happen
11:54AM
PM:
Are we done?
NH:
almost
NH:
quick visit to small cap corner
NH:
is needed
NH:
to witness the sad demise of another Aim company
NH:
actually companies
NH:
metals trader called Wogen
NH:
received an offer a few weeks back from a management buy group backed by a founder
NH:
anyway they have increased the offer to 41p this morning
NH:
which looks generous compared to where it was trading
NH:
but not so much when you reflect on the float price
PM:
go on
NH:
122p
PM:
of dear
NH:
yes
NH:
raised £20m
PM:
so on the face of it the company are playing tough
PM:
getting an increased bid
PM:
where n reality it was the management who slotted a load of stock at 122p
NH:
er, yes
PM:
and are now buying back the bear
NH:
nice work
NH:
oh and one more Aim blow up needs to be mentioned
NH:
a former plaything of a Robert Bonnier
NH:
who is the kiss of death for small cap companies
PM:
NH:
called Artilium
NH:
we never quite figured what it did
NH:
but it went to the moon
NH:
and then came back to earth
NH:
anyway shares suspended this morning
NH:
The Board of Artilium has requested the suspension of trading in the Company’s
shares with immediate effect. The suspension follows Board disagreements over
the appropriate financing strategy for the Company going forward. Due to the
current size of the Board (being the Chairman and the CEO) and the differences
in opinion between the Board members, the Company has requested that trading in
its shares be suspended pending the resolution of these issues. The Board is
hopeful of resolving these issues in a satisfactory manner however, if this does
not prove feasible, it is possible that the Company may no longer be regarded as
suitable for continued admission to AIM which may result in its securities being
cancelled from trading on AIM.
shares with immediate effect. The suspension follows Board disagreements over
the appropriate financing strategy for the Company going forward. Due to the
current size of the Board (being the Chairman and the CEO) and the differences
in opinion between the Board members, the Company has requested that trading in
its shares be suspended pending the resolution of these issues. The Board is
hopeful of resolving these issues in a satisfactory manner however, if this does
not prove feasible, it is possible that the Company may no longer be regarded as
suitable for continued admission to AIM which may result in its securities being
cancelled from trading on AIM.
NH:
Now you may recall that Bonnier faced a massive margin call in Artilium
NH:
that eventually resulted in his swanky Notting Hill Home being seized.
NH:
right
NH:
few more bits
NH:
people asking about Afren
NH:
Morgan Stanley upgrade
NH:
Overweight Afren (58p price target implies 41% upside) remains a compelling and unique growth
story based around West Africa with one of the most attractive risk-reward trade-offs in our E&P
coverage universe. With market concerns on financing alleviated by April’s equity placing and
higher oil prices, we expect a re-rating of the stock, and the recent 25% correction offers an
attractive entry point, in our view, relative to our NAV of 77p on the forward curve (the strong price
performance since February was off a low depressed base). Afren is one of the few names in our
coverage where we see the shares discounting well below core value. Put another way, we
estimate the shares are discounting c. $55/bbl on core ($45/bbl on a risked basis).
story based around West Africa with one of the most attractive risk-reward trade-offs in our E&P
coverage universe. With market concerns on financing alleviated by April’s equity placing and
higher oil prices, we expect a re-rating of the stock, and the recent 25% correction offers an
attractive entry point, in our view, relative to our NAV of 77p on the forward curve (the strong price
performance since February was off a low depressed base). Afren is one of the few names in our
coverage where we see the shares discounting well below core value. Put another way, we
estimate the shares are discounting c. $55/bbl on core ($45/bbl on a risked basis).
NH:
sorry bullish note
NH:
and also
NH:
another Kurdish oil
NH:
play
NH:
Gulf Keystone
NH:
had results this morning
NH:
shares up 21.7% to 14p
NH:
here’s some comment
NH:
actually I have lost it
NH:
but here’s whats happened
NH:
RBC believes that Gulf Keystone has made an encouraging start. Moreover, the insight provided today and the technical/drilling achievements to date should encourage shareholders, and could generate new interest in a stock that has lagged its Kurdistan focused-peers.
Unrisked they estimate that Shaikan-1 could add around 40p/share to their 23p/share (PV15%) NAV.
PM:
right — come on Neil — i have to get some sunscreen on
PM:
jb — im not sure recent rally was put down to short closing
PM:
Simply people rushing to get back in — thinking they were locked out
PM:
Anyway — i really do have to run
PM:
Footsie up 6.5 points at 4236
PM:
Everything on hold ahead of FOMC
NH:
indeed
NH:
well Paul
NH:
you’d better go
NH:
got the tickets
NH:
and your pass for the lounge?
PM:
Will all be sorted
PM:
thanks for joining us today
PM:
Thanks for all the comments
PM:
back tomorrow at 11.03 sharp
NH:
see you all then