Markets live chat transcript for the chat ending at 12:14 on 3 Jul 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM)
NH:
good morning and welcome to Markets Live
NH:
or what passes for it, the morning after the night before
NH:
it was Sam’s leaving party last night, which ended in the Connaught Hotel in Mayfair in the early hours of this morning
NH:
it’s the sort of place where the monsters of W1 hang out
NH:
and they are Sam’s new contact base
NH:
Izy and Tracy have managed to drag themselves in and they don’t look to bad
NH:
but still no sighting of Murph or Sam
NH:
however, we have had contact with Murph
NH:
I’m not being a complete slacker….
I’ve got a serious fraud problem with my bank card.
Seems about 5000 has been nicked.
NH:
personally I blame the builders’ merchants that Murph is constantly dealing with
NH:
after all identity theft is not the sort of things that happens at the Connaught
NH:
anyway we hope to get to the bottom of the mystery later on
NH:
and before anyone asks, I could make last night’s festivities in W1 due a prior commitment
NH:
right, on to the wider the market
NH:
well, there is absolutely nothing happening
NH:
FTSE 100 down just 4 points at 4,229
NH:
which given yesterday’s drubbing is a pretty pathetic dead cat bounce
NH:
not much price action at the stock specific level either
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.
NH:
the torpor has been caused by obviously the Independence Day holiday in the US
NH:
and Andy Murray at Wimbledon
NH:
who we have laid again (only in a betting sense you understand).
PM:
Bank have extended my overdraft till the end of the month while they sort it out
NH:
it’s not Barclays then?
PM:
four and half grand nicked
PM:
but i had to go thru every bloody transaction
PM:
Some operation called “PMC Consultant” hit me
PM:
First discovered something was wrong last night when i went to pay for ONE of the bills associated with Sam’s drinking binge
PM:
Later bills at the Connaught had to be picked up by Izzy’s fella
PM:
Which was very nice of him
PM:
Anyway — i tell you most uncomfortable thing
PM:
Well, after we had sorted it with the bank Kate (good wife) decided to go through six months of statements…
PM:
You do like the Ivy Club
PM:
Hilton — “hotel services” — 400 quid ????
NH:
you’ve not done a Jacki Smith have you?
PM:
I had to think for a mo
PM:
It was actually having to pick up the table wine bill for an FT table at some awards
PM:
Alliance of Online Publishers or somethign
NH:
can we transfer some funds from H&M Capital, a la Keydata.
PM:
Can you do that in hedge fund land?
NH:
oh yeah, Sam told me you can
PM:
The auditors wont notice
PM:
What’s wrong with the machine — prices havent changed since yesterday
PM:
Shall i reboot reuters?
NH:
it’s Independence Day
NH:
from yesterday’s losses
NH:
market now off 12 points
PM:
so what’s happening individual stock wise?
NH:
Barclays ticked higher ahead of an index re-weight
NH:
shares 4p better at 293p
NH:
as of Monday all those MCN notes convert and that means more shares in issue and a bigger weighting
NH:
here’s an explanation from MF Global
NH:
Heads Up on Barclays
Effective start of trading 6th July Barclays will see its FTSE shares in issue increased by 1,337m shares to 11,013m following the conversion of its Mandatory Conversion Notes.
See: http://www.ftse.com/tech_notices/2009/Q2/27517_20090626_Barclays_PLC.jsp
NH:
As at last night’ close this issuance would raise Barclays weighting in the FTSE All Share from 2.20% to 2.55% and in the FTSE 100 from 2.49% to 2.89%.
We estimate that around 18% of the UK market are index trackers or closet index trackers and they will need to buy around £700m of Barclays to maintain their index weighting.
If you would like to set your own index tracker weightings to see potential demand please use our attached Barclays ready reckoner spreadsheet
NH:
I have a copy of the spreadsheet
NH:
shout if u want to see it in the Long Room
NH:
and staying with the banks
NH:
there’s a pretty bullish piece out in Lloyds today
NH:
they have been looking at the impact of a stabilising house market on impairment charges at Lloyds
NH:
and estimate that if the bottom has been reached then it would mean £3bn being added to forecasts
NH:
Our estimates are based on falling house prices this year and next. Yet halfway through the year, house price indices are slightly higher. If the low point in house prices has passed it would reduce our estimates for risk assets and, more importantly, for mortgage loan impairment. Cumulatively over three years to 2011E, the lower loss given default would add £3bn to pre tax profits and some 7p to book value by December 2011E. Arguably conditions that are consistent with stable house prices would result in a lower default rate across retail loan books giving a further benefit to earnings, capital and book value.
Our view remains that house prices will decline but near term news flow may support a more optimistic outlook, of which, on our estimates, Lloyds is the major beneficiary in the sector. If the share price rises we would regard it as an opportunity to sell the shares.
NH:
Furthermore, a scenario in which house prices stabilise would suggest a more benign economic picture; for example unemployment might not rise through 2010E as we assume. Therefore under the scenario of stable house prices, the likelihood is that the probability of default would be lower also across the loan books, particularly retail, than we have in our estimates. We have a further £10bn of impairment arising over the three years to 2011E from retail unsecured loans.
NH:
We leave our estimates unchanged. Mortgage supply will remain constrained as the banking system reduces its reliance on wholesale funding, while the prospect of a rising tax take to service government borrowing adds further pressure to the outlook for arrears from a consumer sector with record levels of debt.
NH:
obviously there are a lot of bullish assumptions there
PM:
yeah, bullish — or delusional
PM:
Hanging it all on house prices seemingly stabilised
NH:
look, I think it is supposed to be a “what if”.
NH:
the sensitivities are interesting
PM:
Mentions of Bank of ireland over to the right
PM:
have any thoughts or commentary on that?
NH:
as noted the statement is nonsense
NH:
some of it makes no sense at all
NH:
I have a bit of comment
NH:
Bank of Ireland IMS statement - Ongoing margin pressure but improved capital ratios
In summary, the group indicates margin pressure owing to liability spreads, while loan loss impairments are largely as expected (and guided). The capital position has been boosted by the EUR 1bn of gains made from debt buyback, which are larger than expected, leading to an equity tier 1 ratio of 7.1%, which is positive in our view in light of the upcoming NAMA process. The bank indicates that progress on NAMA is being made with the legislation expected in the autumn. We retain our Neutral view of the shares in light of the significant uncertainty around the upcoming NAMA process for which little details are available at this stage.
NH:
The statement does not quantify the margin pressure, though similar to the UK banks we would expect severe margin contraction this year. RBS, at its recent IMS, indicated that it expected the group net interest margin to fall by 25% for the full year. NIM at the full year stage for BoI was 1.74%, including liability spread compression of 7bps, which is likely to increase significantly, in our view. This would be offset to some extent by balance sheet/treasury management, in our view. However, additionally, the margin for the year is likely to be further affected by the transfer of assets to the NAMA (in exchange for Irish govt bonds) expected to take place in the second half of the year. While details of this remain scarce at this stage, we would expect the NAMA transfer to be further margin negative as higher margin development/property assets are transferred.
Demand for new lending is indicated to be muted, leading to loans being flat on a constant currency basis. Deposits are indicated to be marginally lower compared with 31 Mar 2009 owing to intense deposit competition. Management also indicates margin pressure from wholesale funding, which included EUR 3bn of term funding raised in the quarter.
NH:
Management indicates a focus on cost saving measures, which are delivering benefits but the cost savings have not been quantified.
Management has highlighted earlier loan loss guidance of EUR 6bn for the three year period to Mar 2011 and indicated that economic trends driving the impairment charge are broadly as expected. We expect EUR 6.4bn over the same period, though this is likely to be significantly affected by the NAMA process.
The capital position has been boosted by the EUR 1bn of gains made from the debt buyback, which are larger than our earlier expectations of cEUR 700m. This is accretive to equity tier 1 by 95bps, higher than our assumption of 60bps. Pro-forma equity tier 1 at the end of March 2009 has increased to 7.1%, which is positive in our view, as it provides a buffer to absorb losses expected from the implementation of the NAMA. Proforma TBVPS at the end of March 2009 is EUR 4.3 factoring in the gains, although we see this declining in the current year as a result of losses as well as NAMA haircuts as below.
PM:
so there’s no RAW this morning
NH:
none, there’s no brokers around to talk to
NH:
although the Dana story gets colder and colder by the day
PM:
What do you call RAW that is actually dead
NH:
they seem to be intent on growing organically - that’s RWE
NH:
at least until they have completed their disposal programme and have some firepower to bid
NH:
and while the Germans would not comment specifically on Dana reiterated that a) following Essent any further acquisitions are likely to be relatively small and b) it is seeking to grow its equity gas business organically.
NH:
the view in the market from one analyst I have talked to is, that RWE would like to do Dana but just not yet
NH:
they are in the process of selling off around €1.7bn of assets over the next 18 months - which could then fund M&A
PM:
okay - thanks for that
NH:
just been sent a note
NH:
putting some of it up
NH:
There has been press speculation about a potential bid by RWE for Dana Petroleum. However until RWE has executed on its planned disposals (which at an estimated €1.7bn are relatively similar to Dana’s €1.9bn MV) we would view any material bid speculation by RWE as premature
NH:
Longer term we would view Dana as a good fit for RWE Dea. Dana has 2P reserves of 225mboe (post Bow Valley acquisition) and contingent resources of over 150mboe. Roughly 75% of its current production is from the North Sea with the remainder from Egypt. Strategically it would increase RWE’s 2P reserves from 465 to 690mboe and its contingent resources from 844 to over 1bn boe. There would also be a good geographic overlap with RWE and Dana already owning shared fields in the North Sea and both companies holding significant prospects in Egypt. Longer term, gas supplies from Egypt could be used in the Nabucco gas pipeline to Europe.
NH:
On a valuation basis we believe a deal also makes sense. Adjusting for the tax losses acquired as part of the Bow Valley acquisition, Dana is currently trading at an EV/2P of $11.7 – in line with recent UK transaction values $11.5 (Oilexco $11.8/Orange Nassau $11.4). Whilst the deal would represent a 2009 EV/EBITDA of 7.5x this should fall to 4.6x by 2011 based on Bloomberg consensus forecasts. RWE’s economic net debt : EBITDA ratio would increase from our 2010 forecast 2.7x (including expected disposals) to 2.9x – but still be below the ceiling 3x we believe the debt agencies may impose to achieve a single A debt rating.
NH:
However, despite these attractions, given the comments from management regarding an organic growth focus and until RWE has disposed of the majority of its American Water stake we do not anticipate any significant acquisitions.
PM:
Dana price is down 15p at 13.65
PM:
Any more news on the PVM front?
PM:
Javier was just over discussing it with Izy
PM:
But they’ve sloped off cos i was complaining about too many people making too much noise around us here when were trying do ML
PM:
For some reason, half the FT newsroom think the best place to hold their morning meetings is just alongside Alphaville
PM:
Late morning meetings, that is
NH:
we are trying to find out where Steve Perkins lives
PM:
Ah, he’s been confirmed as the alleged rogue, has he?
NH:
he has, by the company
NH:
if anyone knows him, his friends, address
PM:
And pic — we’d like a picture
NH:
actually Miles Johnson, one of our wonder grads,
NH:
went down to PVM this morning
NH:
to doorstep employees
NH:
he was there from 6.00am
NH:
no one wanted to speak
PM:
Thank you Fistynuts — but that’s not the Perkins we are looking for …
NH:
and Izy is set to publish a story on PVM
NH:
a research note that came out a day before the rouge trade
NH:
a move higher in the oil price
PM:
Clairvoyant research, clearly
NH:
we like that sort of stuff
PM:
(Yeah T4T1 — bu tthe underlying trades were rather larger…)
NH:
and it made waves in the market
PM:
Okay — now for something completely different
PM:
Something for Tolstoi
PM:
And our other Ukrainian readers
NH:
is this the stuff from Goldman Sachs
NH:
or the vampire squid as they are popularly known
PM:
Yes, specialist rsearch on the Hryvnia
PM:
Ukrainian of course
PM:
This is from Sergiy Verstyuk
PM:
We apply the approach of our GSDEER currency valuation model to estimate a ‘fair
value’ for the Ukrainian Hryvnia. Our calculations show that the UAH was slightly
‘undervalued’ in the first few years of this decade, but appeared in ‘overvaluation’
territory by 2007 — around the time when the current account switched from surplus to
deficit. The ‘fair value’ for the UAH has been weakening on the back of high CPI
inflation, but this dynamic has accelerated even more as Ukraine’s terms of trade and
output collapsed in 2008-2009. The consequent depreciation of the UAH has allowed it
merely to catch up with the unfavourable fundamentals. Most recently, some
macroeconomic adjustments, an improvement in emerging market sentiment and IMF
support have helped to reverse part of the depreciation. However, expectations of sticky
Ukrainian inflation and only a gradual recovery in global commodity demand warrant
further deterioration in the UAH’s ‘fair value’.
NH:
so the Hryvnia is not out of the woods yet?
PM:
Hryvnia — how is that pronounced, do you think
NH:
good piece from the Vampire Squid though
PM:
Don’t keep taunting GS — my supply of research will get cut off
NH:
actually what does a vampire squid look like>
NH:
The Vampire Squid (Vampyroteuthis infernalis, lit. “vampire squid from hell”) is a small, deep-sea cephalopod found throughout the temperate and tropical oceans of the world. Unique retractile sensory filaments justify the Vampire Squid’s placement in its own order: Vampyromorphida (formerly Vampyromorpha), though it shares similarities with both squid and octopuses. As a phylogenetic relict it is the only known surviving member of its order, first described and mistakenly identified as an octopus in 1903 by German teuthologist Carl Chun.
PM:
This is a ref to a wild conspiratorial piece in Rolling Stone magazine
PM:
They referred to GS being a “vampire squid wrapped around the face of humanity…”
NH:
apparently it is no threat to humans
NH:
At a maximum 30 cm (1 ft) in total length, the Vampire Squid is no threat to humans. Its 15 cm (6 inch) gelatinous body varies in color between velvety jet-black and pale reddish, depending on location and lighting conditions. A webbing of skin connects its eight arms, each lined with rows of fleshy spines or cirri; the inside of this “cloak” is black. Only the distal half (farthest from the body) of the arms have suckers. Its limpid, globular eyes; which appear red or blue, also depending on lighting; are proportionately the largest in the animal kingdom at 2.5 cm (1 inch) in diameter.[citation needed]
PM:
You’d still want to give it a wide berth tho, no?
NH:
but a jellyfish sounds more dangerous
PM:
Well, yes — i got stung by a one once. hurt like hell
PM:
Taxloss — thanks for that
PM:
Should have thought of Fowke
NH:
he is. Perkins is a person friend.
NH:
The passing of the man called “King of Pop” last week has created a run on his music, which is partly owned by Dutch state pension fund ABP. It is the world’s third-largest state pension fund after Japan’s and Norway’s.
“There are always certain songs that for whatever reason, in this case tragic, suddenly become very popular. The last fact is a basis for the investment,” an ABP spokesman said.
ABP bought two music catalogues last year, including the rights to some Michael Jackson songs like “You Are Not Alone”, according to the website of Imagem Music Group, which manages the music assets for ABP.
PM:
Any more reaction to the LSE?
NH:
share price has stabilised
NH:
down just 3.5p at 660p
PM:
There’s a negative note out of Citi
PM:
Tariff Reductions Unlikely To Stop Market Share Declines
Market share in UK Equities down to 68% at end June – BATS data shows that the
LSE’s market share in UK Equities continues to fall each month with the MTFs
(particularly Chi-X) continuing to build positive momentum.
Tariff reduction announcement (01 July) to take effect from Sep 09 – New CEO,
Xavier Rolet, is responding to this competitive threat as expected by reducing
fees. Overall, the cut is equivalent to about 10% for UK equity trading tariffs,
which is in line with our assumptions for FY2010. It still means though that the
MTFs will be significantly cheaper on execution fees alone.
Moving away from maker-taker model – It is somewhat surprising that the LSE is
abandoning the maker taker pricing schedule it only introduced in Sep 08.
Instead it will now charge both sides of the trade the same. This brings the
exchange into line with peers Deutsche Boerse, Euronext and BME but all the
competing MTFs have a maker-taker structure, rewarding liquidity providers with
rebates.
PM:
Both sides to be charged the same - Previously LSE charged just the aggressive
side of an order (taking liquidity away) between 0.45bps and 0.75bps of value,
depending on how much a client traded in a month. The passive side of the order
was rebated between 0 and 0.4bps but few clients qualified for much of these
rebates. Going forward the LSE is to charge both sides of the trade (buy and sell
orders) the same at between 0.2 and 0.45bps again depending upon value traded
in a month. The minimum charge is to be cut from 25p to 10p per side.
About 10% cut to average fee charged - The LSE detailed that if the tariff change
had been implemented between Jan-Mar 09, revenues would have been £3m
lower. This is about 10% of the fees made from trading of the UK order book. £3m
would be about a 2% hit to group-wide revenues. We understand that the average
tariff from Jan to Mar 09 would have been 0.82bps of value rather than 0.91bps.
120 job cuts detailed in the press – Separately, the LSE has detailed it is
undergoing a review of its cost base. Media reports have indicated 120 job cuts
are likely – equivalent to c.11% of combined UK and Italian workforce.
NH:
but look we should not too harsh on Rolet
NH:
in fact you should be one of his biggest fans
NH:
he wants to bring back market making
NH:
and do away with electronic trading
NH:
especially in small caps
PM:
Not doing away with electronic trading!
NH:
he is a fan of market making
NH:
particularly in the less liquid stocks
NH:
its by David Blackwell
NH:
Any fears that Aim might have to take a back seat following the change of regime at the London Stock Exchange were dispelled this week by Xavier Rolet.
The new chief executive this week travelled to Manchester to take part in a round table with several Aim companies and advisers. He left them in no doubt of the importance of the junior market for the LSE’s future. “We are very, very committed to Aim - it is a cornerstone of our primary brand,” he said.
He comes across as an enthusiast for small companies, which to some extent is based on personal experience. He has an interest in a small biotech company, so knows about building on university know-how, applying for grants, and struggling to raise further funds.
Mr Rolet believes that Aim, which continues London’s long tradition of market making, can help to bridge the funding gap. Brokers prepared to make markets are “very important, particularly at times of high stress such as now. They help to ensure minimum liquidity - and even if liquidity is too small, it’s still better than none at all.”
NH:
you used to be perhaps the biggest critic of SETS in the UK media
PM:
Well, it was the way they just kept rolling it out to every more illiquid stocks
PM:
Everyone told the LSE it was the wrong thing to to
PM:
So the LSE simply ignored the market
PM:
To the point where they did away from small cap liquidity
PM:
so what else is moving?
NH:
very good note out of Credit Suisse
NH:
and that’s good in my book
NH:
they reckon it is a no longer valid to hold a negative view on this sector
NH:
and it seems to have helped a couple of media names this morning
Reed Elsevier (REL:LSE): Last: 455.75, up 15.75 (+3.58%), High: 455.75, Low: 442.00, Volume: 2.41m
NH:
which has bounced back a little from yesterday’s drubbing
WPP (WPP:LSE): Last: 390.00, up 5.5 (+1.43%), High: 392.75, Low: 384.50, Volume: 3.02m
NH:
We like this: Credit Suisse
based on 5 factors. We now believe this negative view is no longer valid:
• 1. The sector has significantly underperformed. Relative to the market, Media is down 15% 2009 YTD and 24% since its
March peak. So our concern in January about the rally in Q4 last year being overdone (20% 3-month relative bounce) has
therefore been addressed.
NH:
• 2. Consensus earnings forecasts are more supportable. In January the market optimistically forecast 7% earnings growth in
2009 (Credit Suisse -1%). Forecasts have been revised down by 14ppts to -7% (Credit Suisse -9%) in the last 6 months, and
by 20% for stocks within our coverage. Our strategists’ concern about Media’s high exposure to discretionary spend in the
downturn has been accommodated; Media now ranks second on their industry score card.
NH:
• 3. Structural risk can be avoided by stock selection. We had been concerned that structural forces in the digital age had not
been factored into margin forecasts. However, since the earnings downgrades in 2009 H1, margins are lower overall.
Structural issues persist, but stock selection from less vulnerable sub-sectors, e.g., Professional Publishers and Agencies,
could mitigate risk. We see downside risk for Broadcasters and Consumer Publishers.
NH:
• 4. Valuations now at record lows. In January Media valuations were not cheap enough, in our view, with the sector trading at
a PER premium of 14%; it now trades at a 17% discount, a 10-year low, starkly contrasting with its 10-year average premium
of c50% (c30% ex TMT boom). Our HOLT analysis also portrays the sector in a more favourable light.
NH:
• 5. We are closer to recovery. The last two cycles have seen Media stocks experience strong rallies, particularly the Agencies,
whose share prices bounced between 80% and 102%. Rallies typically occurred up to three months ahead of their respective
GDP inflection, which at the start of the year was in our view at least 1-2 quarters away. Although green shoots have yet to
emerge, we now look two quarters closer and anecdotally are hearing of signs of stabilisation-a necessary first step in the
recovery process.
NH:
• Our preferred sub-sectors are Professional Publishers, Conglomerates and Agencies. Media valuations have converged as
the market has been indiscriminate in its sell-off and tarred all media with the same brush. We believe now is the time to
differentiate. In our report we identify the ‘fallen angels’ that we believe have been unfairly punished, in particular Reed (OP,
TP 680p), WPP (OP, TP 610p), Vivendi (OP, TP Eu26) and, to a lesser extent, Pearson (N, TP 630p) and Publicis (OP, TP
Eu29). These stocks have de-rated along with the sector to well below historical trading ranges, but in our opinion should
Pearson plc is the parent company of the Financial Times, publisher of FT Alphaville.
NH:
sorry missed the last bit of that notwe
NH:
suffer far less from the structural headwinds of digitisation. Downside risk is tempered by their already depressed valuations,
relative earnings resilience and greater size/liquidity. Conversely, on the upside, they should all participate in a market
recovery. We also highlight that the Agencies and Professional Publishers are exposed to the earlier cycle US GDP and as
such, historically have been the first sub-sectors to rally in an upturn. We stay cautious on ad-funded media owners, e.g., FTA
Broadcasters, whose 2009 H1 rally has been overdone in our view. We believe particularly vulnerable stocks are Mediaset
(Underperform, TP Eu3.10) and JCDecaux (Underperform, TP Eu7).
NH:
we have moved new printing presses
NH:
and also a new type face
NH:
the paper is smaller because
NH:
it is summer and the new presses are bedding in
NH:
paignation always falls in the summer
PM:
Always falls in recessions, also
NH:
what we need another financial crisis
NH:
that will get the page count up
NH:
right lots of people asking about the move by the Swedish central bank yesterday
PM:
Got any stuff on that?
PM:
Tracy had soemthing, no?
NH:
its from the Vampire Squid
NH:
Riksbank opts for fixed repo over bond purchases
Staying with the Swedish theme, the Riksbank surprised
us this week with its decision to squeeze an additional
25bp out of the repo rate. At its April meeting, when it
cut the repo rate to 0.5%, the Board voiced the concern
that any further reduction in the repo rate may prove
counter-productive (because it could damage money
market operations and – by reducing the profitability of
new lending – potentially inhibit the bank lending
channel). After exploring the issue further, the Riksbank
has now decided that 0.25% would be a more appropriate
floor for rates.
NH:
Having decided that unconventional policy measures
were also required, the Bank decided to offer long-term
fixed rate repos rather than opt for bond purchases,
against previous communication on the subject. At its last
meeting in April, the Riksbank stated that if “economic
activity deteriorates further…there is a possibility to
supplement the regular monetary policy with purchases
of government bonds and possibly also mortgage bonds.”
Given the success of the ECB fixed-term refinancing
operation, the Riksbank appears to have chosen to go
down this route instead.
NH:
The Riksbank’s growth forecast is gloomy (2009 GDP
revised down from -4.5% to -5.4%; 2010 broadly
unchanged at +1.4%) and it expects the repo rate to
remain unchanged at the current level until the end of
2010. We are more bullish on growth and more hawkish
on rates. Reflecting the easing in financial conditions, we
expect growth to bounce back reasonably sharply from
2009H2 onwards, and rates to start rising next summer.
NH:
actually VP, traffic has been good this week on ML
NH:
yesterday was pretty busy
NH:
for a hot day in July
PM:
(True Mervyn, but I reckon we should be nice to Goldman. everyone else beats em up)
NH:
some flashes coming up on Punch Taverns at the moment
NH:
as it is sometimes known
PM:
[11:58:49] Neil Hume: RTRS-PUNCH TAVERNS PLC - PUNCH SAYS RECEIVED 49 PCT VALID ACCEPTANCES FOR OPEN OFFER
11:57 03Jul09 RTRS-PUNCH TAVERNS PLC RAISED £375 MLN FROM AND OPEN OFFER OF NEW ORDINARY SHARES
11:58 03Jul09 RTRS-BRIEF-Punch Taverns raises 375 mln stg from placing, open offer
NH:
probably not as bad as it sounds
NH:
and I guess any unwanted stock
NH:
will be taking up the firm placees
NH:
they tend to underwrite these things
NH:
Punch just above the placing price of 100p
Punch Taverns (PUB:LSE): Last: 100.75, up 0.75 (+0.75%), High: 102.00, Low: 97.50, Volume: 610.09k
PM:
We were thinking of closing Alphaville up a little early today
PM:
Tracy is going to watch fireworks later
PM:
actually, she says no
NH:
they aren’t on my screen Garbitrage
Friends Provident (FP:LSE): Last: 62.60, down 5.49 (-8.06%), High: 67.00, Low: 62.30, Volume: 4.32m
NH:
not sure what your data provider is up to
NH:
FP have demerger their stake in F&C Asset Management this morning
NH:
which should create some volatility going foward
NH:
in fact there could be a large placing in F&C soon
NH:
but that stock is likely to be acquired by the trackers
NH:
there’s a big re-weight coming in F&C
NH:
F&C - update [FCAM.L FCAM LN] 69p In Line, Sector Neutral
The demerger of FP’s holding in F&C is expected to be effective this Friday, 3 July. We expect there to be a period of considerably higher than average volume (admittedly against a low base) as new shareholders address positions. While we are concerned about short term volatility in the share price, we believe that there is good longer term value in the stock, and would look to buy on any weakness resulting from the demerger process.
Demerger process
FP shareholders will receive 1 F&C share for each 10 FP shares owned, although for small shareholders with 2,500 or less FP shares (i.e. they would receive 250 or less F&C shares) there is a “cash out” option unless shareholders have actively elected to receive F&C shares. The Demerger Record Time is 6pm on 2 July 2009, with the crediting of F&C shares to CREST accounts by 8am on 6 July 2009.
NH:
FP will retain approximately 5.3% of F&C (~26.3m shares) which it will sell to cover the costs of the demerger process, while the Cash Out process could involve up to 8% of F&C’s shares (~39m shares). The sale of FP’s residual stake and the shares from the Cash Out procedure will be effected at the same time, which could be as early as Friday although no timetable has been set other than “as soon as reasonably practicable”.
Index weighting
The free float weighting of F&C will increase from 40% to 100%, with effect from the start of trading on 3 July 2009.
http://www.ftse.com/tech_notices/2009/Q2/27512_20090625_F_and_C_Asset_Management.jsp;jsessionid=ACC48FE72DF8CE4CD4F27708F209D55D.tc1
NH:
are ex-entitlement to the F&C stock
NH:
1 F&C share for each 10 FP shares
NH:
this sort of thing happens all the time
NH:
the data providers never up to speed
PM:
Quick market update..
NH:
pls remember to enter the sam jones mermorial competition
NH:
the post will be going up (again) very soon
NH:
winner to be announced on Monday
NH:
and there is an extra prize
NH:
in addition to the KBC t-shirt
NH:
I have some re-cycling bins to give away
PM:
??
NH:
perfect for a mini icebath
NH:
that’s the sort of freebies I get
PM:
These are very portable recycling bins
PM:
Neil’s got them next to his desk
NH:
well here’s the story
NH:
one day a PR called up
NH:
and said Straight PLC had won a big contract to provide new bins to Herts County Council
NH:
because we have got any
NH:
bins arrive in a massive box
PM:
Hmm — three bins here — like a russian doll, three sizes
PM:
A roll of biodegradable bin bags!
NH:
here’s the company who sent it
NH:
For the past 15 years, Straight has provided the timely delivery of waste and recycling products and services in accordance with our long-standing tradition of exceptionally high standards.
We work together with many local authorities, waste management companies and utilities supplying an extensive range of waste and recycling solutions. Our customers also include corporate businesses, facilities management companies, hospitals and educational facilities.
We are totally committed to our customers and through a development programme of continuous improvement we have maintained our position at the forefront of the waste and recycling industry. We have continued to grow pushing boundaries forward with innovative designs and quality products coupled with competitive prices and outstanding levels of customer service.
PM:
(Baz — Sam’s off to be hedge fund correspondent over in the financial services team)
NH:
whoever wins the Jones comp
NH:
will deffo get these bins
NH:
we have managed to drag that out for an hour
NH:
which is pretty impressive
NH:
given the dearth of material
PM:
Right 0– we really off this time
PM:
Thanks for bearing with us
PM:
We will be back, refreshed on Monday morning at 11am
