Markets Live chat transcript for the chat ending at 12:22 on 22 Jan 2010. Participants in this chat were: Bryce Elder Neil Hume, FT
BE
I’m in.
NH
Okay
NH
let’s try again
11:05AM
NH
hello
NH
good morning
NH
and welcome
NH
to Markets Live
NH
FT Alphaville’s
NH
Daily markets chit chat
NH
Bryce is here
BE
Hello.
NH
(Poppy – we are working on that)
NH
so how are the markets after Obama’s declaration of war on Wall Street
BE
Fragile
BE
nervous
BE
to be honest Obama’s move has raised many more questions that it has answered
BE
* Where do prop desks and marketing-making meet?
BE
* will this get through Congress?
BE
* will Goldman weasel out?
BE
* what does too big to fail actually mean?
BE
* Will banks be broken up?
BE
* where was Tim Geithner yesterday?
BE
* when will we get to see the small print?
NH
(Monkey – link does not work)
NH
so
NH
the FTSE 100
NH
currently down 21 points at 5,314
NH
and it’s the IDBs that are being hit hardest this morning
ICAP (IAP:LSE): Last: 397.00, down 28.7 (-6.74%), High: 424.80, Low: 396.90, Volume: 3.54m
Tullett Prebon (TLPR:LSE): Last: 311.00, down 18.9 (-5.73%), High: 324.00, Low: 310.00, Volume: 1.01m
NH
interesting
NH
and the view seems to be that both these IDBs do a lot of their business with prop desks
NH
so the Volcker Rule is bad
BE
Indeed.
BE
Panmure reckons ~20%
BE
Exposure to prop trading. According to ICAP, c20% of its trading volumes relate to bank prop trading, a figure that we suspect probably understates the actual significance of prop to ICAP’s flows. This is a hard number to pin down since a) banks do not separately report prop trading in their P&L statements, and b) ICAP merely facilitates banks’ dealing flows without needing to determine their clients’ agenda.
BE
Risks to ICAP. In our opinion, the greatest risks to ICAP’s trading volumes are in commodities, equity derivatives and structured credits which all together account for less than a quarter of total revenues. We are less concerned about ICAP’s high volume, flow products like rates, treasuries, spot FX, which account for the majority of trading volumes. We also see ICAP’s post trade and information businesses as likely beneficiaries of OTC structural reform – these businesses together account for nearly 10% of revenues, a proportion which is growing.
BE
but
NH
go on
BE
that’s not a figure ICAP recognise apparently
NH
oh dear
NH
sounds like Panmure might be issuing a correction on that
BE
quite possibly a clarification.
BE
anyway here is the house view
BE
from Merrill Lynch
BE
And notably lacking in specifics
BE
Another source of noise
This proposal certainly will add noise to ICAP’s performance. Our view at present
remains that the company is at the epicentre of systemically important markets,
with a business model which goes with the grain of current regulatory actions.
We think it has the flexibility to ride out any market structure changes which may
ensue. Investors, though, will once again have to brace themselves for more
swings in sentiment.
This proposal certainly will add noise to ICAP’s performance. Our view at present
remains that the company is at the epicentre of systemically important markets,
with a business model which goes with the grain of current regulatory actions.
We think it has the flexibility to ride out any market structure changes which may
ensue. Investors, though, will once again have to brace themselves for more
swings in sentiment.
BE
Clearly, this topic will be high on our watch list for the company. At present,
though, we maintain our pre-existing price objective and recommendation. IDBs
flourished during Glass-Steagall, and we believe that non bank owned prop shops
are increasingly important in the marketplace. We believe that ICAP’s positioning
as a global business active across multiple asset classes, and with leading edge
electronic connectivity and industry leading post trade operations, leaves it
extremely well placed to adapt to changing conditions. Ultimately, we believe that
trade occurs due to a mixture of customer need and profit opportunity. If you
assume neither of these is set to disappear, you would assume that a flexible,
market-leading business would continue to prosper.
though, we maintain our pre-existing price objective and recommendation. IDBs
flourished during Glass-Steagall, and we believe that non bank owned prop shops
are increasingly important in the marketplace. We believe that ICAP’s positioning
as a global business active across multiple asset classes, and with leading edge
electronic connectivity and industry leading post trade operations, leaves it
extremely well placed to adapt to changing conditions. Ultimately, we believe that
trade occurs due to a mixture of customer need and profit opportunity. If you
assume neither of these is set to disappear, you would assume that a flexible,
market-leading business would continue to prosper.
NH
hmmmm
NH
that market obviously disagrees with that view
NH
at the moment anyway
11:12AM
NH
LSE also down
London Stock Exchange Group (LSE:LSE): Last: 664.50, down 30 (-4.32%), High: 687.00, Low: 663.00, Volume: 631.64k
NH
will this really affect them?
NH
in the longer term?
BE
Dunno.
BE
People talking about 10% of trading from prop for the main exchanges.
BE
Eurex and ISE are both 10% apparently
BE
CME 14%
NH
OK
NH
thanks for that
11:13AM
NH
Right
NH
I am hearing that Icap are talking to Panmure about that 20% claim
NH
which is being described as wildly wrong
BE
It’s impossible for Icap to know how much comes from prop
NH
why’s that?
BE
Well, its clients don’t have to tell them.
NH
So we will never know then?
BE
Well, the banks are estimating between 2% and 7% of revenues aren’t they?
NH
what from prop trading
BE
Apart from The Squid, obviously, which is up to 10%
BE
So I guess the proportion for Icap, as a counterparty, would be broadly similar. Guess.
NH
anyway one imagines Michael Spencer is going to be none too happy with George Osborne, the shadow chancellor
BE
Why’s that?
NH
er this
NH
The UK opposition Conservative party is likely to follow the lead of Barack Obama , US president, and introduce similar trading curbs for banks based in the City if elected, George Osborne, the shadow chancellor, said Thursday night.
The Tories – widely expected to win a general election which is due within four months – fired a warning shot across the bows of financial institutions including Barclays, Deutsche Bank, Credit Suisse and UBS, saying the Obama crackdown on proprietary trading was “definitely something we think needs to be done”.
NH
might cause some tension within the party
NH
and Property Snake – we look forward to hearing you’re feedback from the party.
11:17AM
NH
Just going back to the Squid for a moment
NH
most popular story on Bloomie
NH
at the moment
NH
is Dick Bove saying
NH
GS will be the big winner from Vockler Rule
BE
Hm.
NH
The company has provided a very loose estimate that businesses deemed to be unacceptable for banks under President Obama’s philosophy may contribute 10% of the Goldman’s Sachs’ profit. This number clearly swings widely depending on how well trading is doing and how well other proprietary investments are doing.
NH
What is very clear, however, is that banks with large deposit bases have distinct advantages in certain sectors of the market. They can produce financial products at lower cost. If the banks are told they cannot use deposits in this fashion in the future, it “levels the playing field” for companies like Goldman Sachs. It should allow the company
NH
However, there is a good chance that this speech is a political ploy. Having lost in the Massachusetts’ Senate race the 60 person majority in the Senate, the President needed a new bargaining chip. He just created one.
NH
Conclusion
Investors are reacting sharply to the fourth quarter results at this company. However, all indicators – M&A, new financings, increasing volatility in a number of markets, growth in the money supply – all suggest that this quarter maybe a one-time event. The new proposals being put forth by the President are likely to benefit not harm the company. The adjustment of compensation lower leaves more money for shareholders. This is not a time to sell this stock it is a time to buy it.
Investors are reacting sharply to the fourth quarter results at this company. However, all indicators – M&A, new financings, increasing volatility in a number of markets, growth in the money supply – all suggest that this quarter maybe a one-time event. The new proposals being put forth by the President are likely to benefit not harm the company. The adjustment of compensation lower leaves more money for shareholders. This is not a time to sell this stock it is a time to buy it.
BE
But Bove has proved in the past to be something of a contrary indicator.
NH
Yes – he is almost as bad as me when it comes to sport.
NH
Reverse midas indicator
11:20AM
NH
Right
NH
shall we look at some more associated fall out
BE
Barclays, for example?
Barclays PLC (BARC:LSE): Last: 268.28, down 14.72 (-5.20%), High: 280.00, Low: 265.25, Volume: 68.78m
NH
crikey
NH
they really have taken a tumble haven’t they
BE
Although there was some chat in the market yesterday about a cash call.
BE
Which, in my opinion, would appear to be noise following the bearish notes from Credit Suisse and others earlier in the week
NH
true
NH
do we have any figs on how much of Barclays revenue comes from prop?
NH
post Lehman US
NH
it must be quite a bit
BE
I doubt even Barclays has that data.
NH
quite
NH
but one imagines this plays into Diamante Bob’s hands
NH
why not spin off Barc Cap now
NH
and base the thing in a Swiss canton??
NH
and leave a rump retail bank
BE
Because the rump retail bank’s their backstop if the capital runs dry?
NH
fair point
BE
Damn dangerous thing to do if we’re talking about a £17bn shortfall in regulatory capital.
NH
true
NH
anyway
NH
a few brokers saying Barclays oversold now
NH
not that it is helping
NH
here’s MF Global
NH
What Price Barclays Capital Now?
NH
We estimate that Barclays Capital is currently valued at 82p per Barclays’ share, equivalent to 2.5x 2011 earnings and 0.4x tangible equity. This appears to grossly exaggerate the impact of any regulatory change on the business.
BE
Those figures seem …. remarkable.
NH
We base our estimate on stripping out the valuation of the remainder of the group using our fully diluted sum-of-the-parts, equivalent to 9.8x 2011 and 1.3x book. We use an 11% cost of capital to discount the valuation to end 2010.
BE
2.5x?
NH
The valuation methodology uses tangible equity and assumes full conversion of warrants without additional profit for the group. In other words, we assume all surplus capital is consumed by regulatory change.
NH
This is a valuation comment, not one based on momentum or sentiment, both of which are heavily against the sector right now. Our workings are shown in the attached presentation.
BE
Good comment from Mike Trippitt at Oriel as well
NH
go on
BE
Inconsistent share price moves
The sell off in UK banks over the last week seems to be based on (i) a read across
from mixed US banking sector quarterly results (ii) potential capital raising resulting
from the BIS consultative documents on capital and liquidity. Barclays, a relative
winner under our BIS stress test (see our recent sector note – 15th January 2009)
has been the weakest link (-8%), with HSBC, potentially harder hit under the BIS
proposals retaining its fortress status, falling 4%. The BIS proposals are consultative,
banks have until April 16th to respond and implementation is scheduled for 2012.
More significantly, we do not know ultimately what the target core tier 1 ratio will be.
We also highlighted in the note that Barclays in our view had a superior range of
‘tactical options’ to replace ineligible core tier 1 under the BIS proposals.
The sell off in UK banks over the last week seems to be based on (i) a read across
from mixed US banking sector quarterly results (ii) potential capital raising resulting
from the BIS consultative documents on capital and liquidity. Barclays, a relative
winner under our BIS stress test (see our recent sector note – 15th January 2009)
has been the weakest link (-8%), with HSBC, potentially harder hit under the BIS
proposals retaining its fortress status, falling 4%. The BIS proposals are consultative,
banks have until April 16th to respond and implementation is scheduled for 2012.
More significantly, we do not know ultimately what the target core tier 1 ratio will be.
We also highlighted in the note that Barclays in our view had a superior range of
‘tactical options’ to replace ineligible core tier 1 under the BIS proposals.
BE
What else could be causing the Barclays underperformance?
Aside from the pure arithmetic consequences of increased capital requirements it
seems clear regulators and policy makers are, at best, forcing tougher capital
requirements for I-Banks under a Living Wills arrangement, or in the extreme case,
forcing a Glass-Steagall re-enactment. The recent restructuring at Barclays, where
Barclays Commercial was moved alongside Barclays Capital to form Corporate and
Investment Banking, seems to follow the demerger agenda.
Aside from the pure arithmetic consequences of increased capital requirements it
seems clear regulators and policy makers are, at best, forcing tougher capital
requirements for I-Banks under a Living Wills arrangement, or in the extreme case,
forcing a Glass-Steagall re-enactment. The recent restructuring at Barclays, where
Barclays Commercial was moved alongside Barclays Capital to form Corporate and
Investment Banking, seems to follow the demerger agenda.
BE
Demerger of Global Retail and Corporate & Investment Banking?
We set out in this note scenarios included in the recent sector note evaluating (i)
alternative risk weightings for Barclays Capital (according to Market risk and
Counterparty risk) and (ii) alternative core tier 1 targets for the newly formed
Corporate and Investment Banking (CIB) business, assuming a doubling of market
risk assets (scheduled for 2011) and a substantial increase in Counterparty risk
assets. The analysis is based on a distribution of risk assets by business and by risk
category which is not publicly available.
We set out in this note scenarios included in the recent sector note evaluating (i)
alternative risk weightings for Barclays Capital (according to Market risk and
Counterparty risk) and (ii) alternative core tier 1 targets for the newly formed
Corporate and Investment Banking (CIB) business, assuming a doubling of market
risk assets (scheduled for 2011) and a substantial increase in Counterparty risk
assets. The analysis is based on a distribution of risk assets by business and by risk
category which is not publicly available.
BE
Potential capital requirements
Goldman Sachs ended 2009 with a core tier 1 ratio (Basel 1) of 12.2%. Assuming an
11.5% core tier 1 ratio for Barclays Capital we estimate an additional £12bn of capital
would be required, leading to a CIB core tier 1 ratio of 10.7% and a Group ratio of
9.8%. Assuming a capital raising at the 230p level and applying a US Investment
Bank style multiple (c.1.6x) to the enlarged CIB capital base would value CIB at
around 350p per share. The Barclays Commercial business would provide a source
for deposits and we assume a strong capital base would attract further liquidity. Such
a scenario would put the future of the Global Retail Banking business under the
spotlight, but investors shouldn’t worry for now as it appears to be in the current
valuation for free.
Goldman Sachs ended 2009 with a core tier 1 ratio (Basel 1) of 12.2%. Assuming an
11.5% core tier 1 ratio for Barclays Capital we estimate an additional £12bn of capital
would be required, leading to a CIB core tier 1 ratio of 10.7% and a Group ratio of
9.8%. Assuming a capital raising at the 230p level and applying a US Investment
Bank style multiple (c.1.6x) to the enlarged CIB capital base would value CIB at
around 350p per share. The Barclays Commercial business would provide a source
for deposits and we assume a strong capital base would attract further liquidity. Such
a scenario would put the future of the Global Retail Banking business under the
spotlight, but investors shouldn’t worry for now as it appears to be in the current
valuation for free.
NH
thanks for that
NH
not helping Barclays
Barclays PLC (BARC:LSE): Last: 266.50, down 16.5 (-5.83%), High: 280.00, Low: 265.25, Volume: 70.05m
NH
rest of the sector also selling off
Royal Bank of Scotland Group (RBS:LSE): Last: 33.39, down 1.93 (-5.46%), High: 35.36, Low: 33.00, Volume: 85.85m
Lloyds Banking Group (LLOY:LSE): Last: 52.35, down 0.95 (-1.78%), High: 54.52, Low: 51.76, Volume: 153.52m
NH
and
NH
the market also falling
NH
off 35 points at 5,300
NH
all the gains for the year gone
NH
(BMB)
NH
and what did that Merrill Lynch fund manager survey says this week?
BE
Go on – remind us then.
NH
hang on Notes Problem
NH
got it
NH
For the first time since January 2006 the survey shows investors are taking above average risk, relative to their benchmark. A net 2 percent is taking “higher than normal” risk, compared with a net 7 percent taking “below normal risk” in December. These figures follow several months of investors displaying optimism about the economy but maintaining a more cautious risk and investment profile.
NH
Average cash balances have fallen to 3.4 percent, the lowest reading since mid 2007 and down significantly from 4.0 percent in December. Appetite for equities is strong. A net 52 percent of asset allocators are overweight equities, up sharply from a net 37 percent in December.
NH
Fewer investors are protecting themselves against a fall in equities. A net 55 percent have no protection against a fall in the next three months, compared with a net 48 percent in December. Investors have been moving into cyclical stocks, are positive about profits and are urging management teams to invest in growth.
BE
MLFM survey: the classic contrary indicator.
NH
it would seem so
11:31AM
NH
Okay we are going to pause for a moment
NH
Stacy has just brough in some chocolate brownies
NH
and they are huge
NH
the size of a brick
NH
So bear with us
NH
while we stuff our faces
BE
GE flashes versus chocolate brownies ……..
BE
Hm.
BE
I’ll try and address both
BE
*GE 4Q EPS 28C VS EST. 26C :GE US
BE
*GE 4Q REVENUE $41.4B VS EST. $39.8B
BE
*GE SAYS COMPANY’S ‘ENVIRONMENT HAS IMPROVED’
BE
And just before we leave Wall Street, Citi’s giving JP Morgan a push this morning, which I suspect may get a bit of attention
BE
Here’s the summary
BE
Upgrading JPM to Buy — Year to date, JPM shares have underperformed
(down 3% vs BKX up 11%), and we view current levels as presenting an
excellent entry point and are upgrading JPM from Hold to Buy with a $48
target price. JPM shares fell 6.6% yesterday on news of the Administration’s
proposal to restrict bank prop trading, which we believe would have a limited
2% impact on normalized EPS from assuming forced divestiture of private
equity. The other risk is impact of “size limits”, but we assign a very low
probability that JPM will be forced to downsize its balance sheet given impact
on credit availability.
(down 3% vs BKX up 11%), and we view current levels as presenting an
excellent entry point and are upgrading JPM from Hold to Buy with a $48
target price. JPM shares fell 6.6% yesterday on news of the Administration’s
proposal to restrict bank prop trading, which we believe would have a limited
2% impact on normalized EPS from assuming forced divestiture of private
equity. The other risk is impact of “size limits”, but we assign a very low
probability that JPM will be forced to downsize its balance sheet given impact
on credit availability.
11:34AM
NH
yum. that was lovely. don’t think I will have room for fish & chips & mushy peas in the FT canteen this lunchtime.
NH
Right
NH
(wiping away some crumbs)
NH
where next
NH
big print just gone through in Petra Diamonds
NH
for small cap watchers
NH
PETRA DIAMONDS….20m PDL just printed at 42p…… tradng 58-60!!!
Petra Diamonds (PDL:LSE): Last: 57.00, down 2 (-3.39%), High: 59.50, Low: 57.00, Volume: 20.25m
11:35AM
NH
Okay Manu asks about
NH
GCWLN
BE
?
NH
Gold Company With Long Name
BE
Ah.
BE
You mean ….
Petropavlovsk (POG:LSE): Last: 978.50, down 62.5 (-6.00%), High: 1,015, Low: 950.00, Volume: 3.55m
NH
indeed
NH
So good trading update from GCWLN yesterday
NH
and news of a dividend
NH
In light of the excellent preliminary trading results the Board has declared an interim dividend of £0.07 per share payable on 30 March 2010 to shareholders on the register on 26 February 2010. No final dividend will be paid but in future years the Board expects to pay both interim and final dividends
NH
and this morning
NH
we get news of a convertible bond issue
NH
here are the highlights
NH
via Investec
NH
POG has announced a convertible bond issue to raise US$300m at 4% over a
five year term to 2015 with a potential over-allotment of US$50m. The
conversion premium is likely to be between 30% and 35% to the VWAP
between launch and pricing. POG will have the option to call the bonds from 2
years after settlement until maturity.
five year term to 2015 with a potential over-allotment of US$50m. The
conversion premium is likely to be between 30% and 35% to the VWAP
between launch and pricing. POG will have the option to call the bonds from 2
years after settlement until maturity.
NH
This fund raising is in line with management’s strategy of ending its reliance on
higher cost, short term debt facilities from Russia, replacing them with longer
term, lower cost, international facilities. Given the group’s current planned
development schedule and its level of free cashflow from 2011 (FCF US$404m
FY11E), we would question the scale of the fund raising unless further
acquisitions are planned or the company chooses to fund a greater proportion of
its iron ore projects itself rather than relying on funding from the Chinese XY
group.
higher cost, short term debt facilities from Russia, replacing them with longer
term, lower cost, international facilities. Given the group’s current planned
development schedule and its level of free cashflow from 2011 (FCF US$404m
FY11E), we would question the scale of the fund raising unless further
acquisitions are planned or the company chooses to fund a greater proportion of
its iron ore projects itself rather than relying on funding from the Chinese XY
group.
NH
Although we recognise that there is likely to be weakness in the price of the
equity whilst the convertible pricing is determined, we restate our Buy
recommendation and unchanged target price of 1339p on a 12 month view. This
is based on 1.5x of our NPV estimate for the company’s gold mining assets plus
0.5x our NPV estimate for the company’s undeveloped iron ore assets (we
continue to apply a WACC of 10% in common with our methodology for the
other gold miners we cover).
equity whilst the convertible pricing is determined, we restate our Buy
recommendation and unchanged target price of 1339p on a 12 month view. This
is based on 1.5x of our NPV estimate for the company’s gold mining assets plus
0.5x our NPV estimate for the company’s undeveloped iron ore assets (we
continue to apply a WACC of 10% in common with our methodology for the
other gold miners we cover).
NH
Now paying a divi one day
NH
and doing a CB next is certainly odd
BE
That’s putting it mildly. I can think of stronger words than “odd”.
NH
but also recall
NH
GCWLN had to buy its subsidiary Aricom
NH
a while back
NH
(LYO – yes good spot)
NH
because it needed cash to buy back a CB
BE
Yes, of course.
NH
and now
NH
it has issued another CB
NH
and you have to wonder why
NH
if everything is going so well
NH
and all of this comes on top of that director selling stock
NH
after the pre-Xmas profit warning
NH
but get a pre-profit warning VWAP price
NH
which was a fancy bit of footwork
BE
Hmmmm
BE
they really don’t do themselves any favours to they?
NH
No
NH
and what is this cash needed for??
BE
Hang on – we’ve got the pricing through
NH
Okay
BE
CONVERSION PRICE HAS BEEN SET AT £12.9345
BE
Premium of 32.5%
BE
Anyway, the cash is needed for …… um ……………
BE
General purposes.
NH
right
NH
just hearing a lot of investors furious about this
NH
not mention in yesterday’s statement of needing cash
NH
yet today they raise $300m
NH
seems the whole issue has been underwritten by JP Morgan Asset Management
NH
and Blackrock
NH
and the company are spinning a line
NH
that the cash is needed for upcoming deals
NH
with Gazprom
NH
They are raising the bond because they can – cheap money and long term (they will not take up the bank facility they negotiated in December). Two objectives – one is to lock in cheap long term money to avoid any repeat of the credit crunch pain they faced last year. Second is to have cash ready for a Gazprom deal. Nod and a wink that there are several deals on the table with Gazprom and this is the primary use of the money but they can’t really give more details yet. So another example of a good deal that is poorly communicated and has a negative short term response – this is a good buy I think when the market gets over today and thinks about the implications of this cash opportunity.
NH
that’s a bit of broker feedback
BE
“another example of a good deal that is poorly communicated”?
BE
Hm. Not sure about that.
11:43AM
NH
Okay
NH
market update
BE
FTSE’s down 45 at 5290
BE
Barc’s getting crushed
Barclays PLC (BARC:LSE): Last: 264.70, down 18.3 (-6.47%), High: 280.00, Low: 263.83, Volume: 75.60m
Royal Bank of Scotland Group (RBS:LSE): Last: 32.35, down 2.97 (-8.41%), High: 35.36, Low: 32.35, Volume: 93.01m
NH
that’s delayed
NH
they are both off 7.5% now
NH
as is Icap
NH
getting crushed
11:44AM
NH
Ok
NH
some more on Petra
NH
Large block of 20m shares traded at 42p against a market price of 57p. No idea by whom. Presumably related to the Saad stake. Rumours of several large trades going on at the moment
NH
and some just pointed out
NH
that the Blackrock mining fund
NH
backing the GCWLN CB issue
NH
is run by the son of Peter Hambro
NH
Evy Hambro
NH
funny old world
BE
How cozy.
11:45AM
BE
Since you mention the miners
NH
FTSE off 50 pointws now
BE
(Lots of people taking about FTSE going through a support level …
BE
no consensus on what the support level was though. Bloody chartists.)
NH
FTSE 100 off 60 points now
NH
NH
get em on
BE
Anyway, any more feedback on this Aussie national resource rent thing?
NH
well
NH
the view is unaimous
NH
it won’t happen
NH
not a cat in hells chance of getting through
NH
apparently
NH
this is from Goldman
NH
*BHP/RIO on the subject of taxes: We think the story about Aussie gov
taxing mining companies is extremely unlikely for 3 reasons. 1) At
present each of the individual states can set their own royalty rates
and can also negotiate deals. They do use this power competitively and
try to attract investment dollars into their state vs one of the others
2) State royalties are an independent revenue stream that gives states
more freedom in determining what they spend money on (why would WA or
Queensland agree to that?) and 3) In order to pass any such proposal,
all states would have to agree by law….
taxing mining companies is extremely unlikely for 3 reasons. 1) At
present each of the individual states can set their own royalty rates
and can also negotiate deals. They do use this power competitively and
try to attract investment dollars into their state vs one of the others
2) State royalties are an independent revenue stream that gives states
more freedom in determining what they spend money on (why would WA or
Queensland agree to that?) and 3) In order to pass any such proposal,
all states would have to agree by law….
NH
but if it does
NH
here’s who it would affect
NH
In order of companies with most exposure to Aus: BHP Billiton and Rio
Tinto (approx 80% of EBIT). Xstrata (47%). Nyrstar (43%), Goldfields
(16%), Anglo American (12%) and Harmony (3%.).
In order of companies with most exposure to Aus: BHP Billiton and Rio
Tinto (approx 80% of EBIT). Xstrata (47%). Nyrstar (43%), Goldfields
(16%), Anglo American (12%) and Harmony (3%.).
BE
Hm
BE
Miners are following the market down at the moment.
Xstrata (XTA:LSE): Last: 1,089, down 10.5 (-0.96%), High: 1,116, Low: 1,078, Volume: 6.73m
BHP Billiton (BLT:LSE): Last: 1,923, down 19.5 (-1.00%), High: 2,002, Low: 1,918, Volume: 4.76m
Anglo American PLC (AAL:LSE): Last: 2,500, up 11.5 (+0.46%), High: 2,529, Low: 2,462, Volume: 3.46m
NH
(james we are not muppet investors. we use Reuters with a live feed)
BE
(NH: steady ……..)
NH
Right
NH
need to tighten the chin strap
NH
FTSE off 63 points
NH
NH
barclays off 8.4%
NH
RBS 8%
NH
Icap almost 8%
NH
LSE getting smashed up too
NH
off 5%
NH
Barc now trade at 259p
11:51AM
NH
Ok
NH
where now
NH
Anything you want to look at Bryce
NH
Market off 75 points now
NH
Hang on
NH
Our Real Tin Hat is coming out
NH
Jamie Chisholm our global markets comment guy
NH
has got it on
NH
I have been given a yellow hard hat
BE
Neil is wearing the safety helmet. I may twitpic it.
NH
(james – goodbye)
BE
Aha – SMI’s uploading at the moment.
NH
ZAP
Warning to rude and abusive commenters – your ability to comment will be terminated immediately and permanently, without warning. Henceforth, FTAlphaville has instituted a One Strike and You Are Out policy. We’ve had enough. We are going to clean up these pixels once and for all.
NH
Bryce
NH
what did you want to look at
NH
(FTSE off 80 points)
BE
Well, if only to provide a distraction from the plunge
BE
Can I do some geeky stuff?
NH
(Barc off 9.5%)
NH
sure
NH
go ahead
BE
Well, I think we should look at BT’s fat-pipe broadband pricing
NH
sounds thrilling
BE
It is, for some people.
BE
They’ve priced their “Infinity” 40meg fibre at more or less the same as DSL
NH
translate pls
BE
Well, it’s about four times as fast to download
BE
And it costs £19.99 a month with 2mb upload speed and a 20 gig limit
BE
Rising to £24.99 for 10mb upload speed and “unlimited” useage
NH
wow
BE
That’s up to £8 cheaper than Virgin’s fat offer, which only does a 1.5meg upload rate
NH
Who cares about upload rates? File sharers?
BE
Yes. Them.
BE
But decent upload speeds also open up things like home CCTV and online backup, which are all handy products to cross sell
BE
Anyway, this is what it’s done this to Virgin shares
Virgin Media (VMED:LSE): Last: 980.50, down 49.5 (-4.81%), Volume: 0.00
NH
crikey
NH
but the question is?
NH
when can I get this service
NH
when will it be rolled out?
BE
That’s one of the issues.
BE
it’s worth highlighting that Virgin’s got more fibre going to people’s houses
BE
BT is expecting to reach only 4m homes and businesses by the end of this year, and 10m by the time the Olympics start
BE
Which is approximately a third of Virgin’s current network
NH
Any comment?
BE
Hang on ……..
BE
(Plastic) tin hat live
BE
Anyway – back to telecoms. Here’s Deutsche
BE
This announcement substantially boosts BT’s competitive position in broadband vs competitors TalkTalk, Sky and Virgin Media and could start to see BT win back market share (or at least not lose share). Announcement is positive and could be compounded if Ofcom force Sky to provide sports content to BT at cheap rates (end March announcement). At the moment only a limited number of customers will be able to avail of superfast but rollout is expected to be quick and will reach 4m homes and businesses at end-2010 and 10m by summer 2012. Superfast roll-out will likely substantially correspond to Virgin Media franchise areas so investors may feel that competitive risk for VM is increasing. Sky and TalkTalk will have to pay BT more money than they do today for LLU in order to offer similar which could see a margin squeeze as BT’s pricing umbrella isn’t moving up. Key for estimates will be any competitive response. TP 175p.
BE
Whereas UBS worries that BT might be shooting itself in the foot.
BE
The offer signals BT’s determination to regain lost urban subs. But does it risk pushing the UK unbundlers too far, especially given BT’s low share?
It may be a long time before BT can market nationally, while DOCSIS 3.0 will not stand still. BT double-play is aggressive, but BT fibre triple-play prices (if in line with DSL) will be at a premium for weaker TV product in our view. We have mild Virgin Media top line growth of 1-2%.
BE
Carphone Warehouse and Sky. Has BT just unbundled a monster?
For unbundlers, BT Retail pricing is a lower than expected ceiling, while the removal of LLU for fibre customers raises costs by nearly £9 pcm. Sky and Carphone may just pass this on, cutting their discount to BT. But they may not. Their large market share relative to BT (36% combined vs BT’s 27%) means a formidable lobby. Instead the two could partner, approach Virgin for a wholesale deal or go it alone. Has BT just risked losing its largest Openreach customers?
For unbundlers, BT Retail pricing is a lower than expected ceiling, while the removal of LLU for fibre customers raises costs by nearly £9 pcm. Sky and Carphone may just pass this on, cutting their discount to BT. But they may not. Their large market share relative to BT (36% combined vs BT’s 27%) means a formidable lobby. Instead the two could partner, approach Virgin for a wholesale deal or go it alone. Has BT just risked losing its largest Openreach customers?
The end of cosy UK price rises, Ofcom and Canvas now a focus
UK operators may now demand answers from Ofcom. We also wait for Canvas.
NH
Right. What’s DOCSIS 3.0?
BE
Um … I think it’s the system standard for cable broadcasting
NH
(Loran – Yellow)
NH
And what’s Canvas?
BE
Um … I think it’s the BBC’s internet broadcasting plan.
BE
I did warn you this was nerdy stuff.
11:59AM
NH
market update
NH
recovery
NH
FTSE ‘only’ off 70 points now
NH
Barc now down 20p at 262p
NH
pity
NH
It was a bit like the old days for a while
BE
We’ve still got to deal with the US waking up.
BE
Close eye on futures from here.
NH
yes
NH
now off 64
NH
looks like I might have fixed the market
12:01PM
NH
Right
NH
it is passed midday
NH
and still a few things to cover
NH
a bit of Friday 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.
NH
very vague this
NH
Munich Re
NH
some very educated buying going on
NH
not sure quite what the story is
NH
Warren Buffett keeps being mentioned
BE
(Edge: S&P futures only down 0.5%-ish last I checked.)
NH
but probably worth keeping an eye ono
12:03PM
NH
Frodo
NH
PetroCeltic
NH
the pendulum has swung
NH
and we are now back on bid rumours
Petroceltic International (PCI:LSE): Last: 13.50, no change, High: 13.75, Low: 12.75, Volume: 6.82m
NH
early stage approaches apparently
NH
checking this again
12:04PM
NH
OK
NH
another negative retail note out today
BE
Geoff Ruddell at Morgan Stanley, isn’t it?
NH
it is
NH
and there really aren’t many bulls left of the retailers now
NH
Merrill, Citi have downgraded
NH
and now Geoff
NH
got the note?
BE
Sure. Although it’s worth noting that Geoff’s team has always been cautious.
BE
1H10 should be reasonably benign for the UK’s
non-food retailers … In the near term, we see no
reason for the robust consumer of 2009 to ‘roll over’.
… but the storm clouds will build as the year
progresses: However, fiscal and monetary tightening
seem inevitable in the medium term. Combined with an
increasingly challenging sourcing backdrop and ongoing
industry overcapacity problems, we think there is plenty
for retailers to be nervous about in 2H and beyond.
non-food retailers … In the near term, we see no
reason for the robust consumer of 2009 to ‘roll over’.
… but the storm clouds will build as the year
progresses: However, fiscal and monetary tightening
seem inevitable in the medium term. Combined with an
increasingly challenging sourcing backdrop and ongoing
industry overcapacity problems, we think there is plenty
for retailers to be nervous about in 2H and beyond.
BE
We now see at least as much downside risk as
upside risk to FY 2010/11 forecasts … With 11% EPS
growth anticipated by consensus for FY 2010/11,
despite the pressures likely to emerge in 2H, we think
the current upgrade cycle is nearly over. 2009 was the
first year in at least seven that consensus retail forecasts
rose, and we don’t think investors should expect a
repeat in 2010.
upside risk to FY 2010/11 forecasts … With 11% EPS
growth anticipated by consensus for FY 2010/11,
despite the pressures likely to emerge in 2H, we think
the current upgrade cycle is nearly over. 2009 was the
first year in at least seven that consensus retail forecasts
rose, and we don’t think investors should expect a
repeat in 2010.
BE
… and retain our Cautious industry view: While the
industry is not obviously expensive, without further big
upgrades it isn’t nearly cheap enough to be attractive, in
our view. Our central case is that the industry modestly
underperforms in 2010, but we see the risk as very much
to the downside.
industry is not obviously expensive, without further big
upgrades it isn’t nearly cheap enough to be attractive, in
our view. Our central case is that the industry modestly
underperforms in 2010, but we see the risk as very much
to the downside.
BE
We downgrade Home Retail Group and Kesa to
Underweight: We make a number of changes to our
ratings and price targets today (as summarised in the
box on the right). Perhaps most notable among them is
our downgrade of Home Retail Group to Underweight.
We see the combination of cyclical and structural
challenges Home faces as a microcosm of those faced
by the wider UK non-food industry.
Underweight: We make a number of changes to our
ratings and price targets today (as summarised in the
box on the right). Perhaps most notable among them is
our downgrade of Home Retail Group to Underweight.
We see the combination of cyclical and structural
challenges Home faces as a microcosm of those faced
by the wider UK non-food industry.
Home Retail Group (HOME:LSE): Last: 253.30, down 8.8 (-3.36%), High: 261.70, Low: 253.30, Volume: 3.90m
Marks and Spencer Group (MKS:LSE): Last: 347.50, down 2.9 (-0.83%), High: 354.70, Low: 347.10, Volume: 3.05m
Next (NXT:LSE): Last: 1,952, down 13 (-0.66%), High: 1,974, Low: 1,948, Volume: 455.64k
BE
And, since we’re on the subject …….
BE
UK retail data today was peculiarly awful
BE
December spending up just 0.3% for December
NH
(James you really are a muppet. A block of stock that size does not have to print for a while)
BE
Even though all the surveys ahead of the official number were strong.
BE
Consensus was for 1.1% growth apparently.
BE
However, this dataset has been all over the place.
NH
(James is now taking a long holiday)
BE
(General note to ROTR: it’s Friday. We’re tired. Don’t test our patience.)
NH
oh yes
NH
I saw some flashes on this
NH
did not seem good
BE
Although probably meaningless in the scheme of things.
12:10PM
NH
Right
NH
time to wrap things up
NH
some media navel gazing RAW
NH
via Gorkana
NH
The Sunday Times
Dominic O’Connell, Deputy Business Editor of The Sunday Times, has been appointed Business Editor replacing John Waples who is leaving to join Financial Dynamics. Dominic is expected to take over in February but the exact date is to be confirmed. Dominic can be reached on +44 (0)20 7782 5825 and dominic.oconnell@sunday-times.co.uk
Dominic O’Connell, Deputy Business Editor of The Sunday Times, has been appointed Business Editor replacing John Waples who is leaving to join Financial Dynamics. Dominic is expected to take over in February but the exact date is to be confirmed. Dominic can be reached on +44 (0)20 7782 5825 and dominic.oconnell@sunday-times.co.uk
BE
Interesting. For us.
NH
indeed
NH
and here is a little something for the weekend
NH
the latest note from Dylan Grice
NH
of Soc Gen
NH
he works with Albert Edwards
NH
Some overvalued stocks to underweight or sell into an overvalued market
NH
Event risk is growing … in developed economy bond markets … in explosive Chinese credit
growth … and in central banks’ exit from their highly experimental reflation strategies – to
name but three. Yet upper quintile equity valuations offer scant reward for taking such risks.
Indeed, in our global universe our latest intrinsic value estimates throw up only two names
we’d consider ‘bargain issues!’ We flip the screen over and find expensive candidates to sell.
growth … and in central banks’ exit from their highly experimental reflation strategies – to
name but three. Yet upper quintile equity valuations offer scant reward for taking such risks.
Indeed, in our global universe our latest intrinsic value estimates throw up only two names
we’d consider ‘bargain issues!’ We flip the screen over and find expensive candidates to sell.
NH
It might be something to do with the time of the year, but more people than usual seem
to be asking if I think the market will go higher over the next 12 months. For what its worth,
I actually think it probably will (dont tell Albert!).
to be asking if I think the market will go higher over the next 12 months. For what its worth,
I actually think it probably will (dont tell Albert!).
NH
But the reasons why I think the market will go higher arent interesting. I also dont see
the point in exploring them here because I think its the wrong question to answer. I can give
a view on the market in the same way I can give a view on who will win the Champions
League (I think Barcelona, if youre interested). But judging whether you think something will
happen isnt the same as judging whether something is an attractive bet. At 4-1 favourites
going into the knock-out phase, Barcelona dont look particularly interesting and neither do
equity markets.
the point in exploring them here because I think its the wrong question to answer. I can give
a view on the market in the same way I can give a view on who will win the Champions
League (I think Barcelona, if youre interested). But judging whether you think something will
happen isnt the same as judging whether something is an attractive bet. At 4-1 favourites
going into the knock-out phase, Barcelona dont look particularly interesting and neither do
equity markets.
NH
So Ill leave you now with those 27 names. Bear in mind that such stocks have an annualised
annual return of close to 0%, so youd have to have a good reason for holding them at the
best of times. In times like this though, with aggregate valuations stretched as event risk
grows, the hurdle for justifying ownership of these positions should be even higher.
annual return of close to 0%, so youd have to have a good reason for holding them at the
best of times. In times like this though, with aggregate valuations stretched as event risk
grows, the hurdle for justifying ownership of these positions should be even higher.
NH
Level 3 Communications Inc. Telecoms USA 2,294.6 -1.7 1.5 -1.10
Vertex Pharmaceuticals Inc. Pharma USA 7,956.7 -19.4 42.9 -0.45
Advanced Micro Devices Inc. Semiconductors USA 6,009.7 -4.3 9.7 -0.44
Want Want China Holdings
Ltd.
Misc Foods China 3,790.6 0.4 4.8 0.09
Lenovo Group Ltd. Electronics HK 5,239.8 0.4 4.9 0.09
Crown Castle International
Corp.
Telecoms USA 11,210.1 3.5 39.0 0.09
Sun Microsystems Inc. Electronic Data
Processing Equipment
USA 7,022.2 1.0 9.4 0.11
Vestas Wind Systems A/S Misc. Machinery Denmark 12,810.7 40.3 317.0 0.13
Wynn Resorts Ltd. Hotel Chains USA 6,582.7 8.8 58.2 0.15
Ferrovial S.A. Services Spain 6,894.2 1.3 8.2 0.16
Starwood Hotels & Resorts
Worldwide Inc.
Hotel Chains USA 7,244.1 6.5 36.6 0.18
Oil Search Ltd. Oil & Gas Australia 7,044.6 1.1 6.1 0.18
Terex Corp. Construction Machinery USA 2,518.6 3.6 19.8 0.18
Robert Half International Inc. Services USA 4,374.3 5.0 26.7 0.19
Patterson-UTI Energy Inc. Drilling Equipment USA 2,804.8 3.0 15.4 0.19
Check Point Software
Technologies Ltd.
Systems & Subsystems Israel 7,205.3 25.4 128.5 0.20
Paladin Energy Ltd. Drilling Equipment Australia 2,689.3 0.9 4.2 0.20
American Tower Corp. Telecoms USA 17,740.2 9.0 43.2 0.21
Range Resources Corp. Oil & Gas USA 8,291.4 10.5 49.9 0.21
Intuitive Surgical Inc. Medical Suppliers USA 11,765.4 68.1 303.4 0.22
Santos Ltd. Oil & Gas Australia 10,497.5 3.4 14.1 0.24
Volvo AB Truck Manufacturers Sweden 13,631.4 14.7 61.5 0.24
Shangri-La Asia Ltd. Hotel Chains HK 2,702.2 3.6 14.6 0.25
Odakyu Electric Railway Co.
Ltd.
Dept. Stores Japan 4,608.9 177.0 713.0 0.25
Marriott International Inc. Hotel Chains USA 10,538.5 6.9 27.3 0.25
Lindt & Spruengli AG Confectionery Switz 3,551.6 6,448.5 25,405.0 0.25
Adecco S.A.
Vertex Pharmaceuticals Inc. Pharma USA 7,956.7 -19.4 42.9 -0.45
Advanced Micro Devices Inc. Semiconductors USA 6,009.7 -4.3 9.7 -0.44
Want Want China Holdings
Ltd.
Misc Foods China 3,790.6 0.4 4.8 0.09
Lenovo Group Ltd. Electronics HK 5,239.8 0.4 4.9 0.09
Crown Castle International
Corp.
Telecoms USA 11,210.1 3.5 39.0 0.09
Sun Microsystems Inc. Electronic Data
Processing Equipment
USA 7,022.2 1.0 9.4 0.11
Vestas Wind Systems A/S Misc. Machinery Denmark 12,810.7 40.3 317.0 0.13
Wynn Resorts Ltd. Hotel Chains USA 6,582.7 8.8 58.2 0.15
Ferrovial S.A. Services Spain 6,894.2 1.3 8.2 0.16
Starwood Hotels & Resorts
Worldwide Inc.
Hotel Chains USA 7,244.1 6.5 36.6 0.18
Oil Search Ltd. Oil & Gas Australia 7,044.6 1.1 6.1 0.18
Terex Corp. Construction Machinery USA 2,518.6 3.6 19.8 0.18
Robert Half International Inc. Services USA 4,374.3 5.0 26.7 0.19
Patterson-UTI Energy Inc. Drilling Equipment USA 2,804.8 3.0 15.4 0.19
Check Point Software
Technologies Ltd.
Systems & Subsystems Israel 7,205.3 25.4 128.5 0.20
Paladin Energy Ltd. Drilling Equipment Australia 2,689.3 0.9 4.2 0.20
American Tower Corp. Telecoms USA 17,740.2 9.0 43.2 0.21
Range Resources Corp. Oil & Gas USA 8,291.4 10.5 49.9 0.21
Intuitive Surgical Inc. Medical Suppliers USA 11,765.4 68.1 303.4 0.22
Santos Ltd. Oil & Gas Australia 10,497.5 3.4 14.1 0.24
Volvo AB Truck Manufacturers Sweden 13,631.4 14.7 61.5 0.24
Shangri-La Asia Ltd. Hotel Chains HK 2,702.2 3.6 14.6 0.25
Odakyu Electric Railway Co.
Ltd.
Dept. Stores Japan 4,608.9 177.0 713.0 0.25
Marriott International Inc. Hotel Chains USA 10,538.5 6.9 27.3 0.25
Lindt & Spruengli AG Confectionery Switz 3,551.6 6,448.5 25,405.0 0.25
Adecco S.A.
NH
sorry
NH
bit messy that
BE
Good stuff nevertheless, as always.
BE
Shorter, but also worth noting for the bears, is the latest update on insider selling from Deutsche.
BE
The directors are still slotting, apparently
BE
Over the past two weeks directors’ selling remained significantly higher than buying. We have observed 38 companies with major selling, compared to 19 companies with major buying transactions since our last note of 07 January.
NH
that’s interesting
NH
fund managers get it wrong
NH
by the insiders get it right
NH
does that cover Europe
BE
Yeah.
BE
Haven’t seen the full research. Might be worth a post later if it turns up.
NH
yes
12:15PM
NH
Okay
NH
the Lunch Wrap has to go
NH
which means we must bring today’s session to a close
NH
FTSE now off 58 points at 5,275
NH
so it has stabilised
BE
Pearson currently leading the risers.
Pearson plc is the parent company of the Financial Times, publisher of FT Alphaville.
NH
yipeee
Pearson (PSON:LSE): Last: 898.50, up 7 (+0.79%), High: 905.00, Low: 889.50, Volume: 1.02m
BE
Post Google’s ad recovery in the US, I assume.
BE
Even though the international figures sucked.
NH
yes
NH
got anything on the Google numbers??
BE
They’ve been analysed to death elsewhere.
BE
The upshot being
BE
they’re on something like 34 times earnings.
BE
Anyway, here’s Exane with a bit on the readthrough.
BE
► 1/ Clear pick-up in ad trends, driven up by emergings
Google reported revenues up 17% excluding TAC in Q4 vs +7% in Q3. This is a
material improvement, even though forex helped, driven by the US improving from 7%
to 11% while growth in the rest of the world accelerated to 21% from 7%. The CEO
mentioned here the benefit of an improving US economy in addition to still robust
growth in some emerging markets such as Brazil. In the US, the rebound was driven
by large advertisers while retail was better. This is clearly positive for ad agencies.
Google reported revenues up 17% excluding TAC in Q4 vs +7% in Q3. This is a
material improvement, even though forex helped, driven by the US improving from 7%
to 11% while growth in the rest of the world accelerated to 21% from 7%. The CEO
mentioned here the benefit of an improving US economy in addition to still robust
growth in some emerging markets such as Brazil. In the US, the rebound was driven
by large advertisers while retail was better. This is clearly positive for ad agencies.
BE
► 2/ Expect more ad shift from TV to display, search continues to grow
Google explained that it believes strongly in display, and that as viewing time is
shifting and monetization improving, more traditional TV adspend would move to the
internet through display. However, Google also see continued growth in search, as it
attracts more ROI/marketing budgets, whereas display is more about brandbuilding.
We therefore believe that there is still a lot of room for the total share of online to
grow. Again this is mostly positive for agencies, but negative for most TVs and print
players.
Google explained that it believes strongly in display, and that as viewing time is
shifting and monetization improving, more traditional TV adspend would move to the
internet through display. However, Google also see continued growth in search, as it
attracts more ROI/marketing budgets, whereas display is more about brandbuilding.
We therefore believe that there is still a lot of room for the total share of online to
grow. Again this is mostly positive for agencies, but negative for most TVs and print
players.
BE
► 3/ 2010, the year of mobile and social media monetization
Google expects mobile to take off in 2010 and intends to play a big part in it. It also
said that large numbers of initiatives would improve the monetization of ‘social’ media
platforms such as youtube. Again, time spent on mobile and social media has been
growing rapidly but has yet to be monetized – when this happens (from 2010
onwards) traditional media should lose further ad share.
Google expects mobile to take off in 2010 and intends to play a big part in it. It also
said that large numbers of initiatives would improve the monetization of ‘social’ media
platforms such as youtube. Again, time spent on mobile and social media has been
growing rapidly but has yet to be monetized – when this happens (from 2010
onwards) traditional media should lose further ad share.
BE
► 4/ Good results not enough to propel share price higher
Google was down in after trading hours despite reporting strong results, as
expectations were high. This follows similar patterns for Pearson and Meredith on
good results and could indicate that investors already factor in a yoy improvement in
trends.
Google was down in after trading hours despite reporting strong results, as
expectations were high. This follows similar patterns for Pearson and Meredith on
good results and could indicate that investors already factor in a yoy improvement in
trends.
NH
and they are useless at selling property online
NH
according to Rightmove
NH
if you missed yesterday’s Rightmove letter to staff
NH
here’s a few highlights
NH
Dear all,
It has become apparent that many of you are facing some questions from unusually inquisitive agents who are interested to hear about how we see the future for online property advertising. It could well be that they just asking after us because they care, though I suspect the reality is that this sudden interest in our business and the wider market has been prompted by the will-they-won’t-they story surrounding Google.
The reality – we think! – is that at some point Google will launch a real-estate feature in the UK. We can’t be sure about when they will launch but we can hazard a guess that what they will launch will be along the same lines as their real estate features in Australia and the US, launched in July. So, what do we know about the brave new world of online property advertising in Australia and the US?
NH
What Google have actually launched in both the US and Australia isn’t actually very easy for users to find!
What Google have launched is only accessible via their maps function and not part of their main search results directly through google.com (or Google Australia). In other words, at the moment, users have to know it’s there and go looking for it. See if you can find it. You’ll see what I mean.
What Google have launched is only accessible via their maps function and not part of their main search results directly through google.com (or Google Australia). In other words, at the moment, users have to know it’s there and go looking for it. See if you can find it. You’ll see what I mean.
NH
Not everything Google turn its hand to turns to gold
Google are huge, Google are successful, but Google also get things wrong sometimes. At any one time Google has more than 100 products and features available but not all of these go on to become best-in-show or topple existing market-leaders. Whilst products like Google Mail and Google Maps are obvious successes, Google failed to get the better of You Tube with Google Video and Knol, Google’s user-generated online encyclopaedia, has failed to have any impact on Wikipedia. And anyone used the Google’s answer to Facebook? No, thought not. There are plenty of other examples too. Much of it depends on how seriously they take it and where they see their priorities. Google’s answer to Internet Explorer, Chrome, is being heavily advertised at the moment, but they rarely run such high profile above-the-line advertising on that scale for products. The fact that Chrome is head-to-head with a well-established Microsoft product (Internet Explorer) probably explains the Chrome campaign.
Google are huge, Google are successful, but Google also get things wrong sometimes. At any one time Google has more than 100 products and features available but not all of these go on to become best-in-show or topple existing market-leaders. Whilst products like Google Mail and Google Maps are obvious successes, Google failed to get the better of You Tube with Google Video and Knol, Google’s user-generated online encyclopaedia, has failed to have any impact on Wikipedia. And anyone used the Google’s answer to Facebook? No, thought not. There are plenty of other examples too. Much of it depends on how seriously they take it and where they see their priorities. Google’s answer to Internet Explorer, Chrome, is being heavily advertised at the moment, but they rarely run such high profile above-the-line advertising on that scale for products. The fact that Chrome is head-to-head with a well-established Microsoft product (Internet Explorer) probably explains the Chrome campaign.
NH
Brand and market leaders are pretty hard to budge!
Others have been eying-up our #1 spot for some time without making a significant dent in our lead. And, anyway, we’ve all worked very, very hard to get the position that we are now in – you don’t get c.90% of the agents and more than 50% of all pages viewed without a bit of graft. And some of the numbers from recent research are pretty compelling too:
We serve more pages of property than all the other property websites measured by Hitwise added together (there’s about 1400 of them!)
Awareness of Rightmove amongst the public stands a 64% without prompts and 91% when prompted (to put that in context, McDonald’s have a score of 98% for prompted awareness and Burger King a score of 95%)
Of those that have ever heard of Rightmove, more than 7 in 10 say that it is the property website they “turn to first”
32% of people who bought a home in the last 12 months first saw that home on Rightmove
Others have been eying-up our #1 spot for some time without making a significant dent in our lead. And, anyway, we’ve all worked very, very hard to get the position that we are now in – you don’t get c.90% of the agents and more than 50% of all pages viewed without a bit of graft. And some of the numbers from recent research are pretty compelling too:
We serve more pages of property than all the other property websites measured by Hitwise added together (there’s about 1400 of them!)
Awareness of Rightmove amongst the public stands a 64% without prompts and 91% when prompted (to put that in context, McDonald’s have a score of 98% for prompted awareness and Burger King a score of 95%)
Of those that have ever heard of Rightmove, more than 7 in 10 say that it is the property website they “turn to first”
32% of people who bought a home in the last 12 months first saw that home on Rightmove
NH
The full note in the usual place
BE
For what it’s worth, I think Google Property (beta) looks ace.
NH
but real fighting stuff
NH
let’s hope Rightmove can back it up
Rightmove Plc (RMV:LSE): Last: 513.00, down 9.5 (-1.82%), High: 524.50, Low: 508.00, Volume: 272.55k
BE
Note Daily Mail’s back biting at their heels as well ….
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This came out yesterday
BE
London, 21 January 2010 – As part of its ongoing strategy to invest in innovative businesses and talented entrepreneurial management teams, AND, the digital consumer division of A&N Media (part of DMGT plc) and parent of The Digital Property Group (TDPG), today announces that it has acquired 50% of Globrix (www.globrix.com ). Globrix, as the UK’s largest free-to-list property search engine, has the largest stock of property for sale and rent on the market. As part of this transaction, AND will support the management of Globrix to extend its innovative technology platform into other classified vertical markets.
NH
hmmm
NH
more competition
BE
Ok – we really do have to end this.
NH
yes
NH
thanks for logging in this week
NH
and I leave you with the following thought
NH
guardian poll: is gary neville a boot-licking moron – please vote
NH
goodbye