Good Morning,
Its coming and the bets are on but with the Swiss
National Banks (SNB) decisive actions on Friday the market is looking
for something a bit more charged. Putin will be praying for a
significant cold spell, perhaps even planning a late 2015 re-entry where he can
obtain leverage. QE is likely to assist this conversely promoting
inflows of investment (where possible). The markets are getting hooked on drama
rather than consistent and solid performance (read as also investing in crap!)
with common-sense being applied.
Unlike America where the culture may have ranges (diversity) but similar agendas, the Eurozone does not have this luxury with contrasting voters and more so agendas of protectionism (read as Germany and France albeit not a united front).
Without pretending nor even attempting to be all things Euro or Macro, it’s looking more and more like an inverted pyramid with Germany propping up the fragile economies of the Eurozone. When considering the outcome, the markets will be cooking on gas again until they're taken off the market welfare assistance (QE). The real risk is the incapable governments utilising excuses to justify their spending rather than address their budgetary needs quicker to re-correct the fundamental issues within their economies.
The sticking point is who will be responsible for each member states debt. Its ironic that in alleged harmony the wealthier members do not want to share the load (read as take the load). So whilst the finer print is muddled through one can't help but wonder if the EU is in for some re-branding, to European Disunion.
The conflict of interest is disliking all things EU, with yet another tier of bureaucracy where if the costs of the EU were stripped out it would be a long-term form of QE anyway. For every country contributing there's a net benefit to 2 by their membership in the EU, its a wonder its lasted this long. The EU may or may not have a determination of strength in due course if QE does not work.
The issues of high level unemployment (Circa 10%+*) are unlikely to be improved by the EU's bond purchases as greater focus on the issues within each country are needed. France has yet again (for the third time) asked for an extension to deal with its deficit. The French are notoriously difficult to deal with when they're doing something or not...(yes thought was put into the phrase). So in the absence of economical stimulus with a focused approached its unlikely to be as effective bar a few KPI's (Key point indicators). These are likely to be superficial living standards and welfare claimants measures (distorted by in work benefits).
In the markets today, we had Worthington Group (WRN) (still suspended pending a prospectus which should have been out by now) update on CPS Energy Resources. The question should be, with the information (surely) to hand why was it not specifically excluded in in the Company's calculation of consolidated assets, profits, sectors or geographic locations announced on the 9th January 2015. After all the deal was announced back in October 2014.
Is this one for the regulatory team of AIM...even
as far as the FCA. The company made no exemption for CPS in
their calculation of the net asset value for mining, oil
and gas within the announcement on the Friday 09 January, 2015. Today, in the RNS only
four areas are now included: property, litigation claims, new economy and
emerging markets, yet 13 days previously it includes oil, gas or
energy, oops and also mining now! If you hold the stock it would be
wise to call an EGM and force disclosure of everything
including the prospectus. Actually why bother, if you own this stock don't read on, close the page!
Copper woke up this morning, I suspect with some
draw from gold and the dollar weakening. Iron
ore minnows were getting a kicking, whereas Rio and BLT shrugged
off the obvious and went on an easy trading run. In the absence of traders and pension
funds would Rio and BLT be
circa 2,500 and 985 pence respectively? Although there’s starting to be a
good argument for near bottom of cycle buying that I disagree with. Rio's ramp up and inventory sales support their thesis on expansion, will it continue?!
BLT having further issues with Manganese as Roger
Bade pointed out, prices down circa 10%. Over to the Atlas
Iron (ASX: AGO) whom had opportunity to get out considerably higher
thanks to the DCE (Dalian Commodity Exchange) extension in
trading hours. Gold and silver both stabilising
and awaiting the next indicators its over
to ECB QE. Oil likely to benefit as well with the steady
appreciation continuing, appreciating to circa $55/bbl give of take 3% drift
between WTI and Brent.
AB Foods (ABF) finally giving in to common-sense
with significant selling. Does it really take that long to digest the results? EMC view January 15, 2015, who'd have thought it and time
to quote myself: "With little upside on the current SP, it’s wise not to
carry profits much past the news. Under review for the short, now January 2015
has arrived." Will a DRIP (Dividend
re-investment plan) assist? I doubt it...
Hulme Capital had a few issues this morning with the 'wording',
for which having wanted to find out more had some diplomatic clarification from
two companies in RNS REM & UKOG after this morning's Dismissal of Adviser REM & UKOG. By sheer coincidence both with a related party
associated to both companies, Mr David Lenigas.
Monitise's (MONI) trading update & initiation of strategic review,
informs us its up for sale with the price reacting in the right manner. With UK Mail (UKM) coming out the reporting starting
blocks 10 days ago Royal Mail (RMG) Nine Months Trading Update had little in the way of
surprises and was the long to the news. With little commentary (in fact none)
on fuel cost benefits, RMG have missed an opportunity to
promote their own stock, improving margins and energy costs reducing.
Limited time for some, including Tullow (TLW) and Gulf Keystone (GKP) but to my left eye Malcy has saved myself via his blog today. Fever Tree (FEVR) pre-close update come with no surprises from a quality label. FEVR are the Carlsberg of tonics in my view! Having been drinking FEVR tonic for a good time, its about the only additive to gin I can differentiate in taste save for Hendricks Gin and Adnams Copperhouse Gin after one.
Atb Fraser
*Unemployment stats: Greece 25%, Spain 23%, Cyprus 16%, Croatia 16%, Portugal
14%, Italy 13%, Slovakia 12%, Bulgaria 11%, Ireland 10%, Latvia 10%, France
10%....all 17 others sub 10% with an average of circa 10%.
Fraser- Hi - waiting with all and sundry for the ECB helicopter news. Im not sure how they can ensure they don't buy any Greek gov debt with their QE- perhaps base debt bought on share of EU taxes- that ought to do it as the Greeks famously don't pay taxes... lets see but gold and silver and shares waiting nervously now.
ReplyDeleteRe MONI- they are getting squeezed out of their market place by the bigger players now, and burning cash like there is no tomorrow so despite their partnerships and potential for their market, which is huge, they have put themselves up for sale, and they have some value on top of the cashpile, but not a great deal unfortunately.
Re TRX- nice tight placing there- AMA could have done the same but the frontrunners weren't that good. KMR are off the top (pump and dump could well be the play today). ZOX seem to have found a few friends, despite the tech issues which seem to be an unavoidable part of their zinc separation treatment. So who will cough up $120m for the plant in Thailand shortly.... only WRN come to mind there :-))
Cheers. The Leggie