Morning Mumble: China's Sensible Mini-Me HK and Retailers...Glencore goes long Copper! (Perversely for everyone else.)

Good Morning,

Last week, Nikkei Hong Kong PMI® was released with the dramatic title, PMI falls to lowest level since April 2009. The last time the data was this negative was in 2002 and 2009. The indicators are not great, with a lowering in new orders enabling companies to complete pipeline work. This may be a swallow in the grand theme of things, but we shall watch for a continuance before we long lithium pharmaceuticals. 

One item from Li, is the factories now avidly marketing their wares (inventories) at rocket bottom prices. From some shoddy capital equipment to very decent drilling machines for oil, all are being marketed with discounts that are notable. Could the shale suppliers being under further pressure? 

We shall revisit this over the coming weeks, now the parade is over and they can continue the witch-hunt. As a simplistic recap, production down, services demand down, innovative development and investment down. China has forced a new low, companies can recommend a buy on their own company – A Chinese investment bank rates its own stock — thinks it's definitely a buy. 

Now who do you believe? Man Group China head says she was not investigated by authorities, but was merely meditating. One had to reread this to make sure there was no confusion between meditating and medicating! Of course Li Yifei "had been attending industry meetings and taken a 5-6 day trip to meditate." So for those that don't reappear, say those that worked at CITIC or similar, should we contact the Guinness Book of Records, not only for the longest meditating period but largest event of its kind? 

We had Markit France Retail PMI® that had very similar themes to the BDO High Street Sales Tracker that was reported Thursday. Although as a snapshot in time, predominantly based on weather, it's not necessarily all bad. With some sectors and retailers likely to be more resilient and / or benefit, but there is a theme, with some buying opportunities presenting. Perhaps when considered against household debt (excluding mortgages), there is a very simple answer for the decline in sales? Save for more holidays abroad.

With retail shoppers making decisions on holidays or retails sales, choices are now having to be made. Watch for those margins, as sales competition hots up, especially if there's discounting the autumn/winter season, more so than normal. 

Associated British Foods (ABF) pre-close trading update gives out the positives, save for FX and sugar. Why is ABF not split into two? The argument for a split is getting ever stronger, save for some improvements in sugar more recently on the back of El Niño (FT)

Earlier in the year retailers evidenced improvements in pricing. These benefits are likely to be offset by competitiveness due to weather (lack of punters) and the need for seasonal stock changes. ABF via Primark have shown they’re not insulated either despite lower prices. Concerning that with their pricing perception in Primark stores, customers want even cheaper clothes!?

BDO analysis suggests inventories up, sales under-pressure and weakness in the wider and or global economy it's not looking great. (The last sentence may apply to different regions).

Like the Hong Kong PMI data, it’s noted that key reports are trending with as "bad as, not since levels seen in 2009 etc...” The read across to Kingfisher and Merlin entertainment does not looking brilliant, over to BDO. 

The strength of the pound is proving somewhat detrimental to high street retailers’ revenues. Consumers are spending more on items abroad to take advantage of the exchange rate, whilst tourists – particularly from the Eurozone – are less willing to spend. The continuing political and macroeconomic uncertainty, coupled with the threat of an interest rate rise in mid-2016, is also weighing on consumers’ minds.

Kingfisher (KGF) may be insulated thanks to a growth in French housing purchases by speculators/investors, although spend is normally lower than those buying a ‘home’. We won’t have to wait too long, with the interims due on the 15 September 2015. One can barely contain the excitement with an update on KGF’s “One” and their 'sharp' decisions in September. 

The news is filled with Glencore. As the share initially shot up today on news of a rights issue that was absent entirely of pricing or indicative terms. Please remember, as per Ivan’s statement it has not been determined whether it will be a rights issue. It does appear to be 100% underwritten (so perhaps the market thinks it’s irrelevant), for now. This is in addition to Glencore’s African Copper - Operational Update.

The market, like in the Platinum Group Metals sector, needs a casualty and Glencore have come up with the answer. Putting two large projects under "Doctors Orders" (Care and Maintenance) until improvement works have finished. 

The suspension of production at Katanga and Mopani for 18 months up until the completion of the expansionary and upgrade projects. This includes the whole ore leach at Katanga and the new shafts and concentrator at Mopani. A suspension of operations will remove approximately 400,000 tonnes of copper cathode from the market. 

Glencore blamed the decline in copper prices on aggressive short-selling in their full year interim results webcast. Today's news is starting to make one think that Glencore did not have any idea of the amount of physical in the market place nor in fact much understanding of the current cycle. More so, the surplus is significantly higher that Glencore anticipated by the very cut of near 400K/t’s. If this was not the case, they would have identified suspending production at Katanga and Mopani in their interim results webcast, rather than belatedly. The copper price has improved a smidge of 4¢ since the interims, so what changed?

Glencore have pulled 266K/t's annualised basis from the market, (for 18 months/note for diary) As a result, if copper cannot sustain a comeback to near $2.50/lb and potentially $2.85/lb on the back of Glencore's news, then there is something substantially wrong in the global economy (and/or China).

Is China really sick? Or just slowing? The copper price will give a very good indication over the coming months. Not only immediately will the market react, but due to inventories, a slower appreciation is likely over the next 9 months. (Keep an eye on car sales). A complete gift to Freeport-McMoRan et al (VED, ANTO, KAZ), where any 10¢ appreciate per lb is worth between $300-500M to FCX.

Glencore have come out to state how bad it is, but of course for Glencore it’s not bad at all, Ivan Glasenberg, Chief Executive Officer, and Steven Kalmin, Chief Financial Officer, made the following statement:

"Notwithstanding our strong liquidity, positive operational free cashflow generation, lack of debt covenants, modest near-term maturities and the recent affirmation of our credit ratings, recent stakeholder engagement in response to market speculation around the sustainability of our leverage, highlights the desire to strengthen and protect our balance sheet amid the current market uncertainty.

The measures we have announced today do not affect our core business activities and overall franchise value and have been designed to sensibly accelerate the deleveraging of our balance sheet, maximise future cash flow generation in the current weak commodity price environment and substantially improve our financial and credit metrics, stability and strength, in the event of a prolonged weaker pricing environment.

We remain very positive on the long-term outlook for our business and this is reinforced by senior management's commitment to take up 22 per cent. Of the proposed equity issuance. Copper and zinc are both supply-challenged and an essential ingredient of future global growth. In seaborne thermal coal, a capex drought and low prices have helped rebalance the market. We are confident that thermal coal's position and availability as the lowest cost fuel source for many large economies will underpin its key role in the global energy mix for many years to come.

We have today an extensive portfolio of long-life, low-cost industrial assets, benefitting from the unique capabilities of our marketing business. We reiterate our 2015 full year marketing EBIT guidance of US$2.5 billion to US$2.6 billion and remain confident of our long-term guidance range of US$2.7 billion to US$3.7 billion."

Culling dividends, full year and interim for 2016, cutting production etc...All should have been conducted at the interim results where "Captain Kirk and Scotty" could pull the levers (EMC: Glencore 24th Aug 2015). Have another look at the Webcast from the 25 August 2015, re: Dividend etc...Then consider the news today. 

The fundraising suggests there was an over-confidence in Glencore's senior management at the interims in August. Did they really have sufficient flexibility in the accounting model (in the current market), with some prudence in light of current market conditions? Common-sense?

In the absence of this capital raising, the balance sheet cannot be "stress-tested." Glencore appears very desperate to be doing the fundraising without giving an indication of anything, price, timetable or whether the larger shareholders have approved of such an action. 

If Qatar Holdings, or Harris Associates had agreed to the fundraising, would there have been a need to underwrite? All this of course is allegedly in the interests of the longer-term shareholders, no strong-arming to avoid being diluted!?

What is noteworthy is the significant amount of "debt reduction" in the near-term. Why was this suddenly needed, market confidence? Or common-sense business practice that should have been identified at the interims? Estimated to be near $6B in a very short time frame. So who is next...? Anglo after the dip in diamonds?

Atb Fraser

Morning Mumble: From Steel to Sugar, the Unbelievable + EVR the FX benefaction &...RCG + British Sugar (The David and Goliath of Sugar spats)

Good Morning,

Iran with no news = tank (poor pun I know). Those bulls being torched don't appear to grasp the simplicity of the statement. We'll keep it simple, just for those large traders in NY, having had 3 opportunities to close their burnt positions, are now doing so at a greater losses. If oil inventories and production are up, and demand lower, then the price will fall. Perhaps the market should have kept an eye on the 'well-count' rather than rig count.  Mental note, when applying for positions in large trading houses, in the hobbies put down "not know when to quit." What's $812M between friends.

Sticking with the theme of unbelievable, Evraz update the market today with a proposed tender offer of $375m. Does this company have no debt covenants? Would it not be cheaper to buy their debt? Within EVR's annual financial report investors would be wise to focus in on the 'slight' differential between 2013 and 14 in "equity attributable to equity holders of the parent entity" (that item otherwise known as shareholder funds), with a modest decline of $3,447B from $5,463B (2013) to $2,016B (2014), these figures include non-controlling interests. 

Evraz (EVR) net debt was reduced 11% to US$5.8 billion, which looked to be on the conversion and repurchase of debt in market. As with Kingfisher (KGF), never bet against buybacks in an appreciating market. EVR is mystifying save for the FX benefits of costs, so off like a rocket this morning. EVR's recovery since the height of the Ukrainian crisis has been legendary. With the market being pumped to sell at 10% premium to 187.70 pence, one can't help but wonder where the SP will hit soon, 206? Perhaps even the cap. 

As if the market needed reminding of the woes of British Sugar (ABF), along comes Real Good Food (RGD), with an award for reminding the market of the distressed nature of the global sugar industry. RGD have not only accused British Sugar of market abuse in respect of supplies to Napier Brown, back in 1988 and again 2014, but Napier Brown is now up for sale. Does a buyer want a business that is alleged to be impaired by its key supplier. Perhaps a sale would be wiser post any legal action/settlement between the warring parties?

With an interest in Pork Semi Meaty Riblets (Sternum Part On) (its not so appealing in the UK is it!) and all other food stuffs. One will remember that Napier Brown was proven correct in alleging that British Sugar had abused their dominant market position in 1988. This action resulted in a paltry fine of €3M (Euro) imposed on British Sugar. EU Commission Decision 18 July 1988 Napier Brown - British Sugar. One would be wise to read 'remedies' page 18, item 83. Its likely British Sugar (ABF) will have to make certain provisions, including the potential for a 10% fine of turnover. ABF's  British Sugar last reported turnover was £742m. 

Any actions bought by Napier Brown are not going to assist their bottom line, with debt increasing, any sale is unlikely to realise a true value. Purely on the basis of its long-standing and problematic history with British Sugar (their key supplier). The irony being, the offering could be more valuable to British Sugar than any other entity. All the proceeds are likely to go towards paying down the debt, near £36.3m (Net debt) at the last interims. Over to British Sugar to buy Napier Brown, which could perhaps be cheaper than any fine! 

ASOS (ASC) interim results are out, with no change in view from earlier this month, the market was welcoming the improvement in customer numbers (passing the 9M mark) and more importantly, active customers on the increase.  

ASC cash declined just over £9m in 4 months to £64.9m from 31 August 2014: £74.3m, admittedly up 76% on the comparative half, from £36,914m. Yet again, we see a deterioration in margins,  with retail gross margins down 270bps. The market will focus on the active numbers, local pricing (zonal pricing aka local currency pricing avoiding the customer taking the risk of FX movements) and group revenues being up near 14%. 

One has to wonder with the push in "the label" directory from NEXT, how competitive the UK market will become. Today's news was an opportunity to close longs and await a market reality, the market might realise sooner or later margins have been impacted by the introduction of zonal pricing, albeit with double digit revenue improvements. 

Atb Fraser

Morning Mumble: QE...the amateur simpletons view & WRN...+++Rio, BLT, Monitise, Fever tree and Euroscepticism.

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%. 

Morning Mumble: January dieting...Associated British Foods, Atlas Iron (wonders would...) and Oil. ALO forgot to tell the market about

Good Morning, with the market taking priority there will be no future apologies for the tardiness of updates nor urgency placed on any messages enquiring what time its going to posted. 

Morning Mumble: The diets begin in earnest... and the FT runs with Oil projects worth billions put on hold. The high impact drilling has always been questioned even at circa $100, quite why Premier Oil (PMO's) entered into Rockhopper’s Sea Lion on the economics is a question not of hindsight but of value for shareholders that shouldn't have been completed at this time. PMO's share price has gone only one way since Sea Lion Farm In, pre-the oil drop. 

PMO's all-in-costs from there trading and operations update will offer safety to a lot of oil investors. With some alleged low risk drilling (Falklands & Indonesia) and debt without the immediate concerns or RBL criteria, PMO is likely to have some potential upside. Personally, save for intra-day it’s difficult to justify any oil holding in the current market until the market has digested the changes. (See TLW). 

Tullow (TLW) today have come out with similar, giving clearer guidance on costs, albeit one would be wise to revisit their year-end accounts and work through the costs (limited time today). Tullow Oil plc - Trading Statement & Operational Update with write-off's of circa $1.2B and potentially more, one will wait to see what Tullow do next with murmurings in the market this morning. Over to Exxon Mobil (XOM) to acquire on the cheap with limited options for shareholders, the time to strike is "near." having cast their eye over this company before with the upside potential even in today's market. Do not expect the update to do much in the market, without some validated gossip of TLW losing its independence. 

With Game Digital (GMD) showing how margins and sales were impacted by Black Friday (Compete or Retreat), Home Retail Groups (HOME) update was with no hope of an improvement in comparison to GMD.

With Associated British Food (ABF) trading update today endorse repeated debates for divesting the food divisions, declining margins (as expected). The Sugar alone EMC Food Prices would impact and the EMC Duncan Fox ABF summing things up nicely. The company's trading outlook promoting (read as selling) the company nicely:

Trading outlook

This year we expect Primark's expansion to continue and Grocery, Ingredients and Agriculture to make further progress in operating profit on the back of their very positive performance last year. With the fall in EU sugar prices and weakness in the world sugar price, we expect a further large reduction in profit from AB Sugar, but this will put much of the effect of the structural changes in EU prices, seen over the last three years, behind us. We expect a decline in adjusted operating profit for the group but the impact on earnings will be mitigated by much lower tax and interest charges. Sterling's strength against most of our major trading currencies will also have a negative effect and we now expect a marginal decline in adjusted earnings per share for the group for the full year.

It will be interesting to see how my view on the not to short from November pans out! With my belief previous news being totally validated. (Disc: Long) Bold is mine. The market is now ignoring the Sugar and Ingredients divisions, so will look solely at the positives of Primark's performance the star in the group and making valuations difficult for traders. Closing on the news for the myopic trading and banking profits (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.

It would of course be rude not to mention Atlas Iron (ASX: AGO), some of the dedicated have correctly spotted the shorting opportunity post-Christmas. As always, comments on AGO will be published if there are no obscenities and relevant. It is with pleasure that two significantly underwater holders decided to short post the Christmas nonsense appreciation, and have actually banked a break-even on their investment. Having held for their near 3 years from AU$3 they have actually broken even on shorts...have they been converted. Kudos! One hopes lessons have been learnt.

With Crude Oil finding support (and copper), it’s no wonder there's some hope for the obvious leveraged candidates. Brent and WTI both trading near par at $47.40/bbl (approx.). So today, the warning was on the door, the flags were waving, LGO Energy (LGO) conducts a placing to raise £1 million raised for Goudron, and Cedros update. Surely not, EMC LGO & Copper Coverage (Fumes) (Diet begins in earnest) seeing the writing on the wall, today I close my short and await the "constant" news flow again. LGO's Nomad and Brokers will obvious assure us no one knew about the placing and it wasn't broadcast far and wide and there was no selling down to fund the placement. Strangely no matter what they say, LGO has yet again performed predictably. Whatever happened to LGO's credit facility? 

Staying with the LGO theme, Alecto Minerals (ALO) placing, congratulations to whomever got this away...judging by past performance. Who'd have thought it with the importance of ALO's Completion of Analysis of Historic Drilling Results at Kerboulé Gold Project, Burkina Faso. Can anyone identify what regulatory news is contained within the 6 January 2015 announcement. The company today announces a placing to maintain working capital (read as sustenance) whilst discussions progress on potential joint ventures. ALO could have saved some RNS costs and updated the market on the Burkina Faso issues both with Government (CNT (no joke) and disturbances stopping operations for the Karma Mine operated by True Gold. Obviously other companies would be wise to update the market accordingly, after all gold is highly portable, such as Avocet (AVM) and Amara Mining (AMA), whom I'm led to believe operate not far away or have licenses near. Centamin Egypt (CEY) really need to bring the cosh out and put ALO out its misery...no premium share based takeover. The shareholders would immediately benefit. 

The final thoughts without reading too much into it the third quarter results of Mothercare (MTC) is why do they have shops? Investors should be considering graphite within the lithium squeeze, no cryptic messages just common-sense. Its always pleasing when investors re-read announcements and come back to reality, ZIOC (ZIOC EMC 30th September 2015 with ZOIC typo). (Disc: no positions short now.) Sirius Minerals (SXX) disappoints today with an update harbour facilities application. Perhaps the company can consider the difference between approvals and applications. This decisions is surprising seeing as there is the potential within the process to modify the application. Impatience will punish...

Atb Fraser.

Morning Mumble (late): Housing & Coal

It has already been a few days of speaking with conveyancers and meetings for a house and flat sales/purchases. What is often interesting when dealing with companies is gaining a wider helicopter view understanding of the market.

The auctions have been tailing off from the summer (not uncommon) with a few (Inc. myself) being out bid on most properties from March to September. The achieved price is now significantly lower (near 11% lower than the summer), and the number of interested parties appears to be well down. Seasonally it’s not uncommon, but one factor cited is the affordability elements of the mortgage applications even for clients porting their mortgages to a new property. Positively it is limiting the competition so for the buyers out there are some decent purchases to be had.

Examples being, there is a reduction in borrowing capabilities of home owners or the more common situation occurring being limitations of additional funds to up size. Yes, this is positive in cooling the property market and reducing the risks of a boom albeit contradictory when considering the Help to Buy (H2B) that is meant to assist people on to the market. Historically, I'm from an era of 3.5 times main income plus 1 of the income.

The lawyer's example of the couple had an income for Mr & Mrs A of £45K & £11K, borrowing potential of £166K in the olden days. It would appear the Government Bank differ on this and have approved them for a paltry £104K of borrowings. Perhaps an extreme example of miscalculations/assessment with no other liabilities (no loans nor student loans etc.) one assumes they'd have been lent upwards of £130K. 

The firms I'm dealing with at the moment are finding most of their work is around £105-£250K (North) and £285-£445K south with a large reduction in properties over £500k. Implying the peek has come, with demand tailing off and supply stagnating. This is with no surprise when you consider the recent London developers announcements about cooling off and normalisation of sales.

It has however got me thinking that the housing market is likely to have some form of coming. Whilst speaking with solicitors they note that a lot of sales are being repriced lower (reductions on the offer) even for current home-owners when the affordability terms applied, This is happening even for those porting mortgages from one property to another. It could be construed as the "housing cap" rather than blowing the bubble.

Its uncanny that today's interim management statement by Persimmon Homes (PSN) with PSN stating, "As expected we have experienced a return to a more traditional seasonal pattern to customer activity this year with reservation rates picking up with the onset of the autumn season after the slower summer weeks."

One does have to acknowledge that PSN has good forward visibility on their reservation interest circa £696 million of forward sales reserved beyond 2014, an increase of 12% on the same point last year (2013: £622 million). Perhaps one would be wise to call that the steam.

Its wise to keep my opinions to myself about timber framing after seeing a property being totally rebuilt (bricks only) recently as a result of being incorrectly tied in, could this be a problem for the future. PSN's Space4 timber frame had an analogy recently by a brickie to..."Space4 another home in a few years." One would be wise to consider the significant of "a more traditional" seasonal pattern in conjunction with affordability rules.

Glencore's Interim Management Statement for the 3rd Quarter  was positive in terms of underpinning copper (own source) up 8%, Ferrochrome up 5% and own sourced coal up 7mt to 111.4Mt (7% gain). GLEN's Zinc was just ahead of my expectations with the ramp up in the Australian ops (McArthur River and Mount Isa) and Perkoa avoid some of the consequences of closing the Perseverance and Brunswick mines.

Quite how GLEN will performing with the market outlook for coal for the next 12-18 months is riskier for the long only fraternity. Expect some small acquisitions to consolidate the super-cycle, watch out quality AIM companies. (Easy to identify). As such, with the outlook for coal and the risks to copper due to the control by certain parties, GLEN's a good intra-day trade on the news. With Japan going in the opposite direction to the US, the markets will go following the good news.

Limited time for AB Foods  (but they do miss the managements own LFL sales improvements by 0.5%) and the drinks announcements yesterday, post a telecon I may return to them. Surely I do not need to comment on the sugar outlook we all know too well...just in purchasing it.

Could LGEN's Q3 IMS  bode well for the listed annuity providers with LGEN breaking the trend? Some really good news for HomeServe in the member agreement with AARP. One certainly to watch...

Atb Fraser