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Markets Live: Tuesday, 14th March, 2017

Summary:
11:00 am PM11:00amMorning PM11:00amWelcome to ML blankcanvas good morning Arlington Morning all PM11:00amMarkets Live 11:00 am PM11:01amLet's get a pic up CommentGoesHere Morning All PM11:01am PM11:01amA horse Soundbuy Morning..... 11:01 am PM11:01amBut not just any old horse Twattington-Burbage Morning PM11:02amFav in the Arkle Novice Chase today PM11:02amALTIOR littleclenches 2.10 Altior odds on fave2.50 Ibris Du Rheu 12/13.30 Moonracer 8/1E/W treble chopper bear Moon racer ? 11:02

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PM11:00am

Morning

PM11:00am

Welcome to ML

blankcanvas good morning
Arlington Morning all
PM11:00am

Markets Live

PM11:01am

Let's get a pic up

CommentGoesHere Morning All
PM11:01am

Markets Live: Tuesday, 14th March, 2017

PM11:01am

A horse

Soundbuy Morning.....
PM11:01am

But not just any old horse

Twattington-Burbage Morning
PM11:02am

Fav in the Arkle Novice Chase today

PM11:02am

ALTIOR

littleclenches 2.10 Altior odds on fave2.50 Ibris Du Rheu 12/13.30 Moonracer 8/1E/W treble
chopper bear Moon racer ?
PM11:02am

Cos today is the first day of Cheltenham

Chuck Norris Happy Cheltenham everybody!
PM11:02am

So the bookies reckon this year is going to be "customer unfriendly"

Nately Ahoy
blankcanvas Apart from the stock exchange, Cheltenham is the great redistribution of Irish wealth on the track and at the poker tables at night
PM11:03am

Lots of the top grade horses have pulled out cos of injury etc

VV75 Is that de pub syndicate horse I've been reading about?
Je Suis Muppet ... a horse and not a hogg for the pic today... hmm
PM11:03am

Murad had a good read on that yesterday

PM11:03am

But we're going to push bac

PM11:03am

k

PM11:03am

Push back hard

Otter Hello Friends
PM11:03am

Here's Shrewdette's pics

PM11:04am

With a few of the stars missing this year looks much more open and interesting. In addition to the shorter priced win only (W) have tried to pick a value each-way (EW) in each race. Here we go … 7 races!

1:30 Supreme Nov Hurdle. BALLYANDY 10/3 W to get the better of favourite Melon; and HIGH BRIDGE 16/1 EW is 3-3 over hurdles so must have a shout being ridden by regular conditional Alex Ferguson (No, not that one!). SkyBet special money back free bet offer all losers - worth a check.

2:10 Arkle Novice Chase. The star of today - unbeaten hurdler & chaser ALTIOR 1/4 odds on to Win and he should. BetVictor have 'lengthen the odds' offer by selecting the margin of his win, worth checking out. Somebody has to run 2nd and 3rd and I’ve gone for CLOUDY DREAM 25/1 EW - Unlike most, Bet365 offering quarter odds all EW today so worth a look.

2:50 Handicap Chase. A very open handicap. SINGLEFARMPAYMENT at 15/2 EW - progressive type receiving nearly a stone from Irish NOBLE ENDEAVOUR 8/1 EW.

3:30 Champion Hurdle. The feature today is missing many star names but YANWORTH is pretty starry 5/2 W ahead of O’Leary’s PETIT MOUCHOIR 8/1 EW.

4:10 Mares’ Hurdle. Lives up to its hype this year with strong Irish representation - Limini, Apple’s Jade and second favourite VROUM VROUM MAG 3/1, but I’ve gone for a value EW bet on local LIFEBOAT MONA, progressive but in much deeper here 16/1 EW.

4:50 National Hunt Challenge - Amateur Riders Nov Chase. As always with this one - wide open. BEWARE THE BEAR 8/1 and BIGBADJOHN 14/1 both EW. 4 place quarter odds available so shop around.

5:30 Novices Handicap Chase. Out on a limb here - DOUBLE W’s 14/1 EW - northern raider with the inform Brian Hughes steering. And FOXTAIL HILL 6/1 a safer option for team Twiston-Davies.

Fingers crossed they are all standing up at the end and we are all solvent!

PM11:04am

Good luck!

PM11:04am

So Bryce

PM11:04am

Krona down, stocks up, a bit

PM11:04am

All pretty mixed

BE11:04am

Yeah, that's the theme.

PM11:04am

Charlotte Hogg out at the Bank

PM11:05am

There'll be no women left on the MPC

PM11:05am

What would Sandra Rupp say?

PM11:05am

Have you noticed she's been commenting across the site, like a normal person

PM11:05am
PM11:05am

Not sure we've shared that already

PM11:05am

But let's get to stocks

PM11:06am

Few results around

PM11:06am

Led by Prudential

Prudential PLC (PRU:LSE): Last: 1,715, up 50.5 (+3.03%), High: 1,726, Low: 1,645, Volume: 2.32m
BE11:06am

Yeah, it's very results dominated today with not much else going on.

Upaswellasdown Good morning everyone. Any tips for Ladies Day tomorrow please? (racing not sartorial)
TheManwithaLongChin I'm sure there's plenty of available women who could be on the MPC who understand that they have to be seen to be complying with the rules.
BarneyBear Pru continues to throw off cash, and has capital surplus? But is it accessible to shareholders, or tied up?
psudome Don't wear a head scarf at reception
GBKrona Hola
Umtaliboy2 Fevertree having a down day ....My short of a couple of weeks ago on the basis that it cant climb forever looking pretty sick.
DutchBrat @BE well German utility sector on fire after deal rumours
BE11:08am

Pru's an Asian story, mostly

BE11:08am

US and UK aren't great. Hong Kong sales are.

BE11:09am

Overall growth in new business profit up 7% in constant currency, 18% actual

VV75 Imagination's got some legs this morning, the usual bid flutter?
BE11:09am

The difference is sterling weakening, of course, which is a convenient reminder for today given what the GBK's doing

Upaswellasdown WTF is that video about??
BE11:10am

Asia new business profits up 22%

BE11:10am

US down -13%, UK down 16%

BE11:10am

Question is whether that's sustainable. The former, not the latter.

BE11:10am

RBC incoming.

BE11:11am

Sales in Hong Kong were strong. However we expect lower sales in 2017 and beyond due to new regulation introduced at the beginning of this year. In New rule expected to reduce sales we indicated that the Chinese regulator has introduced another rule to stem the outflow of monies to Hong Kong, and in contrast to previous regulations we expect this one to reduce offshore sales. Prudential has been the most successful insurer at attracting monies from mainland China and therefore is particularly at risk, at a time when its other large Asian geographies are showing slower sales growth.

Blue horseshoe... Peru must be interested in one or more divisions of Old Mutual to extend their global reach
BE11:11am

Prudential has lost some of its diversity in recent quarters but there are encouraging signs. In Indonesia Q4 sales were down 3% with a return to growth in December. In Singapore sales in the 2nd half were 12% higher year on year (constant currency).

PM11:11am

Ah yes, forgot about those new Chinese rules affecting HK insurers

BE11:11am

(@Blue Horseshoe: Peru?)

BE11:12am

The market loves a capital return story. The balance sheet has strengthened with a Solvency II coverage ratio of 201% (31 October 2016: 189%). Also note there was an improvement over the course of 2016 in spite of Brexit. In the European insurance sector, investors reward a capital return story and a stronger balance sheet means not only a stronger dividend to be paid (Prudential grew the dividend by 12% versus consensus expectations of 7%) but also the potential for higher capital return in the future.

BE11:12am

Yes, the market does love a capital return story.

PM11:12am

(Peru Securities)

Flaneur Hope the BoE can find a Vicountess or a Dame to fill the vacant position and fulfill their - what was it? - listen to the plebs remit. Equality n'all that...
Patience @BE - suspect auto-correct - always a laugh.
SoS @upaswell I got to the the bit where she was saying that she and ML had saved unilever, then I couldn't stand her voice any more
BE11:13am

But would the market love a huge acquisition taking it into a difficult market such as South Africa? I doubt it.

BE11:14am

Still .......... who knows. We've noted rumours along these lines already and that's plenty for now.

Trader006 BE / PM can we talk about Segro nil paid rights (not eligible for dividend) trading at a premium to Segro stock which is cum-dividend. (Ex-div during the rights trading period)??
BE11:15am

Here's Barclays.

BE11:15am

Prudential is our Top Pick in our European insurance industry coverage as we believe it is one of the (very) few large cap growth stocks in the sector, but trading in line with the sector (both 12x FY17 operating earnings), and we believe today’s earnings are further evidence of this (7% growth in operating earnings, 12% growth in the dividend). Prudential has also lagged its sum of the parts, trading more in line with UK life insurers, even though UK life insurance only contributed 17% of its divisional FY16 earnings. Asia (3% ahead), US (7% ahead) and Asset Management (c3 % ahead) all beat consensus earnings estimates, while the UK life (where earnings declined 30%) was a modest miss (by 2%). The decline in UK earnings will raise the question on what is the outlook for their UK life insurance / annuity operations, and whether they will consider corporate actions on this business. The UK life insurance operations contributed 17% of divisional earnings, but 60% of capital requirements. Prudential’s reported solvency is strong, with a Solvency 2 ratio of 201%, and the company has disclosed the transitional asset is a £2.5bn or 20 point benefit to Solvency (and more interestingly, 35 points on the UK ratio).

Upaswellasdown I've still got her babbling away in the background - I suspect that there might actually be some new news buried within her 'idiosyncratic' delivery. She sure has some crush on Paul Polman ...
BE11:16am

Forgot to mention the M&G performance. Earnings of £425m, declined 4% YoY.

BE11:16am

But that's better than expected.

BE11:16am

In our view, M&G is at an inflection point with flows starting to recover towards the end of 2016, which bodes well for 2017 earnings. Also, despite net outflows of £8.1bn, M&G’s third party AUM increased 8% YoY to £136.7bn supported by +£18.4bn of market movements. Higher AUM at FY16 will contribute to average assets, which drive the earnings, in 2017.

BE11:16am

That's Barclays again.

PM11:17am

Trader006 -- do explain this

PM11:17am

But tricky for us to do so off-the-cuff

PM11:17am

What's going on with Segro

PM11:17am

??

Blue horseshoe... I'm mean Pru
psudome Rights issue
PM11:17am

And so to Ocado?

BE11:17am

It's dull. It's really dull.

PM11:18am

I thought it was a miss -- but I clearly mis-read

Ocado Group PLC (OCDO:LSE): Last: 270.91, up 12.71 (+4.92%), High: 272.60, Low: 258.80, Volume: 3.00m
BE11:18am

It is a miss, but against a stale sellside consensus.

BE11:18am

Buyside had moved down already.

Maverick OCDO short squeeze....
BE11:18am

So, yeah, there will be downgrades to outer years. Again.

BE11:19am

But nothing that's not already in the price, if we can even talk abotu the price as anything meaningful, which is debatable, given a quarter of the free float's out on loan.

erlkin i'm not getting the left side again oh well
Trader006 Exercise price is 345p, but SGRO comes with a dividend (Ex-Div next Thurs 11.2p). That the rights aren't eligible for.Spread therefore should be 356.2p not 345p
Mouselet reload the page
Forester or use chrome/firefox
BE11:20am

Just going through the latest Goldman note on it .......

squarepeg Anything on Ackman dumping Valeant at a huge loss- does the bull capitulation make these interesting?
Mouselet forester: I've had that failure mode in firefox
BE11:21am

They're now forecasting a loss for 2017 and 2018.

Paul Murphy erlkin -- what system are you using?
erlkin 4rth time charm
BE11:21am

Then 1.54p of EPS in 2019.

erlkin safari....good morgen
PM11:21am

Crazy

BE11:22am

Which led me to dig out its 2010 initiation note from Goldman

Arlington @erlkin do you have flash player updated? 9/10 that's always the issue for me
erlkin thanks u r correct
Upaswellasdown Isn't GS very closely affiliated with Ocado - the founders were ex GS and it was also bkr on IPO?
BE11:23am

Now, I haven't updated this with actual EPS reported, but it's fair to say it never crosses the zero line with any momentum.

BE11:23am

Markets Live: Tuesday, 14th March, 2017

Mouselet add another semi-colon, hit recompile again, wait three more minutes. The glamorous life of the software egnigeer
BE11:23am

So. Not brilliant forecasting.

PM11:23am

Sheesh

BE11:23am

Let's see what they say today.

BE11:24am

Average orders per week: grew +16.7% yoy to 252,000 orders vs GSe +16.5%. This is strong volume growth in a period where implied volume growth for the market ex-discounters was -0.5% (Kantar, 12 weeks to Feb 26).
Average order size: declined by 2.8% to £107.61, sequentially less deflationary vs 4Q16 (-3.7%) and above GSe of -3.5%. Excluding the impact of standalone orders through Fetch, Sizzle and Fabled, average order size fell just 1.6% to £110.84 (-2.9% in 4Q16). This is vs average ONS Food deflation in December and January of 0.7%. Ocado flags the main drivers of the 1.6% basket deflation as being a reduction in multi-buy promotions and further uptake of “Smart Pass” - it does not flag industry wide price deflation.

BE11:24am

Market commentary: Management state that “while the market remains very competitive, there are the first signs of a change in market pricing dynamics coming through” It also states that it is too early to predict how things will develop throughout the year, calling out potential future FX moves as a key factor.
Net debt: As of February 26, 2017 the Group had cash and cash equivalents of £41.2mn (FY16: £50.9mn) and external borrowings of £130.2mn (FY16: £107mn). This implies an increase in net debt of £33mn..
Ocado’s growth: Management state that it believes Ocado can “continue to grow ahead of the online grocery market, and substantially ahead of the market overall”
CFC3 Andover: The number of orders being picked at Andover continues to increase as expected.

BE11:24am

Implications
We make no changes to our £91.8mn forecast for FY17 EBITDA. We believe the Bloomberg consensus of £101.2mn will come down, however from our conversations with investors we believe the market is already anticipating a low c.£90mn range and we note Bloomberg consensus contains several dated estimates. Given the share price has underperformed the food retail sector, with shares -2% YTD vs European food retail average of +1%, we believe the stock will see a positive reaction to this print, with basket deflation easing and Ocado delivering another quarter of strong volume growth as its largest mainstream competitors are seeing volumes contract.

A. M. (if only Adobe would finally accept reality, bin flash and write something from scratch...)
Forester Frankly OCDO has been, is and will continue to be a rubbish investment and I would rather blow my entire savings on the 3.30 this afternoon than hold that stock!
BE11:26am

So ... you can pay 19.0 x EV/Ebitda for a supermarket with basket deflation, whose niche is that you can't use its car park .....

BE11:26am

....... or, not bother. Your choice.

LongandWrong So do remind me why analysts get paid so much?
PM11:26am

What's this Crossrider thing?

LongandWrong GS is Ocado's broker are they not?
Crossrider PLC (CROS:LSE): Last: 61.00, up 4 (+7.02%), High: 61.00, Low: 60.85, Volume: 467.02k
Forester ...and every year we get the same guff about just about to turn a corner, become profitable etc. Yada yada
PM11:27am

It's an app builder

PM11:27am

And it's buying this thing

PM11:27am

Crossrider (AIM: CROS), the online distribution and digital product company, is pleased to announce the acquisition of the entire issued share capital of CyberGhost SRL ("CyberGhost") for an initial consideration of €3.2 million in cash, €3.0 million through the issue of 4,057,813 options over ordinary shares exercisable at nominal value and an EBITDA based earn-out payment capped at €3.0 million (the "Acquisition")

PM11:27am

Oh dear -- we're blocked from CyberGhost

PM11:28am

Markets Live: Tuesday, 14th March, 2017

A. M. @PM: a vpn provider?
PM11:28am

Cyberghost seems to be a VPN thing

Mouselet nine million Euros seems not obviously a completely ridiculous amount to pay for a VPN; but where's the synergy?
DutchBrat @PM are those the guys trying to hack your mailserver?
PM11:29am

@CyberGhost_EN on the twitter

A. M. What does an app developer have to do with a vpn provider?
PM11:29am

Shame

Upaswellasdown 19x?? so just four years with a CAGR of 17% and they'll be down to just 10x ...
BE11:29am

Imagination Tech mentioned on the right, some time ago.

Imagination Technologies Group PLC (IMG:LSE): Last: 297.00, up 23.25 (+8.49%), High: 297.50, Low: 275.00, Volume: 1.59m
Forester Not sure I would be happy to use a VPN owned by a Plc - makes retention of records, data etc more likely
BE11:30am

Haven't heard anything to explain an 8.5% move, though I'll note the idea that Intel buying Mobileye is a positive.

PM11:31am

Ah yes of course

BE11:31am

Mobileye (via St Micro) uses an Imagination MIPS licence.

A. M. @Forester: you have to wonder about the business model of a VPN provider with an uncapped offering (albeit paid).
Maverick Mobileye is an IMG customer
BE11:31am

Liberum were pushing on that basis yesterday ....

BE11:32am

.... based on the argument that Intel won't want to bump MIPS and use its own chips, because what does Intel know about chips after all?

BE11:32am

Mobileye uses MIPS processor cores in all its vision processors and is believed to be one of the fast growing royalty customers for Imagination. Mobileye recently signed a new MIPS license for its forthcoming EyeQ5 processor which is expected to start shipping from 2020. The EyeQ5 will have eight multi-threaded MIPS cores and engineering samples are expected to be available in H1'18. We estimate that Mobileye contributes around $3m to $4m of annual royalties to Imagination currently.

BE11:32am

We expect Mobileye to continue using MIPS in its vision processors, even after the completion of its acquisition by Intel. As stated above, the EyeQ5 is expected to be Mobileye's main processor from 2020 onwards and this is already based on a MIPS processor core. With engineering samples due next year it would be too disruptive to Mobileye's business to try and change this to Intel architecture. More importantly, after Intel's acquisitions of Infineon's baseband business and Altera, the company has continued to use ARM cores in those products. We would expect a similar policy of status quo for Mobileye's processor cores as well.

Intel is clearly not buying Mobileye for the relatively small revenues of Mobileye itself, but for the additional TAM that it can open up for Intel processors to control the car, both within the car and in the cloud. For this to happen smoothly it would be best not to fiddle around with Mobileye's existing successful hardware architecture.

We also believe that in the long run Intel would need to bring some GPU capability within the car, both for graphics and computing. Given the strong relationship that both Intel and Mobileye have with Imagination, we would not rule out Imagination piggy-backing Intel into the car of the future. PowerVR and MIPS are already being used by Texas Instruments, Renessas, Denso etc, within their automotive products.

doodle amazon one hour delivery for food is impressive
doodle ocado simply will never get to that
VV75 Thanks for that explanation guys
BE11:34am

And that's about it for that, I think. We'll not go into Mobileye's is ASIC supplier relationship with STMicro

Pseudonym I doubt any modern software is processor dependent...
BE11:34am

... which, clearly, looks rather more vulnerable.

A. M. @Pseudonym: well, it's a question of performance and processing-time.
Pseudonym Ah ASICs though poss...
BE11:35am

Nor will be touch on the question of whether Intel knows what it's doing ......

Pseudonym @AM Don't think they are picking MIPS for performance.
BE11:35am

............ which is a theme that seemed to generate quite a lot of emails overnight, from people who might've been buying into the Mobileye Bear theory and have been Autonomy'd.

BE11:36am

Ah well. Win some lose some.

PM11:36am

Amazon mentioned on the right

PM11:36am

Might just share this UBS stuff quickly

A. M. I suppose that the image-processing code is highly-tuned to the quirks of the chosen architecture.
PM11:36am

On the back of the annual retail conference in Boston

PM11:36am

Amazon...amazon...amazon is the messgage

Forester @AM for every customer using a VPN for "legitimate" reasons eg political dissidents in China etc, I would wager that 20 are using the VPN to cover illegal activity
PM11:37am

people in retail can't talk about anything else

PM11:37am

I actively avoid Amazon, but Im in the minority i know

PM11:37am

Here's the grey

PM11:37am

Amazon is only in 11 international markets but in the markets where it operates it has profoundly impacted the retail environment across multiple categories. In the US an estimated 50% of product searches begin in Amazon rather than Google, a significant proportion of products are sold via the "Amazon recommends" box and Amazon invested $8bn (net of receipts) on logistics last year. The experts suggested that each sale on Amazon influences a further five sales offline via product research and consumer recommendations. This means that brands are now obliged to have an "Amazon strategy" and choose how they engage with the platform. Unless a brand has a very tight distribution chain the products will likely end up on the Amazon platform in one way or another and it is best to control this from the beginning.

PM11:37am

The first choice for brands is whether to deal with Amazon on a first party retail basis, third party marketplace or the enhanced Fulfilled By Amazon (FBA) offer. The biggest question for most brands is whether Amazon is suitable for the brand equity and how it would fit into their distribution platform. If a brand already has a

PM11:37am

wide distribution platform of own stores, department stores and independents they have to be much more careful about selling via Amazon. Using Amazon allows brands to rapidly gain volume and exposure but there has to be an understanding that is harder to get back customers to own sites in the future. In many regards it is easier for a new brand to start on Amazon and achieve volumes quickly as there are no existing distribution channels to manage.

PM11:38am

Amazon third party selling is the preferred option for some as it allows the brand to set the price but this creates a potential issue for Amazon if the product is widely available at an alternative site for a much cheaper price. The commission taken by amazon on marketplaces varies significantly with c.8% of the selling price for consumer electronics and up to c.15% for clothing. Fulfilled By Amazon may be a further 5-15% of sales value on top of this depending upon product. However, there are a few threats for brands to be aware of: 1) Other distribution channel delisting product, 2) Amazon squeezing up fees over time and 3) Amazon private label offering taking some of the market.

PM11:38am

In our view Amazon has been the most discussed topic amongst investors on our European names for the last two years. There are signs that the fightback has begun in certain sectors, such as electricals, where both Dixons Carphone and Ceconomy have referenced closing the pricing gap to online which has slowed the shift to online pureplays. In clothing and DIY it feels like we are still at the relative infancy of the Amazon lifecycle, and although there may be challenges ahead for Amazon due to brands/product bulk/customer awareness we think they will continue to take share in many of these categories and make life uncomfortable for the incumbent retailers.

PM11:38am

That's from Andrew Hughes and team

PM11:38am

Will try and usual place the rest

TheDubliner Nice move for SIG plc today. Makes up some lost ground over the last few months.
Patience @Forester - main use of VPN is for security of remote login to a LAN. Totally legit.
A. M. @Forester: if you mean downloading/streaming, then that's what I had in mind.
PM11:39am

What else?

PM11:39am

SIG?

PM11:39am

Another one of those shares moving in extreme ways on the back of not so extreme news

SIG PLC (SHI:LSE): Last: 119.00, up 11.8 (+11.01%), High: 119.80, Low: 111.80, Volume: 9.74m
PM11:40am

Surely there's a long/short arb strategy with all these second liners moving on dull resuts?

Forester @patience - really? Many, many people "surf" the free daily allowance offers of the VPN providers without having to enter a credit card number etc
PM11:40am

You don't have to have a view -- just need exposure on the day

BE11:40am

Having not looked closely enough I'm ....... unclear why they're up.

BE11:41am

Earnings of £77.5m, which is bang in the middle of the stated range.

PM11:41am

They've got themselves a ceo

cloudy @Trader006 Re Segro - At the mo dealers are lumbered with people selling their nil paid shares that no-one else is buying. Hence difference. Nice profit if they can hold on for two more weeks.
PM11:41am

Meinie Oldersma

chopper bear Quadrise fuels ?
BE11:41am

That's nice, I guess. Ex of Brammer.

BE11:41am

There's a £100.4m non-cash impairment charge on Lariviere, the French roofing business.

PM11:41am

Meinie Oldersma will be joining the Group from Brammer Limited, where he is currently Group Chief Executive. Before Brammer, he was CEO at 20:20 Mobile Group, and President of Ingram Micro China Group. He is non-executive Chairman of Kondor Ltd, and non-executive Director of Smallsteps BV. He has also been a Non-Executive Director of Bunzl Plc and of Metra Computer Group.

BE11:42am

..... And the divi's rebased, by which I mean cut.

BE11:42am

Because the focus is to get debt back to 1-1.5x.

Patience @Forester - our sales engineers, and owners in Japan, could logon to our LAN via the web with usernames and password encrypted.
BE11:42am

Does any of this explain a 10% rally? Nope. No it doesn't.

BE11:42am

Let's try Goodbody.

BE11:42am

A potential turning point

BE11:43am

Ah.

BE11:43am

In its outlook management notes that trading in the first two months have been in line with its expectations, though the markets remain competitive. In relation to the UK, it expects new build residential to be the best performing sector, with the commercial sector more uncertain. In Mainland Europe, it is seeing improving lfl sales against a backdrop of better macro indicators. Overall, we see the downward bias to forecasts being removed with this set of results

BE11:44am

That's Robert Eason, who's generally correct about stuff.

Pseudonym We use VPN's a lot here, not third party ones though..
BE11:44am

And here's Canaccord.

BarneyBear Anything on Burford Capital's results?
BE11:45am

.............. eventually. Computer's on go-slow.

BE11:45am

Results are reassuring in that trading has not worsened and numbers for 2016 are in the range of management's recent guidance for underlying PBT. Underlying PBT was £77.5m vs our forecast of £77.0m, with consensus nearer to the bottom end of £75-£80m guidance. An exceptional charge for goodwill impairment and disposals of a couple of small businesses has been taken, which shouldn't be a big surprise. Management has already identified actions to address its leverage of c.2 times, including re-basing the dividend. The focus is likely to be on the recent trading comments and the appointment of the new CEO. Trading since November saw LFL sales increases in both Europe and UK, which is reassuring, although cost pressures are coming through and markets remain competitive. Meinie Oldersma has been appointed as Group Chief Executive and will start from April; he is currently the CEO of Brammer Group. Overall the market should be relieved that things have not worsened with recent trading showing some signs of improvement and management already taking action on the balance sheet and leverage. There is no quick fix, but with new management in place, there is the potential to improve leverage into 2018 and deliver higher margins and sales performance over the medium term. We think consensus is unlikely to change hugely from its flat to slightly down PBT forecast for 2017. Valuation could continue to offer potential upside if management can improve the financials over the medium term - but it will likely take time and markets remain uncertain for 2017, particularly in the UK and in Commercial.

BE11:46am

The share price fell by 28% in 2016. The shares reside on a 2017E EV:Sales of c.0.33 times and PE of c.11 times. The shares are trading close to historic trough levels. Although valuation could continue to offer potential upside over the medium term if management can effectively improve the financials, we remain Hold rated as it will likely take time and markets remain uncertain for 2017.

doodle pseudonym - bingo! - if your aim is control and security for corporate communications you will have your own in-house VPN solution using an off the shelf software package - cisco, citrix, etc. You won't trust some fly-by-night operator. Disagree that all use of VPN is hard criminality though - an awful lot is watching foreign TV, which *may* be legal if from EU country to EU country.
Patience @Forester - that was our own VPN. Hadn't noticed conversation was re 3rd party providers. On that you are probably right. But I wouldn't trust one.
BE11:47am

Feels kinda wrong that yesterday's price was wrong by 11.5%, based on today's price, when the company was trading exactly in line with its previous guidance. Efficient markets, eh?

PM11:47am

Sorry, I got the Rabble onto the subject of VPNs

BE11:47am

Yeah, it's an exciting theme.

Upaswellasdown Is a VPN significantly more exciting than a VPL?
PM11:47am

Omg smile

BE11:47am

Meanwhile, I've updated my Ocado-Goldman expectations versus reality chart.

BE11:48am

Markets Live: Tuesday, 14th March, 2017

Forester @patience CyberGhost and their competitors are also heavily downloaded phone apps - I use it to watch sports when abroad etc but obviously it can, and is used for all sorts of shenanigans!
PM11:48am

Cruel, but justifiably so

BE11:48am

Those EPS values were grabbed somewhat haphazardly, so I can't guarantee them. The trend, though, is what to note.

Otter VPN = Very Pretty Nun
rw42 Very Probable Nutcase i thought!
PM11:49am

Actually, while the tech crew are discussing things on the right

PM11:49am

We should get them to test this

erlkin i'm long and wrong in oil reading this am saudis pumped 10mln a day in Feb....i suppose that is inline w/ agreed upon....i follow the gal at rbc Helima Croft who continues to believe the risk is to the upside......
PM11:49am

Do mark stuff for the attention of myself or Bryce

A. M. @erlkin: have you read the Magueri (sp?) doom'n'gloom piece?
Upaswellasdown @erlkin - Helima is pretty smart, stick with her.
PM11:50am

And we'll say thank you in advance

BE11:50am

Readers should know there are many ways to contact us. That's one.

Pseudonym @PM It's a brave man that asks the internet to send him stuff anonymously.
cloudy @ Trader006. Do you agree I was right?
Forester @pm good idea! Might also want that page some links to tips on how to use Tor securely. There are some simple mistakes you can make
BE11:51am

......... But if you'd rather not battle with Tor in some internet cafe on the Edgware Road, meeting at Starbucks works equally well.

A. M. @PM/BE: I'd be wary of TOR (there was a lot of stuff about it in Pando a couple of years ago)
PM11:51am

Or buy us lunch

doeswalk compliance wants to know why you've installed the tor browser on your company laptop
Upaswellasdown @PM / BE - is downloading Tor a way to bring unwelcome attention from the chaps at Cheltenham or is everyone at it nowadays?
BE11:51am

Yes. Buy Paul lunch.

PM11:52am

What else to fill?

BE11:52am

Sheesh, there ain't much.

Residual Don't journos use whatsapp to get things securely now? Unless it's massive data dumps?
Pseudonym Just installing Tor might well flag you up depending on where you did it. Maybe a dead-letter box would be more fun.
A. M. @Residual: isn't whatsapp linked to your phone number?
Upaswellasdown @ AM - you can use a burner, like in The Wire
BE11:53am

(AM: In my experience, Tor's okay. Don't plan a murder on it. But don't pan murders anyway, please.)

Soundbuy Use a fax machine.......
Flaneur Anyone in Holland can tell us if any effect on electoral mood from Turkish shenanigans?
A. M. A usb-strick tied to a brick.
BE11:54am

(The most recent Wikipedia CIA drop shows the authorities probably lack any way to catch end-to-end encryption without targeting individual machines. That should be sufficient for most applications.)

VV75 @Flaneur Nah it's bs posing from Erdogan as usual and we know it.
Residual @AM - thought the end to end encryption was the rationale
BE11:55am

(@Vixal: don't be unkind about other commenters otherwise you're gone.)

Forester @BE correct. Tor is safe for 99.9%.
BE11:55am

Sorry, I'll stop talking in brackets now.

A. M. @Residual: I was thinking of deniability etc.
BE11:55am

So, miners? Mcquarie's selling the rally.

A. M. @Flaneur: http://nltimes.nl/2017/03/14/turkey-row-immediate-impact-dutch-election-polling
Lefevre Anything re the bovis situation? that is share-able?
BE11:56am

The rally being yesterday's inch higher from a two-month low.

VIXAL @ BE : ok
BE11:56am

And Macquarie's had enough of it. Sell

BE11:56am

· Commodity prices – key price forecast changes to bulks and nickel. Macquarie’s Commodities team reiterates the expectation of downside in iron ore as the Chinese apparent demand cycle turns, but given Q1 gains, we have raised full year 2017 expectations by ~16% to $63/t but still expect prices to fall back to $50/t in 2H17. In contrast, manganese and met coal prices have been lowered in the near term. In nickel, the political-driven uncertainty over Indonesian and Filipino ore shipments continues. After looking at a range of scenarios, we now feel there is some ore-driven upside from current levels, and have raised our 2017 forecast by ~12%. We have also increased our alumina price forecast by an average 15% from CY18-21 due to a combination of US alumina closures and ex-China aluminium growth.
· Diversified miners – higher earnings but mixed TP changes. Vale and RIO have experienced the most material near-term earnings upgrades given the predominance of iron ore in the earnings mix. Our CY17 and CY18 EBITDA estimates for Vale and RIO increase by 12% and 18%, respectively. Near-term cuts to metallurgical coal and manganese lead to a reduction in South32’s CY17 EBITDA of 4% but the significant increase to alumina and manganese forecasts in 2018 see CY18 EBITDA rise by 6%. For the rest of the peer group, EBITDA forecasts changes are

Upaswellasdown There's a hayfield near Buxton. It's got a long rock wall with a big oak tree at the north end. It's like something out of a Robert Frost poem. It's where I asked my wife to marry me. We went there for a picnic and made love under that oak and I asked and she said yes. At the base of that wall, you'll find a rock that has no earthly business in a Maine hayfield. Piece of black, volcanic glass. There's something buried under it I want you to have.
BE11:56am

· We acknowledge that after an enthusiastic start to the year, macro momentum in China is slowing and end use demand is seasonally softer; leading to a build-up in supply chain inventories which could cap commodity price gains in the near term. But ex-China economic indicators remain robust and should offer, at least partial, support to prices. Against this backdrop, we retain our preference for stocks with compelling valuation metrics and strong capital return potential. Our relative preference for RIO and S32 amongst the diversified miners therefore remains unchanged. Both stocks offer FCF yields in the mid-teens on our base case, DYs greater than 6% and both companies have either committed to, or hinted at, share buy-back programmes. KAZ Minerals remains our top pick amongst the base metals as we believe that project delivery should continue to reduce the risk discount levied on the stock.

Rio Tinto PLC (RIO:LSE): Last: 3,289, down 15.2 (-0.46%), High: 3,297, Low: 3,267, Volume: 1.16m
Anglo American PLC (AAL:LSE): Last: 1,188, up 1 (+0.08%), High: 1,197, Low: 1,184, Volume: 1.64m
BE11:57am

Etc.

Flaneur @upaswellasdown - dl Tor will get you on a routine monitoring list, but having Tor means they cant read any of it, so....
BE11:57am

@Lefevre: nothing frech on Bovis, though clearly it's now officially for sale.

Flaneur Heres a list of words that kick off monitoring too https://www.forbes.com/sites/reuvencohen/2012/05/26/department-of-homeland-security-forced-to-release-list-of-keywords-used-to-monitor-social-networking-sites/2/#649e76c37d90
BE11:58am

But the Lex note overnight made the point: why buy Bovis when you can buy landbank?

Penny ROYAL LONDON - LIV VICTORIA merger? SKY
BE11:59am

The latter's a better use of capital so that puts a ceiling on the Bovis price.

BE11:59am

Here's UBS .....

Penny Merger talks held, came to nothing. SKY News
PM11:59am

So no one is going to overpay, i suspect

Lefevre I think GFRD has a good chance…I suspect Bovis s'holders would be happy to take Galliford shares, FWIW
BE11:59am

We believe the rationale for a [Galliford] deal with Bovis would be cost synergies from increased scale and potentially better execution following poor operational execution of Bovis over recent times. Given attractive returns available in the land market, we see an all-cash transaction from a larger player as unlikely.

BE12:00pm

(@Penny: I remember chasing that story a year ago. Not sure if it ever made print.)

BE12:00pm

While there have been no material M&A transactions since 2007, we calculate that synergies historically averaged c3% of target sales at announcement and subsequently upped to c4%. Based on Bovis' sales of c£1bn this implies £30-40m of pre-tax synergies, which we expect would come from (1) improved procurement; (2) overhead reduction and (3) consolidation of the Board and PLC structure. However, assuming the acquiring management team could increase Bovis' ROCE (UBSe'18E: 14%) more in line with the sector average (24%), it would imply around £100m profit uplift p.a.

Penny ah ok, old news then. just saw it
BE12:00pm

Based on the proposed exchange ratios and assuming synergies of £30m, we calculate 8% EPS accretion for Galliford Try and 1% for Redrow in FY18E. Assuming more aggressive synergies of £100m p.a. would potentially be c30% EPS accretive for Galliford Try and c15% for Redrow on the announced terms. Both companies have until 9th April to make a firm bid. Given the accretion potential, we see some room for a more favourable exchange ratio, although we doubt either Redrow or Galliford Try would accept short-term earnings dilution. Precedent transactions averaged at 1.47x P/TNAV, 8.6x EV/EBIT and 10.3x P/E on a trailing basis, though the range is wide and depends on the level of returns, size of transaction and point in the cycle.

erlkin still just rain here in nj exit 98
Golly Galoshes "In addition, I was elected as FM on a clear manifesto commitment re #scotref. The PM is not yet elected by anyone." This is going to get nasty.
FATDAZ @Flaneur thx but no ISIS in terror keyword list I note
PM12:01pm

Thanks for all that Bryce

PM12:02pm

Sorry if particularly sluggish this morning

BE12:02pm

Yep. Hard work today.

PM12:02pm

But we are through

PM12:02pm

Thx for joining us on the right

Soundbuy @Golly - Heels at Dawn
PM12:02pm

Back tomorrow, 11am sharp

PM12:02pm

Bye

Are we there yet That list is old
Pseudonym @Golly The PM is never elected other than as an MP.
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Paul Murphy
Paul Murphy is the founding editor of FT Alphaville and an associate editor of the Financial Times. He joined the FT in London in 2006 as development editor of FT.com, concentrating on the expansion of the online business. Prior to that, he served as the Guardian’s financial editor for seven years. He has also held senior positions in business journalism at the Sunday Business newspaper and the Daily Telegraph. Murphy is a graduate of the London School of Economics.

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