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Markets Live: Tuesday, 14th March, 2017

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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Simon Wren-lewis writes One vote to bring them all, and in the darkness bind them

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Miles Kimball writes Restoring American Growth: The Video

Menzie Chinn writes “I am the king of debt. I do love debt. I love debt.”




Welcome to ML

blankcanvas good morning
Arlington Morning all

Markets Live


Let's get a pic up

CommentGoesHere Morning All

Markets Live: Tuesday, 14th March, 2017


A horse

Soundbuy Morning.....

But not just any old horse

Twattington-Burbage Morning

Fav in the Arkle Novice Chase today



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

Cos today is the first day of Cheltenham

Chuck Norris Happy Cheltenham everybody!

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

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

Murad had a good read on that yesterday


But we're going to push bac




Push back hard

Otter Hello Friends

Here's Shrewdette's pics


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!


Good luck!


So Bryce


Krona down, stocks up, a bit


All pretty mixed


Yeah, that's the theme.


Charlotte Hogg out at the Bank


There'll be no women left on the MPC


What would Sandra Rupp say?


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


Not sure we've shared that already


But let's get to stocks


Few results around


Led by Prudential

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

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

Pru's an Asian story, mostly


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


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?

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??

Asia new business profits up 22%


US down -13%, UK down 16%


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


RBC incoming.


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

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).


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


(@Blue Horseshoe: Peru?)


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.


Yes, the market does love a capital return story.


(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

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


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)??

Here's Barclays.


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 ...

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


But that's better than expected.


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.


That's Barclays again.


Trader006 -- do explain this


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


What's going on with Segro



Blue horseshoe... I'm mean Pru
psudome Rights issue

And so to Ocado?


It's dull. It's really dull.


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

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


Buyside had moved down already.

Maverick OCDO short squeeze....

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


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

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

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

Paul Murphy erlkin -- what system are you using?
erlkin 4rth time charm

Then 1.54p of EPS in 2019.

erlkin safari....good morgen



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?

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.


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

So. Not brilliant forecasting.




Let's see what they say today.


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.


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.


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!

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 .....


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

LongandWrong So do remind me why analysts get paid so much?

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

It's an app builder


And it's buying this thing


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")


Oh dear -- we're blocked from CyberGhost


Markets Live: Tuesday, 14th March, 2017

A. M. @PM: a vpn provider?

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?

@CyberGhost_EN on the twitter

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


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

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

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


Ah yes of course


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

Liberum were pushing on that basis yesterday ....


.... 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?


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.


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

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...

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

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

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.

............ 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.


Ah well. Win some lose some.


Amazon mentioned on the right


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.

On the back of the annual retail conference in Boston

PM11:36am 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

people in retail can't talk about anything else


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


Here's the grey


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.


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


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.


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.


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.


That's from Andrew Hughes and team


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.

What else?




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

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

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


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


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


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.

Meinie Oldersma

chopper bear Quadrise fuels ?

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


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


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.


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


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.

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


Let's try Goodbody.


A potential turning point




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


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

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

And here's Canaccord.

BarneyBear Anything on Burford Capital's results?

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


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.


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.

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?


Sorry, I got the Rabble onto the subject of VPNs


Yeah, it's an exciting theme.

Upaswellasdown Is a VPN significantly more exciting than a VPL?

Omg smile


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


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!

Cruel, but justifiably so


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!

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


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......

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.

And we'll say thank you in advance


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

......... 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)

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?

Yes. Buy Paul lunch.


What else to fill?


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

(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.

(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

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

Forester @BE correct. Tor is safe for 99.9%.

Sorry, I'll stop talking in brackets now.

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

So, miners? Mcquarie's selling the rally.

A. M. @Flaneur:
Lefevre Anything re the bovis situation? that is share-able?

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

VIXAL @ BE : ok

And Macquarie's had enough of it. Sell


· 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.

· 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


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

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

Flaneur Heres a list of words that kick off monitoring too

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


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


Here's UBS .....

Penny Merger talks held, came to nothing. SKY News

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

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.


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


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

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

Thanks for all that Bryce


Sorry if particularly sluggish this morning


Yep. Hard work today.


But we are through


Thx for joining us on the right

Soundbuy @Golly - Heels at Dawn

Back tomorrow, 11am sharp



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, 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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