Markets Live transcript 22 Jun 2011

Posted by Neil Hume on Jun 22 11:03. 321 comments | Share


Markets Live chat transcript for the chat ending at 11:38 on 22 Jun 2011. Participants in this chat were: stuart.tarry bryce.elder Paul Murphy Neil Hume, FT   STHello    STHello?    More…

Markets Live chat transcript for the chat ending at 11:38 on 22 Jun 2011. Participants in this chat were: stuart.tarry bryce.elder Paul Murphy Neil Hume, FT

ST
Hello
ST

Hello?
ST

Why the F I’m i some bloody intern from 2 years ago???
BE

Well, hello Stuart Tarry.
ST

What’s wrong with this bloody tech
ST

????????????
BE

The technology never fails to fail, does it.
ST

This isPM, mascaradign as ST
ST

Which stands for Some T…
BE

And you can tell it’s PM by his abstract spellings.
BE

For any newcomers, Paul founded Alphaville way back in the day
BE

And has since gone off to run something called FT Tilt
BE

Paul Murphy
Former FT Alphaville editor and founder of the site. Now in charge of something called FT Tilt.
BE

Which, if you haven’t subscribed to, you should.
BE

And, needless to say, the system’s kicked Paul out as an intruder.
PM

Right
BE

How soon it forgets.
PM

Revolutions never go smoothly
BE

Aha! You’re yourself.
PM

Old Guard have seized control.
PM

sort of
PM

Ive jsut moved from mac to some PC crap
PM

and it shows
PM

I’m back in the chair
PM

maybe
PM

here with Bryce
BE

Hello, ROTR! As ever!
PM

I’m running things.
PM

Old regime is BACK
PM

Seized control of the radio station.
PM

EmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticon
PM

EmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticonEmoticon
BE

(Long time since we’ve seen a few of those bandits.)
11:10AM
PM

Everything now working as it should
PM

And no, this isn’t a shameless promotional stunt for FT Tilt.
PM

Although of course you can always go and register here
PM

No, it’ML proper – and we’ve got Bryce to prove it.
PM

He’s seen snese and signed up to the new Old Order.
PM

sense
BE

Yup. Seen snese.
PM

So what we got?
BE

Greece.
PM

dull
BE

Agreed.
PM

Hasn’t gone up in flames. Markets rally, blah.
PM

maybe
BE

Well, FTSE’s had a relief reverse rally.
BE

Down 33 points at 5742
PM

hehe
BE

As yesterday’s confidence vote means nothing, really, in the scheme of things.
PM

Greek tragedy grinds on.
PM

You know im with Rideon rachman on this.
PM

All this talk of a fiscal union is tosh.
PM

Elitist politics. Europe is not the US.
BE

Very good column, that.
PM

No reason for Greece to merge with Germany. Neither side want it.
BE

Well, neither population wants it.
BE

You’ll also agree with Martin Wolf of course, Murphy.
PM

Who wouldn’t
PM

Killer intro
PM

Albert Einstein is reported to have said that insanity consists of doing the same thing over and over again and expecting different results.
BE

Hm. Guess he’s not off to Falaraki on holiday this year.
PM

Please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article – http://www.ft.com/cms/s/0/ac468dee-9c35-11e0-acbc-00144feabdc0.html#ixzz1PziiN8Kl
The market’s scepticism about the ability of Greece to become creditworthy is warranted. It rests on awareness of two facts: the massive indebtedness and the lack of competitiveness. The fact that the Greek people are unwilling to bear the pain merely makes the already implausible quite inconceivable. If this was the state of, say, Finland, one might just believe it. Rightly or wrongly, few believe that today’s Greece is another Finland.
BE

So what’s Wolf’s conclusion?
PM

Please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article – http://www.ft.com/cms/s/0/ac468dee-9c35-11e0-acbc-00144feabdc0.html#ixzz1PzjElLts
When an outcome is inevitable, it is necessary to plan for it. In this case, that outcome seems to most informed observers inevitable. I can see little merit in having Greece default to the public sector years of agony hence rather than to the private sector soon. The best policy is to act pre-emptively. One aspect of such pre-emption would consist of acting to shore up other fragile eurozone members and financial systems more strongly than now. In at least one case, Ireland, that might require debt restructuring. This will also surely require a further move toward a eurozone-wide financial system, with matching fiscal support.
Yet the principal requirement now is to recognise unpleasant reality. One cannot make the incredible credible by endless delay. One can only make the recognition of reality more painful when it finally comes. The time has surely come to recognise the reality of the Greek predicament and act at once on the wider ramifications for its partners.
BE

Okay – so he doesn’t agree with Rachman.
BE

Advocating move to euro-wide financial system.
PM

I’m still with Gideon.
PM

The world is breaking up into smaller units, not bigger ones.
PM

There are far more countries in the world than there were 20 years ago.
PM

Everythings’s getting smaller.
PM

Ipods, phones, banknotes
PM

Except deficits of course
PM

Whatever, let’s move on
11:17AM
PM

\To the banks…
BE

And, we’re down
Barclays PLC (BARC:LSE): Last: 253.45, down 5.45 (-2.11%), High: 258.15, Low: 252.80, Volume: 9.55m
Lloyds Banking Group plc (LLOY:LSE): Last: 47.47, up 0.16 (+0.34%), High: 47.95, Low: 47.22, Volume: 38.19m
BE

Op – Lloyds is up now!
Royal Bank of Scotland Group PLC (RBS:LSE): Last: 38.49, down 0.43 (-1.10%), High: 39.04, Low: 38.45, Volume: 15.79m
PM

Any sense as to why?
PM

I mean the UK is a seller of RBS, got to be good news
BE

Though hardly a new story.
BE

And they’re not going to crystallise that particular loss any time soon.
BE

There is, however, a big downgrade from HSBC knocking around.
BE

(@Swedes: yellow. Same to you, Milky.)
BE

Here’s the detail.
BE

We estimate the ICB ring-fencing
proposals will cost Lloyds, RBS and
Barclays up to £10bn. The latter two
could be the biggest losers
BE

The source of the pain is numerous:
multiple notch ratings downgrades,
longer duration funding and core Tier 1
ratios of 13-15% outside the ring-fence
BE

We cut price targets materially and, as a
result, we also downgrade our ratings
on all three domestic UK banks from
O/W(v) to N(v) on the back of the ICB
BE

Peter Toeman’s the analyst.
PM

I like Toeman
BE

Want some more? He’s one of the few bank analysts you can actually read.
PM

yes, do share
BE

So far the equity and credit markets have treated the ICB
ring-fencing proposal with remarkable equanimity. Maybe
that is because it is not seen as a credible proposal, or maybe
it is because the initial reaction to the report was a positive
one. We are not so sanguine. It is clear that the proposals
have significant political support. And our analysis suggests
the cost of the ring-fence will be both significant and,
understandably given likely timescales, not in forecasts.
BE

There are two critical factors at play here. The first is that
the activities that lie outside the ring-fence will be explicitly
unsupported by the UK sovereign. That suggests credit
ratings should converge towards the ‘stand-alone’ ratings; a
decline of two-to-five notches if applied today. And that, in
turn, should lead to higher funding costs.
BE

The second factor is that the activities outside the ring-fence
will, almost by definition, be less diversified and weaker
credit propositions than the whole bank is today. Normally
that would suggest ‘stand-alone’ ratings will themselves also
fall. But our expectation is that banks will run with higher
core Tier 1 ratios (we estimate 13-15%) to mitigate the
impact. We do not buy into the Modigliani-Miller theory (for
banks), so this higher capital will be a real economic cost.
BE

While uncertainty on timing precludes us from incorporating
these costs into current forecasts, we add a 4ppt risk premium
to our cost of equity. That brings our price targets down and
our ratings to Neutral (V). There is better value elsewhere.
PM

thanks for that
11:21AM
PM

difficult to concentrate here at Neil’s desk
PM

It’s quite disgusting
BE

Most people complain about the pile of rotting trainers under the desk.
PM

I just want to take a snap of this cup
PM

this mug
PM

hang on
PM

Just getting it uploaded
PM

Thanks to Tracy
BE

Ah – his chewing gum storage mechanism.
BE

Yeah. Not pleasant.
PM

sorry wrong linl
PM

Emoticon
PM

here it is
PM

That’s the real thing, here at AV HQ
PM

See what conditions we have to labor under
BE

Those asking why Neil’s off to hospital today: there’s your reason.
BE

He’s growing his own penicillin.
PM

EmoticonEmoticon
BE

Right – where now?
PM

Man group
11:25AM
BE

Ok then
PM

Can’t avoid
BE

Biggest riser in the blue chips
PM

Man alive this morning
Man Group PLC (EMG:LSE): Last: 239.40, up 8.8 (+3.82%), High: 241.70, Low: 235.00, Volume: 7.41m
BE

And, if you like, you can pin this on a highly suspicious puff story that was doing the rounds yesterday.
BE

About JP Morgan bidding.
BE

Or maybe BNY Mellon.
BE

Or maybe Blackrock.
PM

Er, how are JPM gonna bid for a friggin hedge fund
BE

Well, they’re not. Obviously.
BE

It’s nonsense.
PM

Er, seen US fin reform?
BE

I think I managed to get the word “quixotic” onto the back page today when mentioning this story.
BE

Quite proud of that.
BE

Anyway, the real reason why Man’s up
BE

Is because it’s been down
BE

Lost something like a quarter of its value since mid February.
PM

hehe
BE

And all sorts of sellside are appearing this morning to push the tale.
BE

Goldman, for instance.
BE

In our view, discussion of Man Group’s acquisition of GLG has focused on
the cost and revenue synergies of the deal. We believe that the merger’s
lasting legacy will prove to be its cost of equity (COE) benefit. Integration
of GLG’s non-correlated strategies should increase the stability of Man
Group’s management fee revenues and reduce the volatility of the group’s
performance fee income. In our view, the reward should be a meaningfully
lower cost of equity (and therefore higher valuation multiple), which will
continue to improve as the cross-sell of products gathers pace. We initiate
on Man Group with a Buy rating and a 12-month price target of 310p.
PM

Screaming buy cos its fallen by a quarter. great analysis
PM

Same applies to Sino Forest, except more so
BE

Shush.
BE

Here’s Credit Suisse.
BE

Upgrading to Outperform: With Man group’s shares down 25% year-todate
and consensus expectations increasingly incorporating the higher cost
run-rate we believe the downside to our forecasts is relatively limited now.
Clearly the last month has seen weak returns across the hedge fund industry
but we believe the improving relative performance at AHL and signs of
improved fund raising for Man group should underpin a return to growth for
the group. We have trimmed our EPS forecasts by 6% for this year and 4%
for y/e Dec 2012E largely reflecting lower performance fees assumptions.
That said we have raised our sum of the parts based target price to £2.85
(from £2.70) to reflect slightly higher target multiples given the increased
diversification of performance fees.
BE

Improving fundamentals: Man group’s flagship fund AHL which contributes
50%+ of revenues has been relatively flat over the last month and
outperformed other hedge funds and equity markets. AHL is -4% YTD and
+9% over the last 12 months broadly in line with the hedge fund industry.
Despite choppy markets hedge funds continued to see strong inflows
through April and May. We expect June to be more challenging but further
inflows into a recent Nomura AHL launch in Japan is evidence of continuing
demand. Moreover we believe that uncertain markets make AHL attractive
for investors given the liquidity, long-term track record and the more limited
reliance on rising asset values than other hedge funds. Our conversations
with leading managed futures funds and distributors in Asia suggests no
slowdown in the demand for managed futures in recent weeks.
BE

Look – it’s cheap because it’s not as expensive as it was.
BE

And that’s a good a reason as any.
PM

of course
BE

Better, certainly, than a JP Morgan takeout.
11:30AM
PM

Some Sino forest
BE

Since you mention it, sure.
PM

Seen how Bronte Capital has gone all Michael Fowke?
PM

Yesterday’s post was as error-ridden as anything I have ever published.On the most important matter: I thought the Globe and Mail story on Sino Forest would drive the stock down at least 50 percent.

The last time I saw a major paper of record come right out and agree with a shortseller that a major company was a fraud was… well… never.

I thought that would be significant. I thought it would be game-over.

The stock was down less that 15%.

I have a word for my preconception: wrong.

On the size of the theft in global history – well obviously I was not broad enough. I have to exclude all thefts in the nature of war or invasion (dispossession of the American Indians, Australian Aborigines etc). I have to exclude thefts in the nature of revolution (eg the end of Communism in Russia). I have to exclude thefts by Government (Yukos). I have to exclude thefts from Government in quasi war (eg theft of the reconstruction funds in Iraq). I could go on.

However $2 billion neat stolen (still not proven but in my view looking likely) is a larger net theft than Madoff and about as large as they get in financial markets. But then I am likely to be shown to be wrong on that too.

John

 

BE

So, Murph – you’ve got a team following Sino F-ed on Tilt.
PM

And you’ve got McDizzy.
BE

Emoticon
BE

Is it a fraud?
PM

I don’t know.
PM

But I’d like Simon Murray, the chairman of Glencore, who has been wrapped up in SF for 12 years, to stand up and tell me that it isn’t
PM

Truly shocking.
PM

What’s the price of Glencore actually
BE

You’ll like this
Glencore International PLC (GLEN:LSE): Last: 487.30, down 7.85 (-1.59%), High: 498.55, Low: 486.10, Volume: 980.94k
PM

hahaha
PM

What a complete mess
BE

Total disaster of a float.
PM

How many banks were selling this?
BE

All of them, basically.
BE

And they still couldn’t get the earnings guidance right a month before the results.
BE

Quite a spectacular error to have a veiled profit warning in your maiden results.
PM

Those corner stone investors must be happy
BE

I’m sure they are.
PM

Down 10% in a month
PM

great long-terms SWF investment
BE

Heard relationships have ended over this one.
PM

How many times do eastern SWFs have to get mugged by western banks before they learn the lesson?
BE

A few more times yet, I’d assume.
BE

Still got RBS to go, for instance.
Royal Bank of Scotland Group PLC (RBS:LSE): Last: 38.50, down 0.42 (-1.08%), High: 39.04, Low: 38.36, Volume: 17.10m
PM

What does 明子山本 stand for? havent time to go to google translate
BE

Akiko Yamamoto.
PM

Glencore had planned to merge with Xstrata — maybe it could be a simple takeover now — of Glencore
BE

My Hiragana is exemplary.
PM

Im saying that and dont know what the respective market caps are
BE

That’d be neat. Mick the miner would be delighted I’m sure.
11:36AM
PM

How about doing some electrical retailers, before they leave our high streets for ever
BE

A bit of brown goods?
BE

Good idea.
PM

What’s the Comet story?
BE

Well, Kesa has finally admitted the inevitable.
BE

With an activist biting their backs, they’ve launched a review of the business.
BE

Which, in short, means “what will we do with Comet”
PM

Who was the guy who used to run this years ago
PM

Kingfisher days
PM

People used to say: “he’s no oil painting..”
BE

Oh – the name escapes me.
BE

I’m sure one of the ROTR will help.
PM

had htat HUGE bid battle with Dixons
PM

Mc…
PM

Everyone’s too young on here
BE

Well, it did strike me the other day …..
BE

That if Comet was to bite the dust
BE

Would Kingfisher have any residual lease liabilities?
BE

I’m not sure anyone’s asked that question yet.
BE

Anyway, as to the news today ….
BE

Here’s Nick Bubb with a summary
BE

The focus on Kesa with its final results today was less on any current trading vibes (which are predictably “worse than expected”) than on what it said about the future of the loss-making Comet. There was much excitement a few weeks ago on hopes that Kesa would close or sell Comet and re-list in France, but there is little sign that management are prepared for such a drastic step. As we feared, the Comet solution seems simply to close more stores and hope that things pick up, but as we noted yesterday it is hard to know where we are in the cycle for UK electrical retailers and it is entirely possible that things could get worse, not least as interest rates haven’t gone up yet…Comet’s losses could easily worsen this year, from the £9m for last year to over £20m and that would do a lot of damage to the Kesa bottom-line, notwithstanding the resilience of Darty in France. All Kesa has said today is that it has a strong turnaround plan for Comet and that it is also examining other “strategic alternatives”, without spelling out what these are. We hope this is explained more clearly at the 9am meeting…Management are under increasing pressure to improve performance, after another flattish year for group PBT, and given the good dividend yield, we are maintaining our Add recommendation at this stage, pending more news from its rival Dixons tomorrow…
BE

(An AV classic.)
PM

(thank you pastit2)
BE

(Geoff Mulchahy – that’s the man.)
Kesa Electricals Plc (KESA:LSE): Last: 146.50, up 12.6 (+9.41%), High: 147.90, Low: 135.10, Volume: 5.08m
PM

Looks a tad optimistic that price move, to me
BE

Which is quite a bounce
BE

Agree, given the statement moves us no closer to knowing what the endgame is here.
BE

And, obviously, it’s having an effect on Dixons
Dixons Retail PLC (DXNS:LSE): Last: 16.68, up 1.33 (+8.66%), High: 17.00, Low: 15.60, Volume: 8.52m
BE

Which has results tomorrow
BE

And, according to The Times, is a target for Best Buy.
BE

We were getting pushed this rumour yesterday, and refused to touch it.
BE

As the danger of writing “Dixons bid” ahead of results is just off the scale.
PM

I’ve shopped at best Buy
BE

Particularly the Best Buy story
BE

Yeah? What did you think?
PM

Correction: ive stood in a stupid queue, trying to take stuff back and get a refund
PM

Got a near-monopoly in NY for electrical goods — forces you to use the internet instead
PM

I promise you, it’s worse than Currys
BE

I bought an emergency generic MP3 player there for a flight, after getting my iPod nicked. It didn’t last past taxiing to the runway.
PM

Actually, Currys is a great place
PM

Once, when I was at the Guardian, we wrote something rude about Dixons
PM

And they pulled the advertising from the paper
PM

Cost was running at £2m a week
PM

it hurt
PM

Had to get Sir Stanley in for lunch
PM

he as very funny
PM

The advertising came back when the A level results came out in the summer
PM

Cos so many students got computers as presents (was a number of years ago)_
BE

Nice that the Guardian was prepared to take such bullets for you.
PM

(thanks for that taxloss)
BE

Anyway, if Best Buy bought Dixons it’d have to involve some rather huge changes to strategy.
BE

In terms of dull stuff like sales densities
BE

I’d also note that Best Buy announced a big share buyback overnight
BE

Something like 40% of their equity
BE

And, finally, Nick Bubb doesn’t like the story either.
BE

Dixons (Neutral): We are rather bemused to see the Times market report today flagging rumours that Best Buy is looking at bidding for Dixons, as that seems hard to square with its new interest in “small boxes” rather than “big boxes” and its relationship with Carphone Warehouse, but one thing is clear and that is that the improved performance of Currys Megastores has made Best Buy’s UK entry even more challenging (even if the UK economic headwinds have swallowed up much of the potential impact of Currys’ renaissance on the group’s bottom-line). We shall see: we take the bid rumours with a pinch of salt and we wouldn’t get carried away about the upside, but it’s an ill wind etc and the shares have rallied today from the lowly levels of just 15p overnight. We have our 17p target under review. Meanwhile, as well as an update on the poor trading at Dixons’ specialist Online operations (Pixmania and Dixons.co.uk), we are also looking forward to hearing what management say tomorrow with their final results about the business in Greece…
PM

chers for that
11:49AM
BE

Ok – turning to yesterday’s assortment of bids.
BE

SABMiller
PM

Ah yes,
PM

Since when do you get away with a hostile bid pitched at a 14% premium
PM

Hello?
PM

Fosters have put SAB on the spot here
BE

Well, you have to wonder how much SAB actually wants Fosters.
PM

SAB have developed a nasty habit of not closing deals they start
PM

Remember S&N?
PM

Oh and they did try to merge with Diago once, but never admitted to it
PM

Emoticon
PM

Can remember the code name now…
PM

thing to look at on the Fosters front is the EM exposure tho
PM

Places like Vietnam — that’s what SAB is after
PM

Not the teired old mature market stuff
PM

tired eve
PM

even
BE

Yup – Australia must’ve been bottom of a very long list for SAB.
BE

There’s no attraction to the market, no improvements to be made.
BE

Someone described it yesterday as a PE-style deal.
PM

(John McD’s got his own session running over on the right)
BE

Just putting your leverage to work.
PM

(Shall izap him?)
BE

No point beyond that.
BE

(Yellow to McDizzy.)
PM

hey, we should patent the iZapper
BE

It’s neater than a zapper, but you can’t change the battery and it needs upgraded every 18 months.
BE

Anyway, lots of press this morning about SAB raising its bid.
BE

None of which looks more than speculation.
PM

Well….
PM

SAB is a deal machine tht happened to get clogged up
PM

I actually think they will get it, eventually. Unless some EM brewer comes in and trumps them
BE

Yeah – and it’s hard to see who would.
BE

That’s the great advantage of buying a terminally unattractive asset.
BE

It makes a bidding war unlikely.
BE

So Citi reckons SAB has to go to A$5.50
BE

At which point the numbers really do look awful.
BE

SAB has offered
A$4.90 per Foster’s share, equivalent to 11.1x EV/EBITDA for FY12E, when the EV is
fully adjusted for the benefits of Fosters’ recent favourable tax ruling. We think that SAB
will need to bid 12.5-12.7x FY12E adjusted EV/EBITDA to get Foster’s, as this was the
forward multiple that Kirin paid for Lion Nathan. This equates to A$5.50-5.70 per share.
BE

We estimate the deal will be about 6-7% EPS
accretive in FY13E and FY14E, and generate a year-1 ROIC of 6-7%as well. SAB says
it will beat its target WACC of 8.5-9% by FY18. For a low growth business we are not
impressed by this date. The acquisition is a perfect size for SAB, taking its net
debt/EBITDA to ~2.9x, and FGL is highly cash generative (in contrast to much of SAB’s
business). However, we think the decision to pay up for Australia shows there are few
large attractive options left for SAB (or for the other brewers.) We don’t like the dilution
of the emerging mkt story, nor the exposure to what we regard as the over-valued AUD.
BE

We think it will be hard to generate accelerated operational performance — In the
last decade Foster’s Australian volumes have compounded at -0.4%. To get growth
SAB would either have to price up less generously or spend more on marketing, and
either is likely to cap margin expansion. We also worry that the retail environment will
get tougher for brewers in Australia through the expansion of “Big Box” outlets.
PM

cheers for that
11:57AM
BE

Ok Paul
BE

We’re nearly at midday
BE

And you haven’t mentioned this $40bn bit of RAW you’re sitting on.
RAW is market chatter – information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.
PM

hang on, i didnt say it was $40bn
PM

It’s in GBK, anyway
BE

I hear what I want to hear.
PM

And I’m not even saying at this stage whether its a positive or negative story
PM

RAW RAW, so to speak
PM

This is a simple, MIND YER EYE — either way
BE

Well go on then. Spit it out.
PM

BE

Possibly into the coffee cup.
PM

PM

PM

Centrica
BE

Ok.
PM

I don’t have anything to share. Sorry
PM

But I’m told, “mind yer eye”
PM

Havent done the background work
PM

But thought I’d share, jsut cos im on here
PM

You can make your own story up to accompany
PM

But…
PM

it for it…
PM

This carries this particular quality symbol…
PM

Emoticon
PM

Havent seen that for a while, eh?
BE

No indeed.
PM

Have you got a price?
BE

And there are plenty of stories to make up around that one. SWF tends to be the oft repeated tale.
PM

thign is happening there. jsut dont know whether it is an up story or a down story
Centrica PLC (CNA:LSE): Last: 324.10, up 2.5 (+0.78%), High: 324.10, Low: 321.00, Volume: 4.73m
BE

Been strong forever.
BE

Anything happening to British Gas would, obviously, have a Daily Mail “PROTECT OUR FAMILY SILVER FROM THESE EVIL FOREIGN JOHNNIES” angle.
BE

However, I don’t wish to speculate.
PM

Indeed, that alone would invite us to add Gazprom to the nam,e
BE

Oh – not that old story.
PM

Large yacht owner — buyer/seller beware.
12:03PM
PM

Spent so much time gabbing havent got regulsr sutff done
PM

stuff done
PM

Small cap corner
PM

?
BE

Yeah – sure.
BE

Getting requests for our old favourite PDX
Pursuit Dynamics PLC (PDX:LSE): Last: 315.50, up 18.5 (+6.23%), High: 329.00, Low: 306.00, Volume: 640.22k
BE

Bit of a bounce after it signed a few deals.
PM

(In the background…. Izy has jsut shared a markit chart of the Glencore CDS…. hitting 450…not bad for a firm that has just raised X in the biggest float of the year…)
BE

(Wow!)
PM

(Once it gets to 3000 maybe take it private again)
PM

back to PDX…
BE

Yeah – frankly, I’ve nothing much to say on this one.
BE

Polarised story. You either think it’s a crock or not. Binary play.
BE

So, instead, here’s Mirabaud with some detail on today’s news.
BE

“PDX has announced a further biofuels agreement covering three plants representing 195m gallons of annual capacity. This brings the total plants installed or contracted to be installed to 13 covering some 914m gallons. Assuming an average US$ 3c per gallon fee, these agreements (once revenue producing) should see the Company become profitable. We re-iterate our BUY recommendation and 1565p target price.”
BE

Doesn’t really make up for accidentally warning on sales at last week’s analyst thing, but still ….
BE

It’s Aim – you have to keep feeding the punters with an RNS a week.
BE

Oh – and speaking of ….
BE

You’ll like this, Murph.
BE

Jellybook Limited, (“Jellybook” or the “Company”) is pleased to announce the admission of Jellybook’s shares to trading on the AIM market of the London Stock Exchange (“Admission”), with first dealings expected to commence at 8.00am today. The shares will trade under the ticker symbol “JELY”.
BE

Jellybook is a newly incorporated investment company focussing on the social media sector, with the objective of acquiring or investing in businesses in the sector, particularly those companies with both digital media and social networking capabilities.
BE

Details of the placing· Jellybook placed 110 million new ordinary shares at a price of £0.10 per share, raising a total of £11.0 million, 3.7 times the original underwritten amount

· The placing means that Jellybook lists today with a market capitalisation of approximately £17.1 million

· The initially projected £3.0 million minimum placing sum was underwritten by Banque Havilland SA

· The nominated adviser, broker and joint bookrunner is Allenby Capital Limited, with Banque Havilland SA as partial underwriter and joint bookrunner.

BE

Jonathan Rowland, Chairman of Jellybook, said:
BE

“We are delighted that the investment community shares our excitement about Jellybook and its investment proposition. We believe we will provide a real opportunity for UK investors, both institutional and retail, to invest in the social media sector. We are actively seeking out the best companies in the sector to provide our chosen target with both growth capital and sector expertise, as well as to giving our investors their desired access to this fast-growing sector. We look forward to bringing you more news on our strategy in due course.”
PM

WHAT!!!!!!!!!!!!!!!
BE

I know.
PM

THIS WAS A CLOWN FLOAT IN THE DOT.COMEDY BOOM
BE

Yup. Jellyworks as was.
PM

AND BY JONATHAN ROWLAND
PM

WHO DID IT LAST TIME
BE

Jellyworks reinvented.
PM

sorry for shouting
PM

But this is hilarious
BE

I know. You can’t help some people.
PM

Risk factors: we tried this 12 years ago, but everyone lost all their money
BE

Well, Mr Rowland didn’t lose all his money.
BE

He exited at a rather nice price.
BE

Though, as a listed vehicle, it lasted nine months.
BE

Before a mercy killing by Shore Cap.
BE

Who reversed in and junked all their terrible, worthless investments.
BE

Amazing, isn’t it.
PM

im a speechless
PM

get yer shorts out
PM

Anything tech bubble -mshort it. Only decision is whether to take a 3 or 6 month put
BE

My Reuters machine’s refusing to give me a quote for this thing, and I can only admire its judgement.
PM

Actually, take both
PM

Groupon will be the top
PM

Lastminute style.
PM

I remember going to see them on the mornign of the float — down in knightsbridge — was so so so the top
BE

Facebook would be well advised to shout “YOURS” as soon as possible.
PM

Jellywords pre-dated that by about 4 months from memory
BE

Yeah – that’s right. Lastminute marked the top pretty much to the day.
PM

Facebook won’t make it. Channel is clogged up
PM

Pandora etc
BE

Martha and thingmybob joked about it.
BE

Right down to the shares hitting 14p.
PM

Hulu selling out — that’s a good biz
PM

But wont be worth the price tag
BE

It’s like the slop bin for Youtube, isn’t it?
PM

(John — yes)
BE

What gets deleted there goes to Hulu.
BE

Right – anyway – we’re getting reports that FT.com’s beginning to fade
BE

Likely under the weight of viewers to this session.
PM

Ah, but Hulu also have Hulu live which you can get in the US — got loads of great films etc
PM

You can pay $10 for that or $150 for Time Warner…
BE

Fair enough. I’ve never used it, to my knowledge.
12:16PM
PM

Anyway we are drifting on…
PM

Neil hume Style
PM

I have to go to lunch
BE

Speak of the devil.
PM

At the Bleeer
PM

Bleeder
BE

Old school. Go for the lamb.
PM

Hi Neil
BE

Boss – feel free to join us on this side.
PM

We’ve had a few jokes at your expense
BE

Ok – so requests earlier for comment on the minutes.
BE

Oh – don’t put that link up again.
NH

I’m in
PM

Utcha
NH

Hello Rabble
PM

Just like old times
NH

remember another ML tonight
NH

and I will be on that one
NH

what’s happening markets wise
NH

does anyone believe this Man story?
BE

Of course not.
BE

It’s bobbins.
NH

I don’t
PM

Ah yes, plug for McDizzy and Garcia
NH

apparently
PM

Taking over these pixels a little later
PM

7pm london time
NH

there’s another Chinese Reverse Takeover stocks
PM

2pm ET
NH

in the sights of someone
BE

Go on. Any name?
NH

yes
NH

not sure
PM

Oh do share
NH

I should mention it
BE

Give us a guess re. the sector then.
NH

hang on
NH

it’s on my phone
BE

Nokia?
PM

PM

Ive got to get to lunch
NH

one moment
NH

not it’s not Nokia
PM

Lorcan mentions Foxxcon…
NH

i believe it;s this
NH

which has been flagged
NH

as a potential stock to watch
BE

. Spreadtrum Communications, Inc. is a fabless semiconductor company that designs, develops and markets baseband processor, radio frequency (RF) transceiver and turnkey solutions for the wireless communications and mobile television market.
BE

Hm. Fabless semi.
NH

une 21, 2011 (Chinavestor) A good market day is all oversold China stocks need. While there has been some changes to the most oversold China stock list lately, there are some prominent names that are worth paying attention to. Sina corp. (NASDAQ:SINA) is one of them, a stock that fell almost 50% just in two months. Then there is Spreadtrum Communications (NASDAQ:SPRD) that’s been volatile with a huge negative bias. Online gamers fell hard, with names like Shanda Interactive (NASDAQ:SNDA), Giant Interactive (NYSE:GA) or Shanda Games (NASDAQ:GAME) among the most oversold China stocks. New Oriental Education & Tech. Group (NYSE:EDU) is another industry leader that draws attention. But investors have to be careful with what they see on the chart below. While Vimicro Int. Corp. (NASDAQ:VIMC), Agria Cortp. (NYSE:GRO), Jinpan Int. (NASDAQ:JST) or China Transinfo Tech (NASDAQ:CTFO) may seem like the most oversold China stocks, their low trading volume renders technical indicators useless. So instead, let’s concentrate on names that have real trading volume
NH

there you go
BE

Its main assets should be IP, which shouldn’t be particularly opaque.
NH

now I don’t know for sure
NH

if one of those research houses
NH

is preparing a report
NH

but there was some shorting late yesterday
PM

Emoticon
NH

that I do know
NH

obviously
NH

RED RAW
BE

Nice one – ta. Interesting, if true.
NH

blood dripping from it
PM

Does China Take still work on here?
The Truth! Unvarnished. The price of rice always falls. Shanghai investors do not sell stocks. Torch protestors are vile.
BE

Tad out of date.
PM

Love it
PM

So nice to be back onML
NH

Anthony Bolton does
BE

We’ll have our own vile torch protesters next year.
NH

what on earth was he doing buying a massive put on the Korean market?
NH

does he actually think there’s going to be a war
NH

I thought this fund was a china play?
PM

Being scared of North Korea, that’s what
NH

and he’s buying out of the money puts on Korea
NH

and let’s face it
PM

Silly really. if things really did kick off in N Korea, China would just move in
NH

true
PM

Anyway, that’s it from me
PM

The Beeding Heart calls
NH

but this isn’t exactly a new theme is it?
NH

NK vs SK
PM

Do catch John and Cardiff here later — 7pm BST, 2pm ET
NH

been going on for what
NH

70 years
NH

sorry 60
NH

anyway
NH

did you lot discuss QE2 in the UK
BE

No – actually.
PM

Seeya!
BE

Were just coming to that.
NH

it’s a possibility
BE

Bye Paul – pleasure to have you back in the hotseat.
NH

I have a good note from RBS
NH

if anyone interest
NH

and quick
BE

Yeah – the minutes certainly point to it becoming more plausible.
NH

someone corner
NH

Bannantyne
NH

and see if he fancies
NH

backing a promising start up internet venture
NH

with a loyal following
BE

Bannantyne – huge feet. He could ski without skis.
NH

one moment for the note
NH

also Bryce
NH

have we mentioned
Petropavlovsk PLC (POG:LSE): Last: 750.00, up 20.5 (+2.81%), High: 757.00, Low: 731.00, Volume: 493.83k
BE

Saw him in Dover Street a few weeks ago. Feet like Krusty the Clown.
NH

they are very keen
BE

No – we haven’t mentioned Pog
NH

that we should say something nice about them
BE

We mentioned them in the paper today.
NH

ok
BE

Is that not enough?
NH

job done
BE

Agreed.
BE

Back to the minutes.
BE

And QE2 relaunched.
BE

What’s RBS saying?
NH

here we go
NH

In recent weeks attention has once again turned to the question of whether the Bank of England will restart asset purchases, prompted by weak activity data, dove-ish comments by one member of the MPC and today’s set of MPC Minutes.We have called for QE2 before and have been proved wrong. So although QE2 is warranted now in the opinion of the author, we do not believe that the majority of Committee members will be prepared to commit to more asset purchases until February 2012 at the earliest, if at all.

While we remain of the view that the lion’s share of the surge in inflation is transitory, we have learned the hard way that the reality of high short-term inflation and the risk of second round effects that could follow have proved and will likely continue to prove a major hurdle to further asset purchases. These risks will likely reach their zenith in the run up to the November policy meeting.

The keys to unlocking more QE are (i.) a significant and persistent fall in commodity prices which take the heat out of near-term inflation and help take the risks of second round effects off the table, and more importantly (ii.) significant weakness in activity and wages which together would suggest materially lower domestically generated inflation (DGI) in the medium term.

We suspect that a negative Q3 GDP print, corroborated by dire survey data, is a necessary condition for the Committee to be convinced that more QE is required in November. A possible sufficient condition is a persistent global shock to which the UK economy is heavily exposed – most likely a financial crisis, perhaps triggered by a disorderly resolution of the European periphery crisis – which would both depress commodity prices and UK DGI.

NH

so it probably won’t happen
NH

but the fact that it is being discussed again
NH

is news
NH

hang on
BE

(@taxloss: the bit selling digital radios remains a dog in a doggish market, and the rest’s on the same multiple as Arm. Not much more to say, to be honest.)
NH

some BP related news I think
BE

Go on.
NH

via Transocean
NH

they were the rig supplier, no?
NH

BN 06/22 11:25 *TRANSOCEAN CITES DECISION MADE BY BP THE OPERATOR
:RIG US
BN 06/22 11:25 *TRANSOCEAN REPORT CONCLUDES MACONDO DUE TO WELL
DESIGN/OTHER
BN 06/22 11:25 *TRANSOCEAN LTD. ANNOUNCES RELEASE OF INTERNAL
INVESTIGATION
BN 06/22 11:24 *TRANSOCEAN REPORTS RELEASE OF INTERNAL INVESTIGATION
REPORT ON
BE

Transocean was Macondo’s owner and operator.
NH

Transocean Ltd. Announces Release of Internal Investigation
2011-06-22 11:24:59.947 GMTTransocean Ltd. Announces Release of Internal Investigation Report on
Causes of Macondo Well Incident

ZUG, SWITZERLAND — (Marketwire) — 06/22/11 — Transocean Ltd.
(NYSE: RIG) (SIX: RIGN) today announced the release of an internal
investigation report on the causes of the April 20, 2010, Macondo
well incident in the Gulf of Mexico.

Following the incident, Transocean commissioned an internal
investigation team comprised of experts from relevant technical
fields and specialists in accident investigation to gather, review,
and analyze the facts and information surrounding the incident to
determine its causes.

The report concludes that the Macondo incident was the result of a
succession of interrelated well design, construction, and temporary
abandonment decisions that compromised the integrity of the well and
compounded the likelihood of its failure. The decisions, many made by
the operator, BP, in the two weeks leading up to the incident, were
driven by BP’s knowledge that the geological window for safe drilling
was becoming increasingly narrow. Specifically, BP was concerned that
downhole pressure — whether exerted by heavy drilling mud used to
maintain well control or by pumping cement to seal the well — would
exceed the fracture gradient and result in fluid losses to the
formation, thus costing money and jeopardizing future production of
oil.

NH

blame BP for everything
NH

that seems to be the tactic
BE

Looks that way, yes.
BE

Not accepting the shared blame line.
NH

there’s loads of it
NH

I won’t bother you with the rest
BP PLC (BP.:LSE): Last: 442.30, down 3.4 (-0.76%), High: 445.38, Low: 441.25, Volume: 7.15m
BE

No settlement with Transocean likely any time soon though.
NH

no
BE

Wouldn’t be surprised to see BP go weaker by a few pence more on this.
NH

yes
NH

just when we thought they were making some progress
NH

on the Macando litigation
NH

OK Bryce
NH

I imagine
NH

you want to go
NH

and have some lunch
BE

Breaks the “it’s all getting tidied up painlessly” angle getting pushed yesterday.
BE

Yeah – I do.
BE

You in tomorrow?
NH

yep
NH

I make work from home today though
NH

too wet to come in
NH

and we have lunch
NH

at Le Pont de Tour tomorrow
NH

with an oil expert
NH

I’m not missing that
BE

And GKP supporter.
BE

Should be interesting.
NH

Milky that’s the most sensible thing you have ever said
NH

are we done?
NH

If so
NH

see you all at around 7.00pm
NH

for the Bernanke presser
BE

Yup. And Joseph’s your man for Greece ML, hopefully.
BE

Right – we’re done.
BE

(@TK: agreed.)
BE

Thanks for all your comments.
BE

Thanks again to Murph for stepping in.
BE

And Neil for the outside broadcast.
NH

yes
NH

thanks Paul
NH

and thanks Bryce
BE

See you tomorrow, everyone.
NH

for keeping this old heap on the road
NH

cya
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