Weekly Newsletters
22 May 2020 | William Buckhurst
That Was The Week That Was
MACRO
- Jay Powell, chairman of the US Federal Reserve, started talking about full recovery not being complete until end of 2021
- Janus Henderson show a best-case scenario of a 15% reduction in global dividends, worst case 35%. They say that the US will be less impacted due to a lower level of payout in the first place; and they think that the major impact on Asia will not be until later this year
- UK CPI came in at 0.8% for April, the lowest in four years, prompting a letter of explanation from new governor Andrew Bailey to the Chancellor
- The Bank of England issues gilts on a negative rate for the first time ever
STATISTIC OF THE WEEK
Investec’s Roger Lee published a piece reminding us that the continued outperformance of growth stocks should not be taken as a given. To illustrate this, he points out the market capitalisation of Zoom is now larger than every major US airline combined, which he feels is unwarranted
COMPANY NEWS
- Nike’s statement was broadly in line with expectations, showing that many of their Chinese and Korean stores are now open again. Although footfall is down, conversion rates are much higher – i.e. when people do enter a store, they are much more likely to buy something
- It was interesting to see Taiwan Semi-Conductor going ahead with a new $12bn chip plant in Arizona
- Compass, where around 50% of its catering business is closed, announced a $2bn rights issue to shore up its balance sheet
- A Zoom call with the FD of Persimmon showed us that they have been very effective in getting workers back onto building sites over the last three weeks
- Experian released a very robust statement highlighting their resilience against a weak economic background and the repeat nature of their business
SMALL-CAP NEWS
A reassuring update from the management team at the listed property vehicle Secure Income REIT. With the share price now giving little to no value to parts of the portfolio negatively impacted by the pandemic, there could be meaningful upside if and when things return to some semblance of normality. Debt levels are low, and they astutely sold some assets last year with the proceeds still held in cash
FUNDS
A UK investment trust manager gave us an insightful look into some sectors that are under pressure. They still have large positions in Ryanair and EasyJet (believing that both will be in a stronger position once the pandemic is over); and that balance sheet strength for the housebuilders is being overlooked. They also mentioned that in their own models Frasers Group (previously known at Sports Direct) could survive for another 18 months without a single store reopening – Frasers have recently announced they will reopen on 1st June
THIS WEEK IN HISTORY
1801: William Hammond, chairman of the Committee of Managers, laid the first foundation stone for the new London Stock Exchange building on 18th May 1801
1864: In the US, the great “Civil War Gold Hoax” causes gold prices to spike 10% overnight
LOCKDOWN LOWDOWN
UK streaming services showed that Britbox (the ITV, BBC, Channel 4 back catalogue) has not got off to a good start. Its main problem is that it is not on any of the platforms, such as Sky, and is difficult to put onto your TV set. This is not encouraging for ITV’s share price.
MARKET DATA
|
% returns |
1 Week |
1 Month |
1 Year |
5 Years |
|
UK Equities (% return GBP) |
3.27 |
4.09 |
-16.24 |
1.52 |
|
World Equities (% return GBP) |
2.67 |
6.69 |
3.71 |
60.79 |
|
10 Year US Treasury Yield ((%) |
0.66 |
0.63 |
2.39 |
2.21 |
|
GBP / USD (fx rate) |
1.22 |
1.23 |
1.27 |
1.55 |
As at 22nd May 2020. Source: Financial Express
This publication has been produced by Vermeer Investment Management Limited (VIM) trading as Vermeer Partners. It is provided for information purposes only. VIM makes no express or implied warranties and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included in this publication. VIM will not treat unauthorised recipients of this publication as its clients. Prices shown are indicative and VIM is not offering to buy or sell or soliciting offers to buy or sell any financial instrument. Without limiting any of the foregoing and to the extent permitted by law, in no event shall VIM, nor any of its officers, directors, partners, or employees, have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents. Other than disclosures relating to VIM, the information contained in this publication has been obtained from sources that VIM believes to be reliable, but VIM does not represent or warrant that it is accurate or complete. VIM is not responsible for, and makes no warranties whatsoever as to, the content of any third-party website referred to herein or accessed via a hyperlink in this publication and such information is not incorporated by reference. The views in this publication are those of the author(s) and are subject to change. VIM has no obligation to update its opinions or the information in this publication. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the client who receives it. Any securities discussed herein may not be suitable for all investors. VIM recommends that investors independently evaluate each issuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results. This material has been issued and approved for distribution in the UK and European Economic Area by VIM.
©2019 Vermeer Investment Management Limited. All rights reserved. No part of this publication may be reproduced or redistributed in any manner without the prior written permission of VIM. VIM is authorised and regulated by the Financial Conduct Authority (FRN: 710280) and is incorporated in England and Wales (company number: 09081916).
Other Recent Weekly Newsletters
That Was The Week That Was
13 May 2022
That Was The Week That Was
06 May 2022
That Was The Week That Was
29 April 2022
That Was The Week That Was
22 April 2022
That Was The Week That Was
15 April 2022
That Was The Week That Was
08 April 2022
That Was The Week That Was
01 April 2022
That Was The Week That Was
25 March 2022
That Was The Week That Was
18 March 2022
That Was The Week That Was
11 March 2022
That Was The Week That Was
03 March 2022
That Was The Week That Was
25 February 2022
That Was The Week That Was
18 February 2022
That Was The Week That Was
11 February 2022
That Was The week That Was
04 February 2022
That Was The Week That Was
28 January 2022
That Was The Week That Was
21 January 2022
That Was The Week That Was
14 January 2022
That Was The Week That Was
07 January 2022
That Was The Week That Was
17 December 2021
That Was The Week That Was
10 December 2021
That Was The Week That Was
03 December 2021
That Was The Week That Was
26 November 2021
That Was The Week That Was
19 November 2021
That Was the Week That Was
12 November 2021
That Was The Week That Was
05 November 2021
That Was The Week That Was
29 October 2021
That Was The Week That Was
22 October 2021
That Was The Week That Was
15 October 2021
That Was The Week That Was
08 October 2021
That Was The Week That Was
01 October 2021
That Was The Week That Was
24 September 2021
That Was The Week That Was
17 September 2021
That Was The Week That Was
10 September 2021
That Was The Week That Was
03 September 2021
That Was The Week That Was
27 August 2021
That Was The Week That Was
20 August 2021
That Was The Week That Was
06 August 2021
That Was The Week That Was
30 July 2021
That Was The Week That Was
23 July 2021
That was The Week That Was
16 July 2021
That Was The Week That Was
09 July 2021
That Was The Week That Was
02 July 2021
That Was The Week That Was
25 June 2021
That Was The Week That Was
18 June 2021
That Was The Week That Was
11 June 2021
That Was The Week That Was
04 June 2021
That Was The Week That Was
28 May 2021
That Was The Week That Was
21 May 2021
That Was The Week That Was
14 May 2021
That Was The Week That Was
07 May 2021
That Was The Week That Was
30 April 2021
That Was The Week That Was
23 April 2021
That Was The Week That Was
16 April 2021
That Was The Week That Was
09 April 2021
That Was The Week That Was
02 April 2021
That Was The Week That Was
26 March 2021
That Was The Week That Was
19 March 2021
That Was The Week That Was
12 March 2021
That Was The Week That Was
05 March 2021
That Was The Week That Was
26 February 2021
That Was The Week That Was
19 February 2021
That Was The Week That Was
12 February 2021
That Was The Week That Was
05 February 2021
That Was The Week That Was
29 January 2021
That Was The Week That Was
22 January 2021
That Was The Week That Was
15 January 2021
That Was The Week That Was
08 January 2021
That Was The Week That Was
18 December 2020
That Was The Week That Was
11 December 2020
That Was The Week That Was
04 December 2020
That Was The Week That Was
27 November 2020
That Was The Week That Was
20 November 2020
That Was The Week That Was
13 November 2020
That Was The Week That Was
06 November 2020
That Was The Week That Was
30 October 2020
That Was The Week That Was
23 October 2020
That Was The Week That Was
16 October 2020
That Was The Week That Was
09 October 2020
That Was The Week That Was
02 October 2020
That Was The Week That Was
25 September 2020
That Was The Week That Was
18 September 2020
That Was The Week That Was
11 September 2020
That Was The Week That Was
04 September 2020
That Was The Week That Was
28 August 2020
That Was The Week That Was
21 August 2020
That Was The Week That Was
14 August 2020
That Was The Week That Was
07 August 2020
That Was The Week That Was
31 July 2020
That Was The Week That Was
24 July 2020
That Was The Week That Was
17 July 2020
That Was The Week That Was
10 July 2020
That Was The Week That Was
03 July 2020
That Was The Week That Was
26 June 2020
That Was The Week That Was
19 June 2020
That Was The Week That Was
12 June 2020
That Was The Week That Was
05 June 2020
That Was The Week That Was
29 May 2020
That Was The Week That Was
22 May 2020
That Was The Week That Was
15 May 2020
That Was The Week That Was
08 May 2020
That Was The Week That Was
01 May 2020