Philip O'Sullivan's Market Musings

Financial analysis from Dublin, Ireland

Market Musings 27/03/11

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A couple of things caught my eye since my last update on Friday. China provided two of those, the first being the news that the country has 879m mobile phone users, more than the combined population of the EU and the USA. The second being the eye-popping statistic that 240,000 new internet users go online every day in China. Elsewhere, Samsung revealed another interesting statistic, namely that electric power plants in the U.S. consume 49% of the water used in that country.

Morgan Stanley came out with its Global Investment Perspectives late last week. It warned that, for European equities, “consensus estimates for margins are far too optimistic” given the pressure being applied by rising input prices. MS sees European stocks posting EPS gains of 12% this year against consensus of a 16% rise. If true (and I’d be inclined to agree with MS), we could be seeing a lot of downgrades as the year progresses. I wrote a piece about the effects of input price increases on Irish plcs in the March issue of Business & Finance magazine.

In my last blog I said that Osborne’s raid on the North Sea oil and gas producers was ill-considered. This article gives plenty of ammunition for those of you who share my view.

The Aussie dollar moved towards record levels against the US dollar, which to me says about as much about Australia’s economic strength as it does about America’s monetary policies.

The perils for bloggers of writing about companies came to mind upon reading this.

Are UK small caps poised for a comeback? Click here to listen to the views of legendary fund manager Gervais Williams.

Closer to home, Bloxham Stockbrokers also revealed its preferred picks in the Irish market. The battle for the Irish owned Maybourne (Claridge’s, Berkeley and Connaught) hotel group is also nearing the endgame. I was pleased with Ireland’s victory over Macedonia but FAI bosses are surely less pleased with their ticket pricing strategy, which saw only about 60% of seats filled at Lansdowne Road. I also note that Independent News & Media is considering charging for some of its web content, according to reports on Bloomberg. Presumably they’ll follow the Irish Times’ lead and start charging for access to its archives. The VHI should be condemned for its bone-headed decision here, which serves only to reduce competition, raise rates and increase overcharging.

So what’s happening in Ireland next week? We got confirmation that the Irish banks’ stress tests will be released at 4.30pm on March 31st. Joe Brennan at Bloomberg’s Dublin bureau has a nice primer on this that’s worth a read. In terms of corporate news, we will have results from engineer Kentz tomorrow, travel software provider Datalex on Tuesday and financial services group IFG on Wednesday.

Finally, on a lighter note, click here to see the Keynes versus Hayek rap video.


Written by Philip O'Sullivan

March 27, 2011 at 5:55 pm

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