Market Musings 21/11/11
Origin Enterprises issued a solid trading update earlier this morning. Management said the “performance [is] in line with the group’s expectations in the seasonally quiet first quarter of the 2012 financial year”, adding that it “remains comfortable with consensus market estimates for the full year”, helped by the positive outlook for primary food producers. Of course, much hinges on the performance in the second half of Origin’s financial year, which accounts for 85% of the full-year profitability of the group, but given indications of a further loosening of monetary policies in many of the world’s leading economies, I think the outlook for soft commodities will remain positive, which will translate into clear benefits for Origin, which supplies many key inputs into the farming sector. Given this macro backdrop, and the excellent job management has done in repositioning the group through securing strategic alliances for its food and fishmeal operations and concentrating on its core agri-services and agri-inputs operations, Origin Enterprises is a stock I like.
(Disclaimer: I am a shareholder in Total Produce plc) Staying with the food sector, I uncovered this piece of information regarding Total Produce – in its recent H1 results the group referred to having increased its shareholding in the leading South African fresh produce company, Capespan, without stating by how much it has increased its shareholding. I note that some six weeks or so after this announcement Capespan disclosed that Total Produce has in fact nearly doubled its shareholding in the company to 20%. This helps cement Total Produce’s partnership with its leading provider of citrus, deciduous and stonefruit categories to the European market.
A troubling indicator of the health of Ireland’s retail sector – on Saturday morning I went into the Argos store in the Stephen’s Green shopping centre in central Dublin. Despite Christmas being just over a month away, it had no cashiers on duty at 11.15am, with customer service staff taking payments. If a mass-market chain like Argos needs no cashiers at that hour on a Saturday morning during what is meant to be a seasonally busy time, you’d wonder about how grim things must be for a lot of retailers at this time. Which makes plans to raise the VAT rate by 2% all the more ridiculous. The government should instead be taking a chainsaw to public spending, much of which, as multiple reports from the Comptroller and Auditor General show, disappears into a black hole.
Staying with troubling indicators – how’s this for a statistic around the UK housing sector: The average age of a first time home buyer in England is now nearly 43.
If you’ve any plans to travel to Moscow, you should check this place out.
Finally, on a lighter note, one of my readers flagged this tweet by Martin Geddes:
With the Euro, Germany thought it was getting everyone to adopt the Deutschmark. What has happened instead is that Germany got the Lira.