Philip O'Sullivan's Market Musings

Financial analysis from Dublin, Ireland

Market Musings 1/12/11

with one comment

How the year has flown. It’s hard to believe that it’s December already. Less hard to believe is that central banks remain willing to do whatever they deem necessary to keep the show on the road. As I have noted before, such actions are bullish for equities and commodities (especially gold), and bearish for cash and bonds. Or, put more succinctly, this headline sums up what I make of it all.

 

(Disclaimer: I have an indirect shareholding in DCC plc) Yet another sign of the under-siege UK consumer: Topps Tiles lfl sales were -6.9% yoy in the past 7 weeks, versus -3.8% in the year to Oct 1. On a more positive note, UK DIY group Kingfisher released an update earlier this morning, but what really caught my attention was the factsheet that accompanied the results. Have a look at the buoyant sales figures for winter-related products such as insulation, electric fires and rocksalt. If people are engaging in precautionary buying because last winter’s freezing weather has taught them not to take any chances, this has positive implications for DCC, the largest home heating oil and gas distributor in the UK and Ireland.

 

And here’s yet another sign that the Chinese property market is in big trouble.

 

My thesis for some time has been that when China rolls over, so does Australia. Bang on cue, Australian housing approvals have fallen by almost 25% in the space of two months.

 

(Disclaimer: I am a shareholder in Total Produce plc) There have been further developments around South Africa’s Capespan, with the fruit group confirming that its largest investors are in “talks“. Total Produce is Capespan’s second largest shareholder, with a 20% stake in the group. For a primer on this newsflow, check out some excellent work by Wexboy and ValueandOpportunity. All of my previous entries on Total Produce can be found here.

 

(Disclaimer: I am a shareholder in AIB plc and Bank of Ireland plc) We got a trading update from AIB yesterday, which while somewhat lacking in detail contained a number of positive signs. AIB referred to a stabilising NIM, stabilising deposits and good progress on deleveraging. Which pretty much mirrors what Bank of Ireland said in its recent update. While the Irish banks are by no means out of the woods yet, and nor is the broader financial sector, they are in my view moving into more interesting territory.

 

Finally, Greencore reports its FY results next Tuesday. NCB’s Darren Greenfield has a good preview of them here.

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Written by Philip O'Sullivan

December 1, 2011 at 5:18 pm

One Response

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  1. […] is the latest installment of (for a change) good news from the Irish financial sector after recent positive updates from AIB and Bank of Ireland. The sector certainly is getting more […]


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