Stephen Rawlinson
27 February 2017 · 3 min read

Market Commentary - Housing, Infrastructure, Construction and Services 27th February 2017

Persimmon, Gleeson and Keller opening the batting today in what promises to be a very busy week for the sector. The Berkshire Hathaway/Warren Buffet annual letter to investors, published late last week, puts accounting adjustments, a very common feature of UK HICS stocks into a managerial context. The results round so far has been one of virtually two opposites.

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Stephen Rawlinson
24 February 2017 · 2 min read

Market Commentary - Housing, Infrastructure, Construction and Services 24th February 2017

St Gobain released its 2016 results last night and provides the best guide to UK HICS stocks this morning. Aside from Morgan Sindall’s 8.6% increase yesterday most moves were in a tight range. MGNS has been indicating for some time that it enjoyed a very good 2016 and more importantly provided indications that there was much good revenue and margin growth to come. Closing at 982p last night the shares are 30% YTD.

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Richard Windsor
23 February 2017 · 1 min read

India e-commerce, Edison View: “Flipkart likely to buy Snapdeal

“India e-commerce – Flipkart likely to buy Snapdeal.  The latest in a series of woes that has hit the Indian e-commerce market reinforces our view that in network based businesses, there really is only space for one player to do well. This time around it is Snapdeal which is cutting costs by laying of 800 people, cutting the salaries of its founders to zero and exploring the sale of its mobile wallet FreeCharge at a big discount to what it paid for it in 2015 ($400m). The founders of Snapdeal admit to spreading themselves too thin and not executing optimally, but the real issue here is much more fundamental.

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23 February 2017 · 2 min read

FOMC minutes: Fairly soon = March or June?

FOMC minutes highlight risk market will be caught offside by Fed in 2017

The most recent FOMC minutes suggest to us that March is a live meeting for the next US interest increase, in contrast to market expectations which imply a less than 20% probability of a hike. We believe the market continues to underestimate the resolve of the US Federal Reserve to use the opportunity of low unemployment and close to target inflation to re-normalize US interest rates.

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Alexandra West
23 February 2017 · 3 min read

All eyes on the Geared Turbofan

2017 is a make or break year for Pratt & Whitney’s beleaguered engine programme

The Geared Turbofan (GTF) engine is proof that innovating in aerospace is never an easy task. When Airbus and Boeing first introduced the concept of their new re-engined narrowbodies (A320neo and 737MAX) they were quick to reassure airlines and investors that this was a simple development proposition - a design modification rather than a clean sheet aircraft. I remember noting at the time that Airbus and Boeing were cleverly transferring the majority of engineering risk to the engine original equipment manufacturers (OEMs), and it has proved to be ever thus.

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Stephen Rawlinson
23 February 2017 · 2 min read

Market Commentary - Housing, Infrastructure, Construction and Services 23rd February 2017

Morgan Sindall, Howden Joinery and Rentokil have released their 2016 Finals this morning. We did not expect to see Serco decline 20% yesterday to close at 119p. We attended the meeting which provided few reasons for such a dip, in our view.

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Richard Windsor
22 February 2017
Stephen Rawlinson
22 February 2017 · 2 min read

Market Commentary - Housing, Infrastructure, Construction and Services 22nd February 2017

Serco’s progress in 2016 on its road to redemption is reported today. Barratt Developments has also reported its results for the half year to end December. The moves yesterday saw Mitie fall by around 2%, the largest faller and G4S and Galliford dip by 1%.

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Richard Windsor
21 February 2017

Samsung - Residual Fall-out

It is still the long-term damage that we fear.

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Stephen Rawlinson
21 February 2017 · 3 min read

Market Commentary - Housing, Infrastructure, Construction and Services 21st February 2017

Interserve was the back marker yesterday, quite predictably as the warning was a bit of a shocker. Balfour Beatty has unexpectedly announced that it has sold its Middle East JV to its partner for £11m; Capita has announced that it will take £90m, non-cash, asset impairment to its P&L for last year; Wolseley has announced that it is to merge its Swiss operations with a locally based business, Walter Meier and Galliford Try has announced some solid numbers at the halfway stage of its financial year.

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