Friday, 25 January 2013

Abchat Weekly Wrap Up: Is this the winter of discontent?

The final three months of 2012 saw a shrink in the UK’s GDP. The Office for National Statistics claim the UK’s output shrank by 0.3% in Q4 2012. This is a preliminary estimate, and could therefore be liable to change in the months ahead. Having said that it is highly likely that the ONS’s estimates are accurate, so what does this mean for the UK economy looking forward for Q1 2013? The traditional week of snow which we Brits have become accustomed to hit us reasonably hard over the last 10 days, and now Britain prepares for the economy to slide into the dreaded triple-dip recession.

The main area for concern in Q4 2012 was the production industries, which decreased by 1.8% of the three months. On a brighter note, construction output rose by 0.3% which is some long awaited encouraging news for the sector. The services industry, which is the dominant driver of the UK economy, experienced a flat quarter.

The 0.9% expansion the UK experienced in Q3 as a result of hosting the Olympic Games now seems a distant memory – and the country now stares down the barrel of a triple barrelled shot gun! Economists are putting this potential slump for Q1 2013 down to the snow; heaven forbid if this country ever had any sustained periods of snow fall. Let’s hope February is one of the hottest months since record began!

Howard Archer, IHS Global Insight chief, UK hammered the point home: “With the economy in a fragile state, even relatively limited disruption from snow and freezing conditions could very well be enough to tip the balance towards modest GDP contraction rather than modest growth in the first quarter of this year.”

Apple and its investors suffered another blow this week as the Company falls victim to own success. The share price crashed by 12% - its biggest percentage in four years, as analysts from more than 20 banks slashed their price targets. The responses emerged amidst fears of Apple’s slowing product pipeline as well as their own ‘catch-22’, whereby the high sales have generated market saturation.

The London Stock Exchange released encouraging figures which suggest that the economy is indeed experiencing a positive turn. The Exchange has acknowledged several good indications of new market listings as well as an increase in equity, bond and derivatives trading.

The Moscow Exchange, Russia’s largest bourse, confirmed plans to go ahead with an IPO. After many Russian companies dismissed the exchange for a London Listing, the Group hopes the exclusive listing on its own platform will stem the current exodus and turn Moscow into an international financial centre.

EasyJet flies high off the back of the recession. The Company reported revenue boosts of 9.2% in the last quarter as they capitalise on increased business passenger numbers as companies cut travel costs, and competitor capacity reductions. Shares soared to their highest level since the company floated in 2000.

Bank of America warned of ‘bond crash’ alert this week, comparable to that experienced in 1994. With the world economy seeming to be at the start of a fresh cycle, and investors reverting back to financial market investments, bond yields face a threatening surge with potential drastic impact on the $800bn poured into the ‘safe store’ bond market since 2008.

Stock Watch: Long-term investors look to capitalise on “Agflation” following a year of droughts which has pushed up the price of agricultural commodities. The sector, which has started to differentiate itself as a unique asset class, is attracting fund managers looking to diversify their portfolios. Moreover, as many banks are failing to lend money, it is an industry starving for cash and farmland offers the same type of revenue stream as long-term bond yields.

This week we entertained the lovely team from Daniel Stewart over drinks and canapés to talk about where our current interests overlap.

Abchaps held a strategy day where the whole team got together to brainstorm ways that we could make Abchurch even better than it already is.

Bozzy joined Baker Tilly for their brilliant Burns Supper.

Our CIPR Committee members joined the Corporate and Financial Group Committee meeting, where activities and events to support its members are proposed.

The alleged ‘worst job in PR’ – otherwise known as head of comms for Ryannair – has gone to Robin Kiely who has been promoted from comms manager for the budget airline.

We are excited that on Monday we have an Apprentice joining the team. This has come about through the Evening Standard campaign and City Gateway’s amazing work to support youngsters getting into work.

We learned this week that old Abchum Ollie Rigby has been appointed CFO of AIM-listed Magnolia Petroleum.

Baker Tilly has appointed Paul Merris to financial reporting advisory partner, specialising in international finance reporting standards and UK accountancy practices.

Dragan Trajkov has joined the oil and gas research team at Westhouse Securities. He previously covered Africa and Middle East oil and gas companies at Renaissance Capital.

A number of FT Journalists will be looking for a new home after Lionel Barber announced plans to move to a ‘digital-first’ strategy and reduce headcount at the paper. In an email to all staff, he said he also plans to bring in around ten new digital specialists.

"Agriflaton" - Increase in food prices as a result of increased demand from consumptions as well as for energy production

If you have no plans tonight and have that Friday feeling, look out for locations in the Capital which will be celebrating Burns Night! Green’s in St James’s and the City is offering an upmarket celebration with £80 (whiskey included) set menu. On a cheaper note the York & Albany pub in Camden Town is putting on a £21 set menu including haggis, Scottish Salmon and whiskey galore.

Check out the Australian Open Men’s Final on Sunday morning with Britain’s Andy Murray looking to make it Grand Slam number two, he will be taking on World Number 1 Novak Djokovic.

If you fancy a couple of hours of culture, check out the Alexander the Great exhibition at the British Museum, which will cost a meagre £5.

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