ICAP Share Discussion Threads

[rennes] 26/7/2012 03:57

JEFFIAN - re your posts of 23rd. That is exactly what you were saying last November, I seem to remember with a crack up date in early 202. Well here we are in August now and Euro limping on with also a good piece in yesterday Telegraph about the creation of the central bank for the Euro and how the break up would be much more costly on Germany than continued support and reform. Fiscal and tighter monetary union is more likely and less costly and geopolitically in keeping with the the New World Order.
I would put that stash of yours you are keeping for a break up in Euro blue chips!

[jeffian] 25/7/2012 09:12

Some more for Rennes -

[salpara111] 24/7/2012 11:20

Well, as per my earlier post I was waiting to see if we got to 300 but now that we are there I am not feeling as confident about going long as I did the last time at 315.
Now that the market is taking a risk averse stance again all financial stocks are going to be under pressure.
300 is probably a good enough entry point and there is a very nice divi which is covered.

[uhound] 24/7/2012 08:50

Was looking to get back in if share price hit £3.00, but have added now as imo at these levels I see the downside as limited.

IMO I think there will be a market rally in the next week or so (not sure how long it will last!) and IAP should benefit well.

[jeffian] 23/7/2012 10:16

Still on the subject of the Euro (sorry if considered o/t for IAP, but relevant, I think), a very thought-provoking piece in today's Telegraph business section -



The article poses a third option which I hadn't considered before (the other two being either mutualisation of Eurozone debt or the 'southern' states being forced out), being that the stressed southern states band together and use their votes in the ECB to force the bank to support them which, it is suggested, might lead to Germany and a few other 'strong' states refusing to carry the can and leaving the currency themselves. That would leave the Euro as a weakened and devalued currency which, for the stressed economies, would have the double benefit of achieving the devaluation they so desperately need and avoid the problem of how they would ever pay off Euro debts if they were themselves outside the Eurozone.

It's still not clear how it will pan out, but something has to give soon.

[jeffian] 20/7/2012 18:03

Tick! Tock! It's only a matter of when, not if. I'm only surprised the market hasn't mounted an all-out attack to force the issue. Never mind Spain having to pay an "unsustainable" 7%+, why is anyone prepared to lend to the PIIGS at all when - as the Greek 'haircut' showed - there is a very good chance they'll lose a goodly proportion of their capital? If the bond market cut up rough and simply refused to lend to these countries on any terms, then we would see pretty quickly how strong the German resolve is.

What I think has happened is one of the things we discussed; that Merkel has been playing a canny game of saying "over my dead body" for German domestic consumption whilst quietly allowing a steady drip of financial support but one day the German public are going to catch on and stop it. After all, the plan to mutualise the Eurozone banking system is effectively the strong northern states underwriting the debts incurred in the struggling south. There is also a challenge in the German courts due to be decided in September - if we get that far.

The argument isn't whether the Euro is going to be a strong currency, but whether all of its 27(?) members can continue to be part of it. As I've always maintained that the only two solutions are either mutualisation of Eurozone debt (i.e. supported by Germany) or a break-up with the weaker nations reverting to their (devalued) national currencies, the Euro is either going to be 'strong' or 'very strong'! The issue is what economic damage will be wreaked in achieving either of these results (long-term stagnation or short-term pain and mayhem).

From an investment point of view, I am keeping a meaningful amount in cash in anticipation of a significant 'event' around the Euro which, I hope, will present some good buying opportunities. I also have quite a significant proportion in corporate bonds for income.

[rennes] 20/7/2012 17:00

Hi Jeffian - did you see the Keiser report yesterday? Had someone on talking about strength of the Euro and German support vs the Dollar and GBP which do not have such a secure future ihisopinion?

HAve you rethought some of your views in the light of the 6 months that have now elapsed since our first discussion?

Interested to know how you feel now.

[pictureframe] 19/7/2012 19:36

First test 3.40p imo

[pictureframe] 19/7/2012 12:25

Bounced nicely of triple bottom - each time has made good gains. Just bought in myself for the ride.

[jeffian] 17/7/2012 13:00

Interesting that IAP got its Corporate Bond away early. There is such a hunger for yield, I'm surprised that more companies aren't tapping this market as an alternative to dilutive equity placing.

I've taken some up for income. There's an interesting quirk that if the rating agencies reduce the rating on the bond to below 'investment grade', IAP will pay an additional coupon of 1.25% on top of the original 5.5%.

[salpara111] 06/7/2012 17:58

I took some the last time it hit this level and sold out when it hit 390...just popped up on my radar again, it appears that trading volumes have suffered considerably.
I think I will wait and see if it hits 300 before considering a long.

[jeffian] 06/7/2012 16:12

But it has to be done. The present position of countries running unaffordable deficits fudged along by loans whenever a repayment is due is unsustainable. Something has to give.

[rennes] 06/7/2012 14:27

Jeffian

Those boys at Oxford may be clever but the telling para is as follows:

"Furthermore, mutually agreed dissolution is just about the least likely of all
possible break-up scenarios. There isn't a widespread desire throughout the
union to dissolve the euro. Rather, there is substantial pressure on particular
countries to leave it. It would seem extraordinary for the other members
who wish to keep the euro to undergo all the costs of adjustment just to
accommodate a minority of members – or perhaps only one member –
which wants to leave. Accordingly, for any of those countries which want
to leave the euro, and are daunted by the practical and legal issues which
this would entail, it is hardly helpful to be told: "first secure the agreement
of all other euro members to dissolve the single currency". This would be
rather like the Irishman who, when asked the way to Cork, replies, "I
wouldn't be starting from here."

No possible to unscramble the euro omelette easily!

[jeffian] 06/7/2012 11:22

Interesting bit on FT Alphaville today. They seem to agree with my comments above!


ICAP PLC (IAP:LSE): Last: 317.30, down 8.6 (-2.64%), High: 324.43, Low: 317.20, Volume: 606.20k
PM
Suffering from poor market volume i guess
BE
That's certainly a concern, yes.
BE
Equities volume's been pitiful this week.
BE
Not helped by Independence Day, of course, but still ....
BE
The easy excuse for today's move is Numis turning cautious.
BE
Analyst is James Hamilton, who's very good and very opinionated generally.
BE
June electronic volumes were down 22% following the 21% fall in May and 13% fall in April. The LIBOR scandal can only be unhelpful even if the suspension of a trader relating to this does not lead to any action against the group as more regulation is inevitable. We have increased our COE from 14% to 15% to reflect this, the negative earnings volatility and the other regularity uncertainty. Through the summer the comps for the electronic business are very tough with last years August volumes being $904bn vs. the $708bn just reported for June this year. Our target price falls to 344p from 412p and consequently our recommendation moves from Buy to Hold.
BE
The numbers: We have downgraded our forecasts by 4% this year (EPS 37.7p from 39.2p) and 5% next (EPS 41.5p from 43.8p). We continue to expect good cost control but the expected additional volume lost is not expected to be compensated for.
BE
Poor operating environment: We continue to see revenue pressure with the
regulatory environment expected to negatively impact revenues for years. We do
however believe ICAP to be a core part of the global financial landscape. In addition, the now likely exit of Greece (and potentially a number of the countries from the bonkers idea of the Euro) will deliver a substantial spike short term revenues and permanently create additional currency trading pairs.
PM
Hmm
BE
Valuation: Our valuation is DCF based and consequently falls from 412p to 344p.
While a multiple of 8.7x prospective (depressed) earnings is not expensive but the LSE on 9.6x offers more growth and less risk.

[jeffian] 06/7/2012 10:25

Hi Rennes!

Funny you should resurface on the day the Wolfson Prize was published!



Not if; when!

A nice bout of market volatility could be good for ICAP though.

[rennes] 06/7/2012 09:50

Jeffian - liked the picture in May by the way. Will use that!

My A---se still safe in the ole dungerees - and Euro still bumbling on into the summer .
All part of the "one world agenda" to erode the fractious nation states with the power of money.

ICAP almost back into buying territory now. I feel the fickle finger hovering over the buy button on a major CFD placing! (again!)

[bobcomins2] 28/6/2012 11:26

Probably because i bought a few for my ISA a few days ago!

[highlands] 28/6/2012 11:01

wonder if the recent fall is to do with the Libor manipulation saga?

[iomhere] 27/6/2012 07:26

Perhaps they'll extend the idea to the Olympics and strap a bag of cement to each of the European athletes.

[jeffian] 24/5/2012 09:17

They may, but can they force it on London?

(From the Telegraph)
"Earlier on Wednesday the European parliament adopted proposals on the FTT by a strong majority.
It passed the resolution with 487 votes in favour, 152 against and 46 abstentions, calling for the implementation of the tax by the beginning of 2015 "even if only some member states opt for it".
Nine countries have come out in favour of the FTT - Austria, Belgium, Finland, France, Germany, Greece, Italy, Portugal and Spain."

[highlands] 24/5/2012 08:39

Looks like the Europeans may force though the transaction tax which IMO will have a negative impact on ICAP.

[jon827] 18/5/2012 15:27

For a pound !

[jon827] 18/5/2012 15:25

Icap buys PLUS

[jeffian] 17/5/2012 19:04

"Euro crack up ? - my eye. To use the much loved expression - if that happens I will show my a--e in Burtons Window!"

Get ready, Rennes!



8-)