Wednesday, January 8, 2020

FT Alphaville: Bryce Elder Is In Da House! Bryce Is In Da House!

He's forgotten more about individual equities than most of us ever knew.

And as Paul Murphy's playmate in the mosh pit that was Markets Live he made it look effortless.
As a solo goer, after Mr. Murphy left, it was a bit more ah, interesting with Mr. Elder trying to keep everyone from getting sued for comments made by the rabble (the "Live" part) and to keep them generally pointed in the same direction, see after the jump for a couple examples.

From FT Alphaville:

Markets not live, Wednesday 8th January 2019
Okay, let’s do this. The author having been smuggled back into the FT office inside a roadie’s flight case, we’re going to have a go at daily stocks commentary again.

Yes, we know it’s not Markets Live. That’s dead. Technological evolution and cost-benefit analysis combined to kill it and there’s no prospect in the short term of resuscitation. What we’ll do in its absence is have a spin around the day’s big movers up here and you, high-quality reader and customer, can help fill in the gaps in the comment box.
Starting with . . .

NMC Health is off 15 per cent at pixel, having been below the trough it hit shortly after December’s Muddy Waters short report. The latest tumble followed its two controlling shareholders launching the sale of a $490m stake to repay margin loans.

Bookrunners said the Abu Dhabi investors Saeed Al Qebaisi and Khalifa Al Muhairi, better known as the Butti family, slotted NMC stock at £12 apiece, a 20 per cent discount to Tuesday’ close.
The pair had owned a 39.4 per cent stake so with 31m shares sold, or 15 per cent of the total, their combined holding appears to have fallen to 24 per cent. On paper, that should be more than enough to close out the 22m shares they had pledged as loan collateral.
Good news? Potentially. Here’s what Morgan Stanley said overnight.
In our conversations with investors, removal of the pledge over NMC’s shares often comes up as perhaps the most important catalyst for a re-rating and — if the [accelerated bookbuild offering] is completed in full — we expect a positive share price reaction tomorrow.
Eh . . . turns out not so much.
In addition to the overhang indigestion and the deeply discounted sale price there’s a worry is that, with NMC founder and co-chairman Bavaguthu Raghuram Shetty still holding 16 per cent, control of the company remains a bit of fiefdom. Here’s HSBC:
We view this stake sale as positive as it increases the influence of minority shareholders and reduces the likelihood of more related-party transactions, a key concern for investors . . . . [But] it is difficult to know whether the existing shareholders are acting in concert, and what the filters are for transactions with them. The company has taken steps to increase the oversight by independent board members over such transactions; nevertheless we believe that going forward the frequency of related-party transactions needs to be reduced even if they are arm’s length. One way to achieve this is to further reduce the holdings of large strategic shareholders. The current stake sale will help on that front. Other options include a spin-off of the distribution business, giving the strategic shareholders ownership of it in return for reducing their stake in NMC. The distribution business is also a source of many of the related-party transactions.
The Buttis also dissolved about $72m of shares in Finablr, the vowel-efficient owner of Travelex currency exchange booths, which is co-chaired by NMC’s Shetty.

Travelex had already been in the news after being floored by the Sodinokibi extortion-as-a-service ransomware on the last day of 2019. (See Computer Weekly for the best explainer). Finablr’s had said on January 2 that “there is no indication that any personal or customer data has been compromised”. This morning it said: “whilst there has been some data encryption, there is no evidence that structured personal customer data has been encrypted, and that there is still no evidence that any data has been exfiltrated”, which is the opposite of a clarification. Finablr’s down 16.5 per cent at pixel....MUCH MORE
A couple visits with Bryce, the first one is a look back at a November 2018 session;
FT Alphaville's Markets Live: Was Apple's Decision To Stop Reporting Unit Volume a Tell?
Stepping outside the chronological order we have been using in our look back at Markets Live we skip ahead to the tenure of FT UK equities reporter Bryce Elder's time at the helm of ML, and what turned out to be a very profitable observation.

Was Apple's Decision to Stop Reporting Unit Volume Last November A Tell?
I vaguely remember reading about it at Markets Live, but the images are jumbled.

Bryce was delayed getting to the Markets Live desk, but unlike a day earlier, not complaining that ML cut into his actual work. He seemed oddly resigned to his task of  keeping the Rabble on the Right on a short leash.
Cue dream sequence:
Bryce Elder

BE What?
Blank canvas good morning everyone
VV75 morning
AAAA bonjour !
Sails Morning
Soundbuy Morgen..........
BE The time? Yeah, new policy. From now on we won't be releasing specific data on the exact start time of ML.

GBKrona Hola
LeonardSG Morning
BE We believe the metric distracts the ROTR from the underlying trends affecting the quality of FT Alphaville's daily thing with the typing.

AAAA à la AAPL ...
Soundbuy We're well-conditioned already
Viking1 Morning and APPL down 7.3 pre market
Viking1 %
AAAA if aapl do it, why not ML
JimboRock Alibaba please
rwl Good morning "randomville" :)
Viking1 How many points on the Dow?

BE The ROTR should expect the information we are willing to provide, not the information they actually want.
BE Which, TBH, has always been the policy.

irish hedge fund guy guten morgen, or perhaps abend
irish hedge fund guy yes apple tired of focus on Iphones lol
BE So ............. let's head straight into the world's biggest single-product toy maker.


And then there was the time in August 2019 when the yield curve inverted and every two-bit prognosticator was talking recession, recession. Except for Bryce. He somehow rose above the fray (possibly medicated?) and looked forward to the prospect of eating ones pets for sustenance:
Capital Markets: "Having Fun Yet?"
That's the FT's Bryce Elder. He is the ringmaster of a four-ring circus called Markets Live at FT Alphaville.
Ostensibly real-time market commentary but actually a demonstration of how many plates one can keep spinning at the same time while herding cats and trying to avoid defamation lawsuits brought on by random comments of the audience/participants.
There used to be a firm called Bedlam Asset Management.....but I digress.

Sometimes Mr. Elder joins the madness (don't worry, I'll get to the point). Here's an example I was going to title "As Britons Consider Whether They Will Be Forced To Eat Their Pets":
Via the Duchy de Bryce:
BE I'm slightly behind schedule because I've only got round to reading the Office for Budget Responsibility's Fiscal Risks Report.

BE Read the whole thing yourself here:

BE Or go argue about the nature of economic forecasting on the comment box of this:
Soundbuy Any mention of when our pets become our food.......
Maudise @Soundbuy my cat can feed a family of 5 for a fortnight
BE (@Soundbuy: to make an accurate forecast we'd need a clearer definition of "our". Because I'm not a big fan of the neighbour's dog.) 
Good times.
And then there's today's edition. Yikes:

BE Are we having fun yet?

GBKrona Tin hats!!
BE And welcome to another week of Markets Live, FT Alphaville's thing with the etc.

BE .............. So. Why?
Blank canvas Good morning everyone
Excel Developer Good morning, good morning. What a lovely morning, a wonderful cool wind blowing through a hitherto sultry stock over-valuation.
BE I mean, the reasons are obvious. It's trade again. Escalation. Trump Tweeting random policy changes while the toilet. You know.
DogDay Morning all
BE Plus the FOMC.

BE But that was all last week. So why this morning?
BornCynic Take your pick of reasons BE - please feel free to invent one.
Excel Developer @BE: Iron Ore price collapse?
marktime Morning and gulp
Excel Developer @BE: Rio grey might illuminate.
BE Is it because people thought on Friday, "this is really bad" and then thought again this morning, "actually, this is really bad"?
BE To be sure, there's some pretty bleak strategy stuff around.

BE Here's Morgan Stanley.
Trade tensions have pushed corporate confidence and global growth to multi-year lows. Tariffs announced on Aug 1 raise downside risks significantly. If US lifts tariffs on all imports from China to 25% for 4-6 months and China takes countermeasures, we believe we will enter recession in 3 quarters. Key points Citing a lack of progress on trade talks, the US has announced that it would impose 10% tariffs on the remaining US$300bn of imports from China from Sep 1.
China has indicated it would take countermeasures. About two-thirds of goods tariffed in this round are consumer goods, which could lead to a more pronounced impact on the US as compared to earlier tranches. If these measures are implemented and stay in place for longer than 4-5 months, global growth will likely remain weak in the range of 2.8-3.0%Y in 1H20 despite forthcoming policy support. The most important area of impact is corporate confidence.

While we don’t know the exact tipping point, we are cognizant of the risk of a potential non-linear tightening in financial conditions and its impact on capex and the labour market. As we view the risk of further escalation as high, the risks to the global outlook are decidedly skewed to the downside. If the US were to implement 25% tariffs on all imports from China for 4-6 months and China were to respond with countermeasures, we believe we would see the global economy entering recession in three quarters.
BE Global central banks, in particular the Fed and ECB, will provide additional monetary policy support. But these measures, while helpful in containing downside risks, will not be enough to drive a recovery until trade policy uncertainty dissipates.
 cracklenpop Any grey on gilts?
 Excel Developer "we are cognizant of the risk of a potential non-linear tightening in financial conditions" , non-linear risks can be a killer.
OurAdvice Morning.
BornCynic What is "non-linear tightening" please?
JimboRock UK Commercial property down sliding - any bottom in sight?
BE Yep. Futures already pricing in four 25bips Fed cuts by December next year, so the whole "overly hawkish" narrative doesn't quite hold.

BE (@BornCynic: I'm happy to post strategy but don't make me read it.)

BE HSBC:....

Probably the best insta-roundup on the web.
Plus, for no extra charge,  the rabble-on-the-right!

Today I Learned: Alphaville's Bryce Elder Switches Tasks Quicker If Not Attempting to Loin
Bryce has the toughest job in da 'Ville, switching from whatever he's doing at 10:59 to ad lib commentary on what's up (and down) in the markets, all while attempting to keep the reader's comments on point and not defaming folks, or wandering off in twos and threes to chat amongst themselves about cricket or Gloucestershire Cheese Rolling (yesterday):

or something.
So I thought it noteworthy to link to this:
11:04 am
you read that right, as close to on-time as we are likely to see before the return of Halley's Comet.

He begins:
11:04 am
BE Sad news .....

BE The sing in was unable to happen this morning.

BE Did you know the FT has a corporate song we sing each morning, to express our "shafu" or company spirit.
BE "Flap your wings, carry hope on your shoulders, hand-in-hand, Financial Times people will make a salmon pink rainbow across the world"
BE It's stirring stuff. But, today, sadly, there was a failure when attempting to loin.

BE Apologies if the mood is rather lower today as a result....MORE