Investors remain cautious ahead of Federal Reserve and latest Greek meetingsWith a spate of takeover talk and despite some disappointing company updates and the usual worries about Greece, leading shares managed to end the day higher.The FTSE 100 finished up 12.16 points or 0.17% at 7007.26, the first time it has closed above 7000 for a week and a half. But investors were cautious ahead of the US Federal Reserve minutes due later, which be scoured for clues as to when the central bank might begin to raise interest rates.There has been a fair amount of speculation by analysts about Vodafone joining up with Liberty in one form or another. Vodafone has acknowledged that, at a certain price, a merger makes sense. However, agreement on price looks unlikely at this stage and we would treat it as a potential upside, given that shareholders anyway will have to approve it. While for Vodafone this would be “nice to have” on top of its existing converged assets, Liberty may be more driven by a lack of sufficient mobile assets and the unsatisfactory nature of renting capacity to create a virtual operator – also Sky’s strategy.As part of a multi-bank foreign exchange settlement with the US Department of Justice/Federal Reserve, RBS pays $669m. This is (more than) covered by an existing £704m forex-related provision, (including £334m charged in the first quarter of 2015). RBS had already settled with the UK’s FCA and the US’ CFTC for £0.4bn in November 2014.We believe that investors had (rightly) seen foreign exchange and Federal Housing Finance Agency [mortages] as the two key “outstandings” on RBS’ conduct agenda. As such, we see today’s news as an important stepping-stone towards a £10bn share buyback in 2016. Buy. Patisserie Holdings delivered a strong set of first half results which demonstrated the operational leverage in the business. As well as the expansion programme we are encouraged by the progress made in areas such as menu development, digital marketing and third party relationships. The high rating is justified for a business growing 20% year on year, with added spice presented by the potential for acquisitions. Buy. Continue reading...
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