James Price's Blog : January 2010
Happy New Year
Friday, January 8 2010
Happy New Year everybody, hope you had an enjoyable festive period. Apologies for the long break in blog entries, this was due to getting married, Christmas, and, what the heck, the wrong kind of snow (well, that excuse seems to work for everyone else).
Perhaps the wrong kind of snow will be the explanation for any further delay in the economic recovery - it's got to be worth a try. On a serious note I hope that these wintry conditions have not impacted to severely on trading levels for SMEs.
Over the last month or so, I have continued to observe trends in two sectors that interest me hugely, the banking sector and the pub/restaurant sector.
In respect of the former, the RBS share price is stubbonly sticking at below 40p. Difficult to see an exit for the UK taxpayer until it's double that price and who knows when it will get there. It seemed almost inevitable that RBS would have an exposure to the Dubai World debacle, with several billion owed. Abu Dhabi seem to have come to the rescue, at least for the time being. The Government appear determined to make a hash of selling Northern Rock back to the private sector, so we probably won't realise full value there.
Better news, in my view, comes with the prospect of new banks entering the sector. Whilst Richard Branson's Virgin Group purchasing a small private bank in Somerset will not, in itself, impact greatly on the sector, given Dicky's track record it is safe to say he will not be leaving it there. I have heard naysayers asking "what does Branson know about banking? Well, erm, clearly not as much as the great industry leaders like Fred Goodwin. Tesco also look to be expanding their horizons, but selfishly I am looking for change in lending practices to businesses and it will be a fair while before either Virgin or Tesco can influence that.
The large pubcos continue to dominate the headlines, with the GMB threatening strike action by pub landlords who, I firmly believe, are getting a raw deal from the pubcos. There seems to be an inherent problem though with self employed individuals threatening strike action. Still, it has at least brought the public spotlight on to these issues. There are one or two signs of movement from certain pubcos, at least those who brew their own beer and can adjust their business model to accomodate price freezes and price cuts. For the likes of Punch, Enterprise and Admiral though, the huge debt servicing cost will restrict their ability to offer any assistance to landlords, and, as a result, I can still see these companies imploding in the not too distant future.
Happy New Year
Friday, January 8 2010
Happy New Year everybody, hope you had an enjoyable festive period. Apologies for the long break in blog entries, this was due to getting married, Christmas, and, what the heck, the wrong kind of snow (well, that excuse seems to work for everyone else).
Perhaps the wrong kind of snow will be the explanation for any further delay in the economic recovery - it's got to be worth a try. On a serious note I hope that these wintry conditions have not impacted to severely on trading levels for SMEs.
Over the last month or so, I have continued to observe trends in two sectors that interest me hugely, the banking sector and the pub/restaurant sector.
In respect of the former, the RBS share price is stubbonly sticking at below 40p. Difficult to see an exit for the UK taxpayer until it's double that price and who knows when it will get there. It seemed almost inevitable that RBS would have an exposure to the Dubai World debacle, with several billion owed. Abu Dhabi seem to have come to the rescue, at least for the time being. The Government appear determined to make a hash of selling Northern Rock back to the private sector, so we probably won't realise full value there.
Better news, in my view, comes with the prospect of new banks entering the sector. Whilst Richard Branson's Virgin Group purchasing a small private bank in Somerset will not, in itself, impact greatly on the sector, given Dicky's track record it is safe to say he will not be leaving it there. I have heard naysayers asking "what does Branson know about banking? Well, erm, clearly not as much as the great industry leaders like Fred Goodwin. Tesco also look to be expanding their horizons, but selfishly I am looking for change in lending practices to businesses and it will be a fair while before either Virgin or Tesco can influence that.
The large pubcos continue to dominate the headlines, with the GMB threatening strike action by pub landlords who, I firmly believe, are getting a raw deal from the pubcos. There seems to be an inherent problem though with self employed individuals threatening strike action. Still, it has at least brought the public spotlight on to these issues. There are one or two signs of movement from certain pubcos, at least those who brew their own beer and can adjust their business model to accomodate price freezes and price cuts. For the likes of Punch, Enterprise and Admiral though, the huge debt servicing cost will restrict their ability to offer any assistance to landlords, and, as a result, I can still see these companies imploding in the not too distant future.
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