Over the last 12 years the disparity of equity market returns is remarkable:

  • US: +153%
  • China: +17%
  • France: +14%
  • Japan: +14%
  • Germany: +12%
  • Brazil: +1%
  • UK +1%
  • Spain: -19%
  • Russia: -29%
  • Italy: -39%

(note: total return, in US $)

  • While in Germany mortgage backed bond yields have now gone negative. Which are now cheaper than US treasury debt.
  • It is hard to see yields increasing by the reversal of government policy. But I fancy we could have a different kind of liquidity crisis as the markets way of finding an end to this situation which would increase bond yields and reduce equity markets.

TP ICAP – H1 Results

Share Price 282p

Mkt Cap £1.56bn

Conflict Disclosure: No Holding

  • Results Revenue up 1.3% to £922m. Operating profit up 1.9% to £158m. Margin ticks up from 17% to 17.1%. PBT down 3.6% to £134m and EPS 19.2p. Global Broking was down 6% while the growth businesses of Institutional Services and Data & Analytics aren’t yet big enough to move the needle. Net debt is modest at £80m.  The statement confirms that another £75m of integration savings will be achieved in H2 and the outlook says they are “deep into the process of designing a strategy and so they are confident.
  • Estimates H2 profit estimates are currently lower than H1 which suggests scope to increase FY estimates
  • Valuation FY 19 PER 9.3X yield 6%
  • Conclusion If there was an award for the most boring set of results TP ICAP would be a strong contender. And in current markets boring looks strangely attractive.