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.