It's Paul here with Monday's SCVR.

Estimated timings: should mostly be finished by 1pm, but I'll carry on writing into the afternoon because I got bogged down in thinking about the possible implications of coronavirus, which I suspect could become quite serious. Fully done by 3pm.

Edit at 15:12 - today's report is now finished.



Red Flag Report

Issued this morning. Click on the heading above (everything in blue is a link, for anyone not aware) to read the latest quarterly report from Begbies Traynor (LON:BEG) - an insolvency practitioner and property services group.

 ...the number of businesses in significant1 financial distress has risen to 494,000 - the highest number recorded by this research, with the real estate and property, support services, construction and retail the sectors particularly badly affected.

Other points of note;


  • Q4 was worse than Q3
  • Not clear if this is due to short term confidence (affected by political situation) or more fundamental issues
  • Online retail - not immune from sector malaise, with 8% increase in companies suffering financial distress vs last year
  • Environmental credentials are becoming more important, to attract customers. BEG suggests that fast fashion such as "BooHoo and Primark models could fall from favour in 2020" - that strikes me as far-fetched. I think it's more likely that they continue taking market share from other retailers.
  • Plus some general waffle about the political situation, which doesn't really add any value.




PMI Data

Released late last week, which comes from IHS Markit. This is a widely followed survey of business confidence, because it's a forward-looking indicator - useful for gauging what share prices might do.

The Jan 2020 report is well worth reading, and only 3 pages long. UK PMI rose to a 16-month high, of 52.4 (anything over 50 is net positive). This confirms what the very bullish Deloittes CFO survey said a couple of weeks ago - that business confidence shot up after the decisive general election result.

The big question is whether this is a relief rally, or whether it has legs?



Fundsmith letter to investors

Of all the reading I did last week (thanks to Graham for holding the fort here!), Terry Smith's 10th annual letter to his investors was the best. I strongly urge readers to…

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