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FTSE falters on G20 disappointment but Randgold and Fresnillo rise

Discussion in 'Market News' started by Lily, Feb 29, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Investors seek havens on worries about global growth

    Following last week’s rally, investors have turned away from risk as the month ends, in the wake of a disappointing G20 statement over the weekend.

    With worries about the global economy - China in particular - there had been hopes the finance ministers who met in Shanghai on Friday and Saturday would agree co-ordinated moves to boost growth. But there were no concrete proposals, so with fears that China may devalue its currency again, equities are on the back foot.

    We continue to rate Standard [as] outperform but bring down our target price to 600p to reflect the income headwinds... Depressed commodity prices have made restructuring and the income environment difficult and have pushed out our recovery story by a year. But the franchise is far from dead...as current valuations imply.

    Thursday’s presentations illuminated not just ‘the growth drivers’, but how powerful Merlin’s pioneering intellectual property collaboration can be. Difficult to incorporate in forecasts/multiples, but we wonder if this isn’t the single most underappreciated aspect of the equity story. The strategy is about owning the visit; we think investors should own the shares. Reiterate buy.

    Merlin is pioneering the fusion of IP based ‘content’ between screen and location based entertainment, through symbiotic relationships with global leaders in adjacent industries, from LEGO IP extension with Warner Bros (Ninjago), DreamWorks (Shrek/Kung Fu Panda), Lucasfilm/Disney (Star Wars), to SONY (Ghostbusters) and BBC. Merlin’s unique offer, market leading positions, and quality of management, make it the go to partner: we envisage the ‘competitive moat’ only widening over time.

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