Weekly Roundup 03/12/10

Economic Snapshot
According to the ONS, mean household spending in the UK dropped from £471 per week in 2008 to £455 per week in 2009, a drop of 3.4% in monetary terms and 6.5% in real terms. Most of the decrease was due to lower mortgage and transport costs. On the one hand it's good news that people may be saving more, but on the other . . .

Cheers
In the UK, the Markit purchasing managers' index (PMI) for November rose from 55.4 to 58, compared with the previous month, the highest figure for 16 years. In China, there was also a rise in factory output from 54.7 to 55.2. The index for UK construction also rose from 51.6 to 51.8 but, looking out on the snow, I doubt that will continue.

Jeers
Portugal continues to deny, officially, that it requires financial assistance, although its 10 year bonds were yielding nearly 7% earlier in the week. The UK PMI for the services sector fell from 53.2 to 53.0 in November, indicating that jobs growth in this are will be subdued. In the US, unemployment rose to 9.8% with only 39,000 jobs created in November.

On the week, Sterling was flat at €1.1774 and rose slightly to $1.5755. UK Treasury 2020 fell slightly to give a gross redemption yield of 3.41%. The FTSE100 rose from 5668.70 to 5745.32 and the FTSE250 rose from 10809.43 to 11082.17. Gold rose from $1355.00 to $1403.50 per ounce. Brent Crude rose from $85.67 to $91.14 per barrel and copper rose from $8227.50 to $8737.50 per tonne. After a volatile start to the week, the markets seem to have shrugged off Eurozone worries and have had a positive week.

Equity Portfolio (+2.1% on week, +19.01% ytd)
The brewer and pub owner Marston's delivered some good results this week with underlying profits up by 4.6% on the year. However, the recession has taken its toll and the dividend, prudently, has been cut from 8.5p to 5.8 p, but this still yields an attractive 5.5%. The company continued to invest through the downturn after raising cash via a rights issue. Net debt has been reduced, but not by much, and now stands at £1.08 billion, still horribly large when set beside the market cap of £600 million.

I first bought them in August last year at 96p and they have advanced to £1.08 since then. They are liable to fall as the economic woes of 2011 roll in but, given the recent track record, I may buy more if they do.