F1 fans expected this weekend’s opening race in Melbourne to be officially postponed despite F1 fiercely resisting it given the costs of staging each race and the tight timetable between races in different countries. It all requires detailed and flawless planning and execution to move the F1 circus every week during the racing season. However the market is probably the most reliable indicator on the cancellation with a whopping $600 Million in value being wiped off F1 shares yesterday which takes the hit to $2.6 Billion since January. It is estimated that each F1 car costs $15.5 Million before costs such as development, drivers, fuel, transport etc etc. So no wonder that F1 organisers and manufacturers are more than a little hot and bothered at the implications of no revenues from advertising for all that investment. China has already cancelled their Grand Prix, Bahrain will be holding their Grand Prix but without spectators and Vietnam’s inaugural Grand Prix is under threat.
Unsurprisingly equity markets had a very bad day yesterday. With the FTSE down at 5,250, 1-6-18 and 7860 the all time high seems another world. At SGM-FX we believed that the UK offered value at the beginning of the year given that the UK market had been weighed down for the previous 18 months by the Brexit debate saga. So it’s tin hats on and if readers do have ISA money or other liquid savings, the consolation is that the UK now offers great value. For those of you who have short memories we have been at 5,250 before: in fact in 2012, 2011, 2010, 2008, 2005, 2002, 1998 and 1997 all immediately come to mind. As for GBP it has become caught up in the further Dash for Dollars movement which in tandem with the expectation that the Bank of England will not hesitate to ease further, means that GBP continues to look weak.
Himalayas and the flatlands of….Essex
Talking of high peaks rather than low troughs, climbers of Mount Everest have been banned from climbing up the Chinese side of the mountain but the Nepal side remains open to teams determined to scale the highest mountain in the world at 29,000 feet or 8,848 metres. Nearer to home, SGM-FX’s James and keen scout (Motto: Be Prepared) is downcast at the news that August’s Scout Jamboree due to be held In Essex, UK for 9,000 scouts from all over the world has been cancelled. At least we have been spared the sight of James’s knees- never mind his woggle!
Nice weekend everybody…and stay safe and well!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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