Guest notes: Boatman’s analysis on Babcock should be treated with scepticism
All the noise around Babcock and its financial woes have left me feeling distinctly uncomfortable. It’s not the fact that the company has issues, as do most outsourcers.
My problem is with the source of the recent vicious bear raid on the business – the so-called Boatman Capital. It is a month since Boatman and its ‘research report’ on Babcock was first mailed to the media and posted online, and no-one is any the wiser on them or their motives.
What is even more alarming is that the media has taken the report at face value and used it to attack the business repeatedly, wiping more than 10 per cent off the share price in the past month, a small matter of £300m.
Despite its success, we have not heard another peep from Boatman. Its website is all obfuscation and pious poppycock. In its research section there is only one report – the one on Babcock – so the firm looks like a special purpose vehicle established with the sole purpose of destabilising one of Britain’s largest defence contractors. To me this looks close to market abuse, and yet the FCA hasn’t stirred. Boatman’s silence means it has good reason to remain anonymous. My real concern is that no-one in the media appears to have made any real attempt to find out who they are and swallows their lines without question. Babcock has traced it to a front company in Panama – which hardly instils confidence in its bona fides.
I am sure the people behind Boatman are upstanding characters. But in the quieter corners of the City the conspiracy theories are multiplying. Just supposing… that Vladimir Putin and his clever acolytes wanted to find a way to destabilise one of Britain’s most sensitive businesses – the one charged with the maintenance of our nuclear deterrent. If they did, they would probably conjure something that looked a lot like Boatman’s attack. What wonderful irony! Using the tools of capitalism against us. John Le Carre take note, there’s a book in this somewhere. Whatever the truth, a scoop of the year award awaits the journalist who unmasks Boatman.
Until then we should treat its analysis with deep scepticism.
An optimistic view on a City Brexodus
Despite all the hysteria around Brexit, one bogeyman has not re-emerged in recent weeks, the potential loss of City jobs. In 2016 there were daft and doom-laden predictions that Brexit would cost up to 200,000 City jobs (thank you Xavier Rolet). Those numbers have fallen steadily as it has become clear that the EU has neither the resources or will to rebuild the City inside the Eurozone.
The Corporation of London revised its minimum number of job losses to just 5,000.Government stats show the real picture is even better. Employment in the City is actually rising – up by 24,000 in 2017 – as our financial markets continue to grow. All the time we have been staring at the wrong statistic – it’s true that jobs have been created in Frankfurt, Paris and Luxembourg, but these are new jobs and not at London’s expense. The City’s new office blocks are full and firms are recruiting busily. The real loser has been the operating costs of the banks and firms that now have to straddle the Brexit divide. Ah well.
Black Friday blues
Happy Black Friday. I have little sympathy with retail ‘experts’ who claim that Black Friday is ruining trade. If shops want to sell stuff cheap on any given day of the year, good for them. But it has been dragging on an awful long time this year – we were being bombarded with Black Friday emails a month ago. From Monday we will no doubt be pestered with unmissable New Year’s sale bargains. It is rather like one of those optical illusions – where prices keep coming down, but never actually get any cheaper.
Tulip shows fun is taking root
We should be more worried perhaps about the way fun is infecting the Square Mile. The latest example of this is ‘The Tulip’ the planning proposal for a huge rotating viewing tower. It looks very futuristic, but when I started working in the City is was a place where people came to work.
Now it’s somewhere that crowds gather to eat and drink (a lot). The Tulip suggests that in the coming decades it will morph again – into a theme park. Clearly people don’t get enough thrills and spills on the stock exchange any more.