The Santa rally is finally upon us…

The markets rallied strongly this week following last week’s oil and commodities driven sell-off. The M&C20, which outperformed on the way down, has less ground to recover and so underperformed the All-Share this week, which finished up 2.3% and the M&C20 up 1.1%.

Most of the big caps were up broadly in line with the market, with Greene King, M&B and Dominos up over 2% each, with Marston’s the exception among the pubs, down 3.2% over the week as the stock went ex a 4.3p final dividend.

SSP was also slightly down, giving up 1.2%. The stock retained its value during the recent downward lurch, so compared to its peers the shares have less to recover.

Eclectic Bars continues its decline following its profit warning last month, down another 3p this week to 105p.

Patisserie Valerie, on the other hand, was up 9.5% as the market continues to digest the company’s expansion plans. The group expects to add some 20 sites this financial year. 

Enterprise rose 5.4% this week having fallen 5% last week during the market downturn. Uncertainty over the future of the tenanted pub model prevails with the threat of Market Rent Only options on the horizon. The bill is likely to go to the House of Lords early next year, and clarity on tenanted companies’ futures, good or bad, will likely improve market sentiment.

The Restaurant Group and JD Wetherspoon were up over 3% apiece. Both companies are expanding rapidly and as investors move money back into equities following last week’s panic, the two companies are likely to get special attention.

Updates on the M&C20 will recommence in the new year, when we will likely see updates on Christmas trading from a couple of operators. 

Commentry provided by Will Brumby of Langton Capital.