Monday Call – April 26 2004
Last week’s calls proved to be reasonably robust in spite of new polls in both the UK and US. Please note that next week’s Monday Call will not be published until Monday evening because of the UK public holiday.
There’s continuing speculation over the future of both the Lib Dem and Labour leaders that is attracting coverage and could be the focus of most betting activity. Our LAY call on Blair/Kennedy on the current 1.85 in the party leaders at the General Election market remains. The referendum has led to more speculation about Tony Blair’s short-term future. We’re not convinced that either Blair or Charles Kennedy will go – but there’s a good chance that one of them might. By laying the two to still be leaders at the General Election you win if either or both go. The latest Kennedy story does not suggest he is very confident about his position. Laying Blair/Kennedy at 1.85 offers better value than laying Blair alone at the current 1.64.
What’s attractive about this bet is that the any upward price movements will be dramatic and large while downward movements will be gradual allowing you to bail out at not too great a loss.
There is no “Will Kennedy Step Down” market so the only place that you can bet is on the party leaders market. This is complicated because the option “Tony Blair only” is also in doubt. The option “None” has seen a price tumble.
The biggest test of UK public opinion before the General Election takes place on June 10 when there will be the elections on a PR basis for the European Parliament, local elections in many areas and the London elections including that for mayor. The Conservatives launch their campaign this week to be followed by Labour and the LDs a few days later. This will be the first electoral test for Michael Howard since he became Tory leader.
On the betting markets there is little activity apart from one bookmaker who is making a market on the individual regions in the Euro vote and, of course, the London Mayoral Election. We expect more markets to be created as we get near the date. There have also been very few opinion polls.
We stick by our call that the market price on Ken Livingstone is far too low and does not reflect the true situation.This is probably because of three key facts that many punters have not fully appreciated.
The result is based on the aggregate all-London vote so that outer Tory and LD areas with much higher turnouts will have a hugely disproportionate influence.
Because of this effect Labour was out-voted by the Tories in the all-London local elections in 2000 and 2002 even though it was upto 20% better off in the national polls than it is today.
The second preference Liberal Democrat votes last time went to Norris by a big margin – not Ken as is widely assumed – and this is likely to happen again.
It’s easy to call the 1-5 favourite in a contest. It’s much harder to say, as we are, that this might be wrong. This call against Livingstone might be out – but not by more than 2-3% and certainly not by a margin to justify prices of 1.2 on Ken and 9-11 on Hughes and Norris. The layers are out there so BACK both Hughes and Norris if the prices remain at current levels.
The latest opinion polls have shown a move back to Bush and there is very little betting value about. UK prices range from 1.53 – 1.73. The Kerry prices range from 2-2.37. We can’t see any major movements in the coming week and perhaps the best strategy is not to tie your cash up longer than is necessary by betting on either man now. Also we will get a clear idea of whether Bush is really recovering. DON’T BET.
The main “who will win” markets seem to have shrugged off the latest opinion polls from ICM and Mori which reported slight declines in Tory support. But will this indifference continue if the April YouGov poll on Friday follows suit? The Tory betting exchange price has, as predicted, moved from 4.3 to 4.2. We were suggesting short-term gains here but now you should wait until the YouGov figures are out. Our overall view remains – Labour are almost certain to win most seats. DON’T BET at the moment – you will get better value on Labour after the June 10 Euro and Local elections.
The seat number markets with the spread-betting firms have moved down slightly from LAB 332-342 to 330-340, perhaps in response the point we have made that they have ignored the reduction by 13 of Scottish Westminster seats at least 10 of which will be Labour. As was pointed out by politicalbetting.com on Saturday the two pollsters who were most accurate at the last General Election are now putting forward figures that would produce a huge difference in the number of Labour seats. YouGov would have it at 300 – ICM at 380. This market is only for the very bold and unless you are very confident that one of these top pollsters is totally wrong then DON’T BET.
The “Which year will the General Election be?” market on Betdaq has not moved and still nobody is laying 2005. If they do above 1.5 – BACK.
A potentially interesting Betdaq market links who will win with which party leader. The main options are:-
Labour led by Tony Blair 1.4
Labour led by another 2.4
Conservative led by Michael Howard 4.8
The only value bet is Tory/Howard which is substantially better than the 4.33 on the Tories alone that two bookmakers are offering. As we’ve said before – the way the Westminster seats are distributed make it very hard to contemplate anything other than Labour coming out on top. The problem with all Betdaq markets is the lack of liquidity. If you want to back the Tories this is the place to do it.
It might be that one of the bookmakers will open a market on the planned Euro referendum. If this happens do not be tempted to bet either YES or NO. Without a referendum date you could by locking up your stake for a long time and a lot can happen in the intervening period. We don’t know yet what the final Euro-deal will be or how other countries react to it. Our guess is that the UK referendum will be hugely influenced by the way other countries in Europe who are having referendums vote. DON’T BET.
NOTE: When we make a call we are stating that we believe that the chances of something happening are better than the odds that are available.
All prices quoted are as at time of posting.
Because of the UK Public Holiday – next week’s Monday Call will be published on Monday evening