BAE

• BAE..weakness a chance to buy for 2014
• UAE Rules Out Eurofighter Deal is clearly -ve for sentiment although not sure it was in many peoples numbers
• Still in negotiation with the Saudis on the price inflation agreement on ongoing contract. Still very likely that gets done in the next few months
• Looks more like a PR mess/embarrassment.
• Military orders are hard top predict
• From a global perspective I believe that 2014 will see an increase in defence spending firstly from US budget agreements leading to increased spending
• China Japan tensions are just starting
• Japan has already increased its defence budget recently following a white paper on defence
• China will continue at a pace to become a world military force and close the gap on the US
• BAE is still cheap in absolute and relative terms to competitors and pays a healthy dividend and 2014 will be a good year for defence stocks in general