Coronavirus fears cause shares and oil price to fall

(qlmbusinessnews.com via bbc.co.uk – – Mon, 27th Jan 2020) London, Uk – –

Worries over the continued spread of the coronavirus have hit the financial markets, with London's FTSE 100 share index dropping more than 2%.

Airlines and companies with significant sales in China saw some of the biggest share price falls.

The coronavirus has killed 81 people in China with almost 3,000 confirmed ill, while at least 44 cases have been confirmed abroad.

The price of oil also fell, with Brent crude dropping 3% to $58.65 a barrel.

Among the biggest share price declines was luxury clothes maker Burberry, which fell 5.5%. It makes about 16% of its sales in China, one of its fastest-growing markets, and has warned investors that a drop in Chinese spending could spell a decline in its own revenues.

Shares in InterContinental Hotels Group dropped 4.7%. It says China and Hong Kong are a “growing share of our business” and contributes 8% of the firm's profit.

British Airways owner IAG, which also contains Iberia, fell 5.6%, while HSBC Holdings, which takes most of its profit from Asia, fell 3.5%.

Shares across Europe saw similar declines, with the German Dax and French Cac 40 indexes both down by about 2%.

Analysts at research firm Bernstein say Chinese consumers had spent $149bn (£114bn) during the Chinese New Year celebrations last year and that will probably be smaller this year due to travel curbs.

Companies in China have advised staff to work from home in an attempt to slow the spread of the deadly coronavirus.

Businesses are also offering workers longer holidays, as well as telling employees returning from the most affected areas to stay away from work.

Janet Mui, global economist at Cazenove Capital, told the BBC's Today programme that China's economy could suffer as the outbreak has happened over Chinese New Year, when a lot of shopping is done and gifts exchanged.

“If you look at history the most comparable example would be the Sars episode in 2003,” she said.

China's annual growth slumped from 11% to 9% in the wake of that outbreak.

Greggs to pay staff special bonus after success of UK vegan sausage roll

(qlmbusinessnews.com via uk.reuters.com — Wed, 8th Jan 2020) London, UK —

LONDON (Reuters) – British bakery operator Greggs (GRG.L) said will pay staff a special bonus after what the CEO described as a “phenomenal” year that included the launch of a vegan-friendly sausage roll and higher-than-expected profits.

Greggs, present in more than 2,000 stores in Britain, recently also launched a vegan version of its steak bake as more and more Britons try to cut down on meat and dairy.

The company said it would spend 7 million pounds ($9.2 million) on a one-off payment for its 25,000 employees, giving around 19,000 of its longest-serving staff about 300 pounds each.

CEO Roger Whiteside called 2019 “phenomenal” and said Greggs, which already shares 10% of annual profits with staff, was making an extra payout for the first time.

“This is all about the front line getting 300 pounds in their pocket as a thank you at the end of January for their help in delivering what has been an exceptional year,” he said.

Underlying store sales grew 9.2% over the 12 months to 28 December, as it attracted new customers for products including a vegan donut and vegan soups.

In a sign of the fanfare attached to vegan launches, earlier in January, dozens of people were pictured queuing at midnight at a Greggs branch in northern England to be the first to try the vegan steak bake.

“They’re flying off the shelves,” Whiteside said of the steak bake, which is made with meat substitute Quorn.

Annual pretax profit would be “slightly higher” than expectations, it said.

Analysts expect Greggs to post a 24% jump in pretax profit to 111.6 million pounds for 2019, Refinitiv data shows.

Whiteside said there would be headwinds in 2020 however as wage costs and the price of pork both rise.

Shares in Greggs, up 70% in the last year, were down 2% in early trade before moving into positive territory, standing up 0.7% at 0957 GMT.

Future growth would come from more shops at airports, drive-throughs and by expanding its home-delivery business, he said.

Whiteside, a former Marks & Spencer and Ocado executive, has overseen a 405% share price rise since he took over in 2013.

Greggs was founded in 1939 when John Gregg, who had started off delivering eggs and yeast by bicycle, set up a shop.

By Sarah Young

Oil prices have risen sharply after the killing of a top Iranian general in Iraq

(qlmbusinessnews.com via bbc.co.uk – – Fri, 3rd Jan 2020) London, Uk – –

Oil prices have risen sharply after the killing of a top Iranian general in Iraq.

Analysts warned the action could escalate tensions in the region and affect global oil production.

The price of Brent crude jumped by more than 4% to hit $69.50 a barrel at one point, the highest since mid-September.

It came after General Qasem Soleimani was killed in a US drone strike at Baghdad airport, which the Pentagon described as “defensive action”.

The price spike pushed oil stocks on the London stock exchange higher, with BP up 2.7% and Royal Dutch Shell nearly 1.9% higher.

Shares in US oil companies such as Exxon Mobil dropped, however, amid a wider US market fall prompted by weak manufacturing data and concerns about the implications of the Middle East conflict.

At mid-day in New York, the Dow was down about 0.7%, while the S&P 500 was off 0.5% and the Nasdaq was 0.6% lower. The declines followed record highs a day earlier.

“2020 opened on a very positive note,” said Aneeka Gupta of Wisdom Tree. “This event has actually stalled the bullish optimism we've seen.”

Sanctions

Tensions between the US and Iran have been rising since the US pulled out of a nuclear deal between Iran and other countries meant to curb Iran's nuclear programme and prevent it from developing nuclear weapons.

The US also reimposed sanctions on Iran, a move that has hurt the country's economy and severely restricted its oil exports.

This recent strike has sparked new fears of risks to energy supplies in the region.

Several of the world's biggest oil producers can be found in the area, which could be affected if there were a wider military confrontation involving Iran.

As much as a fifth of global supplies pass through the Strait of Hormuz, a narrow passage which provides access to the Gulf.

Caroline Bain, analyst at Capital Economics, said further conflict would likely lead to additional, short-term spikes in oil prices.

But even if tensions subside, the firm expects the cost of oil to move higher this year due to “output restraint, slower growth in US oil production and a gradual pick-up in global economic growth,” she added.

What does this mean for oil markets?

Analysis by Andrew Walker, BBC World Service economics correspondent

The potential disruption to the global oil market from conflict in the Gulf is severe.

The US Energy Information Administration estimates that 21% of oil used in 2018 passed through the Strait of Hormuz, a narrow passage which has Iran on its northern shore.

Some of the biggest producers would be affected if the Strait could not be safely navigated. Saudi Arabia, Iraq, Kuwait, Iran, UAE and Qatar all ship some or all of their exports via the Strait.

Saudi and the UAE have pipelines that bypass the Strait but they have nowhere near the capacity to take all the oil. There is also the possibility of Iranian military action against other countries' oil installations.

Last year there was a drone attack on the Saudi industry. Houthi rebels from Yemen claimed responsibility and they are widely seen as having Iranian backing.

Previous episodes of Middle East conflict have seen higher oil prices which contributed to global economic slowdowns, from the mid-1970s to the early 1990s.

What is different now, and what might moderate the impact, is the presence of the US shale industry, which can respond relatively quickly to supply shortfalls and higher prices.

UK Manufacturers see orders pick-up after no-deal Brexit avoided – CBI

(qlmbusinessnews.com via uk.reuters.com — Tue, 19th Nov 2019) London, UK —

LONDON (Reuters) – British manufacturers saw a pick-up in orders in November albeit from near decade-low levels, helped by the avoidance of a no-deal Brexit at the end of October, a survey by the Confederation of British Industry showed on Tuesday.

The CBI’s monthly orders balance rose to -26 from -37 in October, their highest level since August and stronger than a median forecast of -31 in a Reuters poll of economists.

October’s level of orders was the weakest in nine years.

“While the thick fog of uncertainty from a no-deal Brexit has lifted somewhat, the manufacturing sector remains under pressure from weak global trade and a subdued domestic economy,” Anna Leach, the CBI’s deputy chief economist, said.

“It’s clear that the outlook for the sector remains precarious.”

Export orders picked up after touching their lowest level since the financial crisis of 2008.

Manufacturers expected output to be flat over the next three months, the CBI said.

The European Union has set a new Brexit deadline of Jan. 31 and Prime Minister Boris Johnson has called an election for Dec. 12 in a bid to break the impasse in parliament over the divorce deal he negotiated with Brussels.

Reporting by William Schomberg

BP profits fall amid weak oil prices and hurricane impact

(qlmbusinessnews.com via theguardian.com – – Tue, 29th Oct 2019) London, Uk – –

BP’s profits have fallen sharply as global oil prices tumble amid gloomy forecasts for the global economy.

The oil major reported underlying profits of $2.3bn (£1.76bn) for the last three months on Tuesday morning, compared with $3.8bn in the same months last year.

The decline comes just weeks after BP announced its chief executive Bob Dudley would step down after almost a decade at the helm.

Dudley blamed weaker global oil prices, a string of one-off financial costs and the impact of Hurricane Barry, which dealt a “significant” blow to BP’s oil production in the Gulf of Mexico in July.

Dudley will end his four-decade career at BP early next year and be replaced in February by Bernard Looney, currently head of exploration and production.

The profits from Looney’s business division fell to $2.1bn for the last quarter, from $3.4bn in the same months last year following a fall in the global oil price.

The oil price has slumped to an average of $62 a barrel in the last quarter, from more than $75 a barrel a year ago.

The oil price slide comes a year after the oil major agreed to buy a $10.5bn stake in the US shale boom from BHP Billiton, in a deal seen as a show of confidence that global oil prices would remain at about $70 a barrel.

Brian Gilvary, the BP chief financial officer, told Bloomberg the company was able to get the deal over the line due to higher oil prices over last summer – and he expected oil prices to remain at about $70 a barrel.

There has been growing public opposition in recent months to the fossil fuel giant’s contribution to the climate crisis. Earlier this month the Royal Shakespeare Company ended its sponsorship deal and protesters targeted the National Portrait Gallery over BP’s ongoing support.

An investigation by the Guardian revealed that 20 oil and gas companies – including BP, Shell, Chevron, ExxonMobil and Total – could be directly linked to a third of greenhouse gas emissions since 1965.

The companies are planning to keep increasing their oil production, despite global efforts to avoid a runaway climate crisis by limiting carbon emissions, in large part from US shale reserves.

By Jillian Ambrose

HSBC business restructuring plans fuel fears of job cuts

(qlmbusinessnews.com via bbc.co.uk – – Mon, 28th Oct 2019) London, Uk – –

HSBC is planning to restructure its business after the banking giant said its performance in parts of Europe and the US was “not acceptable”.

Interim chief executive Noel Quinn said plans to improve these divisions were “no longer sufficient” and that it was “accelerating plans to remodel them”.

Earlier this month, the bank, which employs 238,000 people, was reported to be planning up to 10,000 job cuts.

On Monday, Mr Quinn said there was “scope” for potential cuts,

“There is scope throughout the bank to clarify and simplify roles, and to reduce duplication,” he told Reuters. However, Mr Quinn did not provide any further details on potential job cuts.

Mr Quinn took over as HSBC's acting chief executive in August following the shock departure of John Flint.

His remarks came as the bank reported worse-than-expected third-quarter profits.

Europe's largest bank said profit before tax fell 18% to $4.8bn (£3.8bn) in the three months to September, and also warned of a “challenging” environment ahead.

HSBC has been navigating uncertainty arising from Brexit, the US-China trade war and ongoing unrest in Hong Kong.

However, Mr Quinn praised the bank's performance in Asia – the region where it makes most of its profits.

“Parts of our business, especially Asia, held up well in a challenging environment in the third quarter,” said Mr Quinn.

“However, in some parts, performance was not acceptable, principally business activities within continental Europe, the non-ring-fenced bank in the UK, and the US.”

Analysis: By Dominic Oconnell

HSBC's dual nature – listed in London and Hong Kong and standing astride the trade flows between east and west – has often been a source of comfort for investors, who like a bank that doesn't have all its eggs in one basket.

It has also, however, been a source of discomfort for the bank and its shareholders. A dozen years ago, activist investor Knight Vinke led a campaign against HSBC's board, accusing it of corporate governance failings and urging it to stop spending money on western markets and concentrate on Asia, where there were more and more profitable opportunities for growth.

Fast forward to today and those same themes run through the first financial results from Noel Quinn, the bank's interim chief executive.

Mr Quinn, a battlefield promotion after the abrupt departure of John Flint in August, is clearly making his pitch for the getting the job full-time.

Statements from bank chief executives are normally bland in the extreme, but Mr Quinn pulls no punches, saying performance in the UK, Europe and US was “not acceptable” and that restructuring plans to focus on the Asian operations would be accelerated.

The bank has also warned there will be one-off financial hits in the next quarter to pay for the restructuring – which is likely to be shorthand for big job cuts to come.

The Financial Times reported earlier this year that HSBC would cut as many as 10,000 jobs; given the language in which Mr Quinn has couched his warnings about the bank's performance, that looks a likely outcome.

‘Significant charges'

HSBC said the revenue environment was “more challenging” than in the first half of the year, and predicted “softer” revenue growth than previously anticipated.

It also warned of “significant charges” in the fourth quarter – including those related to restructuring – if the backdrop worsened further.

While HSBC warned earlier this year that profits would be hit by a slowdown in China, the broader region was profitable for the bank in the third quarter.

The bank said profit before tax in Asia rose 4% to $4.7bn in the period, citing “resilience” in Hong Kong.

It follows months of unrest in the territory that have raised concerns about the impact on the economy and the reputation of the Asian financial hub.

Marks & Spencer demoted from the FTSE 100 for the first time

(qlmbusinessnews.com via theguardian.com – – Wed, 4th Sept 2019) London, Uk – –

Exit of founding member of top City share index is latest sign of retailer’s declining fortunes

Marks & Spencer is to be demoted from the FTSE 100 for the first time in the latest sign of the declining fortunes of the retailer, which was a founding member of the leading City share index.

Relegation to the FTSE 250 comes as the company is closing 120 stores as part of an overhaul designed to shore up profits.

M&S’s demotion reflects a share price at nearly a 20-year low as a long-running sales slump at the retailer’s clothing arm is compounded by the high street crisisaffecting rivals including Debenhams and House of Fraser.

The FTSE 100, which was established in 1984, contains the UK’s biggest listed companies by market value, with membership considered a mark of business prestige. The index is reshuffled four times a year according to share price movements, allowing a handful of companies to move up and down.Q&A

Marks & Spencer timeline

Tony Shiret, an analyst at the stockbroker Whitman Howard, said: “It is significant [for M&S] in the sense that it is a fairly objective measure of the diminished scale of the company.”Advertisement

M&S shares closed down 1.5% at 187p, valuing the company at £3.6bn.

A decade ago, M&S was making a £1bn annual profit but the latest figure was below £100m on the back of more than £400m of restructuring costs relating to the revamp being led by the company’s chair, Archie Norman, who is highly regarded for turnarounds during his career including at Asda and ITV.

Losing its FTSE 100 status means M&S shares will no longer be held by the investment funds that only track the index of Britain’s highest-value companies, forcing them to dump the stock. Norman has previously been sanguine on the matter, saying: “When I went to ITV we dropped out of the FTSE 100, the sky didn’t fall in.”

Last year, he told shareholders M&S had bigger problems because it was facing an existential threat as retail shopping moved online. “This business is on a burning platform. We don’t have a God-given right to exist and unless we change and develop this company the way we want to, in decades to come there will be no M&S,” Norman warned.Q&A

What is the FTSE 100 and why does it matter?

Nick Bubb, a retail analyst, said M&S had been in the relegation zone for some time. “M&S has been declining remorselessly for many years, as a result of weak and arrogant management, and stronger, more focused competition [such as Primark]. The problems have mainly been on the clothing side, where M&S tries and fails to be all things to all people in the mid-market,” he said.

M&S – which was founded on a Leeds market stall in 1884 – was late to adapt to the rise in online shopping, hampered by its legacy of 300 clothing stores. Many of the chain’s shops predate the second world war and are no longer in the right place or are the wrong size for their local market.

Norman is putting the company through its biggest shake-up in a generation. He has paid £750m for a 50% share in Ocado’s retail arm and, from autumn next year, M&S products will replace Waitrose-branded goods in shoppers’ deliveries. But investors are split on the merits of the deal, with some arguing the company has taken an expensive route into the fast-growing online grocery market.

But Norman, who is working closely with the company’s chief executive, Steve Rowe, has had his work cut out reviving the M&S clothing business, which remains the country’s biggest in sales terms despite seven years of decline.

In July, M&S sacked its clothing head Jill McDonald after she failed to get a grip on the biggest job in high street fashion. At the time, Rowe – who is now running the business – revealed buying errors meant key products such as jeans had sold out, resulting in the poorest stock levels “I have ever seen in my life”.

With FTSE 100 membership purely a function of market cap size, Bubb said: “Other companies have grown bigger and M&S has got smaller. Life will go on after the exit from the FTSE 100 and in some ways, a lower profile might help M&S.”

By Zoe Wood 

UK firm Just Eat agrees £9bn merger with Takeaway.com

(qlmbusinessnews.com via theguardian.com – – Mon,29th July 2019) London, Uk – –

British firm joins Dutch rival to form one of the world’s biggest online food delivery companies

Just Eat is merging with its Dutch rival Takeaway.com in a £9bn deal that will create one of the world’s biggest online food delivery companies.

The two companies have reached an agreement in principle on the key terms of an all-share deal in which the Amsterdam-based company will acquire Just Eat at 731p a share, valuing the British firm at £5bn.

The combined group had 360m orders worth €7.3bn (£6.6bn) in 2018 and strong positions in the UK, Germany, the Netherlands and Canada.

Shares in Just Eat jumped 25% to 794.28p on the news.

Just Eat shareholders will receive 0.09744 Takaway.com shares for each Just Eat share and will own 52.2% of the combined group. It will be headquartered in Amsterdam and listed on the London Stock Exchange, with a “significant part of its operations” in the UK.

Takeaway.com’s boss, Jitse Groen, is to become chief executive of the new company. It will be chaired by the Just Eat chairman, Mike Evans, while the Takeaway.com chairman, Adriaan Nühn, becomes vice-chairman. The Just Eat chief financial officer, Paul Harrison, will take on the same role for the combined group, and its interim chief executive, Peter Duffy, will leave.

Groen has described the UK as one of the best three markets in Europe, along with the Netherlands and Poland. Takeaway.com was founded in 2000 and operates in 10 European countries as well as Israel and Vietnam but does not have a presence in the UK. The two companies have little geographical overlap apart from Switzerland.

Analysts at Barclays said: “Just Eat shareholders would be getting the best operator in the space to run the business – a notable shift from missed execution from management in the last few years.”

There has been a flurry of deals in the fast-growing online food delivery market, with competition heating up from Uber Eats and Deliveroo. Just Eat bought UK firm HungryHouse in January 2018, and in December Takeaway.com acquired Delivery Hero’s food delivery business in Germany.

The Canaccord analyst Nigel Parson said: “It is a possibility that Delivery Hero could table a rival bid.”

Just Eat has come under pressure from its activist shareholder Cat Rock Capital to merge with Takeaway.com, in which the US hedge fund also holds a stake.

Just Eat gained more than 4 million customers last year across Europe, Canada, Brazil, Australia and New Zealand. Its revenues are expected to top £1bn this year. It made a pretax profit of £101.7m last year, following a £76m loss in 2017. It will publish first-half results on Wednesday.

In 2018, Just Eat had 26.3m customers while Takeaway.com had 14.1m, Just Eat had 221m orders versus Takeaway.com’s 94m; Just Eat’s revenue was £780m versus Takeaway.com’s €232m; and Just Eat’s underlying profit (Ebitda) was £180m versus an adjusted loss of €11m for Takeaway.com.

Launched by five Danish entrepreneurs in 2001, Just Eat originally linked customers to restaurants that handled their own deliveries. Its former chief executive Peter Plumb, who left suddenly in January, upgraded its technology and launched its own delivery service but he came under fire from Cat Rock and other shareholders after his investment drive slowed earnings growth.

By Julia Kollewe

UK may be entering full-blown recession: budget watchdog

(qlmbusinessnews.com via uk.reuters.com — Thur, 18th July 2019) London, UK —

LONDON (Reuters) – Britain might be entering a full-blown recession and a no-deal Brexit could more than double the country’s budget deficit next year, the watchdog for public finances said on Thursday.

The Office for Budget Responsibility said the world’s fifth-biggest economy appeared to have flat-lined or possibly contracted in the second quarter, some of which was probably “pay-back” after Brexit-related stock building in early 2019.

“But surveys were particularly weak in June, suggesting that the pace of growth is likely to remain weak. This raises the risk that the economy may be entering a full-blown recession,” it said in a report on the outlook for the public finances.

A no-deal Brexit would hurt confidence and deter investment and lead to higher trade barriers with the European Union, pushing down the value of the pound and causing the economy to contract by 2% by the end of 2020, the OBR said, referring to forecasts by the International Monetary Fund.

A no-deal Brexit – something the two contenders seeking to be Britain’s next prime minister say they are prepared to do if necessary – could add 30 billion pounds ($37.4 billion) a year to public borrowing by the 2020/21 financial year, the OBR said.

The OBR said the spending and tax cut promises made by Boris Johnson and Jeremy Hunt, one of whom is due to become prime minister next week, would put a strain on the budget.

“The spending control framework seems to be under pressure, with major announcements being made outside fiscal events, and the Conservative leadership making pledges that would prove expensive if pursued,” it said.

Reporting by David Milliken

Bitcoin falls below $10,000 down 30% from last week

(qlmbusinessnews.com via theguardian.com – – Tue, 2nd July, 2019) London, Uk – –

Cryptocurrency climbed to nearly $14,000 on news social network was launching rival

The price of bitcoin has fallen back below $10,000, down 30% from last week’s peak of nearly $14,000.

Continuing its wild ride, the digital currency dropped to $9,717 on Tuesday, down 8.1% on the day. Last Wednesday, the cryptocurrency shot up to $13,879, breaking through the $12,000 and $13,000 levels in less than two hours.

Bitcoin had languished below $6,000 for months, but was galvanised by Facebook’s plans to create a cryptocurrency called Libra next year.Q&A

What is bitcoin and is it a bad investment?

Other digital currencies have also fallen back. Reports that an investor placed a large short order on Sunday, betting that the bitcoin price would go down in coming days, sparked panic among investors.

Bitcoin has seen wild swings in the past, and some analysts say it could rise back to $20,000 again – or fall as low as $3,000. In late 2017, it rose to close to $20,000, before a spectacular collapse in 2018.

The cryptocurrency’s latest gyrations prompted the US economist Nouriel Roubini, a long-time critic, to say that the bitcoin price would eventually fall to zero. He tweeted: “Its true value is negative, not zero, given its toxic externalities! It will get to zero in due time.”

Simon Peters, an analyst at global investment platform eToro, said: “We appear to be in a period of indecision, where the market is figuring out where to go next after its heavy surge and sell-off.”

Investors hope Facebook’s entry into digital currencies will bring greater legitimacy to the sector. Regulators around the world have warned that the move could lead to greater controls and tougher regulation to protect consumers.

Mark Carney, the governor of the Bank of England, cautiously welcomed Libra. He said the central bank would support new entrants into the UK financial system, but warned that Facebook would need to meet the highest regulatory standards.

Bloomberg reported last week that Henry Kravis, the co-founder of the US private equity firm KKR, had become the latest financier to bet on cryptocurrencies. He is investing in a cryptocurrency fund provided by ParaFi Capital. Other high-profile investors include British hedge fund manager Alan Howard, PayPal co-founder Peter Thiel and US hedge fund manager Louis Bacon.

By Julia Kollewe

Markets rally after US and China agreed to restart trade talks

(qlmbusinessnews.com via news.sky.com– Mon, 1st July 2019) London, Uk – –

The FTSE 100 rose by about 1% to reach a two-month high following developments at the G20 summit over the weekend.

Stock markets have rallied after the US and China agreed to restart trade talks, easing fears over the escalation of a damaging dispute between the world's two biggest economies.

The FTSE 100 was around 1% higher, taking the index above the 7,500-mark to its highest level since late April, while European bourses also made strong advances.

That followed gains for Asian markets overnight, after a meeting between Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 meeting over the weekend.

Mr Trump offered concessions including not imposing any new trade tariffs and easing restrictions on Chinese tech company Huawei – which has recently been placed on a US blacklist.

China agreed to make unspecified new purchases of US farm products and to return to the negotiating table.

The developments helped the FTSE turn higher when trading resumed on Monday, led by industrial group Melrose – up by more than 3% – while Asia-focused financial powerhouses Prudential and HSBC also made gains.

An upturn in the oil price – with Brent crude rising 3% to nearly $67 a barrel – also lifted stocks.

The rise came after OPEC and other oil-producing countries looked set to extend supply cuts at a meeting in Vienna.

That helped boost UK-listed BP, up 2%, and Royal Dutch Shell, more than 1% higher.

In Germany – an exporting giant especially susceptible to global trade tensions – the Dax rose by 1.6% in early trading.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: “Trump and Xi gave investors what they wanted at the G20 meeting in Osaka this Saturday: hope.

“A deal is not sealed just yet, but the two countries showed mutual willpower to end the deadlock and move on with the talks.”

By John-Paul Ford Rojas, business reporter

UK sales of houses worth £1m have risen – but London suffers a decline

(qlmbusinessnews.com via news.sky.com– Thur, 27th June 2019) London, Uk – –

The rise in numbers of £1m homes was seen in Scotland, Wales, the Midlands and in the north of England – but London saw a fall

The number of homes worth a million pounds or more that have been sold nationally has reached a record high – despite a fall in London.

In total, the number of sales of houses valued at £1m or more increased by 1% in 2018 to a new high of 14,638 – which is the highest number recorded, according to Lloyds Bank.

The number of homes sold for more than £2m was down though, from 2,530 in 2017 to 2,501 in 2018.

The rise in numbers of £1m homes was seen in Scotland, Wales, the Midlands and in the north of England, according to Lloyds, which analysed Land Registry and Registers of Scotland figures.

However, sales in London and the South East remained relatively flat, despite making up around 80% of the sales for homes worth over £1m.

8,267 million pound homes were sold in London in 2018 – down from 8,308 in 2017.

The capital also saw a 3% fall in the sales of homes worth more than £2m, from 1,946 to 1,886 over the course of a year.

The South East showed no major growth in the sale of million pound homes, with 3,390 being sold, which is only 13 more than than the year before.

In Yorkshire and the Humber, the number of million pound homes sold dramatically fell by 23% year-on-year in 2018, with only 103 sales made.

The south-west of England saw a 1% fall from 676 homes in 2017 to 668 in 2018.

Louise Santaana from Lloyds Bank said: “The high-value property boom the country has experienced over the last decade has decelerated in the past 12 months, which is in line with expectations.

“However, while growth across London and the South East has slowed, there are still a number of property hotspots across the country that would create some value for investors, particularly in the East Midlands.”Sponsored Links

Huawei to cut production by $30bn amid US-led backlash

(qlmbusinessnews.com via bbc.co.uk – – Mon, 17th June 2019) London, Uk – –

Huawei founder Ren Zhengfei has said the Chinese telecoms giant will slash production by $30bn (£23.9bn) over the next two years as a US-led backlash against the firm intensifies.

Speaking at the firm's headquarters, Mr Ren said sales were expected to remain flat at $100bn in 2019 and 2020.

Last month, the US put Huawei on a list of companies that American firms cannot trade with unless they have a licence.

The move marked an escalation in efforts by Washington to block Huawei.

The US argues that the Chinese company – the world's largest maker of telecoms equipment and the second biggest smartphone maker – poses a security risk.

“In the coming two years, the company will cut production by $30bn,” Mr Ren said at a panel discussion at the firm's headquarters in Shenzhen.

However, Mr Ren said the company would “regain [its] vitality” in 2021.

Spending on research and development would not be cut, Mr Ren added, despite the anticipated hit to the firm's finances.

The Huawei founder had previously downplayed the impact of the US restrictions on the Chinese firm.

However, the actions by the US have prompted tech companies around the world to retreat from Huawei.

Google barred Huawei from some updates to the Android operating system, meaning new designs of Huawei smartphones are set to lose access to some Google apps.

Japan's Softbank and KDDI have both said they will not sell Huawei's new handsets for now.

UK-based chip designer ARM told staff it must suspend business with Huawei, according to internal documents obtained by the BBC.

Surveillance fears

Washington's clampdown on Huawei is part of a broader push-back against the company, over worries about using its products in next-generation 5G mobile networks.

Several countries have raised concerns that Huawei equipment could be used by China for surveillance, allegations the company has vehemently denied.

Huawei has said its work does not pose any threats and that it is independent from the Chinese government.

However, some countries have blocked telecoms companies from using Huawei products in 5G mobile networks.

So far the UK has held back from any formal ban.

Uber posts $1bn loss in first quarter after stock market listing

(qlmbusinessnews.com via bbc.co.uk – – Fri, 31st May 2019) London, Uk – –

Uber has posted a $1bn (£790m) loss as the ride-hailing firm delivered its first figures since a disappointing flotation earlier this month.

The quarterly loss came despite a 20% rise in revenues to $3.1bn and increase in monthly active users to 93 million.

The results were in line with many analysts' forecasts and may provide reassurance about the company's future profitability.

Uber shares have sunk almost 11% since it listed on Wall Street on 10 May.

The company is the biggest of a group of Silicon Valley start-ups that have gone public this year against the backdrop of a global stock market sell-off sparked by renewed US-China trade tensions.

But Uber has also faced strong competition in the smartphone ride-hailing business, and incurred extra costs for signing up new drivers and establishing the Uber Eats delivery service.

‘Long journey'

Finance Chief Nelson Chai said he had recently seen some less aggressive pricing by competitors, which include arch rival Lyft.

He added that Uber was prepared to keep spending. “We will not hesitate to invest to defend our market position globally.”

The company has ambitions to move into electric scooters, e-bikes, and even aircraft, allowing people to hail rides via their smartphones.

During a conference call after publication of the results, Uber boss Dara Khosrowshahi said the company's disappointing start as a public business was just a step on “the long journey of making Uber a platform for the movement of people and transport of commerce around the world at a massive scale”.

Short sellers

The share price was almost flat in after-hours trading immediately following release of the numbers, but then jumped 1.6% higher before falling back.

Some analysts have expressed unease about the company ever making a profit. The number of investors betting that Uber's share price will fall – called short-selling – has risen during the past two weeks.

One analyst, Atlantic Equities' James Cordwell, said a lack of any forward guidance in Thursday's statement “is a little disappointing”.

Uk economy likely to grow less than Bank of England forecast

(qlmbusinessnews.com via uk.reuters.com — Thur, 30th May 2019) London, UK —

LONDON (Reuters) – Britain’s economy is likely to grow less than the Bank of England forecast earlier this month as Brexit uncertainty hurts investment and productivity, Deputy Governor Dave Ramsden said on Thursday.

Ramsden, who voted against the BoE’s first post-crisis interest rate increase in November 2017, said rates would need to rise if Brexit went smoothly, but a disruptive Brexit would make the right path for monetary policy an open question.

Even if Brexit does go smoothly, it would be unlikely to dispel all business uncertainty, he said, so investment might pick up less than the BoE had forecast, hurting short-run growth and the economy’s longer-run productive capacity.

“Relative to the best collective judgment expressed in the MPC’s central forecast I am … a little more pessimistic on GDP growth than my colleagues on the MPC,” he told businesses during a visit to Inverness in northeastern Scotland.

The BoE forecast this month that the economy would grow by 1.5% this year and 1.6% in 2020 if Brexit goes smoothly.

Ramsden said his outlook for inflation and how fast to raise interest rates was similar to that of his colleagues, because weaker productivity growth was likely to push up on inflation, cancelling out the drag on inflation from slower growth.

Brexit uncertainty is leading businesses to use extra workers rather than invest in improving productivity, he said, something that was likely to weigh on productivity over the coming years.

“We are unlikely to achieve full certainty until the final outcome of (Brexit) negotiations is known, and there is a risk that more persistent uncertainty could push out the pick-up in investment and continue to drag on growth,” he said.

Figures earlier on Thursday showed the biggest annual fall in car production since the financial crisis, after carmakers temporarily halted work last month because they were unable to reverse closures planned before the scheduled March 29 Brexit.

At the start of this month, BoE Governor Mark Carney said investors were underestimating how much interest rates could rise, even as the British central bank kept borrowing costs on hold due to Brexit uncertainty.

At the time, markets only priced in one quarter-point rate rise over the next three years, and short-term interest rate expectations have fallen back since and markets now think a rate cut is more likely than an increase over the coming year.

Ramsden, a former chief economist at Britain’s finance ministry, said a no-deal Brexit with no transition period beforehand would have “large negative economic effects”.

But that would not automatically mean interest rates should be cut, he said, because of the inflationary impact of a weaker pound and a further reduction in productivity.

Reporting by David Milliken

Asda considers stock market listing after blocked merger

(qlmbusinessnews.com via bbc.co.uk – – Wed, 15th May 2019) London, Uk – –

Asda could be listed on the stock market after its merger with supermarket rival Sainsbury's was blocked by the competition authorities.

Judith McKenna, chief executive of Asda's owner Walmart, has told staff such a listing is being considered.

But, she told managers at an event in Leeds – where Asda is based – any listing could “take years”.

It comes after the Competition and Markets Authority blocked its merger with rival Sainsbury's.

The CMA was concerned the tie-up would raise prices for consumers, raise prices at the supermarkets' petrol stations and lead to longer checkout queues.

It has left the giant US retailer Walmart looking at options for the supermarket chain it bought twenty years ago.

“While we are not rushing into anything, I want you to know that we are seriously considering a path to an IPO – a public listing – to strengthen your long-term success,” Ms McKenna said.

Walmart would have kept a 42% stake in the enlarged Sainbury's-Asda business if the £15bn tie-up had gone ahead.

The remarks by Ms McKenna are the first time that Walmart has spoken about the future of its UK operations since the CMA blocked the deal.

Asda is traditionally a value supermarket but had come under pressure from discounters Aldi and Lidl, which have rapidly expanded their market share in recent years.

Walmart, often described as the world's largest retailer, has already listed its Mexico operations and has been buying smaller companies, such as online shopping Jet.com, as well as brands such as Bonobos and Bare Necessities, to expand into new areas.

Price cuts loom

Ms McKenna told the 1,200 managers at the meeting: “Walmart does not have a one-size-fits-all approach to operating its international markets, but a consistent focus on strong local businesses powered by Walmart”.

Even before the CMA formally blocked the deal, there had been reports that private equity house KKR could consider an offer for Asda and install former Asda chief executive Tony De Nunzio to run the operation.

The current Asda chief executive Roger Burnley also spoke to the managers at the meeting, which took place on Tuesday, and told them that there would be no change in strategy.

Asda, which calls its staff “colleagues”, intends to make £80m of price cuts during the rest of this year and trial new technology.

A “scan and go” initiative was launched in 25 stores last week and more “click and collect” towers will be installed in stores.

TUI reports widening half-year losses of £261m

(qlmbusinessnews.com via news.sky.com– Wed, 15th May 2019) London, Uk – –

The travel operator is counting the cost of a weak consumer environment as well as the grounding of Boeing 737 MAX aircraft.

Travel operator TUI has reported widening half-year losses and a fall in summer bookings as it counts the cost of weak consumer confidence and Brexit uncertainty.

The group reported an underlying loss of €301m (£261m) for the six months to the end of March, up from €170m (£148m) in the same period a year ago.

It has also been knocked by the grounding of Boeing's 737 MAX aircraft, which it has previously warned could cost up to €300m (£261m) as it leases more aircraft to cover its routes.

TUI said the decline in its first-half performance was partly due to the knock-on impact of last summer's heatwave holding back bookings and because it had too much capacity in Spain as holidaymakers opted for cheaper destinations such as Turkey.

For this summer, bookings in its package holiday and airlines business are down 3% while selling prices are up by only 1% amid a competitive market – not enough for TUI to cover rising costs.

TUI said that for this part of its business “weak demand environment persists”, putting pressure on profit margins.

“This is driven by a number of factors – reduced demand due to last year's extraordinary hot summer, slowdown of consumer confidence, Brexit uncertainty, shift in demand to the eastern Mediterranean coupled with overcapacity to Spain, as well as the 737 MAX grounding,” TUI said.

However, the group said its hotels and cruise ships business, where it has been investing in expansion over recent years, continued to perform well.

The results come after two profit warnings from TUI earlier this year – one blamed on the weak UK market and the other on the Boeing issue.

TUI's fleet of 150 aircraft includes 15 currently grounded 737 MAX aeroplanes, with a further eight scheduled for delivery after the lifting of the grounding.

It has warned investors that it faces a €200m (£174m) hit from the grounding of the aircraft, assuming flights resume by mid-July.

If it does not become clear by later this month that flying will re-start by that time, it will have to extend measures to cover for this until the end of the summer season, adding a further impact of up to €100m (£87m).

TUI chief executive Fritz Joussen said the company was “on track, both strategically and operationally” and that medium and long term growth forecasts were intact. Shares rose 3%.

The company is not the first travel firm to warn of a Brexit impact on demand, with easyJet saying last month that the uncertainty was having an impact.

Meanwhile, TUI's rival Thomas Cook has been seeking new debt funding from lenders and has been looking to sell its airline business.

By John-Paul Ford Rojas, business reporter

Barclays profits fell 10 percent in the first quarter, signaling further cuts if conditions persist


(qlmbusinessnews.com via uk.reuters.com — Thur, 25th April 2019) London, UK —

LONDON (Reuters) – Profit at Barclays fell 10 percent in the first quarter as its under-pressure investment bank struggled with tough markets, prompting it to signal further cost cuts if these conditions persist.

The poor investment banking performance comes at an awkward time for chief executive Jes Staley, who is locked in a public battle with activist investor Edward Bramson who wants to see the unit pared back to boost overall returns at Barclays.

Barclays said on Thursday returns in the investment banking business fell to 9.5 percent from 13.2 percent a year ago, while its overall profit was 1.54 billion pounds ($1.99 billion).

Although this was in line with the 1.57 billion forecast compiled from the average estimates of 13 analysts polled by the bank, shares in Barclays were down 1.43 percent at 0730 GMT.

“Despite a better than expected result in fixed income trading, today’s numbers will do little to take the pressure from activist Edward Bramson off the board,” said Nicholas Hyett, analyst at one of Britain’s biggest online investment platforms, Hargreaves Lansdown.

Barclays said that if the tough market conditions persist, it may have to cut annual costs in 2019 below the 13.6 billion to 13.9 billion pound range it earlier said it expected.

The bank said measures it took three years ago to ensure bonus pools in a given year are better aligned with that year’s performance, mean it has more discretion to cut bonuses when performance dips.

“What you see in the first quarter is Barclays using this discretion around variable compensation to manage our costs anddeliver expected profitability,” Staley said.

Staley last month ousted his lieutenant Tim Throsby, a fellow former JP Morgan banker who he had recruited in September 2016 to run the investment bank and who then embarked on a hiring spree in a bid to restore morale and performance.

Barclays said income from its equities business fell 21 percent and banking advisory fees were down 17 percent, although earnings from fixed income, currencies and commodity trading (FICC) rose 4 percent.

The drop in equities income follows similar announcements from U.S. rivals such as Goldman Sachs and JP Morgan which saw first quarter declines in trading revenues as client activity slumped.

Barclays’ core capital ratio fell to 13 percent from 13.2 percent at the end of the previous quarter, and its total income of 5.25 billion pounds fell short of analysts’ expectations.

Reporting by Lawrence White

JD Sports defies high street gloom reporting 15% rise in pre -tax profit

(qlmbusinessnews.com via news.sky.com– Tue, 16th April 2019) London, Uk – –

The rise in pre-tax profit and confidence in the face of Brexit uncertainty comes as many high street names are struggling.

JD Sports has defied high street gloom, reporting a 15% rise in pre-tax profit for the year.

Executive chairman Peter Cowgill said that the retailer of sports, fashion and outdoor brands had delivered a “record result” thanks to its “relentless focus” on providing a “compelling differentiated proposition to the consumer”.

Pre-tax profit was £339.9m in the year ending 2 February, compared with £294.5m the previous year.

The result comes as many high street names are struggling.

During the past week Debenhams has fallen into administration, LK Bennettannounced a third of its stores would close and Monsoon Accessorize has made preliminary moves towards a Company Voluntary Arrangement (CVA).

Mr Cowgill said: “JD is not immune to the widely reported challenges to physical retail in the UK with lower footfall on many high streets, malls and retail parks combined with cost challenges from increasing minimum wage rates and rises in business rates.


“Therefore, it is very pleasing that the core UK and Ireland Sports Fashion fascias, the most mature part of our group, have delivered a further increase in sales and profitability.


“This helps maintain our belief that the store base at its current scale continues to provide a positive influence on our future development as it raises brand awareness, provides consumers with an opportunity to physically see and try the product, and enables us to provide multiple delivery points.”

JD Sports said it had increased its store count by 39 across Europe and a further 34 stores had opened in the Asia Pacific region. In the previous year 56 stores were opened in Europe and nine in Asia/Pacific.

Its acquisition of Finish Line in the US had also “significantly” extended its global reach and was “delivering encouraging early results”, Mr Cowgill said.

He also said the group was confident about the future, despite Brexit uncertainty.

“While we recognise that there is uncertainty surrounding the nature and timing of the UK's exit from the European Union, we are cognisant of the potential consequences of a disorderly exit on supply chains, tariffs, exchange rates and consumer demand,” he said.

“Notwithstanding this uncertainty, the board remains confident in the international potential of the JD proposition.”

By Sharon Marris, business reporter

The world’s largest oil company Saudi Aramco’s bond sale sets record as orders top $100bn

(qlmbusinessnews.com via theguardian.com – – Wed, 10th April, 2019) London, Uk – –

Investors set aside concerns over Jamal Khashoggi murder to take up oil firm’s $10bn issue

Saudi Aramco, the world’s largest oil company, was massively oversubscribed for its multibillion dollar debut bond sale, in a further sign that investors have put aside concerns over doing business with Saudi Arabia following the murder of the journalist Jamal Khashoggi.

The state-owned firm is expected to raise more than $10bn (£8bn) through its first-ever bond issue. But a surge in demand meant the sale was oversubscribed, with orders exceeding $100bn.

It reportedly sets a record for emerging market bond demand, trumping orders worth $52bn for Qatar’s $12bn deal last year, $67bn bid for Saudi Arabia’s bond sale in 2016 and $69bn for Argentina’s $16.5bn trade that same year.

The stampede to pick up Aramco debt is seen as a vote of confidence by investors, just months after Khashoggi was killed in a Saudi consulate in Istanbul last October.

Saudi authorities spent weeks denying any knowledge of the journalist’s death before saying he was killed in an operation masterminded by former advisers to Mohammed bin Salman, but denying the crown prince’s involvement.

The journalist had written columns for the Washington Post criticising the crown prince before his death.

Some investors initially tried to distance themselves from the Gulf state amid global outrage, pulling out from a major finance conference in Riyadh in October.

Saudi Aramco last week emerged as the most profitable business in the world, with its 2018 profits of $111.1bn overtaking Apple at $59.5bn.

Documents from its bond offering revealed the company produced 10.3m barrels of crude oil per day, resulting in annual revenues of $355.9bn.

Proceeds from Saudi Aramco’s bond sale are expected to help fund its takeover of rival Sabic in a deal worth $69.1bn.Topics

By Kalyeena Makortoff