Uk new car sales see biggest downturn since 2008

(qlmbusinessnews.com via news.sky.com– Mon, 7th Jan 2019) London, Uk – –

Plummeting diesel sales, new emissions rules, and a Brexit-linked hit to consumer confidence were all blamed for the downturn.

New car sales fell by nearly 7% last year in the biggest annual drop since 2008, according to industry figures.

A slump in demand for diesel, stricter emissions rules, and falling consumer confidence ahead of Brexit were blamed for the decline.

Figures from the Society of Motor Manufacturers and Traders (SMMT) showed 2.37 million new cars were sold in 2018, down more than 174,000 on the previous year.

The 6.8% fall was the second year in a row of decline and the largest drop since demand fell by 11.3% during the financial crisis a decade ago.

SMMT chief executive Mike Hawes described the challenges facing the industry as a “perfect storm”. The trade body is forecasting a further 2% decline in 2019.

Mr Hawes said: “A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.

“The industry is facing ever tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.”

The key factor in the decline for last year was a 29.6% drop in diesel sales – with the SMMT blaming a “lingering sense of uncertainty” over how diesel cars will be taxed and treated after the Volkswagen emissions cheating scandal in 2015.

Petrol car sales were up by 8.7% while alternatively-fuelled vehicles such as plug-in hybrids or electric cars were up 20.9%.

Another factor affecting car sales was the implementation of a new EU emissions testing procedure which came into force in September and was blamed for a supply shortage in the autumn.

Mr Hawes said it would be unfair to attribute too much significance to concerns over Brexit when explaining the fall in new car sales.

But he said that falling consumer confidence had reduced consumers' appetite for a “big ticket purchase”.

The SMMT, like other business bodies, is calling for MPs to back Theresa May's Brexit agreement and avoid a no-deal scenario.

It says that crashing out of the EU without an agreement risked destroying the car manufacturing industry, which employs more than 850,000 people in the UK.

UK shares fall in poor start to 2019 after disappointing data from China

(qlmbusinessnews.com via uk.reuters.com — Wed, 2nd Jan, 2019) London, UK —

(Reuters) – UK shares were lower on Wednesday as investors returned from New Year celebrations to more disappointing data from China that deepened concerns about the health of the global economy and sparked a global sell-off.

London's blue-chip bourse .FTSE dropped 0.9 percent and the mid-cap index .FTMCdipped 0.3 percent by 1018 GMT.

Most sectors were still in the red, setting a bleak tone for 2019’s first trading day after both indexes recorded their worst yearly drop since the 2008 financial crisis last year.

Positive domestic PMI data due to Brexit-induced stockpiling provided some respite, but investors were focussed on Chinese data that showed manufacturing activity in the world’s second-largest economy contracted for the first time in 19 months.

It followed a poor official survey on factory output on Monday. Data also revealed that euro zone manufacturing activity barely expanded in December.

Continued concerns that the prospect of a global cyclical downturn will likely cap the upside of UK’s blue-chip shares, said CMC Markets analyst Margaret Yang.

“A string of missing PMIs from China’s official and private sector suggest that Asia’s largest economy is still cooling off due to weaker external demand and trade uncertainties,” Yang added.

“It is still too early to say markets have bottomed out yet.”

UK-listed companies with more exposure to the Asian market were the most hit with HSBC (HSBA.L) edging 1.8 percent lower and Standard Chartered (STAN.L) down 3 percent.

Fellow financial heavyweights Prudential (PRU.L), Lloyds (LLOY.L) and Royal Bank of Scotland (RBS.L) also fell over 3 percent.

Global miners were also weak with copper prices lower amid concerns over growth in top metals consumer China. Antofagasta (ANTO.L), BHP (BHPB.L), Anglo American (AAL.L), Rio Tinto (RIO.L) and Glencore (GLEN.L) were down between 3.2 percent and 4.3 percent.

Blue-chip medical products maker Smith & Nephew (SN.L) tumbled 2.5 percent, with traders citing a rating cut by brokerage JPMorgan.

Among the midcaps, Energean Oil & Gas (ENOG.L) added 5.1 percent to top the gainers after signing a gas supply agreement with independent power producer I.P.M. Beer Tuvia.

Elsewhere in corporate news, Ophir Energy (OPHR.L) shares outperformed the small-cap index .FTSC and soared over 33 percent after the oil and gas producer said it was in takeover talks.

Gambling software company Playtech (PTEC.L) gave up losses to turn positive. It said it would pay 28 million euros under a settlement with Israeli tax authorities following an audit of its annual accounts.

Real estate investment trust Hammerson (HMSO.L) was 3.9 percent lower as it said its share buyback programme will be paused ahead of the release of 2018 results.

Reporting by Muvija M and Shashwat Awasthi in Bengaluru

GlaxoSmithKline to merge with rival Pfizer in agree £10bn healthcare deal

(qlmbusinessnews.com via news.sky.com– Wed,  19thDec 2018) London, Uk – –

The UK drug firm behind the Aquafresh toothpaste and Beechams flu remedies is to be effectively broken up under its Pfizer deal.

GlaxoSmithKline (GSK) is to merge its consumer healthcare unit with that of rival Pfizer, to create a new business with almost £10bn in annual sales.

The UK pharmaceutical firm – behind many well-known brands including Aquafresh toothpaste, Panadol and Beechams cold and flu remedies – said it would control 68% of the joint venture.

Pfizer – best known for Viagra and Anadin painkillers – would own the rest, though GSK added that the all-equity deal “lays the foundation” for it to spin off the healthcare arm – as shareholders had demanded of the company.

Its stock was 5% up when the FTSE 100 opened.

GSK said it planned to create two separate UK-based companies – one focused on pharmaceuticals and vaccines and the other on consumer healthcare – within three years of completing the tie-up.

GSK said the merger was set to deliver cost savings of £500m by 2022 and admitted there would be job losses under the programme.

By James Sillars, business reporter

ASOS online fashion retailer sales suffering in the run-up to Christmas

(qlmbusinessnews.com via news.sky.com– Mon, 17th Dec, 2018) London, Uk – –

A major online fashion retailer has caught the high street's cold with sales suffering in the run-up to Christmas.

ASOS has reported a “significant deterioration” in sales growth – with heavy discounting ahead of Christmas now expected to take a toll on profits.

The online fashion retailer said in an unscheduled trading update it had been forced to join a markdown frenzy at a time when the wider high street is already suffering the effects of weaker consumer confidence in the run-up to Brexit.

Shoppers were also more cautious in many of its other major EU markets, ASOS said, including Germany.

France, which has suffered five consecutive weekends of sales disruption because of riots, was also hit by tougher trading.

ASOS reported a 14% rise in total retail sales for the three months to 30 November – with UK sales up 19%.

However the company said that its sales growth had come at a cost to profit margins and was sharply down on its earlier expectations.

The chain said it was now forecasting sales growth of 15% for the year to August, down from 20% to 25%.

Its anticipated earnings margin was revised down from 4% to 2%.

Shares fell by almost 40% when the market opened while other fashion retailers, including Next and M&S, were leading the fallers on the FTSE 100.

The ASOS statement read: “Whilst trading in September and October was broadly in line with our expectations, November, a very material month for us from both a sales and cash margin perspective, was significantly behind expectations.

“The current backdrop of economic uncertainty across many of our major markets together with a weakening in consumer confidence has led to the weakest growth in online clothing sales in recent years.

“We have recalibrated our expectations for the current year accordingly.”

The company's trading update suggests few are immune to the trading troubles.

Primark – like ASOS – has been a consistent performer in recent years but the high street fashion favourite warned investors 10 days ago that November sales had proved “challenging”.

Sports Direct and House of Fraser boss Mike Ashley is another to have spoken extensively on the high street's struggles.

ASOS had delighted the market when, in October, it announced a 28% surge in annual pre-tax profits despite demand headwinds and had predicted even better things to come.

Chief executive Nick Beighton said on Monday: “We achieved 14% sales growth in a difficult market, but in the light of a significant downturn in November, we think it's prudent to recalibrate our expectations for the full year.

“We are taking all appropriate actions and our ambitions for ASOS have not changed”.

By James Sillars

Theresa May, Tory win of confidence vote pushes Pound Sterling up

QLM Image

(qlmbusinessnews.com via news.sky.com– Thur, 13th Dec, 2018) London, Uk – –

Sterling recovers some ground as investors see the vote by Tory MPs bolstering the chances of a soft Brexit or even no Brexit.

The pound has reacted positively after Theresa May saw off a Tory vote of confidence in her leadership – but wobbled when the size of her majority became clear.

Sterling has had a rocky ride this week amid the growing political crisis over Brexit, with sharp falls first focused on the delayed parliamentary vote on the PM's Brexit deal with Brussels.

It later fell further – to fresh 20-month lows of $1.2475 – when confirmation came early on Wednesday that there was enough support among Conservative MPs to secure the confidence ballot.

But the currency rallied against both the dollar and euro later as it became clear Mrs May would see off that challenge to her authority.

It was trading at $1.2652 in the wake of the announcement that she had secured a majority – but that value briefly slipped back to just below $1.26 when it emerged that majority consisted of 83 backbenchers.

It suggested investors were less than convinced by that level of support.

The pound was also up 0.6% versus the euro on the day – representing a slight pull-back on the day's high.

The result means the PM can not face a fresh Tory confidence vote for at least another year, though she had earlier told backbenchers her time at the helm would be limited as she would not fight the next election as Conservative leader.

Traders said it left investors asking themselves what the Tory turmoil meant for the Brexit process, including whether Mrs May's victory over the hard Brexiteers in her party bolstered the chances of a ‘no Brexit' scenario.

:: Bosses ‘tearing their hair out' over confidence vote'

Commenting on the possibilities as the vote loomed Ranko Berich, head of market analysis at Monex Europe, said: “If she does survive, her situation will be marginally improved as she will be in a stronger position to argue that Parliament's options are her deal or no deal.”

He added: “Although the prospect of a marginally strengthened May removes some downside risk for sterling, any relief rally will be limited unless tonight's vote demonstrates a sudden increase in Tory support for May's deal.”

The PM had to postpone a visit to Dublin on Wednesday during which she was due to discuss “reassurances” over the backstop element of her agreement with Brussels.

While MPs were on course to reject the plan before the parliamentary vote was dramatically pulled, it had secured the tentative backing of business groups including the CBI.

They have since urged Mrs May to get on with it as the clock ticks down to 29 March when the UK is due to leave the EU.

However, there remains dissent within UK plc.

A 28-strong group of Brexit-supporting business leaders — including Sir Rocco Forte and JD Wetherspoon boss Tim Martin – signed an open letter on Wednesday night urging the PM to preside over a “managed” no-deal Brexit.

They argued that leaving without a deal would “give us the flexibility to embrace global opportunities, extend global trade and focus outwards.

“It would give the government the chance to run our economy and country in a way that operates in the best interests of us all,” the document said.

By James Sillars

Bank of England Governor Mark Carney defend warnings of Brexit scenarios

(qlmbusinessnews.com via uk.reuters.com — Tue, 4th Dec 2018) London, UK —

LONDON (Reuters) – Bank of England Governor Mark Carney defended the central bank’s warnings of a potentially major economic hit from Brexit which angered lawmakers opposed to Prime Minister Theresa May’s plans for leaving the European Union.

The BoE said last week that under a worst-case exit from the European Union, Britain could suffer greater damage to its economy than during the global financial crisis.

Carney told lawmakers on Tuesday that the scenarios set out by the BoE were based on detailed preparatory work to ensure banks and other lenders were ready for Brexit, and were not off-the-cuff forecasts.

“There’s no exam crisis. We didn’t just stay up all night and write a letter to the Treasury Committee,” Carney said at a committee hearing in parliament. “You asked for something that we had, and we brought it, and we gave it to you.”

Less than four months before Brexit, it remains unclear whether Britain will leave the EU with a transition deal to smooth the shock for the economy.

May agreed a plan with EU leaders last month but it faces deep opposition in parliament including from within May’s own Conservative Party. The plan faces a key vote on Dec. 11.

Pro-Brexit critics of Carney, who have long accused him of political meddling in the debate about Britain’s relationship with the EU, dismissed last week’s BoE report as scare-mongering.

Former BoE Governor Mervyn King joined the criticism on Tuesday when he lamented the central bank’s involvement in what he said was an attempt to frighten the country about Brexit.

“It saddens me to see the Bank of England unnecessarily drawn into this project,” King said in an article published on Bloomberg.

BREXIT SHOCKS
Carney stressed the worst-case scenarios were “low-probability events in the context of Brexit” which the central bank needed to consider to make sure Britain’s banking system could withstand any Brexit shocks.

“We’re already sleeping soundly at night, because we have the financial sector, the core of the financial sector, in a position that it needs to be for a tough scenario.”

But he told lawmakers that the price of food could go up by 10 percent if Britain left the EU with no deal and no mitigating arrangements to avoid chaos at the country’s ports.

He said Britain’s ports were not ready for even a managed shift to World Trade Organization rules for the country’s exports and imports with the EU.

“Don’t assert what is not correct,” he snapped at one lawmaker who said the BoE had not considered the possibility of substituting trade with the EU for other markets.

Carney reiterated his opposition to ceding decision-making over rules for the banking sector to the EU after Brexit, given the scale of Britain’s financial services sector.

US, China offer differing takes on trade ceasefire
“We would not be comfortable…outsourcing supervision of this incredibly complex, incredibly important financial sector,” he said.

Deputy Governor Jon Cunliffe said a Norway-style Brexit — in which Britain would stay in the EU’s single market and follow the bloc’s rules without any say on them — was undesirable given Britain’s finance industry was 20 times the size of Norway’s.

Some lawmakers have suggested a Norway-style Brexit could be a temporary solution for Britain as it struggles to find a way to strike a new long-term relationship with the EU.

Additional reporting by Sarah Young, Andy Bruce and Amy O'Brien,; Writing by William Schomberg, editing by Ed Osmond

By David Milliken and Huw Jones

 

 

How Baird & Co. UK’s Only Gold Refinery Processes 10 Tons A Year

Source: Business Insider

Baird & Co. is the only gold refinery in the UK. The company goes through over 10 tons of gold a year. The smallest gold bar that Baird & Co. makes is a 1-gram bar that’s worth about $41. The most expensive one is a 5-kilograms bar worth about $212,350.

 

Pound falls as Prime Minister Theresa May struggles to broker an agreement on Brexit

(qlmbusinessnews.com via bbc.co.uk – – Mon, 12th Nov 2018) London, Uk – –

The pound has fallen against the dollar amid political uncertainty as Prime Minister Theresa May struggles to broker an agreement on Brexit with her cabinet.

In early trading, sterling fell nearly 1% against the dollar to $1.2845.

Against the euro, it was down 0.2% at €1.1422.

Analysts said the fall was partly a reaction to the latest news concerning Brexit talks, but also reflected a stronger dollar.

Mrs May is trying to rally support among cabinet ministers for her Brexit proposal in time for a hoped-for summit in Brussels later this month.

However, media reports suggest that her efforts have been delayed by increasing disarray in her cabinet over the issue.

On Friday, Transport Minister Jo Johnson became the latest government figure to quit his post over Brexit, arguing that UK was “on the brink of the greatest crisis” since World War Two.

Simon Derrick, head of currency research at Bank of New York Mellon, said the pound's drop was “obviously related to the uncertainty over the weekend”, but noted that sterling had largely “held its own” against the euro.

He told the BBC: “At least half of it is actually about dollar strength and the expectation that the Federal Reserve will hike interest rates in December.”

Connor Campbell, financial analyst at Spreadex, said: “Sterling's early November rebound continued to unravel on Monday, the currency coming down with a nasty case of the Brexit blues.

“With her most ardent anti-EU MPs opposed to her customs arrangement plans, and a potential Remain rebellion brewing following the resignation of Jo Johnson, Theresa May appears to have been forced to abandon the emergency cabinet meeting that was pencilled in, after a supposed breakthrough last week.”

 

 

Takeda Pharmaceutical set to hold investor votes on its $62 billion acquisition of Shire

(qlmbusinessnews.com via uk.reuters.com — Mon, 12th Nov 2018) London, UK —

LONDON (Reuters) – Japan’s Takeda Pharmaceutical (4502.T) will hold an investor vote on its $62 billion acquisition of Shire (SHP.L) next month and aims to close the deal on Jan. 8, signaling its confidence in securing the required support.

Shares in London-listed Shire rose 3 percent on the news, hitting their highest level since Takeda first disclosed its interest in buying the rare diseases specialist in March.

The deal would be the biggest-ever overseas acquisition by a Japanese company – but it needs two-thirds support from shareholders, some of whom are worried about the enlarged company’s resulting debt burden.

Takeda said on Monday it would hold an extraordinary general meeting (EGM) of shareholders to vote on the transaction on Dec. 5.

Previously, Takeda had said it hoped to hold the EGM early in 2019, leaving uncertain the level of backing for the deal, which has been opposed by some members of the founding Takeda family.

“With the date of our extraordinary general meeting of shareholders now set, we are looking forward to continue our dialogue with shareholders regarding the compelling strategic and financial benefits of this transaction,” Chief Executive Christophe Weber said.

Weber — a Frenchman and the first non-Japanese CEO of the company — believes that buying Shire will accelerate Takeda’s growth and increase its international reach, boosting earnings.

The transaction is still awaiting approval from European regulators, although two people familiar with the matter told Reuters last week that Takeda was set to win conditional EU antitrust approval.

Takeda has offered to divest Shire’s experimental drug SHP647 to address concerns about overlap in inflammatory bowel disease treatments.

The takeover has already secured clearance from regulators in the United States, Japan, China and Brazil.

Weber said last week he was confident of securing investor backing for the purchase of Shire, but until now it has not been clear when exactly Takeda would call its EGM.

Takeda, which has a market value of around $32 billion, has secured a $30.9 billion bridge loan to help finance the Shire acquisition and some investors are concerned as to how well it will cope with debt repayments.

The Japanese company struck its agreement to take over Shire in May, in a deal that will propel it into the top 10 rankings of global drugmakers by sales.

However, the enlarged group faces significant challenges, particularly in hemophilia, where a new drug from Roche (ROG.S) and the prospect of new gene therapies now in development threaten a key part of Shire’s existing business.

Reporting by Ben Hirschler

 

Sainsbury’s report a huge drop in profits ahead of crucial Christmas period


QLM Image

(qlmbusinessnews.com via cityam.com – – Thur, 8th Nov 2018) London, Uk – –

Sainsbury’s posted a huge drop in profit for its half-year results today as it issued a warning about the impending Christmas period.

The figures
The supermarket delivered a mixed shopping bag of rising sales growth and pre-Christmas warnings in its half-year report for the six months to mid-September.

Like-for-like sales climbed 0.6 per cent year on year during the six months, rising from the 0.2 per cent growth it reported for the first quarter of the year. That helped revenue hit £16.8bn, up 3.5 per cent on the same period in 2017.

Sainsbury's also posted a 20 per cent rise in underlying pre-tax profits, which rose to £302m largely as a result its recent acquisition of Argos, which was delivered ahead of schedule.

But profit before tax plunged by 40 per cent to £132m.

Why it's interesting
The firm blamed store management restructuring and its planned merger with rival Asda for the fall in profit.

Sainsbury's, which is the second largest supermarket chain in the UK, added that consumer outlook remained “uncertain” in the run-up to the grocer’s crucial Christmas trading period, with the market remaining “highly competitive and very promotional”.

Lee Wild, head of equity strategy at Interactive Investor, said: “Sainsbury’s shares are not far off a 16-month high and up over 40 per cent since March, thanks in large part to April’s Asda announcement. Margins have suffered at the hands of the German discounters and, although the worst is over, business remains tough. Tesco was punished last month for missing half-year expectations, and Morrisons suffered a similar fate this week following a third-quarter slowdown.”

Wild added: “Sainsbury’s admits that consumer uncertainty will make the crucial second-half difficult, and that clothing is fiercely competitive. However, its confidence in meeting forecasts for underlying full-year profit of £634m is reassuring.”

Shares climbed 1.6 per cent in early morning trading.

What Sainsbury's said
Boss Mike Coupe said: “The market remains very competitive and we are transforming our business to meet rapidly changing customer needs. We have fundamentally changed how our 135,000 Sainsbury’s store managers and colleagues work and I would like to thank them for their ongoing hard work through this period.”

In comments to the Today programme, he added that he was positive about Sainsbury's merger with Asda getting the nod from the Competition and Markets Authority (CMA), which is currently probing the deal.

“They're going into a lot of detail and looking at all aspects of it but we are confident in our case,” he said.

“We believe that by bringing the two organisations together there is a unique opportunity to lower costs and ultimately those costs will be passed back to customers in the form of lower prices.”

The CMA is expected to publish its findings in late January.

By Sebastian McCarthy

 

 

Schroders wealth management giant confirms merger talks with Lloyds

Flickr/Money Bright

(qlmbusinessnews.com via bbc.co.uk – – Tue, 9th Oct 2018) London, Uk – –

Investment giant Schroders has confirmed it is in discussions with Lloyds Banking Group over merging their wealth management businesses.

The tie-up will see two of the City’s biggest players join forces, with Lloyds benefiting from its new partner’s technology and investment management experience and Schroders gaining access to the vast customer network of the country’s biggest high-street bank.

A deal comes in the form of a joint venture 50.1pc owned by Lloyds, according to Sky News, which first reported the deal.

It is the first part of a three-pronged alliance between the two financial blue chips that would also include Schroders taking on a £109bn investment management contract from Lloyds’s insurance and pensions company Scottish Widows, which is currently held by Standard Life Aberdeen.

Schroders is also considering selling a 19.9pc stake in Cazenove Capital, its high-net-worth wealth manager, to Lloyds.

The combined deal was reported to be worth about £500m, with Lloyds’ wealth unit and the Cazenove stake both valued at roughly £250m each.

Schroders said the companies were in talks “with a view to working closely together in parts of the wealth sector”.

They added: “Discussions are ongoing and there can be no certainty that [they] will lead to any formal arrangement being entered into.”

A further announcement will be made when appropriate.

Expanding Lloyds’s wealth management credentials has been a key aim for António Horta Osório, who took charge of the banking group in 2011.

By Jack Torrance

 

 

 

US Federal Reserve raises short-term interest rates again on Wednesday

(qlmbusinessnews.com via theguardian.com – – Thur, 27th Sept 2018) London, Uk – –

Move is the eighth since 2015 as the central bank aims to unwind years of historically low rates

The US Federal Reserve raised short-term interest rates again on Wednesday, the eighth such move since 2015 as the central bank moves to unwind years of historically low rates.

After a two-day meeting the Fed announced a quarter percentage point rise in its benchmark rate to a range of 2% to 2.25%. The rate is used to set credit card, mortgage and loan rates and will trigger rises across the board for consumers.

The increase is the third rate rise this year and comes as US unemployment has hit new lows. In August the US added 201,000 new jobs – a record-breaking 95th consecutive month of jobs growth – as the unemployment rate remained steady at 3.9%.

The rise pushed the Fed’s rate above 2% for the first time since 2008, when the central bank stepped in and cut rates to close to zero as it sought to tackle the recession triggered by the last financial crisis.

 

 

In a statement the Fed signaled more rate hikes were imminent. “The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced,” the statement read.

The rate hike came despite Donald Trump’s explicit – and unprecedented – criticism of the Fed’s decision to increase interest rates. “I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said in an interview with Reuters last month.

Due to the independence of the Fed, it is highly unusual for a sitting president to criticize its decisions. The Fed chair, Jerome Powell, defended the policy at a meeting of central bank heads in Jackson Hole, Wyoming, last month.

At a press conference on Wednesday Powell once again defended the Fed’s independence. Asked about Trump’s criticisms, Powell said: “We’ve been given a really important job to do. We’re focused exclusively on carrying out that mission.” He said the Fed’s mission was “to set monetary policy to achieve maximum employment in the context of price stability. That’s what we do. We don’t consider political factors.”

Powell said the Fed had heard a “rising chorus on concerns” about the Trump administration’s trade disputes from businesses but added that it was “hard to see much happening at this point”.

By Dominic Rushe

 

Comcast Triumphed Over Fox In Auction For Sky


QLM Image

(qlmbusinessnews.com via news.sky.com– Mon, 24th Sept 2018) London, Uk – –

Comcast's dramatic shoot-out with the US entertainment giant ends 21 months of uncertainty for Sky over its ownership.

Comcast has triumphed in the auction to buy Sky plc, the owner of Sky News, for £29.7bn in the biggest takeover ever seen in Europe's media industry.

Comcast's offer of £17.28 per share was £1.61 ahead of Fox's offer of £15.67.

The US giant's victory follows a dramatic shoot-out with US entertainment giant 21st Century Fox in a rare three-round auction overseen by the Takeover Panel.

The result ends 21 months of uncertainty for Sky over its ownership after the company's independent committee unanimously recommended the offer to shareholders.

In a statement Sky plc said: “As the price of the final Comcast Offer is materially superior, it is in the best interests of all Sky shareholders to accept the Comcast offer.

“Accordingly, the Independent Committee unanimously recommends that Sky shareholders accept the Comcast offer, and in order to ensure the successful closing of the Comcast offer, urges shareholders to accept immediately.”

Both companies want Sky to help them compete more effectively with the new wave of online entertainment providers, including streaming services provided by the likes of Netflix and Amazon Video, who sell their content directly to viewers.

Comcast in particular wants Sky to give it a presence in Europe and reduce its dependence on the US and has also made clear its admiration for Sky's technological know-how.

Disney, meanwhile, has been looking for a way to make its content available directly to viewers without having to go via a third party like a cable company.

Sky agreed to be taken over by Fox, its biggest shareholder, in December 2016. Since then, Fox has agreed to sell most of its entertainment assets to Disney, including its Hollywood film studio and its 39.1% stake in Sky.

However, the bid was held up by a lengthy series of investigations by the Competition & Markets Authority and by Ofcom, the broadcasting and telecoms regulator.

That opened the door for Comcast to make a counter-bid for Sky. In July, it tabled a £14.75-a-share offer for Sky, valuing the company at £26bn.

That was the highest offer going into today's auction and compared with Friday night's closing price of £15.85.

Under the contest, Fox – as the lower bidder – was entitled to raise its offer first.

In the second round, only Comcast was allowed to raise its offer.

This meant the two sides went into a final “sudden death” round of bidding.

Such auctions are exceptionally rare. There have been only four since the rules were changed in 2002 and the most recent of these was in April 2008 when Enodis, a maker of kitchen equipment for McDonald's and Burger King, was acquired by the US company Manitowoc for £948m.

 

 

Brian Roberts, chairman and chief executive officer of Comcast, said it was a “great day”.

He added: “Sky is a wonderful company with a great platform, tremendous brand, and accomplished management team.

“This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.

“We couldn't be more excited by the opportunities in front of us.

“We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018.”

Jeremy Darroch, group chief executive for Sky, said: “This is the beginning of the next exciting chapter for Sky.

“Brian and his team have built a great business and we are looking forward to bringing our two companies together for the benefit of our customers and colleagues.

“As part of a broader Comcast we believe we will be able to continue to grow and strengthen our position as Europe's leading direct to consumer media company.

“Today's outcome is down to the hard work of tens of thousands of people who have built and developed this business together over the last 30 years. Sky has never stood still, and with Comcast our momentum will only increase.”

21st Century Fox said in a statement that it was “considering its options regarding its own 39% shareholding in Sky and will make a further announcement in due course”.

It added: “Sky is a remarkable story and we are proud to have played such a significant role in building the incredible value reflected today in Comcast's offer.”

 

 

Other companies whose fates have been decided by an auction overseen by the Panel include Corus, the owner of British Steel and Canary Wharf, the commercial property company.

However, in terms of the amount of money being paid, this auction is by far the biggest yet.

Sky, which was founded in 1989, is Europe's biggest pay television broadcaster.

It has 23 million household customers in the UK, Ireland, Germany, Austria and Italy, while it has recently launched “over the top” services in Spain and Switzerland.

It floated on the stock market in 1994 and, since flotation, has been a remarkably stable business, having had just five chief executives in the intervening 24 years – the late Sam Chisholm, Mark Booth, Tony Ball, James Murdoch – who is the current chairman of Sky and current chief executive of Fox – and Mr Darroch, the current incumbent.

 

 

By Ian King, Sky News business presenter

IMF: No-deal Brexit would entail substantial costs for UK economy

(qlmbusinessnews.com via bbc.co.uk – – Mon, 17th Sept, 2018) London, Uk – –

The International Monetary Fund has warned that a “no-deal” Brexit on World Trade Organization terms would entail substantial costs for the UK economy.

Such an outcome would affect “to a lesser extent” other EU economies.

It said challenges in getting a deal done were “daunting” and warned against further UK interest rate rises.

The IMF said it expected Britain's economy would grow by about 1.5% a year in 2018 and 2019 if a broad Brexit agreement was struck.

Christine Lagarde, the IMF's managing director, added: “Those projections assume a timely deal with the EU on a broad free trade agreement and a relatively orderly Brexit process after that.”

The IMF said that all likely Brexit scenarios would “entail costs for the UK economy”, but that a disorderly departure could lead to “a significantly worse outcome”.

Speaking at a news conference at the Treasury in London, Ms Lagarde said: “Any deal will not be as good as the smooth process under which goods, services, people and capital move around between the EU and the UK without impediments and obstacles.”

She said a “disorderly” or “crash” exit from the EU would have a series of consequences, including reduced growth, an increased deficit and depreciation of sterling, leading to a reduction in the size of the UK economy.

She pointed out that countries tended to trade mostly with their neighbours, adding: “I think geography talks very loudly.”

In July, the IMF said the UK economy would grow by 1.4% this year and 1.5% in 2019.

 

Deutsche Bank to move assets from London to Frankfurt after Britain’s planned exit from the EU

(qlmbusinessnews.com via uk.reuters.com — Mon, 17th Sept 2018) London, UK —

FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) said on Monday that it would move assets from London to Frankfurt after Britain’s planned exit from the European Union next year, in line with British and EU regulators.

“The terms on which banks will operate in the EU and UK after Brexit remains unclear in the absence of a firm political agreement but our intention is to operate in the UK as a branch in line with the Prudential Regulation Authority’s guidance”, the lender said in a statement.

It added that it announced in 2017 that would make Frankfurt rather than London the primary booking hub for its investment banking clients.

According to a source close to the matter, Deutsche Bank is considering shifting large volumes of assets from London to Frankfurt and to transform its UK arm into a smaller, less complex and ringfenced subsidiary.

By Arno Schuetze

 

 

UK economy grew by 0.3% in July helped by World Cup and warm weather

(qlmbusinessnews.com via bbc.co.uk – – Mon, 10th Sept 2018) London, Uk – –

The UK economy grew by 0.3% in July after being helped by the heatwave and the World Cup, according to the Office for National Statistics.

In the three months to July, the economy expanded by 0.6%.

“Services grew particularly strongly, with retail sales performing well, boosted by warm weather and the World Cup,” said Rob Kent-Smith from the ONS.

“The construction sector also bounced back after a weak start to the year,” he added, but production contracted.

“The dominant service sector again led economic growth in the month of July with engineers, accountants and lawyers all enjoying a busy period, backed up by growth in construction, which hit another record high level,” said Mr Kent-Smith.

The 0.6% growth rate for the three months to July was at the top end of forecasts, and marks a pick-up from the 0.4% rate seen in the three months to June.

 

 

UK investors spurred on by US market’s record-breaking bull run

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 27 Aug 2018) London, Uk – –

Surging investment in shares is boosting stamp duty tax payments to levels not seen since the peak of the boom years in 2007 and the dotcom bubble in 2000.

British investors are being spurred on by the US market’s record-breaking bull run, which is driving investment in equities across much of the world.

It adds to evidence investor sentiment has fully recovered from the ­financial crisis. But it could be another warning sign that exuberant markets are at risk of entering a bubble.

So far this financial year the Treasury has raised £1.3bn from stamp duty on share purchases, up by 17pc on the same period last year. If this continues the Exchequer will bag a windfall haul of more than £4bn, a level not hit for more than a decade.

FTSE 350 share trading volumes are up by more than 20pc this year on their previous peaks in 2007 or 1999, according to data from Bloomberg.

However, past eras of such vigorous stock buying were followed by a crunch. There are already signs of wobbling markets in the US tech sector, where booming prices have left investors exposed to any bad news.

“Markets have been rising for such a long time, expectations are relatively high,” said Tom Stevenson at Fidelity Personal Investing. “When you get disappointing results in that environment then you get some pretty savage market reactions.”

US markets are likely to fall next year as boom turns to a crunch of around 20pc, according to John Higgins at Capital Economics. Such a bust would hit UK markets too, he believes.

“There is a good chance the UK stock market will suffer as a result of that,” he said. “When the US stock market falls sharply we invariably see other stock markets around the world doing likewise, irrespective of conditions in the local economy.

“Many of these stock markets, particularly the FTSE, are chock-full of ­international companies so are ­exposed to what is going on in the global economy as much as they are at home.” 
Britain is particularly exposed to any downturn in the world economy ­because it is home to so many giant companies. This could mean investors, who have not seen shares rise as much as those in the US, could be hit by a downturn that is just as severe.

“The UK is globally exposed, people use the UK’s markets as a proxy for buying into the upturn in global activity,” said Andrew Milligan at Aberdeen Standard Investments.

Risks to the market include the trade war, higher interest rates, China’s debts and the eurozone, Mr Milligan said, though these are midterm problems that are only likely to strike in 2020. 
“In the past 10 years people have been very fearful, there has been a lot of money parked on the sidelines for a very long time,” said Robert Burgeman at Brewin Dolphin.

“I get people who are worried about the level of stock markets and think that there is a crash around the corner, but that is music to my ears because it means we have not reached that final capitulation stage [of a bubble] when people say: ‘Stuff it, I am all in’. We haven’t got to that stage yet where the taxi driver is telling you about the latest stock he has been buying.”

By Tim Wallace

 

 

PepsiCo to buy drinks machine maker SodaStream in $3.2 billion deal

(qlmbusinessnews.com via uk.reuters.com — Mon,20 Aug 2018) London, UK —

(Reuters) – PepsiCo (PEP.O) is buying household drink-machine maker SodaStream (SODA.TA) (SODA.O) in a $3.2 billion deal, it said on Monday, seeking an edge in health-conscious beverages as it battles chief rival Coca-Cola (KO.N).

PepsiCo will acquire SodaStream for $144 per share in cash, representing a 10.9 percent premium to the Friday closing price of SodaStream’s U.S.-listed stock.

SodaStream, which makes machines that turn tap water into carbonated water, will help diversify PepsiCo’s portfolio of snacks and beverages. The Purchase, New York-based group will use cash on hand to fund the acquisition.

SodaStream’s Israel-listed shares will be halted for trading until its Nasdaq-listed stock opens later on Monday, the Tel Aviv Stock Exchange said in a statement.

Reporting by Bhanu Pratap

 

 

GVC shares hit record high after joint venture with MGM Resorts

(qlmbusinessnews.com via uk.reuters.com — Mon, 30th July 2018) London, UK —

(Reuters) – GVC Holdings Plc (GVC.L) shares leapt to a record high on Monday after it agreed to set up an online betting platform in the United States with U.S. hotel and casino operator MGM Resorts International (MGM.N) .

The announcement comes ahead of the American football season and as British betting companies look to capitalize on the U.S. market after a U.S. Supreme court ruling in May lifted a ban on sports betting.

Bookmakers have also been assessing the impact of recently implemented UK gambling curbs after the government said in May it would cut the maximum stake on fixed-odds betting terminals (FOBTs) to two pounds from 100 pounds.

“GVC appears to have struck gold by signing a 50/50 JV with arguably the biggest gambling brand in the U.S.,” London-based broker Shorecap’s Greg Johnson said in a note.

GVC shares rose as much as 7.5 percent to a record high of 1,178 pence before retreating slightly to trade 5 percent by 0748 GMT.

The companies will initially invest $100 million each in the joint venture, which will have a U.S. headquarters, said GVC which owns the Coral, Ladbrokes and Sportingbet brands.

GVC said the joint venture would get access to 15 U.S. states with a population of 90 million, adding that the venture will get access to all U.S. land-based and online sports betting while integrating both companies’ customer loyalty programs.

“We are proud to join forces with GVC, the largest and most dynamic global online betting operator, with existing reputable and trusted operations in the U.S.,” MGM Resorts Chief Executive Jim Murren said.

GVC had said on Friday that it was in advanced talks regarding a joint venture with MGM. Sky News had also reported that the deal could pave the way for a merger between the two firms.

GVC, which has grown rapidly through acquisitions including the purchase of Ladbrokes late last year, has been looking to expand in the United States, after the U.S. Supreme Court paved the way to legalize sports betting.

The company said in July that it expected to post full-year results in line with expectations.

Reporting by Sangameswaran S

 

 

China blames U.S. for ‘largest-scale trade war’ in month long conflict

(qlmbusinessnews.com via uk.reuters.com — Fri, 6th July 2018) London, UK —

BEIJING/WASHINGTON (Reuters) – The United States and China slapped tit-for-tat duties on $34 billion worth of the other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war” ever in a sharp escalation of their months-long conflict.

Hours before Washington’s deadline for the tariffs to take effect, U.S. President Donald Trump upped the ante, warning that the United States may ultimately target over $500 billion worth of Chinese goods, or roughly the total amount of U.S. imports from China last year.

China’s commerce ministry, in a statement shortly after the U.S. deadline passed at 0401 GMT on Friday, said that it was forced to retaliate, meaning $34 billion worth of imported U.S. goods including autos and agricultural products also faced 25 percent tariffs.

However, an ensuing three-plus hour delay before Beijing confirmed that it had implemented retaliatory tariffs sowed confusion in markets.

“After the United States unfairly raised tariffs against China, China immediately put into effect raised tariffs on some U.S. goods,” foreign ministry spokesman Lu Kang told a daily media briefing on Friday afternoon.

China’s soymeal futures fell more than 2 percent on Friday afternoon before recovering most of those losses, amid market uncertainty over whether China had implemented tariffs on a list of U.S. goods, including soybeans.

Some Chinese ports had delayed clearing goods from the United States, four sources said on Friday. There did not appear to be any direct instructions to hold up cargoes, but some customs departments were waiting for official guidance on imposing added tariffs, the sources said.

Ford Motor Co said on Thursday that for now, it will not hike prices of imported Ford and higher-margin luxury Lincoln models in China.

An analysis of over four dozen imported U.S products facing higher duties showed that prices were little changed on Friday afternoon versus earlier in the week. The products, all sold on Chinese e-commerce platforms, ranged from pet food to mixed nuts and whiskey.

While Chinese state media have slammed Trump’s protectionism and on Friday likened his administration to a “gang of hoodlums,” the trade conflict has gained little traction on China’s tightly controlled social media, not cracking the 50 top-searched topics on the Twitter-like Weibo platform.

The dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal in recent weeks.

Chinese shares, which have been battered in the run-up to the tariff deadline, reversed earlier losses to close higher, but the yuan remained weaker against the dollar. Asian equities wobbled but also managed to end up.

In the run-up to Friday’s tariff implementation, there was no sign of renewed negotiations between U.S. and Chinese officials, business sources in Washington and Beijing said.

“We can probably say that the trade war has officially started,” said Chen Feixiang, professor of applied economics at Shanghai Jiaotong University’s Antai Colege of Economics and Management.

“If this ends at $34 billion, it will have a marginal effect on both economies, but if it escalates to $500 billion like Trump said then it’s going to have a big impact for both countries,” Chen said.

‘GANG OF HOODLUMS’
China’s commerce ministry called the U.S. actions “a violation of world trade rules” and said that it had “initiated the largest-scale trade war in economic history.”

Trump has railed against Beijing for intellectual property theft and barriers to entry for U.S. businesses and a $375 billion U.S. trade deficit with China.

“You have another 16 (billion dollars) in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump told reporters aboard Air Force One on Thursday.

Throughout the escalating conflict, China has sought to take the high road, positioning itself as a champion of free trade, but state media ramped-up criticism of Trump on Friday.

“In effect, the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China,” the state-run China Daily newspaper said in an English language editorial on Friday.

“Its unruliness looks set to have a profoundly damaging impact on the global economic landscape in the coming decades, unless countries stand together to oppose it.”

While the initial volley of tariffs was not expected to have major immediate economic impact, the fear is that a prolonged battle would disrupt makers and importers of affected goods in a blow to global trade, investment and growth.

“For companies with supply exposure to tariffs, they will move sourcing country of origin if they can; if they can’t, they’ll pass on as much of the tariff cost as they can, or see a cut in margins,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council in Beijing.

A China central bank adviser said the planned U.S. import tariffs on $50 billion worth of Chinese goods – $34 billion plus a planned follow-on list worth $16 billion – will cut China’s economic growth by 0.2 percentage points, although the overall impact would be limited, the official Xinhua news agency reported Friday.

“This is not economic Armageddon. We will not have to hunt our food with pointy sticks. But it is applying the brakes to a global economy that has less durable momentum than appears to be the case,” Rob Carnell, chief economist at ING, said in a note.

U.S. Customs and Border Protection officials were due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

China’s tariffs on hundreds of U.S. goods include top exports such as soybeans, sorghum and cotton, threatening U.S. farmers in states that backed Trump in the 2016 U.S. election, such as Texas and Iowa.

By Adam Jourdan in SHANGHAI, Michael Martina, Christian Shepherd, Dominique Patton and Elias Glenn in BEIJING, David Lawder and Jeff Mason WASHINGTON; Writing by Tony Munroe;