Facebook announces tighter rules on political advertisement before the expected UK general election. The company extends advertising checks in order to reduce the impact of political advertisement on election results.

Legality of Political Advertisements

Advertisers target individuals by sending them tailored messages. These tailored messages influence voting decisions. Furthermore, Facebook does not have a system to test the accuracy of what is included in political advertisements. The lack of an accuracy test raises the risk of spreading fake news to influence public opinion. The UK has clear rules on news and political advertisements during election campaigns. However, popularity of Facebook challenges these rules by creating a legal gap. While the UK laws on political advertisement are strict, these laws do not apply to social media platforms. The legal gap between UK legislation and social media raises concerns about the outcome of the upcoming UK general election. The company hopes that newly introduced change in rules will help close this legal gap. Facebook Verification System Facebook created a verification system amid allegations that Facebook facilitated a Russian interference in the US presidential election campaign. Donald Trump faced allegations that he received help from Facebook to collude with the Russian government. Consequently, Facebook decided to require political advertisers to go through a verification process to prove their identity and residence. This verification process was insufficient as it did not provide a precise definition for political advertisement. The introduced change requires anyone who runs a social or political advertisement in the UK to go through this verification process. As a result, individuals running advertisements about social issues such as immigration, health and the environment will need to be verified. The change widens the scope of what constitutes political advertisement. The newly introduced rule will apply starting next week. Those who run social or political advertisements in the UK will have to go through a much stricter process of verification.

TUI AG (LON: TUI) have announced plans for Summer 2020, these include expanding new routes whilst airport capacity has also increased in Glasgow and Manchester of note Additionally, extra services and destinations have been added to a number of UK airports. An extra 194,000 seats have been posed increasing Birmingham Airport’s capacity for TUI customers. Flights from Glasgow airport have also been announced from 2020. TUI have expanded their services to more destinations in Spain and Turkey, supplemeting the addition of long haul flights. New flights from Glasgow Airport have gone on sale today with Bodrum Flights operating on Mondays and Fuerteventura on Sundays. TUI expanded the length for inclusive holidays, by now offering 10 or 11 day packages to eight destinations including Orlando, Antalya and Zakynthos. TUI’s Director of Aviation Planning, Karen Switzer said: “Earlier this month TUI announced an additional two million seats to many holiday destination favourites and today the majority of these seats go on sale for summer 2020. Switzer added “We are delighted that our new additions launched today provide holidaymakers departing from our regional airports with even more choice when deciding where to go next summer on holiday. The customer is at the heart of everything we do and this additional growth to some of our customer’s favourite holiday hotspots demonstrates our continued commitment for people to discover their smile with us”. TUI have been quick to respond after the demise of Thomas Cook, only a few weeks ago (LON: TCP). This move looks to fill the void made by Thomas Cook in oder to establish market dominance. Airport management boards seem to be excited by this expansion, as this will create business and drum up footfall. Paul White, Head of Aviation at Glasgow Airport, said: “TUI’s announcement today is fantastic news for Glasgow Airport and is to be commended. Given the events of recent weeks, there was clearly a need to meet the huge demand out there for some of our most popular destinations.TUI has stepped in with the introduction of a phenomenal number of seats and even more choice to a wide range of destinations, which will be welcome news for our passengers planning their 2020 holidays.” Julian Carr, aviation director at Manchester Airport, said: “We’re delighted that TUI is expanding its operation here from Manchester for summer 2020. By adding more frequencies to lots of its popular destinations, our passengers will have even more choice when it comes to booking their holidays for next year.” Shares of TUI are trading at 1,008p per share following a 5.44% fall during Tuesday trading. 22/10/19 14:19BST.  

Boris Johnson launches a final effort to get the Brexit deal done as Brexit uncertainty impacts economic growth. The Brexit deal suggested has critical implications on the economy of Northern Ireland. Both the UK and the EU hopes to avoid a hard border between Northern Ireland and the Republic of Ireland. However, the alternative proposed by Prime Minister Johnson risks economic recession in Northern Ireland. Consequently, Brexit uncertainty holds back investment in Northern Ireland.

Customs

Increasing uncertainty in Northern Ireland worries investors. Prime Minister Boris Johnson’s Brexit deal proposes extra regulations for businesses. Businesses in Northern Ireland ordering goods from the rest of the UK will need to go through a screening process. Businesses in Northern Ireland will request to order goods from the rest of the UK. Furthermore, customs officers will examine whether ordered goods are at risk of entering the Republic of Ireland. Businesses in Northern Ireland will need to pay an export tax for goods that are at risk of entering the Republic of Ireland. When businesses prove that goods they ordered from the rest of the UK stayed in Northern Ireland, they will get a tax refund. Moreover, businesses in Northern Ireland will declare goods exiting Northern Ireland to enter the Republic of Ireland. If businesses export goods they ordered from the rest of the UK, they will not get a tax refund. The export tax creates a sunk cost for businesses who send goods to the Republic of Ireland.

Who will be affected?

The initial cost of the suggested export tax will affect small businesses that cannot afford the cost. The deal increases the opportunity cost incurred by businesses in Northern Ireland. As a consequence, small businesses who depend on goods coming from the rest of the UK will struggle to survive after Brexit. As a result, Danske Bank predicts a rise in unemployment rate in Northern Ireland. Northern Ireland predicts a 0.5% growth next year compared to 1.3% this year. If the government does not introduce a way to help small businesses, employees in small businesses risk losing jobs.

Forecast

Northern Ireland expects strong growth in various sectors such as information and communication. Further regulations after Brexit might disappoint expectations of growth in these sectors due to a weaker external environment in Northern Ireland. Danske Bank economist Conor Lambe stated they have revised their economic growth forecast in Northern Ireland downwards for 2020. The change in forecast for economic growth reflects increasing Brexit uncertainty. The UK is also feeling in impact of Brexit uncertainty as business in the manufacturing sector slow the flow of investment.  

Metals exploring and resourcing firm Thor Mining (LON: THR) have said they intend to raise £510,000 through share placing. The raised funds will go towards funding activities in the companies tungsten and copper projects. Thor Mining are planning to increase funds by issuing 255 million shares, at a price of 0.2p per share. The share issue was undertaken by Hybridian LLP as lead broker, alongside SI Capital Ltd. The placing price reflected a 38% discount to Thor’s latest closing trade price of 0.32p Metals explorer Thor Mining PLC said Tuesday it intends to raise GBP510,000 through a placing of shares, which will go towards funding activities in the company’s tungsten and copper projects. Thor Mining will raise the funds through the issue of 255.0 million shares at a price of 0.2 pence per share. The placing price reflects a 38% discount to Thor last closing price at 0.32p. Of the shares raised, 113.3 million shares will be issued shortly, while the remaining 141.7 million shares are subject to shareholder approval at Thor’s annual general meeting on November 28th. London listed firm Metal Tiger Plc (LON: MTR) said it had bought shares in Thor, buying 22.5 million shares valued at £45,000. Metal Tiger were specific about their approach to invest in Thor Mining, by saying that they wanted 10.5 million shares in unconditional placing, while the rest in the conditional placing. If the proposed 141.7 million shares are issued, Metal Tiger would own 96.6 million shares in Thor Mining, equating to a 9% stake hold. Thor Executive Chair Mick Billing said “”The use of proceeds will be directed towards continuing to develop, primarily, our flagship Molyhil project, including drilling, scoping, and permitting studies at nearby Bonya, and field pump and recovery trials at EnviroCopper. This is expected to advance both projects materially, as well as giving Thor an increased runway to develop its ongoing discussions regarding securing project finance for Molyhil, about which we look forward to updating investors in due course.,” “We are deeply disappointed with the performance of Thor and have maintained our pro-rata holding in order to protect our investment. We see Thor management (excluding Mark Potter who was only recently appointed) as having failed to deliver on their targets and believe that it is essential that cost cutting measures are taken urgently in order to reduce Thor’s ongoing administrative costs,” said Metal Tiger Chief Executive Officer Michael McNeilly. If all goes as per plan, this will mean Thor Mining will have 1.08 billion shares overall. Shares of Thor Mining are trading at 0.26p per share, whilst Metal Tiger Shares are valued at 1.31p per share seeing a 21.54% and 3.3% decline respectively. 22/10/19 13:56BST.  

British Manufacturing companies are planning their lowest investment levels since the financial crisis, as outlooks for 2020 look glum. The UK manufacturing sector has been hit hard, as Brexit uncertainty continues to dominate the news headlines as PM Johnson toils to get a deal passed through Parliament. Additionally, the ongoing trade war between the United States and China has temporarily slowed supply chains to import resources. The global economic outlook does not look promising in the moment, Britain are struggling to secure a deal with the EU, Donald Trump continues to slap tariffs on UK firms for issues over illegal subsidies given (EPA: AIR) and Boeing (NYSE: BA). Additionally, political unrest in Hong Kong has led it to be declared in technical recession as tensions mount upon the Chinese Government to part ways with both political and geographical sovereignty. This has affected firms such as InterContinental Hotels Group (LON: IHG) and Starbucks (NASDAQ: SBUX). Combining all these issues, UK manufacturers have faced the toughest period of business since the financial crash, with low investment rates and low consumer confidence. The sector slowed down at its quickest rate in the three months leading into October, with orders for supplies slumping to its lowest point in almost a decade. Tom Crotty, group director of chemicals firm Ineos and chair of the CBI manufacturing council said “Each day of Brexit uncertainty sees firms forced to withhold key investment and recruitment decisions that make a huge difference to communities across the country,”. Firms seem very reluctant to invest until Britain’s relations with the EU are set in stone, slowing investment and business. Investment is 20% lower than the Brexit referendum in June 2016, if it were to continue its trend pre-Brexit. The CBI added “he proportion of firms citing political and economic conditions abroad as a factor limiting exports over the next quarter hit a survey record high” A lack of business and lack of confidence led to firms firing workers at the fastest rate since April 2010. Businesses have speculated saying that they expect this rate to accelerate in the months leading up to January 2020.

Collagen Solutions PLC (LON: COS) have unveiled their third consecutive half of double digit revenue growth. Sales in the six months ending in September rose 14.4% to £2.23 million, showing strong revenue growth leaving stakeholders impressed. The biomaterials manufacturer has a focus on regenerative medicine. Seniors announced they had won four new customer contracts and gained ten customers in the period accounted for. The progress was further boosted by a fundraiser held in June, which added £6 million investment before fees applied. These funds allowed Collagen to further product development, manufacturing capacity and repay a financial debt to healthcare investor Norgine Ventures Management Ltd. Chief executive Jamal Rushdy said: “We are pleased to report the third consecutive six-month period of double-digit sales growth demonstrating consistent performance to our expectations by the Collagen Solutions global team. Rushdy added ““Our core business remains strong and our initiative to increase capacity is on track to meet the anticipated higher demand for both collagen and tissue products” In the trading update, Collagen Solutions discussed plans to talk to regulatory authorities as it bids to get a European health and safety sign off for its ChondroMimetic cartilage repair technology. Collagen added: “The company continues to execute on its customer product development milestones, having signed new development customers, which represent additional future contract manufacturing opportunities, once these products are approved and launched.” The exploitation of further revenues in this market is something which will stimulate shareholders. ResarchandMarkets.com reported that the Collagen market is set to be worth $5.6 Billion by 2025. The use of collagen and gelatin products are diversifying the food market, along with increasing applications in healthcare and biomaterials. The company is set to announce its interim results for the six month period up to 30th September on 3rd December 2019. Here it will be proven whether Collagen Solutions can tap into a highly growing and evolving market whilst competitors such as Devro (LON: DVO) evolve. Shares of Collagen Solutions are trading at 3.45p per share 22/10/19 12:28BST.

Members of Parliament start debating Prime Minister Boris Johnson’s Brexit deal this afternoon.

Critical Week for the Parliament

The House of Commons speaker John Bercow refuses to allow Boris Johnson a second vote on the Brexit deal. If Prime Minister Boris Johnson wants to pass his Brexit deal, he needs to push through the legislation required for ratification. Boris Johnson hopes to ratify the deal as soon as possible to make the October 31 deadline. Members of Parliament want more scrutiny given to the deal. Consequently, the House of Commons will hold two critical votes at the end of today. Firstly, Members of Parliament will vote on the suggested timetable for debating Prime Minister Johnson’s deal. Secondly, they will vote on the bill itself. In order to continue debating the Brexit deal, both the timetable and the bill must pass.

Brexit Deal: Concerns

There are three fundamental concerns regarding the deal: deregulation on consumer goods, access to the single market, and trade with the EU. The deal removes significant amount of regulation on consumer goods and safety. It risks economic instability by taking the UK out of the single market. Economists warn about shortages of goods and services following Brexit. Furthermore, Members of Parliament are concerned about reaching a trade deal with the EU. Prime Minister Boris Johnson’s Brexit deal does not include an agreement on future trade between the UK and the EU. The UK needs to reach a separate trade agreement with the EU. There is a possibility of leaving the EU without a trade deal. If the deal passes, the UK will enter a transition period with the EU. Although the UK will no longer be a member of the EU, the EU will treat the UK as a member until the end of the transition period.

Brexit Deal: Market Reaction

The Pound fluctuates as the Parliament battles to get the Brexit deal done. Risk increases for those invested in assets that are denominated in pound sterling. Brexit uncertainty impacts the pound sterling negatively. The market reacts to John Bercow’s refusal to allow a second vote on the Brexit deal as the pound falls to $1.2947. Foreign investors are hesitant to invest in assets denominated in GBP until the Parliament reaches a decision at the end of this week.  

Just Eat Plc (LON: JE) have found themselves caught up in a bidding war for a potential takeover, driving up share prices significantly. Just Eat have recently rejected a hostile £4.9 billion bid from investment firm Prosus NV (JSE: PRX), which has threatened its proposed merger with allies Takeaway.com (AMS: TKWY). Chris Beauchamp, chief market analyst at spreadbetter IG said “It is now a firm target, having been approached by Prosus with a 710p cash bid.The response from the share price suggests that a bidding war is now in play, potentially sending the share price back towards the 900p high we saw in early 2018.” Just Eat have responded by saying that Prosus have heavily undervalued their firm by offering 710p per share. Liberum analysts said yesterday: “We are sceptical that the proposed merger will be accepted by Just Eat shareholders as we believe that it substantially undervalues the business” Instad, Liberum analysts said the buy rating and target price of Just Eat shares were valued at 1,360p per share. This was not the first approach that Prosus made after having bids of 670p, 700p and 710p per share, all have been rejected. Prosus have commented saying “It believes the food delivery firm requires “substantial investment, in excess of that planned by Just Eat management. Prosus does not believe that the proposed combination with Takeaway.com will fully or effectively address this investment need”. Bob Van Dijk, Prosus Chief Executive had his say on this affair. “We believe our global experience and resources can help Just Eat to achieve its significant potential. Our plan is to support the Just Eat management team, with whom we have worked closely as joint investors in Ifood, to deliver on the exciting opportunities to grow the business” He concluded “We believe that Just Eat’s customers and restaurant partners will ultimately benefit from more delivery options, greater restaurant choice as well as improved service and delivery speeds driven by the combined group’s expertise in product and technology innovation supported by increased capital investment in the business. As a combined group, we see significant growth and value creation potential” Just Eat and Takeaway.com agreed a merger deal in August, with shareholders set to vote on the deal on 4 December. However this approach has dampened the proposed takeover. US asset manager Eminence Capital, hold a 4.4% stake in Just Eat said it planned to oppose to the deal. Ricky Sandler, chief executive and chief investment officer of Eminence, said: “The proposed financial terms are far too favourable to TKWY shareholders and far too unfavourable to JE shareholders. Accordingly, we intend to vote against this arrangement.” The bid war has now escalated with the three way negotiations set to unfold over the next few days. Certainly, there has been a concerned effort by Prosus to not let Just Eat fall into the hands of Takeaway.com as Just Eat looks to deliver strong future performance. Markets.com’s Wilson said “Prosus’ bid “is in many ways very cheeky and even more low-ball”, coming under Takeaway’s 731p merger price. Whilst it has been rejected, will certainly up the ante and could force Takeaway.com into raising its offer as it looks in a weakened position due to the stock’s decline,” Wilson concluded “a bidding war is good news for shareholders. A merger/takeover of enough scale gives Just Eat and its interim CEO the perfect exit, whilst also creating a company with the scale and strength to take on Deliveroo, Uber Eats and Amazon.” Yesterday, Just Eat announced revenue gains of 25% to £248 million and the news of this approach has certainly got shareholders excited. Shares of Just Eat PLC are trading at 7.442p a 25.92% rise across Tuesday trading. 22/11/19 12:00 BST.  

Pendragon PLC (LON: PDG) published third quarter results this morning. Profits rose leading to stock price increases during Tuesday trading. However, falling revenues were reported as sales from used cars dropped. The operator of Evans Halshaw and Stratstone saw underlying pre-tax profit rise to £3m from £1.1m, due to a combination of ‘better momentum during September, improved processes and good cost control’. Despite rising profits, Pendragon saw a decline in total revenues by 8%, as like for like revenue dropped 3.6% and used car revenues dropped 19.6%. Total revenue from new car sales was strong however, and this climbed 4.5%. Additionally, new car like for like sales increased by 11%. Pendragon said overall sales volumes were lower as it focussed on rebuilding both the quantity and quality of the age-profile of the stock during the period. Pendragon held £458m worth of used car stock at the end of 2018, compared to £372m a year ago. Pendragon commented “Whilst the improved performance during the period is encouraging, we continue to expect economic and market conditions to be challenging, with the ongoing uncertainty around Brexit impacting consumer confidence. The full-year underlying loss before tax remains in line with the board’s expectations,” Berenberg added by saying that the used car sales were the ‘bane’ of the year for Pendragon, given the sizable margin compression in this sector as a result of de-stocking older and preregistered stock. Berenberg concluded “”Most of this has now happened and the business has achieved a marked improvement in margins month by month over the quarter. Specifically, gross margins have risen from 5.9% in July to 7.3% in August to 8.4% in September. With margins now back to normal used levels, we envisage that profitability can return here. With the problem car stores now shut, the company will benefit from the cost savings associated in upcoming periods.” Pendragon announced plans to cut 22 car stores last month as shares have been volatile. Most of these have been formally completed, showing a strategy to cut costs. However, this restructure caused 1,300 job losses. In today’s trading statement, Pendragon said: “The Group returned to underlying profit before tax during the quarter, with performance levels improving steadily through the period. Good progress has been made with each of the planned operational improvements previously disclosed.” They also added “The growth in sales was partially offset by lower margins from a combination of challenging economic conditions and our planned efforts to more naturally achieve manufacturer targets to minimise pre-registered vehicles.” Shares of Pendragon PLC are trading at 12.24p per share, after the positive results shares climbed 5.52%. 22/10/19 11:34BST.