In Tehran this morning, an explosion damaged an Iranian Oil Tanker traveling through the Red Sea sending oil prices higher by 2%. The attack had the effect of shifting Brent Oil and West Texas Intermediate crude futures by more than $1 per barrel. Iran’s state media reported that these vessel was owned by the National Iranian Oil Company. The Sabiti which caught fire and subsequently exploded leaked oil after it was struck 60km from the port of Jeddah. A few hours after the attack, the leak has been controlled. This attack follows a long string of political tensions between Saudi Arabia and Iran. This attack is likely to heighten both political and economic tensions. Crude Prices jumped on this report and industry sources say that this could have effects in driving up shipping costs. Ashok Sharma, managing director of shipbroker BRS Baxi in Singapore said “War risk insurance premiums for the Red Sea will now likely go up significantly, as will likely the freight (rates)” China, the top buyer of Iranian oil hopes that tensions can be settled to stop any disruption to oil supply. However, “Experts believe it was a terrorist attack,” Iran’s Students News Agency (ISNA) reported. Trump added to his list of fragile foreign relations, by stating that Iran was responsible for this attack, something Tehran denies. This follows a list of attacks on Iranian Oil Tankers, the previous coming on September 14th. This attack shut down 5.7 million million barrels of production daily, half of all Saudi output amounting to five percent of global supply. The 2% price rise could suggest a period of short supply following these attacks. If these attacks are to be a common occurrence, supply disruptions may occur for the biggest exporter of crude oil globally. Immediately following these attacks, oil benchmarks showed their biggest prince increase since September 16th. The first few hours trading showed increases up to 20%. Stephen Innes, an Asia Pacific market strategist at AxiTrader “Spare capacity remains fragile and with supply chain vulnerability a worrying concern at virtually every Middle East oilfield, traders continue to hedge supply risk premium,” The prices of crude oil may not be as significant as expected even after this attack. Earlier this week the US Government reported data showing rising domestic crude oil stocks, which may drive down prices. Since the event occurred, prices have stabilized despite attacks in September and October. The International Energy Agency monitored these prices across this event giving this statement ““Oil markets in September withstood a textbook case of a large-scale supply disruption. Prices fell back as it became clear that the damage, although serious, would not cause long-lasting disruption to markets” With an increasing supply of oil in Brazil, United States and Norway this may mean that this rise is very short term and in fact may cause long term dips. Traders were quick to pounce on the 2% price, however as markets have calmed many of these increases are not likely to be long term. There have also been updates to a few other commodity markets with changes to Bisichi Mining PLC (LON: BISI) and , Highland Gold Mining Ltd (LON: HGM) and updates in current affairs to Facebook (NASDAQ: FB), London Stock Exchange (LON: LSE).

Nissan, (TYO: 7201) one of the leading innovators in the electric car industry have just formalized plans to build the next generation Juke at their main plant in Sunderland, despite Brexit looming. As the Brexit deadline draws closer and closer, the risk to start operations in Sunderland by the Japanese car giant shows faith in Britain’s ability to pull through a period of speculation. Despite a fluctuating currency and a tense political climate. Nissan’s Chairman of European Operations Gianluca de Ficchy said that “Thirty-five years ago Nissan decided to create a plant in the UK to serve our European markets,”. He added “The new Juke represents a further 100 million pound investment in our Sunderland plant and is designed, engineered and manufactured in the UK for European customers,” Nissan do not seem to be phased by the stalling talks between the UK and EU, having spent £100 million on their latest investment to shift Juke production to Sunderland. Whilst Britain’s future in the EU seems uncertain, seniors at Nissan are not phased by the political climate. Colin Lawther, Nissan’s European manufacturing boss told legislators in 2017 “As those circumstances change – and we will not wait until the end of the process – we will continually review the decisions that we take based on anything that materially changes.” Nissan’s stock price during trading on Friday stayed relatively constant, and peaked at 669JPY, showing a 1.86% rise. The Japanese carmaker currently employs 30,000 jobs people in Britain and holds 6,000 employees in the main manufacturing plant, located in Sunderland. Although Nissan have agreed for the Juke production to switch to the UK, senior members have acknowledged the risks associated. De Ficchy said “If no deal means the sudden application of WTO [terms] we know that our business model [in Europe] won’t be sustainable in the future.” The Nissan Sunderland plant has grown to be the biggest manufacturing plant in the UK and has produced over 10 million cars since the opening in 1986 during the Thatcher years. The decision by Nissan to make this change was confirmed back in 2015, showing how major investment decisions are made years in advance. Nissan have publicly admitted the risk in this move to the UK, and whilst legislators in Parliament try and push through a deal, the impacts of Brexit have had a decline on the UK car market. Much will be have to be done in order to reassure workers that their jobs are safe. If a No Deal Brexit does happen, then Nissan (TYO: 7201), Aston Martin (LON: AML) and Rolls Royce could face tariffs on vehicles, engines and spare components. Additionally, the No Deal could add customs delays which stops immediate production, stall the supply line and risk the long term prospects of British Manufacturing. Ficchy noted “if a 10% export tariff was introduced after the UK left the EU it would put its operations “in jeopardy”. Legislators have promised to help UK manufacturers prepare for Brexit on the 31st. A media spokesperson said on behalf of the Department of Business, Energy and Sustainable Trading “We continue to work closely with the sector as they get ready for Brexit on 31 October.” As the car industry is the UK’s biggest exporter of goods, the sustainability of manufacturing in Britain will be put to the test. It will be seen whether firms like Nissan move their production sites to have access to EU manufacturing regulations.

Earlier this morning an £2.7 billion agreement was reached for the takeover of Greene King (LON: GNK) by Hong Kong’s richest man Li Ka-Shing. As negotiations have moved forward, the agreement has concluded with 99.38% of shareholders in favor. Phillip Yea, the Greene King Chairman described this takeover. “The board welcomes shareholders’ approval of CKA’s offer to acquire Greene King” He added “As previously set out we believe CKA’s long-term vision for Greene King, supported by our established position in the pub industry, high-quality estate and resilient financial profile, is in the best interests of employees, tenants, customers and suppliers” Nick Mackenzie, chief Executive of Greene King was optimistic about the moving commenting that CK Asset Holdings was an “experienced UK investor and shares many of Greene King’s business philosophies”. With the history of Greene King enduring over 200 years, the takeover represents a change of both vision and strategy for the British Pub Chain and a dependency on Foreign Investment to survive. As this deal enters its completion phase, this is the second biggest inbound deal of the year valued at £4.6 billion, inclusive of debt commitments. This seconded the £6 billion move for Alton Towers by Blackstone (NYSE: BX) and The Canada Pension Plan Investment Board. With the international takeover of Greene King, there has been some fear about job security for 31,800 employees working in 3,100 pubs nationally. Interestingly, since the takeover was formalized the share price of Greene King has shifted. Yesterday, its price was listed at 8,473p and today there has been a rise of 0.07%. Greene King has been reporting strong sales figures in the second quarter of this year, with like-for-like sales of 15.3%, however share prices have been volatile. Even with strong like-for-like sales, and 3% increases in profits at the end of last year, there have been moments of decline. In April, the sudden departure of CEO Rooney Anand caused a slip of -7.52%. The move by the Hong Kong billionaire Li, adds another reputable firm to his list of assets including Three Mobile, Superdrug Pharmacies & many commercial assets. There has been little reassurance to those employed by Greene King as to the status of future employment by the board of CK Asset Holdings which may cause a spark from the Trade Unions. It will take time for the market to respond to this takeover as the negotiations move forward, but another British Asset has been taken by an Overseas Investor and adds to Li’s impressive portfolio. In the retail sector, there have been updates to Dunelm Group Plc (LON: DNLM), Laura Ashley (LON: ALY) and Nissan (TYO: 7201).

One of Belgium’s flagship companies UCB is set to purchase US based RA Pharmaceuticals in a $2.1 billion cash deal, as reported earlier today. Early on Thursday morning, reports suggested that both parties had formalized a fee for RA which enables the Belgian Pharmaceutical giant access to new treatment opportunities in neurology and immunology. UCB’s Chief Executive Officer Jean-Christophe Tellier expressed his optimism in this statement “Ra Pharma is an excellent strategic fit addressing multiple areas of UCB’s patient value growth strategy” Tellier also added “Upon closing, the acquisition will add to our strong internal growth opportunities – six potential product launches in the next five years, strengthening our neurology and immunology franchises with late and early-stage pipeline projects. In addition, the combination will provide us with the opportunity to become a leader in treating people living with myasthenia gravis” The newly formed acquisition is expected to give UBS access to US markets and contacts, whilst driving UCB’s earnings per share (EBR: UCB), and increasing profit from 2024 onwards. As a result, shareholders of RA Pharma (NASDAQ: RARX) will receive $48 per share held, as reported in a joint statement from both parties. This figure represents a 93% premium based on the average closing stock price of RA prior to finalizing the takeover. As the news came in of this deal, the price of RA Pharmaceuticals saw a premarket appreciation of 102.03% which shows the optimism from traders to invest into this merger. The stock price leveled during the course of the day at $22.80. UCB have also benefitted today, seeing a small rise in their share price with a 1.46% increment. The takeover presents a new challenge for UBS, with an attempt to integrate into a foreign markets. UBS look to have a long term plan in place, similar to Dechra Pharmaceuticals However, this takeover comes at no surprise as UBS announced back in January their new strategic growth plan. As a result, UBS will strengthen their presence in the innovation sector of pharmaceuticals in Massachusetts. The takeover will be funded by both existing cash resources and new term bank loans handled by Bank of America Merrill Lynch (NYSE: BAC) and BNP Paribas Fortis (EPA: BNP).

Dunelm (LON: DNLM) have seen a drastic downturn in their share prices as sales and revenues fell in their most recent financial report. In Thursday trade, the stock price of Dunelm fell by 14.23% after opening lower 793.5p this morning, eventually crashing to lows of 700.2p In Dunelm’s most recent trading update, reports suggested that sales grew more than 6% in the past three months. However, in the previous quarterly report this fell way short of the estimated 11% increase. As many firms still await the outcome of the Brexit saga, Dunelm in a press report alluded to the uncertainty of Brexit mounting political tensions leading to poor performance. Dunelm was founded in 1979 as a market stall selling curtains and subsequently opened its first office in Leicester in 1984. With over 170 stores nationally, Dunelm have a market cap of £1.4 billion and are looking to increase digital exposure through website sales. Steve Miley from Ask Traders commented “‘Expectations for sales were in the region of 11 per cent, so the increase reported is a little disappointing. After a strong end to the previous year, expectations were riding high. Brexit uncertainty, consumers reining in spending and shopping habits changing are challenges which appear to be starting to catch up with the homeware retailer” In the previous quarter, sales grew by over 10% hence the recent reports published show both underperformance and distance between projections and outcomes. Dunelm have build a strong brand reputation in the furniture industry, and certainly have the recent figures to back this up, however this shows a slow period after a while. Russs Mould from AJ Bell said the numbers “would still be the envy of many retailers, but arguably not enough to sustain the excitement behind the Dunelm story”. Mould also added “Dunelm’s first quarter trading update didn’t receive the kind of reception management may have expected. The home furnishings chain defied retail gloom to post a series of positive trading updates earlier in 2019 but the stalling share price suggests the strong performance has already been priced in by the market.” Higher authorities from Dunelm have attributed a few factors to the crash in share prices noting the weakening pound, political uncertainty with Brexit and a soft market. Looking at other news in retail, there have been updates on McColl’s Retail Group PLC (LON: MCLS), Boohoo Group PLC (LON: BOO), N Brown Group PLC (LON: BWNG)