Parliament passes Greek deal
The Greek parliament has approved an 86 billion euro bailout packaged, which will allow Greece to make their repayment to the IMF on August 20.
Prime Minister Alexis Tsipras faced rebellion from his party again, relying on opposition vites to pass the motion. 43 lawmakers voted against or abstained, a higher number than the 36 who voted against reforms last month. The motion passed through Parliament with 222 out of 300 votes.
Euro zone finance ministers are expected to approve the vital aid for Athens later on Friday.
Tsipras told lawmakers:
“I do not regret my decision to compromise. We are not exulting but we are also not mourning over this difficult agreement. I have my conscience clear that it is the best we could achieve under the current balance of power in Europe, under conditions of economic and financial asphyxiation imposed upon us.”
The deal includes severe budget cuts and economic reforms, as agreed with Greece’s creditors.
Construction output back to growth
UK construction output has risen by 0.2 percent on the last quarter, still below the 2.2 percent expected by analysts.
According to figures from the Office of National Statistics, in June alone output rose by 0.9 percent, an improvement on the poor figures seen for April and May.
However, the ONS have said that they will not revise their estimate of 0.7 percent GDP growth for the second quarter. Construction output has a bit effect on GDP, making up 6 percent of Britain’s economy, but is notoriously hard to predict. Annual output growth is still at its slowest for two years.
Bang & Olufsen shares drop to lowest in a year
Bang & Olufsen (CPH:BO) stock suffered it biggest drop in over a year today after a withdrawal from car stereo production.
Shares in the Danish company plunged nearly 16% as it announced a loss of 410 million kroner before interest and taxes, compared with a loss of 16 million the year before.
Most of the loss stemmed from the sale of their car radio business to Harman International Industries Inc earlier this year, in order to focus on its high end televisions and Hi-Fi systems. However, demand for those items seems to have dropped, making the quarter “financially challenging”.
The company last paid a dividend for 2008. An analyst at Sydbank A/S told Bloomberg:
“B&O’s problem is that the core clients they used to have are literally dying out. B&O shareholders should be more worried after this quarter than they were in the previous one.”
Success: Morrisons harnesses geo-location marketing
Supermarkets are continuing to show poor performance, with Tesco (LON:TSCO) and Sainsbury’s (LON:SBRY) shares falling as recently as Monday, dropping by 1.4% and 1.2% respectively. Big chain stores are having an increasingly rough time in today’s market when compared with independent food stores, who are seeing an increase in both customers and profits.
One supermarket has shown better performance however -Morrison’s (LON:MRW) have been utilising the downturn to invest in a new marketing technique that appears to be paying off. According to figures form Kantar Worldwide, Morrisons, which has a market share of 10.9%, was the best performer of the big four grocers for the third period in a row last quarter with sales falling by just 0.1%.
Interestingly, the key to the supermarket’s recent success may be their recent experiment with geo-location marketing. With the population now spending around 3 hours a day on a smartphone on average, Morrison’s hired media agency MEC and LoopMe to develop a campaign to harness this.
Phones within a five kilometre radius of a Morrisons’ store were targeted with messages promoting the chain’s fresh produce. The supermarket says that the campaign was a success, driving a 450 per cent increase in awareness of the brand. Overall, 69 per cent of those who received the messages reacted positively.
The campaign directly drove sales, with 63 per cent of those surveyed saying they had or plan to take action as a result of the campaign. 22 per cent stated they had or planned to purchase fresh fruit and vegetables in store.
Alexandra Davies, the store’s digital marketing manager, said to The Drum: “Location targeted full screen ads made for a powerful creative canvas and strong consumer engagement.”
Miranda Wadham on 13/08/2015
Government to intervene in shale gas applications
The government have just announced that shale gas will be made a priority in the UK, telling councils to fast-track planning applications.
Communities Secretary Greg Clark has said that councils must rule on shale gas applications within the 16 week timeframe. If they do not, the government may take over the planning decisions, and may also reconsider some failed applications. Although ministers already had the power to intervene in council decisions on this matter, the Department of Energy and Climate Change has said it is likely to become more frequent.
In a statement, Energy Secretary Amber Rudd said:
“To ensure we get this industry up and running, we can’t have a planning system that sees applications dragged out for months or even years on end. We now need, above all else, a system that delivers timely planning decisions and works effectively for local people and developers.”
Environmentalists say it makes a ‘mockery’ of the government’s promise to give more power to the people.
The announcement could well be a response to Lancashire County Council’s recent rejection of Cuadrilla’s shale gas applications, after it took a year to decide.
The government’s announcement is seen as a response to Lancashire County Council’s recent rejection of Cuadrilla’s shale gas applications after more than a year of deliberations.
A spokesman told BBC News: “It would be very unfair to suggest that we didn’t go as fast as possible. This was the first decision in the UK on fracking so there was a lot of pressure on us to get it right.”
Cryptocurrency fund offers alternative investment
Bitcoin Capital, a cryptocurrency fund managed by Startjoin Tech CEO Max Keiser, showed the potential for bitcoin by raising over $1 million through a crowdfunding campaign on platform BnkToTheFuture.
Bitcoin Capital will invest funds in mining, early-stage startups and cryptocurrencies, with daily dividends paid out in bitcoin. The fund is described as high return and high risk.
Founder Max Keiser, a financial journalist, virtual currency inventor, entrepreneur and investor, and will manage the new fund, along with Simon Dixon, an ex-investment banker, investor, entrepreneur and co-founder of BnkToTheFuture.
Keiser has always been an advocate of cryptocurrencies. He says:
“I have been critical of the traditional financial system for many years. I was the first global news outlet to cover bitcoin when it was trading at $3, recognizing its potential to change the world. Many startups in the bitcoin space credit Keiser Report for getting them started in the business. Bitcoin Capital allows the founders and investors to experiment with new crypto financial business models and currencies to transform global finance.”
Although investing in venture capital usually involves a little patience before seeing a return, Bitcoin Capital is able to pay investors daily dividends by investing a third of all funds raised in bitcoin mining. Bitcoin mining invests in sophisticated hardware that provides security to the bitcoin network in return for newly-created bitcoins.
“We have developed a model for finding startups to invest in which involves them initially crowdfunding through the Crypto CrowdFunding site – StartJOIN, and then Bitcoin Capital may be able to top them up if they successfully raise their funds through an equity offering on BnkToTheFuture.com,” said co-founder Simon Dixon, CEO of BnkToTheFuture.
Cryptocurrencies are becoming increasingly popular, especially with new start-ups and finch companies, and to provide a shelter from volatile currency markets. The fund invests in a portfolio of Bitcoin and other crypto currencies to give investors a diverse portfolio and full exposure to the growth of the ‘Blockchain sector’.
Greka Engineering soars 133%
Unconventional gas sector engineering company Greka Engineering & Technology Ltd. (AIM: GEL) is trading up 133% this morning, after announcing that they have entered into a construction contract with China United Coalbed Methane Corporation, the state-owned Chinese coalbed methane company.
The contract is to modify the power facilities of four valve groups for the purpose of connecting and powering 56 CUCBM wells and follows the successful pilot program to connect one valve group to power 10 of CUCBM’s wells which completed in 2014. Greka Engineering will be responsible for power line construction and support equipment installation.t
The work is to be completed by December and is expected to result in the ongoing supply of power by Greka Engineering to the connected wells.
Randeep S. Grewal, Chairman of Greka Engineering, commented:
“We are pleased to see the development of our relationship with CUCBM. With over 1,500 wells ultimately requiring connections to power grids at the GSS block, this represents an excellent growth opportunity for the Company, which should both expand our engineering footprint and contribute to the Company’s profitability this year and beyond.”
Roche pharmaceuticals in $425 million deal
Swiss pharmaceutical company Roche (VTX:ROG) are trading up 2 percent after announcing plans to acquire US diagnostics firm GeneWEAVE Biosciences in a deal worth $425 million.
The Swiss group’s primary focus is fighting “superbugs”, and the agreement will give Roche access to GeneWEAVE’s “Smarticles” technology.
Roche will pay shareholders of the privately held Californian company $190 million upfront and further $235 million depending on the future success of its products.
Roche discover, develop and provide diagnostic and therapeutic products and services for diseases worldwide. The company is currently trading up 2% at 276 pence per share.
Cineworld posts strong results
Cinema chain Cineworld (LON:CINE) announced strong half yearly results this morning, with UK revenue at £219 million, up 8.4 percent on the year before.
Group revenue climbed 11.3pc to £329.1m and pre-tax profits for the six months to July more than tripled, up from £13.9m to £46.8m.
In a statement, the company said:”The strongest titles released during the period were “Fifty Shades of Grey”, “Fast and Furious 7”, and “Jurassic World”, all of which broke box office records…alongside other titles such as “Avengers: The Age of Ultron” resulted in overall pro forma revenue growth of 11.3%.”
In February last year the cinema chain moved international, acquiring Polish chain Cinema City for £272m in cash with a 24.9pc stake in the combined company.
The company said its interim dividend would rise by a third to 5p a share. Cineworld is currently trading up 2% at 559 pence per share.
Michael Page pays special dividend
Recruitment firm Michael Page (LON:MPI) announced their half yearly results this morning, saying it would pay out a special dividend of £50 million pounds to its shareholders.
The company reported a higher than expected half-year profit of £40.4 million, with strong demand in all regions, pulling the firm into a fourth consecutive quarter of double digit profit growth.
Chief executive Steve Ingham said: “For the fourth successive quarter we delivered double-digit gross profit growth in constant currencies and have continued to see improvement in all our regions.
“Our five high-potential markets of Germany, Greater China, South East Asia, the US and Latin America, despite the challenges in Brazil, are performing at a record level and now represent 30% of group gross profit”
The announcement is the first time the company have paid a dividend like this, preferring to buy back shares.The two dividends will be paid in October.
Michael Page are currently trading up 3.6 percent on the news, at 546 pence per share.