Article 50 triggered, FTSE resilient but pound sinks

Miranda Wadham
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Article 50 triggered, FTSE resilient but pound sinks
Britain has now triggered Article 50, setting both the FTSE 100 and the British pound off on a volatile course. The FTSE sunk during Prime Minister’s Question Time as Theresa May confirmed that her letter triggering Article 50 had been delivered to Brussels. However, it has since moved upwards, currently trading up 0.31 percent at 7366.83. The British pound remained largely flat on the news, but has since sunk 0.125 percent against the dollar. Andrew Sentance, a senior member of the Bank of England’s monetary policy committee, warned of uncertainty over the next two years as negotiations kick off: “Most likely, we face another two years of uncertainty before a new relationship between the UK and the EU is properly agreed. During this period we will probably see some bouts of financial volatility affecting the value of the pound and reduced business and financial confidence.”

Tesco shares fall after supermarket agrees to pay £129m fine

Miranda Wadham
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Tesco shares fall after supermarket agrees to pay £129m fine

Supermarket giant Tesco has agreed to pay a fine of £129 million to avoid prosecution for its false accounting scandal, causing shares to plunge at market open.

The company overstated its profits between February and September 2014, sparking a two year probe by the Serious Fraud Office. It has now reached a deferred prosecution agreement, as well as an agreement already in place with the FCA to pay around £85 million in compensation to investors.

Alongside these two figures, Tesco will also pay legal costs associated with the agreements. The total exceptional charge is expected to be £235 million.

Dave Lewis, the chief executive of Tesco, said: “I want to apologise to all those affected. What happened is a huge source of regret to us all at Tesco, but we are a different business now.”

He added that the company was “committed to doing everything we can to continue to restore trust in our business and brand”.

The agreement to pay several fines is not admittance of guilt, and the FCA stated in a ruling that it is not suggesting the Tesco board of directors knew, or could reasonably be expected to have known, that the information in the company’s trading statement in August 2014 was false or misleading.

Tesco (LON:TSCO) shares are currently trading down 0.08 percent at 189.80 (1135GMT).

 

Dow Chemical and DuPont merger given the go-ahead by EU

Miranda Wadham
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Dow Chemical and DuPont merger given the go-ahead by EU

US chemical giants Dow Chemical and DuPont are set to merge, after the deal was given the go-ahead by the European Commission on Monday.

The merged company will be worth around $130 billion and is expected to lead to cost savings of $3 billion. The European Commission had raised concerns that the merger of the two largest US companies would stifle competition in the sector, and the deal remains dependent on the sales of several substantial assets. “We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment,” European Competition Commissioner Margrethe Vestager said in a statement. “Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future.” The merged company, DowDuPont, will eventually be split into three companies focusing on agriculture, materials and speciality products. Dow said in a statement: “Longer term, the intended three-way split is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each company will be a leader in attractive segments where global challenges are driving demand for their distinctive offerings.” The is the first of three big deals in the sector, with ChemChina’s bid for Syngenta on its way to approval and a deal looking set to be approved between Bayer and Monsanto within the new few months.

Five tips to give your investment portfolio a spring clean

Miranda Wadham
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Five tips to give your investment portfolio a spring clean

With the end of the tax year upon us and attention turned to money matters, it’s the perfect opportunity to ensure portfolios are in good shape before topping up with more money.

Mark Taylor, CEO of investment platform Selftrade, encourages investors to commit to an investment MOT once a year.

“It’s all too easy to skip the MOT and dive straight into topping up funds or making new investments. But giving your portfolio an annual health check to make sure it’s still doing what you want is a fundamental part of investing,” Taylor said.

So, what is the best way to review your investments?

1. Analyse your underperforming funds

“While it’s important to stay invested, and take a long term view, it’s also important to know when to call it a day”, says Taylor.

“Identify whether your portfolio holds any serial underperforming funds and consider cutting them loose. These are not funds that have had a rough few months, but ones that are consistent bad performers against their benchmark year-on-year, and more tellingly, against their peers. It’s not uncommon to want to hold on to investments that we’ve had for a long period; to wait for the rally. However, sometimes in a drought, it’s best to seek water elsewhere.”

2. Check for overlaps

“Most commonly, ISA portfolios are made of up of a whole host of funds and trusts, many of which may invest in the same stocks. Check whether you have any notable overlaps – you could be building an uncomfortably large position in a single stock simply from owning a handful of funds, which could be impacting your diversification”, Taylor continues. “More annoyingly, you may also be paying twice the amount you need to in fees to invest in one stock.”

3. Closet trackers

“If you’re paying active management fees, make sure you’re getting an active management performance”, says Mark.

It’s important to check that your active funds aren’t just tracking the index, but are actually making intelligent decisions and earning their worth. If not, you may as well be invested in a similar ETF instead.

4. Balance it out

The recent rally in equities may have caused a shift in a number of portfolios, causing them to be too stock heavy. The balance of weighting between what you have invested in bonds, and what you have invested in equities, may now be out of kilter. Think about rebalancing your portfolio to keep your risk level on track.

5. Can you increase your contributions?

The best way to invest is regularly, and direct debits into your ISA are a brilliant way to do this. However, when was the last time that you checked if you could be putting away more?

“If you’ve recently had a pay rise, or perhaps set up the payment as a novice investor, with a cautionary amount, you may be able to boost your savings and your earnings by increasing your contributions by a manageable amount. Take the time to think about how much more you could be setting aside”, Taylor concludes.

Robots likely to take jobs from over 10 million workers within 15 years

Miranda Wadham
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Robots likely to take jobs from over 10 million workers within 15 years
Around 30 percent of British jobs are at risk from advancements in Artificial Intelligence, according to new reports, affecting over 10 million UK workers. Robots and artificial intelligence machines are likely to replace a third of UK jobs within 15 years, consultancy firm PwC said in a report released on Friday. These figures are higher in both the US, at 38 percent, and Germany, at 35 percent. In Japan the risk is marginally lower, with around 21 percent of jobs likely to be affected. John Hawksworth, chief economist at PwC, told the BBC that “more manual, routine jobs” were the most at risk, with jobs needing a “more human touch” safer. Jon Andrews, the head of technology and investments at PwC, commented: “There’s no doubt that AI and robotics will rebalance what jobs look like in the future, and that some are more susceptible than others. “What’s important is making sure that the potential gains from automation are shared more widely across society and no one gets left behind. Responsible employers need to ensure they encourage flexibility and adaptability in their people so we are all ready for the change.”  

Venture Life shares fall, despite 57pc profit boost

Miranda Wadham
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Venture Life shares fall, despite 57pc profit boost
Shares in international consumer self-care group Venture Life group (LON:VLG) sunk on Thursday, despite reporting an increase in both revenue and gross profit. Revenues for the group were up 57 percent to £14.3 million for the year ended 31st December, up from £9.1 million in 2015. Gross profit increased 83 percent to £5.5 million, giving a gross margin of 38 percent. Adjusted EBITDA profit stood at £0.8 million, an improvement on 2015’s loss of £0.6 million. Sales growth continued to be strong in China for the second half of 2016, with the trend looking set to continue into 2017 with two long term distribution agreements, including one on UltraDEX, signed this year. Commenting on the results, Jerry Randall, Chief Executive Officer of Venture Life, said: “Venture Life has had a significant year along its path to becoming sustainably profitable. Revenue growth of 57% and our first EBITDA profit demonstrates the focused strategy of the Group is working. “Increasing revenues through our business are enhancing margins, and this year the Group has demonstrated its ability to grow successfully through both organic and acquisitive means. “First international partner deals on both UltraDex and Benecol ‘once-a-day’ liquid sachets confirm the appetite for these excellent products, and we continue to expand and strengthen our distribution networks for these and our other brand products. “We have strengthened our commercial team and developed three new and innovative products through our on-going R&D efforts, and we look forward to the continued growth and momentum throughout 2017.” Venture Life focus on developing, manufacturing and commercializing products for the ageing population, including the sales of branded healthcare and cosmetics products direct to retailers as well as manufacturing services under contract development. Shares in Venture Life are currently down 2.94 percent at 66.00 (1241GMT).

Retail sales surge in February, dampened only by rising petrol prices

Miranda Wadham
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Retail sales surge in February, dampened only by rising petrol prices
UK retail sales rose 1.4 percent in February, but soaring petrol prices held down figures for the quarter as a whole. During the three months to February, seen as a more reliable figure when assessing consumer habits, sales volumes ropped by 1.4 percent. This represents a larger drop than the 0.5 percent decline recorded in the three months to January, and the biggest three-month fall recorded by the Office for National Statistics since March 2010. Fuel prices in February were 18.7 percent higher than a year earlier, with petrol costing an average of 120p a litre in February, and diesel 3p more. ONS statistician Kate Davies commented: “February’s retail sales figures show fairly strong growth, though the underlying three-month picture shows falling sales as February’s figures follow two consecutive months of decline in December and January. “The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months”, Davies concluded. Sterling surged on the news that retail sales had increased in February, with sterling currently up 0.30 percent against the dollar and 0.30 percent against the euro (1149GMT).

FTSE 100 sinks, dragged down by major British stocks

Miranda Wadham
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0
FTSE 100 sinks, dragged down by major British stocks
The FTSE 100 fell from its record highs on Wednesday, dragged down by a stronger pound and sliding shares in Kingfisher and IAG. The FTSE 100 is currently down 0.74 percent at 7323.48, with the FTSE 250 down 1.07 percent at 18,784.48 (1223GMT). The indexes were affected by large falls in household names such as Kingfisher, the owner of B&Q. Kingfisher is currently trading down 5.61 percent after saying it was concerned that uncertainty around Brexit and French politics could hit future demand. Other major shares including Barclays, Standard Chartered and British Airways owner IAG also fell on Wednesday. George Salmon, equity analyst at Hargreaves Lansdown, says: “Screwfix is again the driving force behind a strong UK performance. However, with over half of group sales coming from overseas, much of the improvement in Kingfisher’s reported profits can be attributed to sterling’s weakness.” The falls in British markets follow those in the US, with shares sinking across the board on Tuesday as investors question US President Donald Trump’s ability to deliver on promises to boost growth.

Cost of living in London now cheaper than Tokyo, Paris and New York

Miranda Wadham
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0
Cost of living in London now cheaper than Tokyo, Paris and New York
The cost of living in London has fallen to its lowest level in two decades, with the pound’s fall pushing down prices in the capital. The latest figures from the Economist Intelligence Unit (EIU) show that London is now the cheapest of the world’s major economic centres, including Paris, New York and Tokyo. The sharp fall of the British pound in the wake of Brexit has made prices in London more attractive for foreign visitors, although has had little effect on workers in the capital who earn their wages in pounds. “While the declines mean that British cities are cheaper compared to their international peers, the rise in import prices caused by the weak pound will mean that locals won’t see their own shopping baskets falling in price. “In fact the opposite is likely to be true and, while UK cities fell down the ranking local prices for the basket of goods surveyed have begun to creep back up,” said the EIU. According to figures from Expatistan, London is now 8 percent less expensive than Tokyo. Food accounts for a large proportion of this, at 15 percent lower, with entertainment also also 13 percent cheaper.

UK inflation hits highest level since 2013, negative effects for savers

Miranda Wadham
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0
UK inflation hits highest level since 2013, negative effects for savers

UK inflation hit its highest level since September 2013 in February, with food prices recording their first annual increase for over two years.

The Consumer Prices Index (CPI) rose to 2.3 percent in February, a sharp increase from 1.8 percent in January. Food prices increased by 0.3 percent on the same period a year earlier. The Bank of England has taken the rising inflation into account, expecting it to peak at 2.8 percent next year. According to the latest figures from the Office for National Statistics, rising transport costs, particularly for fuel, were the main contributors to the increase in the rate. Rising inflation rates are likely to have negative effects for savers, with Vince Smith-Hughes, retirement expert at Prudential, commenting:

“These rising inflation figures will dismay pensioners who are living on a fixed income or drawing down an income from their pension fund. Rising inflation hits retired people harder than others because they spend a disproportionate amount of their income on fuel, food and heating.

“Those drawing down an income will need to think carefully about how much they withdraw from their pensions. Increasing withdrawals to pay for higher food and fuel bills means they run a greater risk of exhausting their pension savings.”

British stock markets are down on the news, with the FTSE 100 is currently down 0.03pc to 7,426.21, while the FTSE 250 has fallen 0.16pc to 19,120.96 (1336GMT).
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