29/02/2016
China cuts reserve requirement as shares sink further
China’s central bank has cut its reserve requirement ratio for the fifth time since February 2015, as it attempts to prop up its slowing economy.
Its reserve requirement ratio – the amount of cash that banks must hold in reserve in case of economic difficulty – has been lowered by 50 basis points for all banks effective from March 1st.
As it deals with a dramatically slowing economy, the Chinese central bank have implemented an aggressive easing policy designed to keep the country’s economy afloat, and last cut the requirement in October, alongside a further reduction in interest rates.
Chinese shares in decline
Chinese shares declined again on Monday on a further weakening of the yuan. The Shanghai Composite fell 2.7 percent after a brief recovery on Friday, hitting a 15-month low as the yuan hit its lowest point against the dollar in a month.
The Hang Seng was also hit, but fared slightly better, closing down 1.3 percent.
Morrisons re-enters game with Amazon tie-up
Struggling supermarket chain Morrisons has announced a tie-up with online retail giant Amazon, supplying groceries to Amazon Prime customers.
This will be Amazon’s first foray into the British fresh food market, after launching Amazon Pantry last year. Morrisons will now supply fresh products for both the Amazon Prime Now and Amazon Pantry brands.
This major agreement will be a big coup for Morrisons, who have recently been struggling to compete with discount brands Aldi and Lidl and have issued several profit warnings. As the British grocery market has evolved over the past few years, analysts have warned that this expansion of Amazon’s already huge service could well hurt the traditional players further. In a statement, Morrisons Chief Executive David Potts said: “The combination of our fresh food expertise with Amazon’s online and logistics capabilities is compelling. “This is a low risk and capital light wholesale supply arrangement that demonstrates the opportunity we have to become a broader business. We look forward to working with Amazon to develop and grow this partnership over the coming months.” Morrisons (LON:MRW) shares have shot up on the news this morning, currently trading up 4.31 percent at 196.00 (0843GMT).29/02/2016
New Zealand crowdfunding campaign buys NZ$2.3 million beach
A New Zealand crowdfunding campaign to buy a beach has had its offer accepted, after 40,000 people donated around NZ$2.3 million.
The Awaroa beach in the Abel Tasman National Park, on the north coast of South Island, went on sale last year. A group of friends then launched the campaign in order to secure the beach for public use – a campaign that was contributed to by the government, businesses and schools from New Zealand and Australia.
It’s current owner, businessman Michael Spackman, conducted four days of negotiations with the group before agreeing to sell them the beach, according to local website Stuff. Campaigner Duane Major said: “We’ve been through the wringer to get it and that’s a shared experience that forms friendships. Now we hope people have shared experiences of this beautiful piece of pristine serene NZ beach and bush.” New Zealand Conservation Minister Maggie Barry backed the campaign, telling New Zealand TV the generosity of the public during the tender process was “inspirational”.26/02/2016
Can we all learn something from Donald Trump’s investment portfolio?
As part of the preliminary disclosure required of all presidential candidates, Donald Trump provided an interesting show of his investment portfolio. A look at Trump’s portfolio reveals he is worth somewhere in the region of $10 billion, with most of his stock picks based in America – particularly the Dow 30. So how good is America’s least favourite presidential candidate at playing the markets?
He is posting impressive returns
Trump reported selling 45 stocks throughout January 2014, and amazingly he lost money on just five of them. What’s more, just look at his top five performing stocks, ranked based on total percentage gains:
1.) Facebook
199% gain, $3.9 million profit
2.) Bank of America
135% gain, $6.7 million profit
3.) Best Buy
113% gain, $2.2 million profit
4.) Boeing
80% gain, $4 million profit
5.) Morgan Stanley
75% gain, $750,000 profit
…but he isn’t infallible
Despite this run of great investments, Trump still experiences the occasional lapse of judgment with his choices. Trump posted a loss of 20% after selling his shares in D.R. Horton (DHI), and he also lost money on Pepsi (PEP), Occidental Petroleum (OXY), Coca-Cola (KO) and Enbridge (ENB).
Nevertheless, his portfolio as a whole still boasts envious returns, with his net worth totalling around $10 billion. In fact, his mistake with D.R. Horton (DHI) led to a loss of just over $200,000; a meagre amount when we consider his total gains. Trump claims that his equity investments generated around $27 million in returns, so he probably isn’t likely to complain about a few losses here or there.
Unsurprisingly, he prefers American…
American stocks fared well during the recent bull market, but it is still surprising to see that only three of Trump’s picks were non-U.S. Noble (NBL) from the UK, Volkswagen (VLKAF) from Germany, and Canadian Enbridge (ENB) were the only stock picks from outside the United States.
With the S&P 500 flattening out in the first half of 2015 it will be interesting to see if Trump changes his tune on American stocks. Though with the VW scandal, he might choose to stay investing close to home.
Trump favours the Dow
A whopping 16 of Trump’s stock picks form part of the Dow 30. Choices such as McDonald’s (MCD), Intel (INTC, Tech30), and General Electric (GE) are all part of the Dow 30, with Trump possessing an obvious preference for bigger multinationals. Despite stocks such as these doing well throughout the bull market, those with a large amount of exposure internationally have suffered with the growing strength of the Dollar.
There is certainly something to be said for Donald Trump’s stock picking abilities, so perhaps we can all stand to learn a thing or two from his habitual pro-United States, Dow-heavy choices.
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RBS make billion pound loss – but CEO paid record salary
The UK state-backed Royal Bank of Scotland (LON:RBS) announced a full-year loss on Friday for the eighth year running, as restructuring and litigation costs continue to hit.
The total loss stood at £1.97 billion, an improvement on last years £3.47 billion. RBS, who the government bailed out during the financial crisis in 2008 and still holds a substantial stake in, is undergoing a restructuring costing around £2.9 billion.
However, its chief executive was still paid a total figure of £3.8 million for 2015, the highest for someone of that position since 2008, with 121 other staff being paid over £800,000 base salary. In its report, published on Friday, the bank also warned of the uncertainties in the markets created by the upcoming EU referendum.
RBS shares dropped 10 percent in early trading after the report was released, and are currently trading down 9.08 percent at 221.80 (0959GMT).
26/02/2016
RSA chief warns of Brexit danger as shares soar
The CEO of insurance company RSA (LON:RSA) has spoken out against a British exit from the European Union, warning that it could have a negative impact on business and investment returns.
After his comments, Stephen Hester became the latest in a string of influential figures in British business is highlight concerns over the impact of a Brexit, and was one of 36 CEOs of FTSE 100 companies to sign an open letter arguing that leaving the EU would put the UK’s economy at risk.
“Half of our market value comes from our European businesses, and in all of our markets, some of our major competitors are European,” Hester told Reuters. “A level playing field between European competitors and ourselves is valuable to us in the long run.”
If a Brexit does impact on business, RSA has a lot to lose – its most recent set of results, released on Thursday, saw a 43 percent rise in operating profit to £523 million, sending shares up over 10 percent. Underwriting profit was up by 437 percent, with the final dividend up 250 percent. Hester took on the job as CEO two years ago with the intention of turning the company around, after an aborted takeover by Swiss insurance giant Zurich.
Hester said: “2015 was a year of major achievement for RSA. As a result, the turnaround phase of our Action Plan is largely complete and we have good prospects of substantial further performance improvement.”
Shares are currently up 12.85 percent at 445.20 (1257GMT).
25/02/2016
Foxconn win bid for Japanese giant Sharp
Japanese electronic giant Sharp has accepted a takeover bid from Taiwanese Foxconn, in what will become one of the largest ever acquisitions of a Japanese company by a foreign entity.
The bid, which has been accepted at $4.3 billion, was one in a series of bids made by Foxconn, who have had their eye on struggling company Sharp for a couple of years. Sharp, one of Japan’s oldest companies and once a leader in the technology field, have recently been weighed down with heavy debts and intense competition.
Foxconn, who assemble most of the world’s iPhones, will take control of 65.9 percent of Sharp after beating competition from a Japanese government funded opposing big. Foxconn are mainly interested in Sharp’s liquid display technology, which will be a key asset for the company and start competition with Samsung to provide displays for future iPhones. Trading in Sharp was paused as the announcement took place, but later continued and tumbled as much as 20% at one point in Tokyo trade.25/02/2016
Artisan La Gelatiera exceeds crowdfunding target to scale up expansion in London
The healthy London based Artisan ice cream maker La Gelatiera, winner of two Golden Fork awards and four UK Top 50 Foods at Great Taste Awards, has raised £50,000 through issuing an innovative revenue loan product via Crowd2Fund.com.
The gelateria was co-founded by Antonia Parisi and Stephene Leyvraz, who grew bored of working in the corporate world, and is based on creations by Parisi’s Italian grandfather who made gelato in his home country. All ice creams are produced daily, using 100% natural ingredients, including un-homogenised organic Jersey Cow milk from dairies in Somerset. The campaign started a few months ago, with the aim of raising £40,000 to launch a second shop in London – and was met with enormous enthusiasm from investors, successfully hitting the target and even going beyond.
The funds raised will be used to launch and market the second London based shop, as well as increasing the size of the kitchen, and helping to scale up the business to serve growing demand business customers.
The company chose to seek financing through the crowd as it provided an opportunity to reach and engage with their enthusiastic customer base. Parisi says, “Raising the funds we needed to grow our business through Crowd2Fund was a fantastic experience. It allowed us to reach out to both our existing, and a new customer base. We now have a small army of brand advocates who have a vested interest in the success of La Gelatiera. They have been incredibly supportive on social media. Our initial plans post funding will now be to speed up our search for a second retail site within the Olympic Village area.”
La Gelatiera gelato is priced at £3.30 for a small cone, or £5.00 for a large. Alternatively, if you would like to take away more than just a delicious dessert, you can invest by visiting crowd2fund.com or calling 02037 355 690.
25/02/2016
McBride sees shares rise 10 percent on positive 2015
Household product manufacturer McBride (LON:MCB) saw shares jump over 10 percent on Wednesday after a stronger-than-expected half yearly report.
Adjusted profit before tax rose 78.1 percent in the six months to December, reaching £13 million, with adjusted earnings per share up 52.9 percent to 5.2 pence. The company did see a 5.6 percent decrease in revenue from £364.7 million in the same period last year to £344.1 this, citing the impact of the euro on the translated results as a reason for this.
CEO Rik De Vos commented: “We are pleased with our progress in the first half and the improved profitability following the launch of our strategic transformation plan. The commitment and focus of the McBride team on the execution and delivery of our objectives is very encouraging and a critical aspect for future success. The ongoing actions of our “Repair” phase, which in part will result in lower second half revenues, are nevertheless expected to provide further progress in profitability. As a consequence, the Board is now expecting full year results to be modestly ahead of its previous expectations.”
The company, who are one of the UK’s largest manufacturers of private label household products, saw weak growth in the UK offset by increasing demand in Easter Europe and Asia. Shares in the company are currently up 9.22 percent at 168.75 (1254GMT).
24/02/2016
Weir Group profits halve as oil market hits
Scottish engineering company Weir Group (LON:WEIR) have taken a significant hit to profits, as the weak oil and gas market continues to bite.
The company said in a statement released on Wednesday that pretax profit for the year nearly halved to a loss of £200 million, compared to a profit of £149 million the year before. Revenue fell 21 percent to £1.92 billion.
Chief executive Keith Cochrane warned of the significant “market challenges” facing the sector, and said:
“Given ongoing market conditions, 2016 will be another challenging year. As a result, we are planning for a further reduction in constant currency Group operating profits, driven primarily by lower activity levels in upstream oil and gas markets.”
Rock bottom oil prices have hit all major companies within the industry and beyond, as many firms scrap projects and slash investment. Weir Group warned of the possible need to cut jobs in the future, saying that:
“Power, oil and gas, and industrial markets are expected to remain subdued in 2016, with uncertainty across most process industries leading to customers delaying new investment decisions. Mid and downstream oil and gas markets will be affected the most, with existing projects subject to delays.”
However, investors have reacted relatively well to the news, sending the Group’s share price up 6.82 percent at 963 pence per share (0818GMT).
24/02/2016