Couriers FedEx (NYSE:FDX) and TNT Express (AMS:TNT) have received unconditional approval for a merger from the European Commission, who concluded that the deal would not present any competition concerns.
The companies announced the merger back in April last year, stating that FedEx intended to buy TNT for 4.4 billion euro to expand their business in the European market. With approval from the European Commission to proceed obtained, all that remains is clearance from remaining jurisdictions including Brazil and China. FedEx said in a statement that they expected the offer to complete in the first half of 2016.
“We are extremely pleased to receive the European Commission’s unconditional approval,” said David Binks, Regional President Europe, FedEx Express. “We believe the combination of TNT Express and FedEx will provide significant value to the employees, customers and shareholders of both companies.”
Investors have reacted negatively to the news, with FedEx currently trading down 4.37 percent in after hours trading. (1100GMT). The combined company would become Europe’s second largest courier, coming in just behind Dutch DHL.
Big Four supermarket Tesco (LON:TSCO) is one of the biggest risers on the FTSE 100 this morning, gaining over 5 percent after a positive note from Barclays raised its recommendation.
Whilst giving a nod to the difficulties facing the supermarket sector currently, analyst James Anstead said the near future for Tesco looked positive:
“We think recent share price underperformance has left Tesco’s valuation at attractive levels, although we remain conscious of the numerous headwinds facing the UK food retail market.
“Additionally, we tend to think that the upcoming trading statement (14 January) may be less worrisome than the market’s worst fears. Consequently we upgrade our stock rating to overweight (from equal weight), and our price target (reduced to £1.90 from £2.25, based on an average of discounted cash flow and sum of the parts valuations) still gives a 34% upside potential.”
Britain’s supemarkets have been facing difficulties over the last couple of years, with increased competition from budget chains such as Lidl and Aldi causing a spate of disappointing results.
A positive note from Barclays indicates that 2016 may be a more positive year for Tesco, which is currently trading up 4.67 percent at 145.70 (1026GMT). Their next set of results which covers Christmas trading is due for release on the 14th January, and will shed further light on the overall performance of the company.
Global stocks rose on Friday, regaining the ground lost by the suspension of trading in China yesterday for the second time in a week.
Trading was halted in China yesterday just 30 minutes after market open due to a ‘circuit-breaker’ rule coming into effect, which causes trading to be suspended for the rest of the session if the key index falls by over 7 percent.
This had a knock-on effect on markets globally, with all European indexes falling around 2 percent. China regained ground on Friday, however, ending the day up by nearly 2 percent.
Bejing have now suspended the circuit-breaker rule and European markets have reacted positively. The FTSE is currently up 0.76 percent, with the DAX up by 0.60 percent. However, some volatility is expected later as markets react to key US jobs data, due to be released at 1.30pm.
China has once again taken centre-stage in global economics, after a shock devaluation of their currency ended with the suspension of Chinese markets for the second time this week. But when discussing this matter, which currency is correct – the yuan or the renminbi?
The currency of the world’s second largest economy goes by two names, which are often confused and used interchangeably. Technically, both are correct to use, but refer to slightly different things:
‘Renminbi‘ is the official name of the currency introduced by the Communist People’s Republic of China at the time of its foundation in 1949. It means “the people’s currency”.
‘Yuan‘ is the name of a unit of the renminbi currency. It is the Chinese word for dollar – the silver coin, mostly minted in the Spanish empire, used by foreign merchants in China for some four centuries. Just to confuse matters further, Yuan is also referred to as “kuài” in spoken Chinese.
Renminbi is the official name, with yuan being the main unit – for example, in Britain, Pound Sterling is the official name but the main unit is pounds. An item may cost £1 or £10 – but never 1 or 10 sterling.
So, in short, when you’re speaking about the currency as a whole — and not about a particular number of yuan — it’s correct to say renminbi. When speaking about a specific amount, it’s yuan.
China have suspended the circuit-breaker rule that saw trading on the Chinese stock markets halt after just 30 minutes this morning.
The rule – in which trading is automatically suspended if the markets drop by 7 percent or over – was brought in in order to curb volatility on the markets and increase investor sentiment. However, the ‘circuit-breaker’ has already come into play twice this week, cutting short two days worth of trading – leading to the announcement this afternoon that the rule would be suspended.
European markets have also been down today, with the Dax falling over 3 percent and £47 billion wiped off the FTSE.
Chancellor George Osborne is will say in a speech later today that this year could be the toughest since the financial crisis, as global economic problems make this January the worst financial start to the year in sixteen years.
Trading suspension on the Chinese markets, as well as oil prices hitting 11-year lows after increased tension between Saudi Arabia and Iran, have sent global markets into chaos. The chancellor told BBC Radio 4’s Today programme:
“It is precisely because we live in an uncertain world. It is precisely because we have not abolished boom and bust as a nation, that you need to take these steps, difficult steps and I need to go explaining to the public, that the difficult times aren’t over, we have got to go on making the difficult decisions, precisely so that Britain can continue to enjoy the low unemployment and the rising wages that we see at the moment.”
He continued, saying that far from “mission accomplished” on the economy, “2016 is the year of mission critical”.
Serviced apartments provider thesqua.re has closed a successful investment round of $2 million from London based Fintech company Crowd2Fund and OakNorth Bank.
thesqua.re offer luxury serviced apartments for corporate clients, providing four-star hotel standard accommodation for a fraction of the cost and with all the comforts of a home. Their serviced apartments are a convenient solution for corporations looking to make business travel ‘easier and more enjoyable.’
Launched in 2008 as House of Modern Living, the company has recently undergone a rebrand and now has properties in the main areas of London and other key business cities. Through crowdfunding, thesqua.re has raised enough to support expansion to 500 apartments in central London, with an aim to open offices in New York.
One of thesqua.re’s apartments in Paris
thesqua.re’s founder, Sid Narang, said: “Crowdfunding gave us an opportunity to reach out to investors who were involved in the latest tech and industry trends. We specifically chose to raise on Crowd2Fund due to them understanding our business and the only crowdfunding platform to allow us to raise a loan this way.”
Their online campaign on Crowd2Fund closed with 17 high profile investors, making thesqua.re the first UK serviced apartments provider to secure investment through crowdfunding.
Chris Hancock, Crowd2Fund’s CEO, commented: “Crowd lending is such an exciting and fast-growing industry. We loved working with Sid and the team at thesqua.re – they are an excellent example of the innovative, British businesses we helped fund on the platform and a fantastic way to provide our investors with a good return on their investments.”
thesqua.re has grown profitability at 80 percent CAGR to cross $10 million revenue in 2015, and in December the company received the highly commended lndustry Breakthrough Award by the Association of Serviced Apartments Providers. For more information on thesqua.re, visit www.thesqua.re.
Shares in one-price retailer Poundland (LON:PLND) have dropped over 10 percent this morning, as a decline in high street footfall impacted on the Group’s full year forecast.
Total third quarter sales growth was up by 29.4 percent, however due to losses incurred by the conversion of newly acquired 99p Stores, the company stated that pre-tax profit would be at the lower end of the expected range of between £39.8 and £45.8 million.
In a statement, Chief Executive Jim McCarthy said:
“Total sales in the third quarter increased by 30.1% on a constant currency basis and our Christmas and Halloween ranges were our best ever. However, the trading conditions that we experienced in November continued through the third quarter, with high street customer numbers down year on year and this has impacted sales growth.
“I am very encouraged by the sales uplifts of converted 99p Stores and by the speed and efficiency of the conversion process. I expect the store conversion programme to be substantially complete by the end of April and still expect to generate incremental EBITDA of at least £25 million from the transaction. In addition, we remain on track to open around 70 net new Poundland and Dealz stores in the UK and Ireland in the full year.”
Poundland are currently trading down 11.25 percent at 170.26 pence per share. (1104GMT)
High street retailer Marks and Spencer (LON:MKS) released its Christmas trading update this morning, along with the announcement of veteran Chief Executive Marc Bolland’s departure.
Sales of general merchandise were down by 5.8 percent for the thirteen weeks to 26 December, but the company’s food division had an “excellent quarter” with sales up by 3.7 percent.
Marks and Spencer cited ‘unseasonable conditions’ for its decline in clothing and general merchandise, following the lead of Next who announced similarly disappointing results on Monday. However, online sales grew by 20.9 percent, driven by strong customer traffic.
Marc Bolland, Chief Executive, said: “We continued to prioritise gross margin and held back from the heavy discounting seen across the market in the run up to Christmas. As a result we now expect GM gross margin to be at the top end of the guided range.”
At the same time, Marc Bolland announced plans to retire from the position he has held for the past six years, to be succeeded by Steve Rowe.
Robert Swannell, Marks and Spencer’s Chairman, said in a statement this morning:
“Over the last six years Marc Bolland has led Marks & Spencer through a period of necessary change. Over this time, the company has made significant investment in enhanced infrastructure and capabilities.
“I am delighted that, after the most rigorous succession planning, Marc will be succeeded by Steve Rowe. Steve has a deep knowledge of Marks & Spencer and a proven track record of delivering results in key parts of the business.”
Marks and Spencer are currently trading down 0.64 percent at 435.90 (1026GMT).
Trading was suspended on the Chinese stock market on Thursday just half an hour after opening, as a shock devaluation of the yuan caused the market to tumble.
The People’s Bank of China moved the official midpoint on the yuan to its lowest since March 2011, at 6.5646 per dollar, causing panic in the markets and pushing down regional currencies.
Markets stopped trading 30 minutes after opening, as a new control designed to curb volatility was triggered for the second time this week. The mechanism comes into play when the market falls by 5 percent, which pauses trading for 15 minutes, or 7 percent, which ceases trading for the entire session. The benchmark Shanghai Composite Index fell more than 7 percent to 3125.00.
In reaction to the Chinese markets, the FTSE fell nearly 3 percent at open, before steadying up to trade at 5918.23, down 2.59 percent (1005GMT). All European markets are currently down a similar level, with the DAX falling over 3 percent.
