Shares in Playtech fall over 10 percent on failed takeover
Online gambling company Playtech (LON:PTEC) saw shares fall over 10 percent this morning following an update from the Financial Conduct Authority on its proposed takeover of Plus500 (LON:PLUS).
Over the weekend the Board of Playtech reevaluated steps that were being taken to satisfy the FCA’s concerns about the tatekover and stated that they were unlikely to obtain the FCA’s approval by the deadline of 31 December. Playtech are now withdrawing its change of control application to the FCA.
Playtech, a company who supply software to the heavily growing online gambling sector, had aimed to acquire Plus500 to grow its financials division. However, they stated that they were “continuing to enjoy double-digit underlying growth with a strong pipeline of opportunities” and had “confidence in maintaining momentum.”
Playtech is currently trading down 10.80 percent at 759.50 pence per share, somewhere in the middle of its 52 week range of between 616.14 and 936 pence per share. (0850GMT)
Pfizer Inc to acquire Allergan in this year’s biggest merger – Reuters
Pharmaceutical giant Pfizer Inc (NYSE:PFE) secured board approval over the weekend for the acquisition of rival company Allergan Plc (NYSE:AGN) in a deal that will create the world’s biggest drug company, Reuters reported this morning.
Its sources stated that the merger will be worth more than $150 billion – the largest deal this year, including that of SABMiller – and would involve Pfizer paying with 11.3 of its shares for each Allergan share. The companies’ boards of directors reportedly approved the deal Sunday, but Reuters’ sources have said that final details will be released later today.
A major bonus of the merger is that Pfizer will be able to redomicile to Ireland, where Allergan is based, and slash its corporate tax rate from the 35 percent it pays in the US to the Irish rate of just 12.5 percent.
The deal would put the merged group well above the competition, with combined annual sales of $60 billion. Pfizer and Allergan declined to comment.
Pfizer is currently trading down 0.34 percent, with Allergan up 3.57 percent on the news. (0837GMT)
2016: Is there hope on the horizon for non-energy commodities?
According to Daniel Yergin, IHS Vice Chairman, non-energy commodity prices have dropped 48% since July 2014. The end of the BRICs era has been one of the key factors behind the drop, but is there hope on the horizon for non-energy commodities in 2016?
Gold’s fall from grace has been making the headlines all year, but it is not the only metal to have suffered over the course of 2015. Silver has followed a similar downward trend, as have platinum and copper. Palladium has fared a little better than its fellow metals when viewed over the last ten years, but again in the last year its value has dropped off considerably.
“It’s been a bad year for precious metals and base metals alike,” comments Nikolas Xenofontos, Director of Risk Management of leading online trading services provider easy-forex, “And I’m far from convinced that prices have bottomed out yet. I think early 2016 will bring further declines, but there may be hope of a rally during the second half of the year, particularly if the global economy picks up again.”
Over the course of 2015, the projected global economic growth rate has been steadily cut by the International Monetary Fund (IMF). While the world economy grew by 3.4% during 2014, the IMF projected growth would slow to 3.3% in 2015. Then in October 2015 it lowered the projection to just 3.1%, with the slowdown of China’s economy and the shrinking of the Russian and Brazilian economies noted as having a major impact on the projection.
Grains have suffered just as much as metals over the course of 2015, with wheat, corn, soybeans and oats all experiencing significant drops in value. Rice showed some signs of recovering in the four months from June, but prices have since dropped off sharply.
Livestock, lumber, coffee and almost all other non-energy commodities have followed the same pattern, with only sugar and cocoa breaking the mould over the past 12 months. Sugar’s fortunes have been mixed, while cocoa has shown an impressive increase, to US$3,413.84 per tonne as at 17/11/15, up from US$2,871.10 per tonne a year earlier. Over the past two years, cocoa prices have risen by more than 40%, driven by an increase in demand that supply cannot match.
“Cocoa is an interesting one to watch during 2016,” confirms easy-forex’s Nikolas Xenofontos. “With growth restricted to within 20 degrees of the equator, it’s not a crop that can see production scaled up as easily as something like corn can. Global demand is increasing and, despite a good harvest this year, supply is lagging behind that demand. It’s a situation that looks set to continue into 2016. If you’re only going to invest in one commodity next year, cocoa might be the one for you!”
But with the IMF projecting an improved pace of global economic growth during 2016, at 3.8%, might there be light at the end of the tunnel so far as other non-energy commodities are concerned?
It’s certainly not out of the question, explains Xenofontos,“If the world economy rallies then we could see commodity prices begin to pick up once more, perhaps towards the tail end of 2016. I think it would be overly optimistic to think of them reaching their former heights – the end of the BRICs has led to the end of the commodities super-cycle era – but it’s not out of the question that prices might begin to recover as the world economy gets back into shape. There’s definitely at least a glimmer of hope on the horizon!”
For further details visit www.easy-forex.com, email pr@easy-forex.com or call +44 203 1500 748.
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20/11/2015
Innovative livestock trading platform seeks equity investors on Seedrs
Sell My Livestock, the first online website for livestock trading, is crowdfunding for investment on Seedrs. Launched just over a year ago, this niche business has grown rapidly and is increasingly disrupting the traditional methods of livestock sale, bringing trade into the 21st century.
Sell My Livestock was thought up by Dan Luff, a fourth generation Hampshire-based cattle farmer. He realised there had to be a better – and more modern – way to trade livestock than ringing around to see which farmers could offer the best price. Since then, Luff and friend James McInnes have created SellMyLivestock, a fully functioning trading website with over 2,000 registered users who enjoy the ease of use, zero commission charges and a dramatically reduced risk of disease.
The benefits are obvious. For sellers, there is the ability to trade for free, reach a nationwide audience and decreased transport costs, as there is no need to transport animals to market. Essentially, the website cuts out the inconvenient middle man.
For buyers, there is increased transparency with much more comprehensive access to an animal’s complete genetic history via SML’s application which combines real-time industry and government data, and access to stock from all around the UK.
The business has been supported this far through private investment and grant funding, but plans for growth include the launch of a monetisable automated invoicing and payment system. SellMyLivestock is now looking for an investment £150,000 in return for 15% equity in order to make this possible.
For more information on how to get involved with this opportunity, visit their campaign page on Seedrs.
Water purification company HaloSource drops 30 percent on trading update
Shares in water purification company HaloSource (LON:HALO) have dropped over 30 percent this morning after a trading update stated ‘operational challenges’ have prevented fulfilment of customer orders.
In a statement the company said, “we anticipate that Drinking Water revenues will be impacted negatively during the second half of 2015. However, the Company is confident that these production delays will in no way impact the marketplace demand for its class-leading HaloPure(R) disinfection technology for 2016 and beyond.”
HaloSource create water purification techniques that serve people and preserve the planet, and works with scientists and industry experts across the globe in search of new ways to improve water quality.
HaloSource has a 52 week range between 11.65 and 24.80, and is currently trading down 33.7 percent at 12.76 pence per share. (0937GMT)
HBOS report blames top executives
A report into the collapse of mortgage lender HBOS in 2008 has called for up to ten of its executives to be barred.
The long-awaited report by the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority was finally published yesterday, and blamed its top three executives at management level for the bank’s demise. The three, chairman Lord Stevenson and chief executives James Crosby and Andy Hornby, were also blamed at the time by a group of MPs.
A separate report conducted by independent QC Andrew Green, also published on Thursday, criticized the FSA for its failure to properly hold individuals to account for the crisis and urged other regulatory bodies to review the FSA’s decision not to act against key executives.
The merger between Halifax Building Society and The Bank of Scotland was valued at £30bn, but collapsed just seven years later wiping out its entire value. The taxpayer then injected £20.5 billion into the bank to avert a crisis. Andrew Bailey, the deputy governor of the Bank of England, promised rapid progress into the investigation of HBOS’ executives: “It’s not the intention to have a lengthy investigation. We will do this piece of work as soon as possible,” he said.20/11/2015
‘Abenomics’: what is it, and is it working for Japan?
When Prime Minister Shinzo Abe came to power, the Japanese economy was in a bad way. The country was suffering from long term deflation, a strong yen that was ultimately damaging exports and growth had been hovering around zero for the past twenty years. However, Abe was elected on the potential of his economic plan – so called ‘Abenomics’. But three years on, the Japanese economy is still having a rough time – so what is it exactly, and has it worked?
What is ‘Abenomics’?
Abe’s plan involves several different strategies. Firstly, it involves an increase in fiscal stimulus, using quantitative and qualitative easing to pump cash into the Japanese monetary system. The scale of this easing has dwarfed that in the US and european counties and will hope to drive down the currency, making it more attractive to foreign businesses.
The biggest part of the plan is structural reform of the Japanese economy aiming to restore consumer confidence and abolish deflation once and for all. This is the so-called “Japan Revitalisation Strategy”, and aims especially to help Japanese businesses.
The government is trying to encourage growth through a number of methods, including lowering corporation tax by 2.4 percent, making Japan more attractive to businesses, creating more jobs for women to increase the size of the work force, and welcoming foreigners into business in Japan.
So is it working?
At the moment, the results are disappointing. Asia’s second largest economy shrunk by 0.8 percent between July and September, plunging the country back into recession for the fourth time since 2008. Core inflation in Japan recently fell back below 0% in August, causing some people to declare that full-blown deflation has returned and Japan has a debt equivalent to a staggering 230% of its GDP.
However, at 3.3%, Japan’s unemployment is at an enviable level – one which is almost unheard of for Western economies. In fact, Japan’s labour market at its very worst rarely records unemployment of over 5%. Incentives to get women back into work are also working, with female employment in Japan now higher than in the US. Core inflation, despite the recent setback, has been responding positively since the regime was introduced – which is impressive, for an economy that has been at a standstill for two decades.
It is clear that the reform the the Japanese economy will be a slow process, but it’s not a failure. In his article for Business Insider, Mike Bird thinks that “what we’re seeing is the first genuine increase in the price level since at least the Asian crisis, if not since the bursting of Japan’s colossal equity bubble in 1990. It’s the most serious and sustained effort at revitalising the country’s supply-side too.”
Japan may not have seen a dramatic turnaround since the implementation of Abe’s plan, but it has seen a little more stability than it has for the last twenty years. How it will fare the future remains to be seen.
Miranda Wadham on 19/11/2015
Poundland shares tumble 18 percent on Christmas trade warning
Shares in Poundland (LON:PLND) fell over 18 percent this morning after releasing disappointing interim results, sparking debate that their single price model is failing to provide profit against inflation.
Underlying pre-tax profits fell 26.3 percent to £9.3 million, which CEO Jim McCarthy put down to the opening of 55 new stores in Britain during this period, compared to just 34 last year.
“Sales comparables in the second half are softer and our Christmas range is our best ever. However, we have seen highly volatile trading conditions so far in the third quarter,” Chief Executive Jim McCarthy said.
Poundland first listed on the stock exchange in March last year at 300 pence, and the company recently purchased rival 99p Stores for £55 million. Chairman Darren Shapland said:
“We traded through the first half against an exceptional period last year. We opened a net new 52 shops in the half and are well placed for our critical third quarter, in addition 99p Stores will be an excellent accretive acquisition.”
The 99p Stores acquisition added 252 stores to about 600 Poundland stores in the UK and nearly 60 shops in Ireland and Spain. Poundland is currently trading down 17.9 percent at 228.70 pence per share. (1245GMT)
Royal Mail post 30 percent drop in profit, but shares rise on cost saving measures
Royal Mail (LON:RMG) have reported a 30 percent drop in half-year profits, after extensive cost-saving programmes hit the company in the short term.
Adjusted pretax profit fell 16 percent to £240 million, but shares rose over 5 percent on the news that the company expects operating costs to fall 1 percent this year overall.
The recently privatised company’s profits depends strongly on the christmas season, for which chief executive Moya Greene said the group had put in “extensive preparations”.
“Everything that can be operationally, we have done … At Christmas, we know it’s our time to shine,” she said.
Royal Mail has recently cut 3000 jobs, around 2 percent of the workforce, which now stands at 140,000. Transformation costs doubled in the lat six months to £94 million, and pushed pretax profits down to £116 million from £167 million.
Royal Mail are currently trading up 5.81 percent at 480.80 pence per share. (1004GMT)
Government propose to close remaining coal stations by 2025
Energy Secretary Amber Rudd has announced a proposal to close the UK’s remaining coal-fired power plants, in a bid to move towards more environmentally friendly forms of energy.
Tightening EU legislation on emissions and an uneconomical energy prices means that, although a third of Britain’s electricity is currently provided by coal, all remaining coal power plants willl be closed by 2025.
Rudd said in a statement today:
“Frankly, it cannot be satisfactory for an advanced economy like the UK to be relying on polluting, carbon-intensive 50-year-old coal-fired power stations. Let me be clear: this is not the future.
“We need to build a new energy infrastructure, fit for the 21st century.”
Despite the controversy surrounding nuclear energy, the government’s preferred direction for energy policy is nuclear energy and lower-carbon gas power plants; which will enable it to meet EU emissions targets by 2050. Gas plants emit almost half the amount of carbon dioxide per megawatt produced as coal plants.
18/11/2015