Yuan drops for third day running
China has devalued its currency for a third day running, after the first surprise devaluation on Tuesday.
The central bank stated today that there was no basis for further depreciation in the yuan given strong economic fundamentals. The Chinese markets reacted positively to the news, reversing early losses and rising more than 1 percent. The CSI300 index .CSI300 rose 1.5 percent to 4,075.46, while the Shanghai Composite Index .SSEC gained 1.8 percent to 3,954.56 points.
Should the yuan trade in the lower end of its 2% margin below the midpoint, the central bank may well lower the rate again on Friday.
Q1 disappointing for China’s Alibaba
Chinese e-commerce giant Alibaba (NYSE:BABA) has fallen 6.9% after releasing disappointing Q1 results.
Revenue was $3.2 billion, up 28% on the year before, but lower than analysts’ expectations of $3.39 billion.
In early trading the stock hit its lowest price ever, with Ihares falling 18% since it went public last September.
Alibaba Group’s chief financial officer Maggie Wu said: “We made significant progress monetising our mobile traffic, with our mobile revenue exceeding 50% of our total China commerce retail revenue for the first time.”
Gross merchandise volume also slowed, growing at its slowest pace in three years. However, the company reported revenue growth fuelled by sales from tablets and online.
Alibaba operate China’s largest online sales platform, Taobao Marketplace and several online wholesale marketplaces. The stock is currently trading at 72.25 cents per share.
Crowdfunding diversifies into horseracing
Crowdfunding began as a simple way for entrepreneurs to raise money for projects, but it has since diversified into more niche areas. Unbound is a crowdfunding site for authors, Junction is a site specifically for film finance – so perhaps it should come as no surprise that there is now a crowdfunding platform for horseracing.
Crowdracing is the first crowdfunding site designed to allow the public to fund a racehorse, and become a part owner in the process. Launched in November 2013, it is a unique idea and has the right tools to succeed; its technology partner is Crowdcube, one of the most successful crowdfunding platforms on the market, who have raised over £16 million since their launch.
Founder of the site, Craig McKenna says, “Crowdfunding is growing in popularity as a way for young businesses to raise finance from ‘the crowd’. Now Crowd Racing is taking this model into the wonderful world of horse racing. Owning racehorses will no longer be reserved for the rich and famous; now anyone can genuinely own a share of a Thoroughbred.”
One off costs begin at £90, and owner benefits always include a share of the prize money and share of the proceeds from the sale of your horse. Exit strategy is set out clearly from the beginning, meaning you know exactly when the horse will be sold and your money will be – touch wood – returned to you.
The site offers investors the chance to work with some of the best trainers in the UK, including Nigel Twiston-Davies, Jeremy Gask, Fergal O’Brien, Dan Kubler, Nick Alexander and Keith Dalgleish.
For trainers and syndicate managers, it is a new way to fund the purchase of racehorses and stables expansion by crowdfunding for equity, and having a platform to connect with ordinary people interested in racing.
The site is currently offering the opportunity to invest eith ex-footballer Ian Wright. The trainer is Jeremy Gask, one of an elite group to have trained winners in the UK, Australia and Dubai and best known in the UK for his top sprinter Medicean Man. The pair are looking for co-owners and an investment of £80,000, £26,000 of which has already been raised. The colt is by Dark Angel and the first foal from the winning mare Music Pearl. The opportunity is on offer for another 19 days – for more information, visit CrowdRacing.
Miranda Wadham on 12/08/2015 - @mlwadham
American Apparel issue investor warning
Teen clothing retailer American Apparel (NYSEMKTL:APP) stated on Tuesday that it may not have enough cash to keep the business going beyond 12 months, and warned shareholders and investors that they may not see a return on their money.
The company is in the midst of a law suit with its founder and former Chief Executive Dov Charney over claims of defamation and alleged misuses of funds, and has faced several warnings over the “gratuitously sexual” nature of its adverts.
The American retailer has been posting losses for the last five years, issuing a bankruptcy warning in 2011. Its net loss for the quarter is expected to be at $19 million, compared with $16 million a year earlier.
American Apparel stock has fallen nearly 80% this year, closing up last night at 20 cents per share.
Johnston Press trades lower on revenue drop
Newspaper publisher Johnston Press (LON:JPR) is trading down 3.2 percent this morning after publishing its half yearly results.
The company saw revenue fall by over 4 percent to £128.9 million, due to a fall in advertising revenue. Total advertising sales fell by 5.1% to £80.6 million, although digital advertising grew 17.5% year-on-year to £16.5 million.
Johnston Press Chief Executive Ashley Highfield said the company is potentially looking to consolidate its resources, according to the Telegraph.
“Our lawyers have looked at a number of different combinations as a desk exercise and you could get it done. You might have to sell one or two things but for the most part there is not much overlap.”
The company had warned that it would struggle to hit targets for full and half yearly profits, and have cut costs by £7.2 million to offset revenue declines.
Scotland-based Johnston Press runs over 200 local titles across the UK, including the Yorkshire Post and Belfast News.
Airport shops face boarding pass rebellion
Airport shops are facing a “grassroots rebellion” by customers who are refusing to show boarding passes at the checkout.
Stores are using customer’s boarding passes to check their destination; if it is outside the EU, the store do not have to pay VAT. They are now being urged to pass the savings onto their customer instead.
Many fliers have been surprised to hear that it is not necessary to show a boarding pass at the till in order to buy something at the airport, and any shops have reportedly been saying that showing a pass is a legal requirement, and refused to serve customers without one.
Treasury minister David Gauke said VAT relief at airports was intended to reduce prices for travellers, not be a windfall gain for shops.
Customers of stores including WH Smith, Boots and Dixons are now refusing to show their boarding passes when asked.
The Independent’s travel editor, Simon Calder, told BBC Radio 5 live that there are “all kinds of stories given by retailers to explain why passengers should show their boarding passes, including that it is for security reasons”, which he said is “complete tosh”.
Pearson sells Economist share for £469m
Publishing group Pearson (LON:PSON) has agreed to sell its 50% stake in the Economist Group to the Agnelli family, in a deal worth £469 million.
The sale will make the Italian family the largest investor in the weekly publication. The announcement comes just after Pearson sold the Financial Times to Japan’s Nikkei, in an effort to move their business further into Education.
Pearson chief executive John Fallon said: “Pearson is proud to have been a part of the Economist’s success over the past 58 years, and our shareholders have benefited greatly from its growth. Pearson is now 100% focused on our global education strategy.”
The Agnelli family’s holding group Exor said the sale would bring their 4.7 percent stake up to 43.4.
In a statement, John Elkann, CEO of Exor, said:
“We are convinced of the huge potential that still lies ahead and particularly in The Economist’s ability to seize the many development opportunities linked to the digitisation of the media industry.”
Pearson are currently trading down 0.34 percent.
Wage growth slows, unemployment steady
British wage growth has fallen by more than expected in the three months to June, according to figures released by the Office of National Statistics this morning.
Growth in average weekly earnings fell 2.4 percent on the year in the last quarter, slowing down from 3.2 percent the quarter before.Unemployment held steady at 5.6% after a surprise increase in May, the first since 2013. Unemployment in the three months preceding June was 1.85 million, up 25,000 from the previous quarter.
The number of people claiming unemployment benefits, dropped by 4,900 to 792,400 in July, after a small increase in June.
Official figures will be watched closely as the Bank of England debates when to raise rates. Mark Carney said last week that he could not give an exact date – but analysts expect it to be around the turn of the year.
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Co-op bank narrowly avoids hefty fine
Co-operative bank has escaped a fine, with sources at the FCA admitting that it was the first time a bank has escaped a fine in a situation this severe.
An investigation into a governance and risk management crisis which led to it being rescued by hedge funds two years ago has concluded that they were at fault, but an £120m fine will not be imposed.
The reason the FCA gave was that the bank was not in a financial position to pay a fine. Georgina Philippou, the FCA’s acting director for enforcement, agreed that the banks dealings were misleading to investors, but stated that “it is vitally important that Co-op Bank’s capital resources are directed towards improving its resilience.”
The bank is now under new management and Chairman Dennis Holt made it clear that the running has changed.
“On behalf of the bank, I would like to apologise again to customers for these past failings and reassure them that the bank is a significantly stronger organisation today under the leadership of the current senior management team.”