Morning Round-Up: Anbang withdraw offer for Starwood, Sainsbury’s lead Argos bid, National Living Wage

Miranda Wadham
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Morning Round-Up: Anbang withdraw offer for Starwood, Sainsbury’s lead Argos bid, National Living Wage

Anbang withdraw offer for Starwood Hotels

Chinese insurance firm Anbang has dropped its takeover offer for Starwood Hotels in a surprise statement this morning, allowing Marriott hotel group to become the leading bidder.

The statement from Starwood said the offer was withdrawn due to “market considerations”, and Anbang “does not intend to make another proposal.” Starwood’s Board of Directors reiterated that it would continue to unanimously support the merger with Marriott International. Bruce Duncan, Chairman of Starwood’s Board, commented: “Throughout this process, we have been focused on maximizing stockholder value now and in the future. Our Board is confident this transaction offers superior value for Starwood’s stockholders, can close quickly, and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance.” Sainsbury’s bid backed by Argos owner British supermarket Sainsbury’s has become the leading bidder in the battle for Home Retail Group, the owner of Argos and Homebase. Its £1.4 billion pounds offer for Home Retail has been recommended by the Argos board, making the takeover by Sainsbury’s look ever more likely. Their main competitor, South African company Steinhoff International, withdrew last month. National Living Wage comes into force in the UK

The new National Living Wage comes into force today, requiring employers to pay workers aged 25 and over at least £7.20 an hour.

Announced in George Osborne’s budget last summer, it is expected to raise the wages of 1.3 million workers. However, there are fears that jobs will be lost if businesses – especially smaller ones – cannot afford to pay the workers the new wage, making the move counter productive. 
01/04/2016

Current account deficit rises to highest ever recorded

Miranda Wadham
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Current account deficit rises to highest ever recorded
Britain’s current account deficit has hit a record high, prompting chancellor George Osborne to speak out against Britain leaving the EU. The deficit widened to 32.7 billion pounds in the fourth quarter of 2015, according to the Office for National Stastics, standing at the equivalent of 7.0 percent of gross domestic product. For the third quarter, the deficit was only at 4.3 percent of GDP, pushing the total for 2015 up to £96.2 billion and 5.2 percent of GDP – the highest since records began in 1948. The figures demonstrate Osborne’s gloomy approach to the economy in 2016 he gave during the Budget earlier this month. In a statement today, he said: “Today’s figures expose the real danger of economic uncertainty and shows that now is precisely not the time to put our economic security at risk by leaving the EU.”   However, the ONS figures also showed the UK economy grew 0.6 percent in the fourth quarter of 2015, higher than previous estimates of 0.5 percent. 
31/03/2016

Speedy Hire shares drop on trading update

Miranda Wadham
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Speedy Hire shares drop on trading update
Shares in Speedy Hire, the UK tools and plant hire services company, have fallen nearly 5 percent this morning after the release of a trading update. During a statement, the board confirmed that the full year adjusted profit before tax is anticipated to be in line with market expectations, with net debt broadly in line with the previous year end. Following a review, the Board has also announced that the value of acquired goodwill held on the balance sheet – £45 million – will be written off as a non-cash Exceptional Item in the full year results. The statement also included the announcement that Rob Barclay, Managing Director UK, Ireland and Middle East of SIG plc will be joining the Board as a Non-Executive Director, with effect from 1 April 2016. Speedy Hire (LON:SDY) is currently trading down 4.54 percent at 36.50 (0923GMT). 
31/03/2016

Morning Round-Up: Argentina passes repayment deal, South Korea industry up, TUI up

Miranda Wadham
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Morning Round-Up: Argentina passes repayment deal, South Korea industry up, TUI up

Argentina lawmakers pass landmark payback deal

Argentina lawmakers have passed a repayment deal which will see the country’s access to international credit reinstated, after a 15 year battle with creditors.

The deal was central to President Mauricio Macri’s election win in November and should improve business conditions in the country. Argentina defaulted on a $100 billion loan in 2001, which left them unable to borrow at the standard rate of about 5 percent – instead forcing Argentina to pay at least double, restricting the country’s access to financial help.

The deal has been made with creditors in New York, and Argentina now have until the 14th April to pay holdout creditors. South Korea’s industrial output rebounds

South Korea saw industrial output figures rebound in February, according to official figures published today.

Industrial production rose 3.3 percent on a month earlier – the biggest monthly increase since 2014 – after a 2.1 percent fall in January. Weaker demand from China in recent months has impacted on South Korea’s economy, but the latest set of figures are an encouraging sign, beating expectations. Travel group TUI see growing demand, despite terrorism threat

TUI Group, who own travel giants First Choice and Thomson, have reported higher than expected bookings for summer holidays this year.

TUI said the demand was coming especially from Spanish and long-haul destinations, despite reporting a 40 percent slump in bookings to Turkey last month due to events in the Middle East. TUI makes all of its profit from summer bookings, making them a key indicator for the group. Summer holiday bookings have risen 2 percent, with average selling prices up 1 percent. Chief Executive of TUI Group, Friedrich Joussen, commented: “The Group has again demonstrated the flexibility of its business model and the ability to remix destination capacities to match demand and as a result demand and pricing has remained resilient overall despite the impact of geopolitical events. “We therefore remain well positioned to deliver underlying EBITA growth of at least 10% in financial year 2015/16 ,“ 
31/03/2016
 

Tata Steel announces decision to sell UK plant

Miranda Wadham
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Tata Steel announces decision to sell UK plant
Indian-owned steelmaker Tata Steel has announced that it will put its entire UK business up for sale, after failing to turn the failing Port Talbot plant around. After a major board meeting in Mumbai, the company announced plans to exit Britain’s steel-making industry in order to stem heavy losses. Despite being one of the largest companies in Wales and employing over 4,000 people, the plant at Port Talbot is thought to be losing over £1 million per day, failing to compete with cheaper exports from China. “Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most feasible option in a time-bound manner”, Tata said in a statement. Unions welcomed the decision not to close down the plants but called on Tata to be a “responsible seller” and on the government to play its role. The UK and Welsh governments have issued a joint statement, saying that they are “committed to working with Tata and the unions on a long-term sustainable future for British steel-making”. However, Roy Rickhuss, general secretary of steelworkers’ trade union Community, responded: “We don’t want just want more warm words, we want a detailed plan of action to find buyers and build confidence in potential investors in UK steel. It is understood there have been extensive talks between the government and ministers, and the state are keen to intervene. Labour leader Jeremy Corbyn has already called for ministers to act to protect the steel industry and “the core of manufacturing in Britain”. 
30/03/2016

Morning Round-Up: Yellen “cautious”, Boeing cut staff, McCormick raises Mr Kipling offer

Miranda Wadham
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Morning Round-Up: Yellen “cautious”, Boeing cut staff, McCormick raises Mr Kipling offer

Yellen gives insight into rate rises

Chair of the Federal Reserve Janet Yellen said the Fed would be cautious when raising interest rates over the next year, in a speech at the Economic Club of New York yesterday.

According to Yellen, global risks are not expected to have a deep impact on the US, but due to volatile oil and slowing growth in China US rates will be risen slower than expected.

Boeing to cut over 4,000 jobs The world’s largest plane manufacturer Boeing has announced plans to cut over 4,500 jobs by the middle of the year to reduce costs, after losing market share to Airbus over recent years. Spokesman Doug Alder said: “While there is no employment reduction target, the more we can control costs as a whole the less impact there will be to employment.” The group plans to cut most through voluntary layoffs and will include hundreds of executives and managers. The cuts account for almost 3 percent of Boeing’s workforce, which comprised 161,000 people at the end of last year. McCormick raises offer for Kipling company Australian producer McCormick have raised their offer for Premier Foods, after being told previous bids “significantly undervalued” the company. On Wednesday, McCormick proposed an offer of 65 pence per Premier share, valuing Premier at £1.5 billion including debt and pension liabilities. Its further offer is said to be little over double the stocks close late last week. McCormick, primarily known in the UK for its Schwartz spices, has already had two bids rejected by Premier, the maker of Mr Kipling cakes and Bisto gravy. 
30/03/2016
 

Pensions & ISAs: The Budget Outcome

UK Investor Magazine
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Pensions & ISAs: The Budget Outcome

Pensions & ISAs: What The Budget Means For You

This report outlines the recent changes to tax efficient investment vehicles covering the specific allowances and how you could be impacted.

Contents:

  • Changes to ISAs

  • What Can You Do Now?

  • Capital gains tax changes

  • Pension tax relief

  • Pension freedom amendments

A copy will be emailed to you immediately.

The Partner Practice represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.

Angbang raises Starwood offer to $14 billion

Safiya Bashir
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Angbang raises Starwood offer to $14 billion
China’s Anbang Insurance Group Co raised its offer for Starwood Hotels & Resorts Worldwide Inc (HOT.N) to almost $14 billion in attempts to challenge Starwood’s merger with Marriott International Inc (MAR.O). Bill Crow, an analyst at Raymond James said: “Marriott has the financial capacity and the wherewithal to push its bid up higher. However, so much of the transaction is based on Marriott’s current share price, I think investors would be less than thrilled if it increased its offer materially at this juncture,” If the offer is accepted, it will be the largest ever takeover by a Chinese company in the United States. Starwood shares were trading up 2.4 percent at $84.07 on Monday. Marriott shares were up 4 percent to $71.40.   
29/03/2016

US Elections: Should the private funding of political parties be legal?

Safiya Bashir
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US Elections: Should the private funding of political parties be legal?
With the upcoming US election set for November 8 and the campaigning in full swing, it is perhaps worth considering the election process in the US and the role of large corporations have on American politics. Since 2010, the Supreme Court ruled allowing unlimited campaign contributions by corporations and unions, which has led to millions of pounds from America’s richest corporations being pumped into different political parties. In this process, how much does democracy represent the interest of the US population and how much do these political parties exist to serve corporate interests? Let’s take a look at the current election campaign: Whilst Democrat Bernie Sanders has called for an end to big money in politics, Hilary Clinton has taken full advantage of the 2010 law and has so far raised a total over $130,400,000 (£91,700,000) due to her close ties with big banks and law firms. Donald Trump has been less successful in fundraising, with donations totalling $25,500,00 (£18,000,000), yet has not shown too much concern as is able to use his own wealth to fund the campaign. The consequences of private donations within the election process have previously been made clear. For example, in the 2000 US elections, George Bush and his Republican party were funded a total of $137 million. When Bush was elected, among the first changes to US law made were those to benefit several of the larger corporations who funded the campaign, this included the abandonment of the pledge to campaign to impose legal limits of carbon dioxide emissions – useful to many business strategies of large corporations. Political funding has proved to be very influential in American politics, with statistics showing that the candidate with the most money has won 91 percent of the time. This is not just the case within the US, but also occurs in the UK where in the 2015 general election the Conservative party received almost £29 million worth of donations whilst The Green Party only received just over £600,000. With so much money going into politics, it is undeniable that politicians are beholden to their donors as well as the general population. Is it perhaps sensible to listen to the former President Jimmy Carter who recently said that unlimited money in politics “violates the essence of what made America a great country in its political system. Now, it’s just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. Senators and congress members. So now we’ve just seen a complete subversion of our political system as a payoff to major contributors, who want and expect and sometimes get favours for themselves after the election’s over.”   
Safiya Bashir - 29/03/2016

Ipsos Mori poll shows ‘In’ campaign has 8 point lead over ‘Out’

Safiya Bashir
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0
Ipsos Mori poll shows ‘In’ campaign has 8 point lead over ‘Out’
Results from the Ipsos Mori telephone survey were released today showing that of the 1,023 adults asked, 49% would vote on the June 23 to remain part of the EU, compared to 41% who plan on voting to leave. The poll also found that 83% of the 200 firms owned by venture capital investors believed that remaining within the EU would be best for their companies. This poll comes shortly after nearly 200 businesses called on the British population to vote to stay in the EU in a letter published in The Times newspaper, where they voiced concerns that leaving the EU could hurt the British workforce. Signatories of this letter included BT, Vodaphone, Marks & Spencer and RyanAir. The Ipsos Mori poll was conducted between March 19 and March 22 so therefore does not reflect any change in voting intentions following the bombings in Brussels on March 22, killing 35 people.   
29/03/2016
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