Barclays to leave Africa following fall in profits
Following a 2% fall in full-year profit, Barclays has announced plans to leave Africa in attempts to boost shareholder profits and simplify the the group, cutting down to the two core divisions, Barclays UK and Barclays Corporate International.
This move will occur over the next two to three years, where Barclay has stated that it plans to “sell down” its 62% in the Barclays Africa Group.
Chief executive Jes Stanley, who joined Barclays in December, stated:
“There is of course more we need to do and areas where I believe we can move much faster to deliver the high performing Group that Barclays can and should be,”
The 6.5p dividend for 2015 will be cut to 3p in 2016 and 2017 as the bank hopes to preserve its financial strength.
In early trading, Barclays shares fell 7%
Slow growth in both Britain and China, according to new figures
Growth in Britain’s private sector fell to its slowest rate in three years in January, according to the latest survey by the Confederation of British Industry released on Tuesday.
The CBI’s monthly growth indicator rose a little, to +8 from +6 in January, but still remained slow. Rain Newton-Smith, the CBI’s director of economics, said:
“The British economy has made a slow start to the year, and growth has remained in the doldrums in February.
“With global risks increasing this year following the volatility seen in financial markets, businesses will be keeping a close eye on any possible impact on domestic activity.”
China
Two major surveys gauging China’s manufacturing activity have indicated a further slowdown in growth, becoming the latest in a string of disappointing economic figures for the country.
China’s Purchasing Manager’s Index figure fell to 49.0 in February, down from 49.4 the month before. Any figure below 50 represents contraction. On top of this, the private Caixin PMI survey for smaller businesses came in at a reading of 48.0, its lowest in five months.
These are the latest figure suggesting that the Chinese government’s attempts to control its economic decline with a series of stimuli, such Monday’s lowering of the reserve rate ratio, are not working as well as intended.
01/03/2016
Glencore shares slide further after 32 percent profit drop
Shares in mining giant Glencore (LON:GLEN) fell on Tuesday after announcing its biggest profit drop since floating on the stock market in 2011.
The Swiss-based company saw earnings fall 32 percent to $8.7 billion, after writing down assets by $5.8 billion, and net income plunge 69 percent to $1.34 billion.
The company remained positive, with CEO Ivan Glasenberg saying after the statement was released that they are confident commodity prices have bottomed, and sales into China are looking “pretty good.” However, Glencore have been hit hard over the last year as commodities have collapsed, and are now seeking to reduce debt by selling assets and cutting their dividend.
When Glencore listed on the London market in 2011 it priced its shares at 530p, but has since seen shares slide far below its IPO. On Tuesday its stock fell a further 1.7 percent on the London market, before regaining ground to trade up 1.95 percent at 135.70 (0843GMT).
01/03/2016
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.
29/02/2016
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