Welcome to our summary of the weekend's quality press tips, provided on Mondays by Weekend City Press Review.
PRESS TIPS:
The Times
Tempus: Martin Waller says that in spite of market volatility so far this year, companies are not actually as gloomy as the turmoil suggests. But few investors yet seem confident enough to buy shares heavily again for some time to come [p.51]
The Independent
No Pain, No Gain: Derek Pain is uneasy about the influx of Chinese and other foreign companies on to London's stock markets, especially as the opportunities for investors from the much-hyped emerging markets may not be as great as claimed. [p.60]
Daily Mail
Investment Extra: Sam Dunn says the popularity of corporate bond funds with ordinary investors has raised concerns that they will not be prepared for the impact of higher inflation, helped by further quantitative easing. [p.95]
The Sunday Times
Inside the City: Danny Fortson thinks Michael Page International CEO Steve Ingham is losing the confidence of investors tired of waiting for the recruitment specialist's recovery. The turnaround at Quintain Estates is also taking longer than expected, although newish CEO Max James is trying hard to reduce the 60 per cent-plus discount to NAV. [p.3,12]
The Sunday Telegraph
Questor: Garry White says hold Aviva, 288p, as investors should remain cautious about the implementation-risks of the new strategy from executive chairman John McFarlane. Buy Cineworld, 214p, for both income and growth. [p.B10]
The Mail on Sunday
Midas: Joanne Hart says buy boilermaker Energetix, 23p, which has "massive" potential for growth even though it is not yet profitable, with brokers suggesting the shares are worth twice the current price. Updates: Hold Vectura, tipped in September 2008 at 57p and now 73p, as analysts expect the price to surge above 100p once it starts to sell a key product across Europe now that it has received regulatory approval. [p.76]
Business press headlines courtesy of Weekend City Press Review:
Osborne to fight for bank bonuses
George Osborne is expected to oppose plans at an EU finance minsters meeting this week to restrict bankers’ bonuses to a one-to-one ratio with their pay. Osborne believes that such rigid curbs is the wrong way to tame excessive City remuneration, with the banks arguing it would increase base salaries and fixed costs in a cyclical industry. But the FT, in an editorial, is not impressed with the chancellor’s recent political performance, claiming he has embarked on "little more than a smear campaign" against his Labour shadow Ed Balls.[Financial Times pp.1, 12]
Barclays board weighs break-up
The Barclays board is considering a plan to demerge its investment banking arm in the wake of the Libor rate-fixing scandal. Such a move would likely see the investment banking business, previously called Barclays Capital, listed in New York, with London retained for the bank’s retail and commercial activities. The board is also expected to urge ex-CEO Bob Diamond not to accept his full pay-off, worth up to £17m.[Sunday Times p.3.1]
Bolland on rack as M&S slides
Marks and Spencer CEO Marc Bolland will come under pressure at the retailer’s AGM on Tuesday when he reveals what is expected to be the worst quarterly trading for three years, with sales of clothing and homewares down 7 per cent. Investors believe M&S’s revival under Bolland is stalling and it may be forced into a profits warning if the position does not improve.[Sunday Times p.3.1]
French make £60m play for Hamleys
French toy retailer Groupe Ludendo is in talks to buy the Hamleys toy shop business in the UK for about £60m, with a deal likely by the end of the month. Hamleys is being sold by Icelandic bank Landsbanki, which collapsed in 2008, and funds raised will be returned to creditors. [Sunday Times p.3.1]
£500m Birds Eye payout
Permira is planning to take a £500m dividend from a controversial recapitalisation of Birds Eye which will see the company loaded with more debt. The move comes after Permira’s hopes of selling the frozen food company to another private equity firm for about £2.5bn failed to attract sufficient interest.[Sunday Times p.3.1]
BAE may scuttle Glasgow shipyard
BAE Systems is considering the closure of its historic Govan shipyard on the River Clyde in Glasgow as it seeks to consolidate its naval dockyards in the face of spending cuts for new military vessels. BAE is already believed to be looking at the closure of its naval dockyard at Portsmouth, a move which would likely create a ‘political firestorm’.[Sunday Times p.3.2]
Barclays to ask Diamond to cut pay-off
Former Barclays CEO Bob Diamond is facing a board request that he give up at least some of the £17m pay-off he is entitled to after quitting the bank last week over the Libor scandal. The board has already held talks with the Association of British Insurers over the likely pay-off, which will inevitably be controversial. But there is also said to be growing anger among institutional shareholders over the direct role played by Sir Mervyn King in calling for Diamond’s departure. [Sunday Telegraph pp.B1, B6-7]
BAE bids to land £7bn US jet project
BAE Systems is frontrunner to provide the US Air Force with 350 training jets in a deal worth more than £7bn. BAE believes its Hawk trainer has a "significant opportunity" to win the contract because it is an established aircraft which would cost less than a newly developed trainer. [Sunday Telegraph p.B1]
Permira fashions €600m Valentino sale
Permira is to sell fashion designer Valentino for €600m to an unidentified sovereign wealth fund. Valentino was acquired by the private equity firm at the height of the credit bubble along with Hugo Boss, although the proposed deal will only be for Valentino. [Sunday Telegraph p.B1]
Short sellers bet on Glencore to save merger
Short-sellers are targeting Glencore in the expectation its controversial merger with Xstrata will succeed, forcing its price down in the aftermath. Some 6.6 per cent of Glencore’s total shares are now out on loan to hedge funds and other short sellers, which represents more than 75 per cent of the stock available given the company’s limited free float at the time of its IPO. [Sunday Telegraph p.3.3]
