Michael Page International's drive to cut staff and expand in developing markets seems to be paying off, with acceleration in performance in the Asia Pacific region evident during the fourth quarter. In fact, it may be seeing signs of improvement in the Chinese economy, as opposed to Germany, which proved particularly difficult in the fourth quarter. The problem is that there is almost no visibility of future revenues going into 2013 and Page accepts that the first quarter will be challenging.
Analysts' forecasts for the current year are, frankly, little better than guesswork, The Times' Tempus writes. "As ever with recruiters, the question is whether the cycle has turned enough to justify buying again. Page shares sell on a sky-high 29 times last year's earnings. In the long term, the trends are favourable, but it still looks like too soon to buy," Tempus adds (Last IC rating: Sell, 13 Aug).
Tuesday's was not quite a profit warning from IG Group, but that was only because the market knew what to expect. The financial spread-better traditionally makes more of its money in the second half of its financial year, which runs to the end of May. Yet slowing growth from earlier levels of 40 per cent or so a year has reduced this disparity. The company is doing what it can to raise its customer base, but the days of explosive growth are probably behind it.
As well, uncertainties remain over the Nadex operation in the United States, which is taking longer than expected to reach profitability. There is also the impact of any European transaction tax, although the company is dubious whether this will ever amount to much - and I am inclined to agree. The shares sell on about 13.5 times earnings, full value unless you think the markets are heading into turmoil again (Last IC rating: Buy, 15 Jan).
Business press headlines:
The new boss of AstraZeneca has dismissed two of the drugs company's leadership team as part of a shake-up intended to tackle flagging sales and scientific setbacks. The head of research and development, Martin Mackay, and its global commercial chief, Tony Zook, are to leave the pharmaceuticals group at the end of the month and their positions will be "eliminated". Pascal Soriot, the chief executive, said that he wanted to "accelerate decision-making" and to bring an "even sharper management focus to key pipeline assets, key brands and key markets". [The Times]
Facebook has moved directly into Google's territory after launching an advanced search capability for the social network. Mark Zuckerberg laid out on Tuesday a new vision of search based on his company's private database of social information, rather than the collection of links on the open web that underpins Google's service. "We're giving people the power and the tools to take any cut of the graph that they want and make any query they want," Facebook's chief executive said. [Financial Times]
The banking industry and the Financial Services Authority are in talks to set a new cut-off date to put an end to the continuing multibillion-pound stream of claims for the mis-selling of payment protection insurance. Industry sources confirmed that the British Bankers' Association has suggested a deadline of around next summer in return for the banks agreeing to finance a widespread advertising campaign to ensure that the public is aware of an end-date for claims. The FSA is understood to be sympathetic to banks' concerns that there may be no end to mis-selling claims, despite hopes that the majority would have been made last year. However, the need for consumers to get a fair deal will be central to any solution. [The Times]
Japan's largest airline, ANA, and its competitor JAL have each grounded their entire fleet of Boeing 787 Dreamliners after an emergency landing due to a smoke alarm in the cockpit - the most dramatic of a spate of incidents involving the troubled aircraft over the past week and since its inception. All Nippon Airways said the plane's eight crew and all 129 passengers had evacuated safely on inflatable slides. Instruments in the cockpit indicated there had been a battery malfunction and the pilot had noticed a strange smell. [The Guardian]
Britain's bailed-out banks need billions of pounds more capital to shore up their balance sheets and support the economy, senior Bank of England officials have warned. UK regulators have given Royal Bank of Scotland and Lloyds Banking Group until March to begin dealing with a black hole that Brooks Newmark, a Tory member of the Treasury Select Committee, suggested could be as large as £30bn. [The Telegraph]
Goldman Sachs has been forced into an embarrassing climbdown from plans to allow its highly paid bankers to avoid the 50 per cent top rate of tax, following public intervention by Bank of England governor Sir Mervyn King and pressure from the government. But the Wall Street firm is expected to spark a fresh row over City bonuses on Wednesday by revealing that its bankers have enjoyed a 10 per cent pay rise when it announces profits for 2012. Goldman was already facing condemnation about proposals to defer bonuses until after 6 April, when the top rate of income tax falls to 45 per cent from 50 per cent, when King waded in. The Bank of England governor told MPs he regarded such attempts as "depressing". [The Guardian]
Developing countries should not be tempted to stimulate their economies this year in the face of weak growth, the World Bank warned on Wednesday even though the world faces another challenging year. In forecasts that suggest 2013 will see only marginally stronger growth than last year, the Bank recommends that poor and middle-income countries concentrate on fundamental drivers of prosperity rather than attempt a quick fix. The warning comes as growth rates in large emerging economies including Brazil, Russia and India slowed sharply last year and just days after Japan's incoming government launched a Y10.3tn ($116bn) stimulus package to revive its economy. [Financial Times]
Cuts in public spending and the ongoing eurozone crisis will lead to thousands of fresh job losses across Scotland's construction sector over the next four years, according to a report that warns of a "demographic time-bomb" facing the industry. In today's annual report, the Construction Skills Network (CSN) estimated that employment in the sector north of the Border would fall by 1 per cent a year on average between 2013 and 2017. That is despite the fact that output is set to eke growth over the period, following a drop of 13 per cent in 2012. [The Scotsman]
