Medical device maker Smith & Nephew (SN.) Chief Executive Olivier Bohuon expects the consolidation process in his industry to continue given that companies need to adjust their cost base. As for him, he does not waste time thinking about such possible tie-ups as such a decision is a matter for the Board to decide, not him. However, he is critical of such defensive transactions as a good deal must always have a strategy component. "If it's just for money, I'm not sure this is great", Bouhon said, according to the Daily Telegraph.
The housing market may be a reaching a tipping point in terms of the equilibrium between buyers and sellers, according to Halifax Mortgages Director Craig McKinlay. Thus, the lender's latest survey results revealed that the proportion of buyers who believe that it will be a good time to buy over the coming twelve months dropped sharply during the second quarter. The balance fell to +5 per cent in the second quarter from +34 per cent in the first three months of the year. That shift was noticeable in the property hotspots of London and the south east, according to The Guardian.
Barclays (BARC) is set to surprise number crunchers in the City with its second quarter results due out on Tuesday. The lender will announce that the assets held by its "bad bank" are being reduced much more quickly than had been expected, perhaps by as much as £30bn. That is thanks to the improved market sentiment, with strong demand seen from hedge funds and fixed income investors for the heavily discounted assets. In May the lender outlined its intention to cut the size of that non-core division to approximately £80bn in assets, from about £115bn, The Times writes.
Retailers are up in arms over the controversial plan by 20 city councils to levy a so called £400m 'Tesco Tax' on large supermarkets to finance improvements to local shopping areas. The business lobby group British Retail Consortium (BRC) believes it will hit investment and hurt job creation without reforming a system which is no longer fit for purpose. As well, the Chairman of the BRC's business rates group warned that any further rise in taxation would contribute to higher food prices, The Daily Telegraph reports.
New research out today from City of London law firm Linklaters shows that actions by activist investors are on track for a record year in 2014. A total of 272 have been carried out so far versus 520 in 2013. The study also shows that such investors are becoming increasingly successful in their actions and beginning to turn the heat up on mid-capitalisation stocks, with attempts to gain boardroom representation continuing to be the most popular tactic, The Scotsman says.
A measure of catch-up in house prices outside of London and the southeast is to be expected, according to property consultants CBRE. In five years' time the average price of a house in the UK and in London is thus forecast to be 30 per cent higher than at present. This year prices in the country as a whole will rise by 12 per cent and 20 per cent in the capital. As well, CBRE's stress tests suggest interest rates would need to rise to 3 per cent for affordability to begin becoming problematic, although saving for a deposit continues to be a huge constraint on first-time buyers, The Times reports.
