China black
Markets red
Traders' screens turned a rosy hue on Monday after bourses across the globe fell following yet another precipitous drop in Chinese stocks. A slew of companies in the world's second largest economy hit their maximum 10 per cent daily allowable drop causing more than just ripples around the world with the Dow Jones Industrial Average index nosediving 1,000 points in early trading. The day was dubbed 'Black Monday' by the Chinese state news agency Xinhua, a reference to the 1987 global stockmarket crash. The next day, China reduced benchmark one-year lending rate by 25bps to 4.6 per cent with immediate effect, adding it would loosen bank lending restrictions next month.
Property boom
Cashing in
Investors brave enough to buy into the London property market in the credit crunch's aftermath have started to cash in, according to research by property advisers Cushman & Wakefield. The company's Elaine Rossall, head of research for the London markets, and James Beckham, head of central London investment, said mainly Asian investors had sold £3.4bn worth of London property in the past two years leading to profits of £870m since 2009. The propery company's data showed total investment volumes in the central London market hit a record £24.6bn last year, topping the record set in 2013. South Korea's National Pension Service's sale of HSBC's Canary Wharf headquarters last autumn for £1.2bn - the highest price for a single London building - generated a profit of more than £400m.
Europe cheap
Over sold
Investors have "overreacted" and "too much seems priced in" to European equities, according to research by Bank of America Merrill Lynch (BAML). The bank said at the time of its research the Eurostoxx 50, Stoxx 600 and German Dax were all flat year to date. The Continent's stocks have, like all others, been hit by the fallout from China's recent stockmarket volatility and its moves to allow markets to effectively set the value of its currency. But BAML chief European economist Gilles Moec said even a halving of Chinese growth would only knock roughly 0.4 per cent off euro area GDP. After the sell-off, BAML says European stocks trade on a p/e ratio of 13.5x - just below the long term average.
Apple chat
Solid core
The saying 'if you don't ask, you don't get' certainly rang true for CNBC's Mad Money presenter Jim Cramer this week. The American host sent an email to Apple chief Tim Cook asking about the stock's performance in light of the market turmoil in China. The technology leviathan is notorious - perhaps understandably so - for saying only what it needs to say. But, in what was viewed as an unusual departure from this, Mr Cook told the presenter the business had continued to see "strong growth for our business in China through July and August". This quickly helped the company recoup $78bn of its market value lost in early trading on Monday.
In for a penny
Rubber-stamped
What’s the difference between 99p and £1? Quite a lot, according to the Competition and Markets Authority. The watchdog has given the green light to Poundland’s (PLND) proposed takeover of its closest rival 99p Stores – which was announced in February 2015. The decision brings to a close months of speculation for Poundland shareholders, as the regulator debated whether the deal would reduce choice for consumers and competition in the marketplace. Poundland has continued to defend the transaction throughout the review period. The group said the enlarged business would offer not only better choice for customers, but better value and services.
Healthy consumers
UK solid
With ripples from China's stockmarket gyrations and policy actions being felt almost everywhere, there was a brightspot here in Blighty. Data from the CBI, the business lobby group, reported steady sales growth in August thanks to a net positive 24 per cent of retailers claiming increased sales volumes. This was higher than both the +18 per cent balance expected by economists and July's reading of +21 per cent. Keeping the figures in fashion was a strong showing from clothing sales as well as some respite for the UK's supermarkets whose sales picked up in the 12 months to August after two stagnant months.
Damp squib
Inflation muted
The potential for inflation targets to be missed in Europe has become a greater reality, according to the European Central Bank chief economist Peter Praet. Speaking at a conference in Mannheim, he told reporters the downside risks to inflation had increased, including but not consigned to, emerging market weakness. The central bank is due to release quarterly forcasts for inflation on Thursday but the comments are being interpreted as a signal for lowered inflation expectations. The latest data from the ECB shows inflation in June at 0.2 per cent, rising to 0.3 per cent this year. 1.5 per cent in 2016 and 1.8 per cent the next year.
