Jetting off
Tui bounce
Shares in tour operator Tui have risen nearly a third since their 2016 low of 845p on 29 June and briefly topped the FTSE 100 on the day of their trading update this week. Demand from UK tourists helped, as the group said summer 2016 had closed out as it expected - 97 per cent sold to date - with revenue and bookings up 1 per cent. While demand for destinations such as Turkey and north Africa were weaker than last year, appetite for western Mediterranean and long-haul destinations more than made up for this. Three of its five new hotel openings were in the Dominican Republic and Sri Lanka. Online hotel business Hotelbeds has also been sold.
Twitter rumours
Google a suitor?
There was certainly a lot of chatter about Twitter after rumours began circulating that it was on the cusp of being bought. The shares rose more than a fifth on 23 September to $22.31 after news outlet CNBC reported that the California-based social media company might be targeted for a takeover, with suitors thought to include Salesforce and Google. The company has struggled to grow its user base in spite of co-founder Jack Dorsey's return to Twitter last year. The move by Microsoft to buy LinkedIn is thought to have prompted the speculation about a sale of Twitter.
Open house
Firmer foundations
The reopening of commercial property investment funds by major asset management houses continued this week after Standard Life Investments (SLI) said its vehicle would return to normal trading in October. Several fund houses halted trading in the units of their funds in the immediate aftermath of the EU referendum, which rattled investors and led to a surge of redemption requests that exceeded several funds' cash buffer. SLI said it had implemented a "controlled and structured asset disposal programme" to raise sufficient liquidity to meet future redemptions. It added that the commercial real estate market had stabilised.
Debt double-down
Issuance flurry
Our cover feature last week about how to analyse a company's debt seems to have come at a prescient time given sterling issuance in September (to 26 September) went beyond £3bn - the highest tally for any calendar month in the past two years. This may be pushed even higher given the Bank of England's corporate bond purchases, which form part of its wider policy response to support economic growth, got under way on 27 September. There's also been a surge in euro-denominated bonds, as the European Central Bank is also buying corporate bonds. Recent large debt-raisings include £3bn of bonds from National Grid and £1.8bn from Vodafone in the space of a week.
Discount might
Br-entry not Brexit
Lots is being made about the potential outcome of the UK's eventual disentanglement from the European Union, but the uncertainty hasn't unsettled German retailer Aldi. The company is to spend £300m in the next three years improving its UK stores to further chip away at the 'big four' British grocers. The announcement of the investment came as its UK arm posted revenue of more than £7.7bn for the year to December 2015 - a 12 per cent increase year on year. The business hasn't been entirely immune to the margin-eroding price war between it and its rivals, but its market share has continued to grow. It's aiming for 1,000 stores by 2022.
Deadline looming
RBS division sale
Royal Bank of Scotland's chief executive, Ross McEwan, has said the bank will be in "uncharted territory" if it fails to sell Williams & Glyn before the end of the year. Speaking at a conference hosted by Bank of America Merrill Lynch, he said the bank, which is 73 per cent-owned by the government, was "having to think about the 'what ifs'" in the event that a sale does not transpire. The Financial Times revealed in mid-September that would-be purchaser Santander had walked away from negotiations for a deal.
Slow globe
WTO predictions
The expected rate of growth in global trade has been slashed by the World Trade Organisation (WTO) in its latest update. The body said it expected volume growth to fall to 1.7 per cent this year from an earlier estimate of 2.8 per cent. It is the first time in 15 years that growth in global trade will slip below GDP growth, which is expected to be 2.2 per cent this year. Forecasts for 2017 were also given a hefty cut by the WTO and growth is now expected to reach between 1.8 per cent and 3.1 per cent from an earlier estimate of 3.6 per cent. The data will put even more pressure on global trade deal talks, especially those between the US and EU.
Last week’s approval of a drug to treat duchenne muscular dystrophy (DMD) – a chronic disease characterised by a progressive weakening of the muscles – took the market by surprise, but has served as a real boost to all companies developing similar drugs. The drug in question, Exondys, had previously been criticised by the US Food and Drug Administration (FDA) and so this approval indicates the regulator’s commitment to tackling the disease. That’s good news for Aim-traded Summit Therapeutics (SUMM), whose DMD drug Ezutromid is in the second phase of clinical trials. On Monday Ezutromid was granted fast-track designation by the FDA and a day later was recognised as a rare paediatric disease drug, which will allow it to move through clinical trials quickly.
