Wallonia wallop
A big deal
The difficulty in finalising an EU trade deal was demonstrated this week after Belgium's government said it could not sign Ceta (Comprehensive Economic and Trade Agreement), the highly anticipated EU-Canada trade pact. Opposition led by the largely socialist Wallonia region in the south of the country has restricted Belgium from signing the deal, despite the fact it has been agreed by all of the remaining 27 EU member states. This has flagged concerns for any future EU-UK trade deals post Brexit. As the IC went to press, European Council president Donald Tusk remained hopeful that Ceta would be signed by all member states at a summit on Thursday.
Banking Brexit
BBA warns
The British Bankers' Association has warned that UK-headquartered banks are preparing to move out of the country in early 2017 and have already "set up project teams to work out what operations they need to move by when". Bank bosses are concerned about the prospect of a 'hard Brexit' that involves exiting the single market and losing access to 'passporting' privileges, which permit financial service companies to freely sell their wares in all EU member states.
Blockbuster hit
Media merger
Telecoms giant AT&T has agreed to pay $85.4bn (£70bn) for entertainment group Time Warner. It would be the largest ever merger between a service provider and an entertainment company, and would have an impact across the media and telecoms sector. Politicians from both US parties have already spoken out against the deal, suggesting it could lead to a dearth in competition, while credit agencies S&P Global and Moody's have put AT&T's credit rating on watch, because of the debt needed to make the deal happen. Time Warner's rivals Disney and 21st Century Fox have both suggested that the merger would require high regulatory scrutiny.
Ready for take-off
Heathrow approval
The government has approved plans to build a third runway at Heathrow in order to expand airport capacity. It's a decision that has been a long time in the making and is expected to create jobs and boost UK economic growth. But the project has already encountered considerable opposition from MPs whose constituencies fall under proposed flight paths, including from the Conservative MP Zac Goldsmith, who resigned shortly after the decision. Boris Johnson has called the project "undeliverable", but Heathrow says the runway is expected to be operational by 2025.
PPI claims
Lloyds bashed again
Lloyds Banking has booked a further £1bn in provisions for past mis-selling of payment protection insurance, taking its total compensation pot for the scandal to £17bn. This further payment, the result of an extension to the deadline for those making PPI claims, drove pre-tax profit for the three months ended September 2016 down 15 per cent to £811m. Management expects this to be the final big PPI provision Lloyds has to make.
The Apple falls
iPhone struggles
Annual revenue at Apple has fallen for the first time since 2001, despite the fact that fourth-quarter sales beat analyst expectations. The tech giant sold 45.5m iPhones in the three months to 24 September, beating an average estimate of 44.8m. But revenue in the final quarter was still down 9 per cent year on year, highlighting a slowdown in the smartphone market as well as intensifying competition, particularly from Chinese rivals. The smartwatch market also appears to be slowing, according to figures realised by market analysts IDC, but Apple chief Tim Cook pointed to the performance of its services business, including Apple Pay and Apple Music, where revenue was up by a quarter.
Price of palm
MP Evans soars
A takeover offer that valued Aim-traded MP Evans' shares at a 51 per cent premium to the previous day's closing price sent the share price flying on Tuesday. And yet the board of the palm oil plantation company has rejected the deal, suggesting that the offer fails to match the full value of the business. But potential acquirer Malaysia Stock Exchange-listed Kuala Lumpur Kepong said the all-cash offer represented good value and maintained that there would be "strategic merit" in bringing the two companies together, including cost savings and economies of scale.
Emerging confidence
Emerging markets are on pace for an exceptional year, with the MSCI Emerging Markets Index rising almost 30 per cent since January 2016. Markets such as Russia, India and Brazil looked in dire straits in 2015 as commodity prices plummeted, but with prices improving and growth stagnating in the developed world, investments in these geographies have looked increasingly attractive. The International Monetary Fund recently cut projections for global growth and expects the majority of the world's expansion in the next few years to come from the emerging economies. But others are already calling the top of the emerging markets rally.
