Co-Op's last chance
Bank for sale
The Co-operative Bank has put itself up for sale, after last month warning that its capital reserves would fall below a target agreed with regulators. The troubled bank – which is only 20 per cent-owned by the Co-operative Group – is inviting offers for all of its shares. Chairman Dennis Holt blamed lower for longer interest rates making it harder for the bank to make money. It has been blighted by problems following its takeover of Britannia Building Society in 2009, and its exposure to bad property loans.
Viva la France
Vauxall-Opel in the crosshairs
A majority stake in Vauxhall and Opel, two European marques owned by General Motors (GM), could be sold to Groupe PSA in a deal that would put UK jobs at risk, according to reports by the Deutsche Press Agency. Groupe PSA, the parent company of French brands Peugeot, Citroën and DS Automobiles, confirmed that it was exploring a possible deal to acquire GM’s lossmaking UK and mainland European brands. A follow-up announcement is expected within a matter of days.
Pru’s purchase
Insurer bids for buy-to-let
Prudential (PRU) is bidding for a portion of the £12.5bn Bradford & Bingley mortgages being sold by the government, according to reports from the Financial Times. The life assurer is keen to purchase the buy-to-let mortgages, which could be used to back long-term liabilities such as annuities, the FT says. The government is selling the mortgages issued by Bradford & Bingley before its collapse and taxpayer bailout during the 2008 financial crisis. Paragon (PAG) has also been named by the newspaper as a potential bidder for the loans.
Hawkish Yellen
US dollar/yields jump
Federal Reserve chair Janet Yellen heightened expectations that the US monetary policy committee would increase interest rates in March, after she addressed the Republican-controlled Congress for the first time. Mrs Yellen said it would be “unwise” to wait too long to tighten monetary policy because it could force the central bank to hike borrowing costs at a faster pace in the future. The US dollar rose and bond yields jumped as the market interpreted her comments to be more hawkish than expected.
Happy Ramsdens
Pawnbroker IPOs
Ramsdens (RFX) has landed on the Alternative Investment Market. The pawnbroker had priced the newly issued shares at 86p each. The group has a network of 127 stores in the UK and a small online presence. It operates in four business areas: foreign currency exchange, pawnbroking loans, buying and selling precious metals and retailing of new and second-hand jewellery. Rival H&T (HAT) has profited from a surge in the gold price since the EU referendum, announcing earlier this year that it expected 2016 pre-tax profit to be ahead of market expectations.
Nex step
Volatility peters out
The Trump-induced boost to market volatility that pushed up earnings for brokers during the final months of 2016 has started to flag, according to electronic trading provider Nex (IAP). In the group’s first update under its new moniker, the company formerly known as ICAP said trading in January had generally been more muted. By contrast, revenue during the three months to the end of December 2016 rose 11 per cent on a like-for-like constant-currency basis. Its markets business – formerly electronic markets – grew sales 15 per cent at constant currency, compared with a 2 per cent decline during the first half of the year.
Inflation edges higher
Concern for spending growth
UK inflation hit a fresh two-and-a-half-year high of 1.8 per cent in January, as consumers felt the effects of the weaker pound and rising energy prices. This level is closing in on the Bank of England’s 2 per cent target. However, the latest official reading from the Office for National Statistics was below the 1.9 per cent predicted by economists. The UK economy has so far held up better than expected post-referendum. However, the Institute for Fiscal Studies recently said it expects spending growth to halve this year, as higher prices discourage consumers.
All hell has broken loose at Toshiba, after the Tokyo-based conglomerate failed to deliver audited third-quarter earnings as on schedule. The group said that it needed more time to look at potential problems at its Westinghouse nuclear division, which is likely to result in a $6.3bn (£5.1bn) dollar write-down.
In December Toshiba suffered a heavy fall in its share price after it warned that a hefty write-down was likely. With financial pressures mounting, the group is now considering hiving-off its prized memory chip business and pulling out of nuclear plant construction altogether – casting a pall over the global industry.
