Vodafone up for grabs?
Vodafone (VOD) shares hit a 10-year high of 197p on rumours of a transatlantic bid from US rivals Verizon Communications and AT&T. The Financial Times floated a price of 260p for the deal, which would make it the most expensive acquisition in corporate history. Verizon has been quick to scotch rumours of the bid, although the use of the term "currently" within its rebuttal is bound to raise a few eyebrows. Verizon added that it remained interested in buying out Vodafone's 45 per cent stake in their Verizon Wireless joint venture. We currently have Vodafone as one of our income plays (Buy, 158p, 4 Jan 2013), but the stock has other attractions, and we doubt whether it's the last we'll be hearing from Verizon on the issue.
Rotten Apple
Incomparably arrogant
Apple's chief executive, Tim Cook, has been left slightly flummoxed following an aggressive campaign waged against the US consumer IT giant by China's state-run media. The campaign against Apple was initiated two weeks ago when China Central Television broadcast a critical expose of the company's warranty standards and allegedly lax customer service in China. The print media duly followed suit, with the People's Daily (published by the Communist Party) accusing the US company of "incomparable arrogance". Quite some accolade - but it's hardly the type of endorsement that Tim Cook and his board would have been hoping for ahead of the summer launch of the new iPhone, especially given that the People's Republic is the company's biggest market outside the US.
Price sensitive
Non-food items up
For the first time in 15 months, prices of non-food items at UK retailers have moved into inflationary territory, rising to a rate of 0.2 per cent in March, from a deflationary -0.4 per cent in February, according to the latest British Retail Consortium-Nielsen Shop Price Index. The uplift was driven by higher prices for health and beauty products, electricals, clothing and footwear, explains Helen Dickinson, director-general of the British Retail Consortium. She says the sharp price change could be attributed to a lower level of discounting and increased demand, as many retailers went into the new year with less stock to clear, so discounting was less extensive. Meanwhile, food price inflation remained unchanged at 3.5 per cent.
Parallel barred
Korea opportunities curtailed
If you haven't shorted Samsung already, you might have missed the boat. Tensions are building either side of the 37th parallel following North Korea's decision to stop South Koreans from crossing the border to work at the jointly run Kaesong industrial zone for the first time since 2009. The border entry to Kaesong is the last access point between the two Koreas, and the complex is usually held as a symbol of co-operation. Pyongyang has threatened South Korea and the US in recent weeks, and has vowed to restart a mothballed nuclear plant. And this latest spat has its costs abroad - the iShares MSCI South Korea Capped Index Fund has lost 8.5 per cent of its value over the past quarter.
BP in the dock
Damage limitation
BP's (BP.) settlement hearing in a New Orleans courtroom opens today, with the outcome decisive to the material impact of the cost of the Deepwater Horizon disaster. BP has claimed that the independent administrator of the settlement has been paying out on "fictitious" claims, while lawyers for claimants will argue that the UK oil & gas major has significantly underestimated the size of the collective settlement. Meanwhile, the civil trial over claims for damages resulting from the spill, including actions brought by US federal and state authorities, continues. Separately, BP has said that it will sell its wind power assets in the US for an estimated $1.5bn to focus on its core oil and gas business - and no doubt add to the fighting fund.
Bankers blinkered by pay
Salz in the wounds
The executives that headed HBOS in the lead-up to its collapse face heavy criticism in a report to be published by the Parliamentary Commission on Banking Standards, which looks into the factors behind the 2008 failure. The report details underlying failures in corporate governance and risk management, and comes on the heels of a review conducted by corporate lawyer Anthony Salz subsequent to last year's Libor scandal into the corporate culture at Barclays. Mr Salz makes clear that "pay contributed significantly to a sense among a few that they were somehow unaffected by the ordinary rules". Hardly a surprise for shareholders in the bank, or taxpayers for that matter, but it remains the case that none of the bankers have been required to answer for their actions in court - and probably never will.
SSE hit by £10.5m fine
Compensation pending
It's not just the banks that are at it. In the largest ever penalty imposed on an energy provider, utility giant SSE (SSE) has been hit by a £10.5m fine by energy watchdog Ofgem for what it described as "prolonged and extensive" mis-selling - shades of the PPI debacle. Now around 20,000 customers who bought gas or electricity from the utility have been urged to contact the firm to claim compensation, while SSE already has a £5m fund set aside to compensate affected customers from a previous mis-selling charge (any readers who might be affected can contact the claim line on 0800 975 3341).
