Welcome to our summary of the weekend's quality press tips, provided on Mondays by Weekend City Press Review.
PRESS TIPS:
The Sunday Times
■ Inside the City: Matthew Goodman says Mitchells & Butlers (MAB), 406p, has returned to a 'degree of normality' since the arrival of Alistair Darby as CEO last autumn, although there are some problems still to sort out (Last IC rating: Hold, 23 May).
■ New Thomas Cook (TCG) CEO Harriet Green has done well to get the troubled tour operator back on track in such a short time, although the hard work now starts to rebuild the brand to compete with rival Tui (Last IC rating: Hold, 20 May).
p.3.12
The Sunday Telegraph
■ Questor: Nathalie Thomas and Harry Wilson say hold Betfair (BET), 854p, as the failed bid by CVC Capital Partners has at least focused attention on its problems and strategy (Last IC rating: Hold, 27 Jun).
■ Buy Lloyds Banking Group (LLOY), 63p, as there is the potential for further upside if the Treasury starts selling down its stake (Last IC rating: Hold, 1 Aug).
p.B8
The Mail on Sunday
■ Midas: Joanne Hart says buy MyCelx Technologies Corporation (MYXR), 470p, for its innovative technology to remove oil from water more effectively than using conventional methods (No IC rating).
■ Update: Take some profits at Galliford Try (GFRD), tipped in January last year at 476.5p and now 995p, but hold the rest for further growth (Last IC rating: Buy, 5 Jul).
Business press headlines courtesy of Weekend City Press Review:
THE SUNDAY TIMES
Brussels oil probe homes in on Brent Crude price
The EC competition probe into potential oil price manipulation is understood to focus on whether oil companies and traders rigged the key Brent Crude index, used for about two-thirds of global oil trades. The EC is also reportedly looking at whether the price of ethanol has been rigged by the same manipulation of the price-setting process. [pp.3.1, 3.9]
Carr in pole position to become BAE chairman
Sir Roger Carr is believed to be frontrunner to become next chairman of BAE Systems (BA.), replacing Dick Olver who has held the position for the last nine years. The BAE board is understood so far not to have made a final decision on Carr, although he is widely experienced and is also the outgoing president of the CBI. [p.3.1]
Royal Mail profits tee up £3bn sale
The Royal Mail is set to unveil this week operating profits of between £300m and £400m - almost double the £211m it made last year - helped by the boom in online shopping. The strong profits will help pave the way for a £3bn privatisation of the postal service later this year. [p.3.1]
Oligarchs rile City with low ENRC bid
The three oligarchs bidding for Eurasian Natural Resources Corporation (ENRC) are believed to have offered just 260p as share to take the controversial mining group private, less than the 271.5p level at which the shares closed on Friday. The low-ball offer - backed by the Kazakh government - has been rejected by ENRC's three independent directors. [p.3.1]
Turkey talks for LSE
The London Stock Exchange (LSE) may take a stake in Turkish stock exchange Borsa Istanbul as part of a deal which could see the country's share deals cleared though LCH Clearnet, majority-controlled by the LSE. It is understood that to secure the deal the LSE may need to take a small stake in the Turkish exchange. [p.3.2]
Agenda
■ Dominic O'Connell thinks it would be a mistake to market the privatisation of the Royal Mail to investors in the same way as the utility sell-offs of the 1990s, as the Royal Mail's performance will in future be highly geared to the online economy.
■ The shareholder revolt at Glencore Xstrata (GLEN) against chairman Sir John Bond shows that when shareholders are really angry about something, they can easily act to change it.
■ The consortium bidding for Severn Trent (SVT) may have to pay a 'touch more' to ensure its gets control of another prized UK asset.
■ Wall Street banks are seeking to extract 'a little commercial revenge' against Bloomberg over the confidentiality row involving its journalists.
[p.3.4]
Economic Outlook
■ David Smith says that Sir Mervyn King was able to deliver the positive outlook for the economy he had hoped for in his final briefing as Governor, although it would be an embarrassment if Mark Carney's first act as his successor was to announce a downgrade in the forecasts. [p.3.4]
American Account
■ Irwin Stelzer says that whatever the aim of international trade talks, they are never really about the exchange of goods and services - just politics and war by other means. [p.3.4]
Briefs
■ Former Google executive Barney Jones has revealed details of what he claims is the company's 'immoral' tax avoidance schemes.
■ Tesco (TSCO) is planning to expand its F & F clothing brand in central Asia and the Middle East, with 50 new stores due over the next five years.
■ The MoD is pressing ahead with plans to privatise its procurement operation in spite of possible concerns raised by the Pentagon.
■ Smoke alarm technology business Sprue Aegis has rejected a hostile approach from US rival Jarden Corporation.
■ Andrew Bester, CEO of Lloyds Banking Group's (LLOY) commercial banking division, said demand for business loans had started to increase.
■ Ocado (OCDO) CEO Tim Steiner claims there is '100 per cent no issue with our existing contractual relationship with Waitrose'.
■ City fund managers may be forced by new EU rules to invest half their bonuses in the funds they manage.
■ Wall Street banks want Bloomberg to cut the US$20,000 annual fee for using its terminals in the wake of reports that journalists have been using them to 'snoop' on traders.
■ The Bernard Matthews turkey business is seeking to bring in outside investors to restructure its finances.
■ Lord Myners is teaming up with US tycoon Nick Berggruen to raise a £600m fund for acquisitions.
■ Blackstone and Carlyle are bidding to acquire packaging specialist Chesapeake in a £400m deal.
■ Langholm Capital has put the Tyrrells crisp business up for sale.
[pp.1.1, 3.1, 3.2, 3.3]
THE OBSERVER
Business Leader
■ ...thinks the Office of Fair Trading's clean bill of health for the oil industry earlier this year is embarrassing, given the EC's dawn raids last week on the offices of the oil majors over price manipulation allegations.
■ The key to an economic revival is raising real incomes, which still looks to be some way off.
■ Fund manager Guy Jubb of Standard Life Investment deserves 'three cheers' for his willingness to travel the length of the country to confront in person directors at companies ranging from BP and Royal & Sun Alliance over their policies.
[p.42]
In My View
■ William Keegan thinks 'all the nonsense about leaving the EU' is a 'convenient diversion' from the damage being done by the Chancellor's economic strategy. [p.42]
Media
■ Peter Preston says the question that needs to be asked about BBC2's flagship current affairs programme Newsnight is really whether it deserves to survive - or is it outdated in the modern media world. [p.43]
Briefs
■ Royal Dutch Shell's (RDSA) AGM in the Hague on Tuesday will not be broadcast live via satellite to a simultaneous London meeting as usual, although it will be available online.
■ The unexpected consortium bid for Seven Trent (SVT) that emerged last week could now put United Utilities (UU.) and Pennon (PNN) in the takeover spotlight as well.
[p.39]
THE SUNDAY TELEGRAPH
Bolland 'has backing of M&S board'
Marks and Spencer (MKS) chairman Robert Swannell says he is '100 per cent behind' under-pressure CEO Marc Bolland, claiming shareholders are supportive of Bolland's 'radical transformation strategy'. A consensus of City analysts believe that M&S will unveil flat annual profits on Tuesday at about £685m, with food sales up but clothing revenues falling sharply. [pp.B3, B9]
Energy bills 'could overtake mortgages in five years'
Surging UK energy bills could overtake mortgage payments in parts of the country within five years, claims First Utility CEO Ian McCaig. He urged the government to review its energy policies to minimise the impact of rising costs and encourage consumers to become more energy efficient. [p.B1]
Tesco launches campaign to halt 'breathtaking' level of food waste
Tesco (TSCO) CEO Philip Clarke is this week launching a campaign to end the 'breathtaking' problem of food waste in the UK, claiming that the average family throws away food to the value of £700 every year. The food waste initiative is part of the 'Tesco and Society' campaign being outlined in a new report this week. [pp.B1, B5]
Revealed: The man who is betting against China
Secretive fund manager Carson Block, founder of Muddy Waters Research, claims the problems of China's banks are greater than those of their Western counterparts on the eve of the 2008 financial crisis. He believes that Chinese government support of its financial system will create a 'massive asset bubble' putting 'resource-based emerging market economies' at risk. [pp.B1, B5]
Comment
■ Kamal Ahmed remains positive about the Ocado (OCDO) business model as an online technology platform rather than grocery retailer, but admits that the split with Waitrose may be terminal and inevitably bad news in the short-term. [p.B2]
Economic Agenda
■ Liam Halligan, chief economist at Prosperity Capital Management, says the stock market rally is at wide variance with the real financial and economic outlook which is being 'conveniently ignored'. [p.B4]
The Markets
■ Tom Stevenson, an investment director at Fidelity Worldwide Investment, says he is 'cautiously optimistic' about the market surge, although prefers to stay loyal to the 'high-yielding blue chips' that have served him so well over the past couple of years. [p.B4]
Briefs
■ City veteran Sir Roger Carr is thought likely to be appointed new BAE Systems (BA.) chairman 'within weeks'.
■ Ambassador Theatre Group is poised buy the Foxwoods Theatre on Broadway for up to US$70m from Live Nation.
■ Sir Mervyn King has suggested there is no long-term future for the government's new Help to Buy scheme for first-time housebuyers.
■ Royal Dutch Shell (RDSA) lobbied against EC rules designed to clamp down on commodity market abuse, it has emerged.
■ A British Chambers of Commerce survey suggests that SMEs are focusing their export drive on emerging markets rather than the eurozone.
■ Vodafone (VOD) is coming under pressure from its institutional investors to seek clarity over Verizon's plans for their Verizon Wireless joint venture.
[pp.B1, B2, B3]
THE INDEPENDENT ON SUNDAY
In The City
■ Margareta Pagano thinks we have yet to see the real fall-out from higher tuition fees for university students, especially as the quality of education they receive also leaves much to be desired.
■ It is nearly time to bid farewell to Sir Mervyn King, whose 'marvellous football and cricket quips' and 'dry, if not sardonic, humour' will be missed.
[p.72]
Economic View
■ Hamish McRae argues that while the economic outlook for Italy remains grim, the country itself remains attractive not only for tourists but also its ordinary citizens who understand the life/work balance is as important as economic growth.
■ An imminent sale of the Treasury's stake in Lloyds Banking Group (LLOY) is probably not likely, although the price recovery so far is a clear 'symbol of healing'.
[p.76]
Briefs
■ SSE (SSE) is due to reveal on Wednesday that its retail energy division made a £416m profit in the year to March, according to analysts' estimates.
■ The Consumer Price Index is expected by economists to have fallen to 2.6 per cent in April, down from 2.8 per cent in March.
■ A £100 bonus for Marks and Spencer (MKS) store staff is at risk if the retailer announces a further fall in annual profits this week.
[pp.71, 73]
THE MAIL ON SUNDAY
Comment
■ Simon Watkins thinks there is an urgent need to reform the UK pension fund industry to create the sort of scale which would enable it to compete with their foreign counterparts over acquiring UK infrastructure investments.
■ The latest probe into alleged price manipulation of a key market - this time oil - suggests there is a case for a comprehensive survey of all financial markets to identify which others lack transparency and are open to potential abuse.
[p.86]
Briefs
■ The Canadian-led pension fund consortium bidding for Severn Trent (SVT) may raise its offer this week after an initial approach was rejected.
■ Burberry (BRBY) is expected to reveal this week that sales for the year to end-March have broken through the £2bn barrier for the first time.
■ New Ocado (OCDO) chairman Sir Stuart Rose has seen his holding in the online retailer surge in value by £1.5m in little more than a month.
■ Gala Coral is considering plans to sell its bingo halls before floating the Gala betting shops.
■ Shire (SHP) may return £2bn to shareholders to help fend off a possible foreign predator.
■ Marks and Spencer (MKS) is this week set to unveil its lowest annual profits for eight years.
[pp.85, 86, 87]
SUNDAY EXPRESS
Comment
■ Tracey Boles is concerned about a new report showing that the cost of meeting increased EU and global regulations for refined oil products could put UK fuel supplies in jeopardy.
■ While the government may be close to selling its stake in Lloyds Banking Group (LLOY), a similar return of Royal Bank of Scotland (RBS) to the private sector still looks a long way off.
[p.F2]
Briefs
■ Marks and Spencer (MKS) is expected to post this week its biggest annual profits fall in five years.
■ The IMF could deliver its latest verdict on the UK economy as early as this week.
■ Care home operator Danshell is set to buy rival Castlebeck out of administration.
■ Mothercare (MTC) is poised to post full-year profits up from £1.5m to £6.6m as a result of strong overseas growth.
■ The Co-operative Bank is expected to put £10bn of loans up for sale as part of moves to improve its capital position.
[pp.F1, F3]
PROFILES
The Sunday Times
If I can pay £250m tax, so can my fellow billionaires
John Caudwell, founder of Phones 4u which he sold for £1.5bn, has taken a majority stake in a fitness club chain targeting emerging economies in eastern Europe and Asia. The 65-strong Pure Jatomi chain, established by Fitness Firth founder Michael Balfour, has 65 clubs already operating from Indonesia to the Czech Republic. Caldwell, who spends much of his time now on charitable work, believes that wealthy companies and individuals should be prepared to pay they fair share of tax - in his case some £253m since 2008. [p.3.6]
The Mail on Sunday
'Confidence is back - now firms need to capitalise'
Marcus Stuttard, head of Aim, says there are signs of 'increased confidence' in the market with more smaller companies planning to join the junior stock exchange. But he also points out that Aim is keen to attract large businesses as well as small, with stocks such as Asos (ASC), Majestic Wine (MJW) and Mulberry (MUL) all listed on Aim rather than the main market since this suits them better. [p.89]
