Floats falter
IPOs pulled
The market turbulence continues to buffet London's IPO market. Two so-called 'challenger banks', Virgin Money and Aldermore, pulled their floats last week and this week car auction specialist and webuyanycar.com owner BCA Marketplace withdrew from its planned float process despite the "broad engagement and interest shown in BCA by investors". The rise in risk aversion has also contributed to a dampening of mergers and acquisitions activity, topped by AbbVie's withdrawal of its bid for Shire last week, which means a total of $537bn worth of potential deals have been pulled so far this year.
Stimulus hope
ECB to act?
Equities staged a minor recovery this Tuesday on hopes that further stimulus could be coming down the line for the eurozone. European stocks reacted favourably to reports that the European Central Bank is considering deploying funds to buy corporate bonds in the secondary market early next year. This would constitute a step up from the current round of monetary which the ECB launched this week when it started buying asset back securities and covered bonds. Shifting this into buying corporate bonds on a wider scale is believed to be under consideration and would represent the next front in the eurozone's war on anaemic corporate activity and the threat of deflation.
Value range
Tesco tumble
Ahead of delayed interim results on Thursday 23 October, troubled retailer Tesco was given a modicum of respite by the latest data on the grocery sector. This suggested that Tesco sales fell by 1.5 per cent in the four weeks to 12 October, a performance only bettered by Asda among the 'big four'. Figures suggested that Sainsbuy saw sales dip by 4.1 per cent and Morrison suffered a 4.6 per cent sales reversal in the same period. Tesco's figures for the past 12 weeks were more depressing, showing a sales fall of 3.6 per cent. Discounters Aldi and Lidl continue to take a bite out of their bigger rivals' market share with their sales rising by 24.9 per cent and 19 per cent respectively in the past month.
China crisis?
"New normal"
Disappointing Chinese GDP growth data, which showed the third quarter slipping below target at 7.3 per cent, prompted downgrades for next year's outlook and also encouraged speculation that a further targeted stimulus could be launched by the Chinese government in the coming months. But the Chinese government sought to dampen the expectation of further large scale intervention by declaring that it was comfortable with its GDP growth figure, describing it as the "new normal". Full year growth is forecast to be 7.5 per cent with some analysts now suggesting next year could see a dip to around 7 per cent, its lowest level since post-Tiananman Square sanctions pushed growth down to 7 per cent in 1990.
GSK IPO
HIV unit plan
Pharmaceuticals giant GlaxoSmithKline hinted at quarterly results this week that it is considering the sale of its 80 per cent stake in the ViiV Healthcare HIV treatment development business through an Initial Public Offering process. As part of a wider restructuring plan by chief executive Andrew Whitty, who is looking to save up to £1bn in costs, the spin out could value ViiV in the region of £10bn-£15bn, thus catapulting it straight into the upper echelons of the FTSE100 blue chip index. And further spin offs could follow with Mr Whitty telling journalists on GSK's third quarter conference call that he is 'extremely pragmatic' about future options for increasing shareholder value with some analysts speculating that the consumer healthcare business, which is partnering with Novartis, could be next on the block.
Buy-to-let boom
Numbers soar
The latest figures suggest that the surge in investment property has been one of the major pillars of the recent housing market recovery in the UK. A report by buy-to-let lender Paragon to celebrate 18 years of buy-to-let revealed that there are more than 2 million private landlords in the UK, owning more than £1trn-worth of bricks and mortar. And the trend is showing few signs of slowing down with buy-to-let lending growing at 20 per cent a year and the government's own figures suggesting that by 2032 one in three homes will be rented out.
