Trump tweets
North Korea’s latest nuclear missile test has drawn more ire from Donald Trump. Alongside his regular threats of a military response to Kim Jong Un’s administration in the Asian province, the President has suggested he will impose trade sanctions on any country “doing business” with North Korea. This includes America’s trade deal with China, which last year supported $450bn (£344bn) of imports and $115bn of exports. It’s hard to see how such a trade deal could stop without significant damage to both the US and global economies.
Mining woes
Acacia/Shanta cash flow remedies
In yet another reminder of the impact of Tanzania's crackdown on its resources industry, gold miners Acacia Mining (ACA) and Shanta Gold (SHG) have updated the market on remedial measures to stem cash outflows. The former is to reduce operational activity at its Bulyanhulu mine. It said 35 per cent of its production has been affected to date, leading to a $265m build-up of concentrate inventory and a cash outflow of $210m. Meanwhile Shanta announced measures including a 15 per cent salary cut for senior management and a switch in discretionary executive pay from cash to shares. Separately, management has identified $5m of annual cost savings, offsetting the $39 an ounce hike in government take.
Challenger ahead
Charter Court IPO
Challenger banks OneSavings Bank (OSB) and Aldermore (ALD) have enjoyed rapid growth in their loan books during recent years. Now rival mortgage lender Charter Court has announced its intention to float on the premium segment of the London Stock Exchange. At the time of going to press no pricing data had been announced. However, the group is looking to raise £20m from the IPO, with an additional over-allotment option representing 15 per cent of the offer size. Old Mutual Global Investors has also signed a letter of intent for £100m of shares. Charter Court specialises in buy-to-let and specialist residential mortgages, bridging loans and second charge lending. It wrote £2.5bn in new loans in 2016.
BNN suspended
Change at the top
BNN Technology (BNN) has suspended its shares from trading on Aim, after chief financial officer Scott Kennedy resigned on Friday 1 September. As part of his resignation, Mr Kennedy “made a number of serious allegations” regarding the company, and the actions of chief executive Darren Mercer and Wei Qi, China chief executive and group chief operating officer. Financial controller Patrick O’Connor has stepped in as interim chief financial officer. BNN also announced that while it “does not have sufficient information to comment definitively on the allegations”, it has decided to suspend the employment of both Mr Mercer and Mr Qi effective immediately.
Sports Direct re-elects
Chairman re-instated
Sports Direct (SPD) chairman Keith Hellawell survived an attempt to oust him by the skin of his teeth. Despite several institutional shareholders announcing their intention to vote against Mr Hellawell’s reappointment, he was re-elected by 53.2 per cent of independent shareholders. Some investors have raised concerns about corporate governance and working conditions, including placing temporary staff on zero hours contracts. This followed news that trading across its new flagship sites had exceeded management’s expectations.
Back to normal
Call for end to QE
Germany’s finance minister, Wolfgang Schauble, has called for the European Central Bank (ECB) to return to more normal monetary policy, just two weeks after the euro rose to an eight-year high against sterling. Mr Schauble said the ECB should end its bond-buying programme and negative interest rates, on the back of a stronger eurozone economy. The ECB is scheduled to begin discussion on tapering its €2 trillion bond-buying programme in 2018. It is buying up to €60bn of bonds each month at present, and is set to continue doing so until the end of the year.
Services slow
Orders down
Growth within the UK services sector slowed to its lowest in nearly a year in August, according to the HIS Markit CIPS purchasing manager’s index. The index declined to 53.2 from 53.8 in July. A figure above 50 indicates expansion. The services sector accounts for about 80 per cent of the UK economy. The PMI survey indicated that new order volumes in the services sector increased last month at the second slowest rate since September 2016, while cost pressures also picked up.
