Trade spat heats up
In one of the first signs of the inevitable tit-for-tat to ensue from US President Donald Trump’s decision to slap a 25 per cent tariff on Chinese imports, the People’s Republic has retaliated. Beijing has threatened to raise duties by 25 per cent on 106 US products, including soyabeans, cars and chemicals, worth around $50bn (£39.1bn). China’s foreign ministry said that President Trump’s measures had “violated the rules of the World Trade Organisation and have seriously violated China’s legal rights". The US has said it would consult with industry for up to 30 days before it imposes tariffs on around 1,333 Chinese imports.
Sorrell under spotlight
Investigation launched
2018 doesn’t look like it’s going to be WPP’s (WPP) year. In March, it unveiled its worst annual results since the financial crisis, as lower spending by advertisers weighed on revenue. Now chief executive Martin Sorrell, who founded the advertising behemoth 340 years ago, is under investigation for personal misconduct. Mr Sorrell rejected the allegations. A third-party legal firm has been appointed to conduct the investigation, which the board said did not involve amounts of cash that were material to WPP. The shares dipped 2 per cent on the day of the news, putting the total decline during the past 12 months at more than a third.
Takeover twist
Disney steps up
The convoluted Sky (SKY) takeover story took another turn this week. 21st Century Fox proposed carving out Sky News in its submission to the Competition and Markets Authority, in the hope of easing concerns over the Murdoch family’s influence over UK media. Walt Disney (US:DIS) – which has separately agreed a $66bn (£46.9bn) deal to acquire Fox’s entertainment assets – stepped-up with a bid for the Sky news channel. Fox said the news channel would operate under a completely different executive team, ensuring its complete editorial independence.
RMI under pressure
Topps' sales decline
After getting off to a strong start to the year, a significant slowdown in second-quarter trading weighed on shares in Topps Tiles (TPT). Like-for-like sales accelerated in the first quarter by 3.4 per cent, but this reversed into a 2.2 per cent decline in the second period. Overall, underlying sales were up just 0.6 per cent across the first half. Bosses blamed the performance on “short-term weather factors” - that’s the ‘Beast from the East’ to you and me - and the timing of Easter. However, management also admitted there had been a “softening of the underlying market” as consumers continue to tighten their belts.
Tools downed
Construction falls
The UK construction sector suffered its fastest monthly decline since the EU referendum, as the ‘Beast from the East’ delayed work. IHS Markit’s Purchasing Manager’s Index dropped to 47 last month from 51.4 in February, with a reading below 50 signalling a contraction in the sector. It’s the first time the index has dropped below 50 in six months, but some indicators suggested the reduction in activity would be temporary – employment growth picked up and business confidence rose to a nine-month high, according to the survey.
Hope ignited
Hot bid
After a tumultuous two years, things are looking up for Mytrah Energy (MYT) shareholders. The shares rose more than half, after the renewable energy company said that it had agreed the terms of a recommended takeover offer from its own chairman Ravi Kailas, via a special purpose vehicle called Raksha Energy. Raksha already holds around 57.9 per cent of Mytrah’s existent shares. In October, it emerged that the company has made a $2.4m loan to Mr Kailas for the purchase of a property unrelated to the company’s operations, without the prior approval of the board. That loan was repaid the following week. Under the offer terms, Mytrah shareholders will receive 45p per share, valuing the entire company at £78.9m. The offer represents a 63.6 per cent premium to Mytrah’s undisturbed share price.
UK on tick
Savings dwindle
UK households became net borrowers last year for the first time since the Office for National Statistics (ONS) began collecting data in 1987. Figures showed that savings levels were at their lowest since 1963. The average household saved 4.9 per cent of their disposable income last year, down from the previous record low of 5.2 per cent set in 1971. Rising consumer inflation has put pressure on real wages, however that fell back to 2.7 per cent in February, according to the ONS.
