One voice?
In an attempt to quell what the prime minister may have viewed as backseat driving, Theresa May this week downgraded the Department for Exiting the EU and said she would take “personal control” over the UK’s Brexit negotiating team. That means around 50 of the negotiating staff will be transferred into the Cabinet Office, She told MPs that her chief Europe adviser, Olly Robbins, would have “overall responsibility for the preparation and conduct of negotiations”. Ms May’s letter to MPs came on the same day recently appointed Brexit secretary Dominic Raab told a parliamentary select committee that he was not worried about the possibility of the UK leaving the bloc without a deal.
Easy as ABC
Alphabet ahead
Not all the FAANGS are disappointing investors. Shares in Google-owner Alphabet (US:GOOGL) rose 4 per cent in after-market trading after the tech giant revealed that net revenues increased by around 25 per cent during the second quarter. However, after accounting for the €4.3bn (£3.8bn) EU fine over its Android mobile operating system, net income fell 9 per cent. Still, investors were likely to be encouraged by lower-than-expected traffic acquisition costs – which have been steadily rising – as they came in at 22.8 per cent of revenue, down from 23.6 per cent in the prior quarter.
SuperDry super sale
Ex-CEO banks £71m
Shares in SuperDry (SDRY) closed 9 per cent down on the day UBS revealed co-founder and ex-chief executive Julian Dunkerton had sold 5.5m shares, equivalent to 6.7 per cent of the company, at 1,285p. That represented a 6 per cent discount to the previous night’s closing price – netting himself roughly £71m. Mr Dunkerton continues to own 18.5 per cent of the company. Neither the company nor UBS stated a reason for the sale. Liberum downgraded the shares to a ‘hold’ in response, saying “it potentially raises the question of what the ex-CEO thinks about the value of the current share price”.
Greasing the wheels
Capital injection
As the tit-for-tat Sino-US trade war rumbled on, the People’s Republic unveiled a range of fiscal measures aimed at combating “uncertainty” and boosting slowing economic growth. That included a Rmb6.5bn tax cut for corporate research and development and the accelerated issuance of bonds to fund local government infrastructure projects. That came on the same day that the People’s Bank of China injected $74bn into the banking system via a medium-term lending facility.
FCA steps in
Paltry rates
Continued low interest rates have already meant savers placing their cash with banks have earned paltry returns in recent years, but the Financial Conduct Authority (FCA) reckons some banks may be taking advantage of customer inertia to pay customers less. The regulator has launched a review on ways to combat price discrimination in the savings market, which could include a ‘basic savings rate’ – a minimum interest rate that would come into effect for all cash savings accounts and individual saving accounts (Isas) after they had been open for a certain period.
Risers and Fallers
| FERREXPO | 12.27 |
| MCBRIDE | 11.74 |
| AGGREKO | 11.24 |
| SDL | 9.36 |
| HIKMA PHARMACEUTICALS | 6.76 |
| MCCOLL'S RETAIL GP. | -16.39 |
| PETRA DIAMONDS | -14.56 |
| ALLIED MINDS | -13.61 |
| HUNTSWORTH | -12.95 |
| DEBENHAMS | -10.19 |
Week to 24 July 2018
Barclays over coals
SFO appeals
Litigation has been one of the biggest impediments to recovery for many of the big five UK-listed banks. For Barclays (BARC), charges brought by the Serious Fraud Office over its 2008 rights issue and loans made to the state of Qatar are one of the last – but highest-profile – legal disputes hanging over it. The SFO has made an application to the High Court to reinstate those charges, after they were dismissed by the Crown Court in May. The banking group intends to defend the application brought by the SFO.
Trade aid
Mitigating losses
In a bid to buffer the impact of ongoing trade wars, President Trump has unveiled $12bn (£9bn) in aid to the agriculture sector. The support will be aimed at soybean, pork and other farming hit by what the US argues are illegal retaliatory tariffs imposed by trading partners including the EU and China. The president also plans to buy unsold crops. The US Agriculture Department has said it expected farming losses of $11bn as a result of the trade disputes.
