Beijing strikes back
The trade war tit-for-tat between Beijing and Washington intensified as China’s state council said it would introduce tariffs of up to 10 per cent on $60bn of US imports, after President Trump introduced a fresh round of duties. The retaliatory tariffs are expected to target US goods, including liquefied natural gas, from 24 September, but are lower than the 25 per cent tariff previously proposed. President Trump said he would slap a 10 per cent tariff on $200bn-worth of Chinese imports from next week, raising them to 25 per cent next year if no trade deal is reached.
Aviva voices dissent
Unilever vote ahead
Aviva Investors became the first institutional shareholder to nail its colours to the mast when it comes to Unilever’s (ULVR) proposed move of its headquarters to Rotterdam. The asset manager warned it planned to vote against plans to scrap the dual UK-Dutch structure, arguing that it was not in the best interests of shareholders. If the plans are approved by shareholders – via two separate votes on 25 and 26 October – the Marmite manufacturer will be forced out of the FTSE 100, in turn forcing passive asset managers that use the benchmark, as well as some active funds, to sell their holdings.
Ocado sales up
But order size flat
Shares in Ocado (OCDO) have more than trebled during the past 12 months, surging in May on news of a partnership with US grocery chain Kroger. However, investor reaction to a third-quarter trading update was relatively muted. Retail revenues grew by 11.5 per cent, while the Erith warehouse is now up and running. As a result, the number of average orders are up – last week Erith processed more than 20,000 customer orders 14 weeks after opening, a number that took Andover 15 months to achieve – but the average value of those orders is flat at £106.
EC probes carmakers
Alleged collusion
The European Commission (EC) has opened a formal investigation into German carmakers BMW, Daimler and Volkswagen over whether they conspired to restrict diesel emission treatment systems. The EC said it would probe whether the three colluded to avoid competing on technology to clean up petrol and diesel emissions, in breach of anti-trust rules. Any potential fines would be based on product revenues and adjusted to reflect the duration and severity of any wrongdoing. All three issued statements saying they were fully cooperating with the inquiry.
Risers and fallers (%)
| JARDINE LLOYD THOMPSON | 29.64 |
| MCBRIDE | 22.08 |
| SIRIUS MINERALS | 14.68 |
| FERREXPO | 14.49 |
| PETRA DIAMONDS | 14.06 |
| DEBENHAMS | -14.59 |
| BROWN GROUP | -14.39 |
| GULF MARINE SERVICES | -13.36 |
| CONNECT GROUP | -12.83 |
| ALLIED MINDS | -10.44 |
Week to 18 September 2018
Sirius gets serious
Inks largest deal
Sirius Minerals (SXX) signed its largest binding offtake agreement to date, in a deal to supply up to 2.5m tonnes of polyhalite a year to Brazilian fertiliser distributor Cibra. This takes Sirius’ contracted supply beyond the 7m tonnes per annum level identified as key for second-stage project and bank financing. The complicating factor is a requirement for Sirius to purchase a 30 per cent stake in Cibra, via an equity swap and the issuance of 95m Sirius shares, which rose 5 per cent higher on the day of the announcement.
AJ Bell woos investors
December IPO slated
AJ Bell unveiled a 15 October deadline for retail investors wanting to participate in its IPO, expected to take place in December or early next year. Investors must have opened an AJ Bell account – either Sipp, Isa, Lifetime Isa or sharedealing account – by the middle of next month, but don’t have to have funds cleared in that account until just prior to the IPO application being made. That process is expected to open at the end of November or early in December. Investors must apply for a minimum £1,000-worth of shares.
Inflation beats expectations
Follows strong July
UK consumer prices inflation (CPI) rose more sharply than expected in August, which the Office for National Statistics (ONS) attributed to higher air fares and computer games. CPI increased to 2.7 per cent, according to data from the ONS, up from 2.5 per cent in July. The gain partly reflects the fall in UK sterling over the summer, which has pushed up petrol prices and other import costs. The pound rose 0.5 per cent against the US dollar on the news, surpassing $1.32. Some see the bump in CPI as vindication of the Bank of England’s decision to raise the base rate by 25 basis points to 0.75 per cent last month.
