WeWork to IPO
WeWork announced that it had filed IPO documents with the Securities and Exchange Commission, just three months after Softbank scaled back its investment in the co-working space provider. The Japanese bank had planned to invest up to $16bn (£12bn) in the heavily lossmaking company, but instead acquired $1bn in newly issued shares and bought a further $1bn in existing shares at a $20bn valuation for the group. WeWork’s revenue more than doubled in 2018 to $1.8bn, but so did losses – climbing to $1.9bn.
Alphabet disappoints
But Apple beats
Alphabet’s (US:GOOGL) shares dipped following the release of its first-quarter results, after revenue growth of 17 per cent to $36.3bn missed analyst expectations. The group attributed its expansion to mobile search, YouTube and cloud. Meanwhile, Apple’s (US:AAPL) shares were marked up on release of its second-quarter results. Revenues of $58bn were down 5 per cent year on year, but at the upper end of the group’s guided range. While iPhone revenues slid 17 per cent to $31bn, services revenues reached a record $11.5bn. Apple is guiding towards third-quarter revenues of $52.5bn to $54.5bn.
Ferrexpo tumult
Auditor resigns
Deloitte resigned as Ferrexpo’s (FXPO) auditor, asserting that the iron ore miner was too lethargic in investigating possible missing money at the foundation it set up to do its corporate social responsibility activities in Ukraine. Ferrexpo says the “delay” in the independent forensic investigation between November and January came because it was trying to work with Blooming Land. The committee investigating the issue since February is also now down two directors after Mary Reilly and Bert Nacken quit the board over the weekend. Ferrexpo has said the probe will continue alongside a search for new directors.
Occidental closes in
Buffett voices support
Occidental Petroleum’s rival offer for Anadarko gained a vote of confidence from Warren Buffett’s Berkshire Hathaway, which pledged to reinvest $10bn in the bidder to back the $55bn deal. The US conglomerate said it would invest in new Occidental preferred shares that would pay an 8 per cent dividend. Anadarko’s board said it had “unanimously determined” that Occidental’s $76 cash-and-shares offer would likely be deemed superior to Chevron’s $65 a share bid. The deal was likely to bolster Occidental’s shale assets, giving it a liquefied natural gas project in Mozambique, production in the DJ Basin of Colorado and assets in the Gulf of Mexico.
Brexit relief
Stockpiling eases
UK manufacturing activity slowed in April, as Brexit-induced stockpiling eased following a deadline extension to the UK’s departure from the European Union. The IHS Purchasing Managers' Index declined to 53.1 last month – with any reading above 50 representing expansion – from 55.1 in March. UK companies had increased their output in anticipation of disruption in the supply of goods and raw materials, against the backdrop of a potential no-deal Brexit. The slowdown in output and new order growth led to job cuts for the third time in four months, according to IHS Markit.
Quality control
Sales stagnate
Persimmon’s (PSN) efforts to improve the quality of its buildings and the accuracy of homeowner moving-in times weighed on first-quarter figures. The housebuilder reported a £100m decline in total forward sales to £2.7bn, following management plans to hold back sales releases on a number of sites. Active sales outlets fell from 375 to 350, and the weekly private sales rate was 5 per cent lower than last year. What’s more, management expects flat sales reservations during the first half on the prior year. A small mercy – the average selling price to the private market in the forward order book remained steady at £237,850, compared with £236,500 last year.
Open for business
Foreign ownership relaxed
The Chinese government unveiled plans to further open the nation’s $44 trillion banking and insurance sectors to overseas investors. Beijing said it would remove limits on ownership in local banks and scrap size requirements for foreign companies that operate onshore. Meanwhile, insurance companies will also be allowed to set up units in the country, the China Banking and Insurance Regulator announced. The changes are part of a series unveiled over the past 18 months, as China comes under increasing pressure from the Trump administration to level the playing field between foreign and local companies.
