Boris becomes PM
Hunt defeated
Boris Johnson was elected leader of the Conservative party on 23 July, winning 92,153 votes against Jeremy Hunt’s 46,656, at a ratio of 2:1. Turnout from party members for the widely anticipated outcome was 87.4 per cent. Mr Johnson ran on a ticket to guarantee the UK’s exit from the European Union by the current deadline of 31 October, with or without a deal. Allies of Mr Johnson said that the leader intended to select a ‘unity cabinet’. The pound rallied on the day of his confirmation as prime minister.
Boeing takes charge
Jets still grounded
Boeing posted its worst ever quarterly loss as the continued grounding of the stricken Boeing 737 Max cut into the aerospace giant’s earnings. Boeing announced a quarterly net loss of $2.94bn (£2.32bn) after having reported last week that the worldwide grounding of the Max, which is currently in force following two software-related air crashes, had resulted in a charge that reduced revenue by $5.6bn and earnings by $8.74 a share. Total revenues for the period were down 35 per cent to $15.8bn, while operating cash outflow of $0.6bn largely reflected lower 737 deliveries and a reduced production rate, along with the timing of receipts and expenditures.
Iranian conflict stews
Oil price rises
Tensions rose in the Gulf after Iran’s Revolutionary Guards seized two tankers, including the British-flagged Stena Impero oil vessel, in the Strait of Hormuz on 19 July. Brent crude oil rose in response by 2.1 per cent to $63.23 a barrel. Since their capture, the Iranian regime is reported to have told journalists that it had terminated a ring of 17 US-trained spies – a claim that President Donald Trump has denied. Earlier this month, UK forces took an Iranian vessel, while the US navy also shot down an Iranian drone that flew close to the USS Boxer, according to President Trump.
CMA investigates
A cosy relationship
The Competition and Markets Authority (CMA) began its investigation into the acquisition by JD Sports (JD) of Footasylum, which was approved by shareholders in April this year. The CMA served an initial enforcement order on 17 May to JD Sports and Pentland Group, its parent company, which prevented the merging of the businesses from taking place, out of concerns over the weakening of market competition created by the deal. The relationship between the two parties has come under scrutiny from some quarters. Footasylum founder David Makin was a co-founder of JD Sports, while his daughter, Clare Nesbitt, became Footasylum chief executive in 2015.
Risers and fallers (%)
| EI GROUP | +37.91 |
| ACACIA MINING | +25.55 |
| SAGA | +14.73 |
| REACH | +14.13 |
| INDIVIOR | +11.46 |
| PETRA DIAMONDS | -22.2 |
| THOMAS COOK GROUP | -17.5 |
| FRESNILLO | -14.61 |
| DE LA RUE ORD | -14.33 |
| AMIGO HOLDINGS | -12.69 |
Week to 23 July 2019
Accesso seeks takeover
Shares soar
Accesso Technology (ACSO) put itself up for sale on 24 July “following the receipt of approaches from a number of parties regarding a potential sale of the company”. The pioneer of queue-jumping technology’s shares rose as much as 72 per cent following the announcement, with the shares having been in general decline following the release of half-year figures in September 2018, then slumping after a February 2019 trading update that detailed $1.7m in one-off costs in connection with the termination of a "well-advanced" acquisition opportunity. The board has appointed KeyBanc Capital Markets, Canaccord Genuity and Numis to advise on the deal.
DB posts loss
Investment banking suffers
Deutsche Bank recorded its biggest quarterly loss since 2015 after taking a €3.4bn restructuring charge, posting a net loss of €3.1bn. The troubled bank, whose chief executive Christian Sewing this month announced changes that will include 18,000 job cuts, the reduction of its balance sheet by over a fifth through closures and the creation of a ‘bad bank’, witnessed a 6 per cent revenue drop on last year’s comparable period, with the corporate and investment banking division’s revenues of €2.9bn representing a year-on-year fall of 18 per cent. Deutsche reported a pre-tax loss of €907m.
DoJ investigates platforms
Consumers under threat
The US Department of Justice (DoJ) began an antitrust investigation into the leading online platforms, raising pressure on the likes of Facebook and Amazon. Without naming any US tech giants, the DoJ said that it would examine “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers”. Assistant Attorney General Makan Delrahim of the Antitrust Division said that without appropriate levels of market competition, “digital platforms may act in ways that are not responsive to consumer demands”.
