Barclays is said to be planning a major push to grow business in Paris, with the aim of expanding its headcount in the city by around 200 people over the next two to three years. The bank already has around 300 employees in the French capital and plans to move to larger premises next year. In March, Paris overtook London as Europe’s largest stock market with the UK capital now $250bn (£204bn) smaller than the French equivalent. It lost its place as Europe’s largest centre for trading equities for the first time last year when Paris overtook it.
Indian shares are poised to open higher today on the back of renewed optimism over progress in US debt ceiling negotiations. Indian equities have enjoyed a positive performance this week amid sustained foreign buying of domestic equities, the longest daily buying streak since December 2020. There are several notable quarterly earnings reports from companies including State Bank of India, ITC, GAIL (India) and Interglobe Aviation scheduled for release today.
Australia's Beach Energy shares tumble on Waitsia gas project worries
Reuters
23-05-18 01:33
Beach Energy has said that it is no longer viable to continue with capital expenditure and timing estimates for its $521m Waitsia Stage 2 gas project, sending shares down by 8%. The project, a joint venture with a subsidiary of Japan’s Mitsui, is expected to begin producing gas for export through the North West Shelf liquefied natural gas plant by late 2023. Beach Energy cited Covid-19 as increasing the uncertainty of the project with the tight labour market in particular impacting construction progress. The company said that it remains value-accretive and a key element in its future growth, and that Mitsui E&P Australia and Webuild are reviewing the impact of the delay on the project.
BT is planning to cut up to 42% of its workforce over the next seven years as it seeks to reduce costs and boost profit growth, according to CEO Philip Jansen. Total workers, including employees and contractors, will fall from around 130,000 to between 75,000 and 90,000 by 2030. The telecommunications company has aimed for annual savings of £3bn ($4.1bn) by the end of 2025. The firm has been reducing its workforce for the past five years, though more drastic cuts have been considered since 2019. Jansen’s planned reductions, which will come into effect over several years, reflect in part the shift towards automation and digitalisation in the telecoms industry, as well as the firm’s drive to improve its responsiveness to customers.
Investors should follow Warren Buffett's value investing strategy, according to the Questor column in The Telegraph. The strategy involves purchasing stocks for less than their intrinsic value and focusing on companies that have wide economic moats. Questor suggests that investors should avoid buying "story stocks" and instead mimic Buffett's approach for the best results. One investment trust that follows a value investing approach is Temple Bar, whose strategy is centred on short-term market fluctuations, purchasing temporarily undervalued stocks and avoiding companies that offer scant investment potential. The trust has posted impressive returns over recent years. Despite this, it continues to trade at a 6% discount to net asset value, suggesting that it offers good value for money. The trust's dividend yield is currently in excess of 4.1%, slightly above the FTSE 100's income return of 3.9%.
Emerging market (EM) stocks are trading at a discount in comparison to developed world equities, with the spread of price/book multiples indicating EM is cheaper compared to developed markets than at any other point this century. Indications are that it is time to rethink how investors approach EM investing, particularly in respect of indexing which looks at market cap.
Indexing can be a challenge in many emerging markets since the larger companies are often formerly state-controlled, monopolies, in utilities or banking–and while they may be the largest companies, their growth prospects aren’t thought to be exciting, so it makes little sense to direct investment there.
In China, it seems that after a four-year rally in consumer tech stocks, Chinese state-owned enterprises (SOEs) have led the markets following a government clampdown. The crackdown has created the opportunity to buy non-SOE companies while they are cheap.
UK publisher Future has warned its results for the year will come in at the lower end of market expectations and announced pre-tax profits for the six months to March were £66.4m ($95m), down almost a fifth. Shares fell more than 15% as investors anticipated the negative news, with Jefferies analysts describing the results as a "challenging set". CEO Jon Steinberg, appointed in April, said despite difficult market conditions the business was well placed to outperform others in the sector. However, Future's outlook has worsened since former CEO Zillah Byng-Thorne left amid concerns the business faced the end of favourable Covid-driven trends. Future owns over 100 titles including Marie Claire and Country Life, but has focussed on specialist titles marketed through digital channels that attract niche audiences. However, digital advertising fell by almost a fifth in the first half of the year.
Chinese carmaker Geely is set to double its stake in UK luxury sports car company Aston Martin and, after the £234m ($287m) transaction, is set to become Aston Martin’s third largest shareholder. The deal will unlock £95m in funding for the beleaguered car company. Shares in Aston Martin rose as much as 25% following the news.
India's Ramco Cements posts near-23% rise in Q4 profit
Reuters
23-05-18 10:49
Indian cement maker Ramco Cements has seen a 23% rise in Q4 profits, to INR1.52bn ($18.6m), boosted by increased infrastructure spending in India. Sales rose 51%, to INR25.6bn, but expenses rose 53% as elevated petcoke and coal prices dented margins. The company said margins were expected to improve from Q2 in FY24 onwards.
UK-based telecoms firm BT plans to cut 55,000 jobs by 2030, including replacing around 10,000 affected positions with AI. The reduction represents a 40% reduction in workforce. The firm plans to recoup hundreds of millions of pounds by automating some customer service operations, as well as aspects of network maintenance through software that can detect and repair problems. The company's full-fibre rollout will also be completed by 2026, resulting in 25,000 cuts to engineers in copper networks. CEO Philip Jansen claimed the strategy would “save the company hundreds of millions of pounds compared to its old IT systems”. He added technology would not replace humans entirely, saying "We won’t be in a situation where people feel like they’re dealing with robots".
Italian Design Brands, known as IDB, saw shares jump up more than 3% on their debut. IDB, the conglomerate of Italian lighting and furniture makers, raised €70m in the IPO and is planning to use the proceeds to make acquisitions. IDB CEO Andrea Sasso said he hoped to complete the purchase of another company by year-end. The group's order book was more than twice covered. IDB was advised by Citigroup and Equita.
Future, the publisher of a number of well-known British magazines, such as Country Life and TechRadar, has warned that its full-year performance would be at the bottom end of current market expectations due to a fall in ad revenues and declining readership. In the six months to March, pre-tax profits fell to £66.4m ($85.5m), an 18% fall on the previous year. The company has also said digital ad revenues and affiliate fees have dropped due to tough market conditions. Future is still in beta mode with the AI-powered chatbot, HammerBot, which will answer user questions, giving rise to issues such as giving out-of-date answers.
The world's largest climate-focused investor group, Climate Action 100+, with assets totalling $68tn, is expected to put pressure on Royal Dutch Shell ahead of its annual meeting next week. The company's environmental plans and direction will be questioned by investors seeking to speed up the move towards cleaner energy. Climate Action 100+ wants Shell to implement more stringent targets for cutting emissions of carbon dioxide by 2030. The Church of England Pensions Board and the Local Authorities Pension Fund Forum have said they will vote against the reappointment of Shell Chairman Andrew Mackenzie as a sign of protest.
Shell faces a difficult annual meeting next week as some investors want the company to capture profits from oil and gas rather than moving more quickly on climate change plans. While oil companies posted record profits last year when energy prices increased following Russia's invasion of Ukraine, Shell, BP and TotalEnergies have underperformed US rivals Exxon and Chevron because the European companies have placed greater emphasis on renewables and low-carbon businesses that are less profitable than oil and gas. This has caused increasing concern among investors who are putting pressure on Shell to focus on returns rather than transitioning towards renewables.
India's Gland Pharma reports lower Q4 profit on soft demand
Reuters
23-05-18 13:51
Gland Pharma, the majority of which is owned by Shanghai Fosun Pharmaceutical, reported its Q4 2019 profit fell 56% due to weak sales in its key markets. Consolidated profits before tax and exceptional items fell to INR 1.68bn ($20.54m) from INR3.80bn from the previous year. The Indian company has a business-to-business model and depends on core markets including the US, Canada, Europe, New Zealand and Australia, which provide 70% of its revenue; access to capital markets for funding and the stability of these markets has therefore been key to success.
Tata Elxsi, the software and consulting division of the Tata Group, has reported a 26% rise in profits in Q4 2017, on the back of strong deals in key segments including multi-year deals for its presence in the industrial design and visualisation sector. The firm, which caters to multiple industries from healthcare, media to automotive, saw an increase in earnings to $24.70m in the quarter to 31 March, from $20.64m in the same period last year.
US stocks rose as more companies reported better-than-expected earnings, with the S&P 500 up 0.5% and the Nasdaq composite increasing by 1%. Dallas Fed President Lorie Logan said in a speech that the end to Federal Reserve interest-rate hikes may not arrive as soon as predicted, which saw yields climb. However, the majority still forecast a pause at the Fed's next June meeting. Retailers Walmart, which raised its full-year financial forecast, and Bath & Body Works, which saw stronger revenue and earnings, both supported the market.
China's Zhejiang Geely Holdings has increased its stake in Aston Martin Lagonda Global Holdings to around 17%, making it the third-largest shareholder in the luxury carmaker. Geely will reportedly invest approximately £234m ($290m) to receive both new and existing shares, while Aston Martin will receive £95m cash for the new shares.
Prominent activist investor Carl Icahn has conceded that a major bet he made that the market would crash was wrong and has cost his firm nearly $9bn over six years. Icahn Enterprises suffered short losses of $4.3bn in 2020 and 2021 in the pandemic's aftermath. Hedge positions cost the firm $7bn since 2018, after it bet aggressively that the market would suffer another crash after the 2008 financial crisis. The trades have damaged Icahn's position as a formidable activist investor. Short-seller Hindenburg Research recently released a report claiming Icahn Enterprises’ dividend was unsustainable and its market value was inflated.
The head of property development company Iguatemi Shopping Malls led a successful bid to buy a Brazilian farmland estate being sold to create space for an Amazon rainforest reserve just a week before President Jair Bolsonaro rejected the reserve. Carlos Jereissati, Jr’s purchase of the farm helped open the way for the right-wing president to continue to sell off the Amazon for agriculture and mining development by trading permits to log parts of a federal reserve bordering on the Iguatemi land. The Jereissati family is part of the Cosan group, which has been accused of land grabbing and deforestation.
