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The Daily Telegraph Business May 1 2018

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Business
**
Tuesday 1 May 2018
telegraph.co.uk
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Market report page 7. Questor page 6
Gold
Canary in
coalmine
The credit
market
wobbles
could be the
first tremors
of a wider
quake
Handy
maxim
This could
be just the
year to sell
in May and
go away
Matthew
Lynn
Page 8
Page 2
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Page 7
Page 7
Sainsbury’s
‘in the money’
after shares
jump 15pc
Chief executive makes
PR faux pas with song as
colossal merger leaves
short sellers counting cost
By Ben Woods and Patrick Scott
PRESSURE is mounting on the competition watchdog to launch an immediate inquiry into the mammoth merger
between Sainsbury’s and Asda, with
analysis by The Daily Telegraph showing that more than one in 10 of the
stores owned by the two companies
are close enough to prompt concerns.
Short sellers were left nursing heavy
losses after the supermarket chains
unveiled their £15bn blockbuster deal
yesterday and the share price of Sainsbury’s rocketed by 15pc.
However, the deal’s lustre was somewhat tarnished by Sainsbury’s boss
Mike Coupe dropping a PR clanger
when he was caught singing “we’re in
the money” between media interviews.
The chief executive’s own shares in
Sainsbury’s increased in value by more
than £600,000 yesterday.
The company said Mr Coupe recently saw the musical 42nd Street and
sang the song to himself to “clear his
mind” between interviews. “To attach
any wider meaning to this innocent,
personal moment is preposterous,” the
company said in a statement.
Investors betting against Sainsbury
were left out of pocket by nearly
£130m when the market sent shares
soaring to a four-year high. Short sellers including some of London’s biggest
hedge funds were caught out after lining up trades against major players in
the fiercely contested grocery sector.
The trade involves institutions borrowing shares and selling them on the
market, hoping the stock value falls so
they can buy them back at a lower
price and make a profit.
Sainsbury’s and Asda vowed to slash
prices on everyday items by 10pc and
find cost savings of £500m by creating
a grocery colossus with a bigger market share than Tesco.
The move would hand Asda owner
Walmart around £3bn in cash and a
41pc stake in the combined business.
However, the US grocery giant, which
bought Asda for £6.7bn in 1999, would
book a $2bn (£1.5bn) loss.
Mr Coupe tried to reassure the
330,000 staff working for the two businesses, saying: “We are categoric in the
fact that we won’t close any stores.”
But he could not rule out selling
stores if the Competition and Markets
Authority makes the firms offload sites
as a condition for approving the deal.
Such was the pressure on the proposed merger that shadow business
secretary Rebecca Long-Bailey demanded an “urgent CMA investigation”. In a Commons question, she said
the deal had potential “to squeeze
competition” and posed risks “to workers, suppliers and consumers”.
Analysis by The Telegraph shows
that 65 Asda sites are in the same postcode sector as a Sainsbury’s. The overlap intensifies in southern England,
where Sainsbury’s is stronger.
The CMA said the deal was “likely”
to be earmarked for review, with Sainsbury’s and Asda pushing for it to be accelerated to an in-depth investigation.
Mr Coupe said talks on the deal “got
going this time last year” and called it a
“transformational opportunity to create a new force in UK retail”.
The merger, slated for completion
by the middle of next year, would create a combined group with 2,800 UK
stores.
Sainsbury’s-owned
Argos
would be rolled out into Asda stores.
Sainsbury’s full-year results yesterday
revealed a 19pc drop in pre-tax profits
to £409m despite an 8pc rise in revenues to £28.5bn. The fall was partly
due to higher costs for restructuring
and for integrating Argos, which it
bought in 2016.
Reports: Page 5
Space cowboy Amazon founder Jeff Bezos hails another successful test launch of his Blue Origin space vehicle in Texas, this
time reaching an altitude of 66 miles. He put this photo on Twitter and wrote: “The lucky boots worked again.”
TSB bosses to face Treasury committee over IT meltdown
By Iain Withers
TSB’s top bosses are being hauled in
front of MPs to account for 11 days of
outages to vital banking systems.
Chief executive Paul Pester and
Chairman Richard Meddings will give
evidence before the Treasury committee tomorrow, as will a representative
of the bank’s Spanish parent, Sabadell.
“The Committee is extremely concerned by the problems at TSB, and by
the apparent miscommunication to
customers about the extent and nature
of these problems,” said chairman
Nicky Morgan. She said the MPs would
“find out how they got into this mess,
who is responsible, and how they are
putting it right”.
The crisis deepened yesterday as
TSB warned customers of a rise in
attempts by scammers to take advantage of its IT failures.
TSB’s former owner, Lloyds, apologised for internet banking problems of
its own, with some customers “experi-
encing issues logging on”. Staff were
working on the problem, understood
to be unrelated to TSB’s issues.
Mr Pester called in IBM experts last
week and set a deadline of Saturday to
solve the problems at TSB.
Sabadell indicated they would be
fixed by the start of this week, but customers yesterday still reported being
unable to access money or pay bills.
TSB’s online banking was operating at
50pc capacity, meaning around a million customers could not get access.
TSB is facing criticism for its “big bang”
approach to moving from an old IT
platform rented from Lloyds to one
provided by Sabadell. A City source
said best practice was to split major
migrations into multiple “events”.
Scrutiny has also turned to the
Financial Conduct Authority and the
Prudential Regulation Authority, who
Mr Pester has said were involved in
planning “from day one”. The FCA said
it was not its role to approve such projects. The PRA declined to comment
Ex-BT finance chief loses £500k in bonuses Conviviality turned down 11th-hour rescue
By Christopher Williams
THE former BT finance chief who failed
to uncover massive fraud in the company’s Italian unit will be stripped of
bonuses worth more than half a million
pounds, The Daily Telegraph can reveal.
It is understood that BT’s remuneration committee has decided to scrap
more than 208,000 shares due to Tony
Chanmugam, who served as chief financial officer between 2008 and 2016.
The application of “malus” provisions in the deferred bonus plan is due
to be revealed alongside annual results
next week and at current prices Mr
Tony Chanmugam,
BT’s former chief
financial officer,
failed to detect a
massive fraud in its
Italian unit
Chanmugam stands to lose £518,000.
It will be the second time BT has penalised the 64-year-old over the Italian
scandal. Last year he was stripped of
deferred bonus plan shares valued at
£193,000 after years of accounting
fraud falsely inflated sales and profits.
There is no suggestion that Mr Chanmugam knew about the scheme, which
relied on a complex network of hidden
loans and sale and leaseback agreements with suppliers to disguise losses
and flagging sales.
Nevertheless, his failure to detect
the scam during multiple internal
reviews of the Italian business has
fuelled anger within BT as it has struggled to rebuild investor confidence.
The decision to scrap the bonus shares
still due to him reflects increased certainty at board level about where the
blame should lie. Gavin Patterson, BT’s
Continued on Page 4
Ex-Autonomy finance chief guilty
By Christopher Williams
THE former finance boss of
the British software company Autonomy faces jail after he was found guilty by a
US court of masterminding a
multibillion-dollar fraud.
Sushovan Hussain was
convicted on all 16 counts of
securities and wire fraud following a three-month trial in
San Francisco. The court
heard how Hussain, 54, artificially inflated Autonomy’s
sales and profits prior to its
$11.7bn (£8.5bn) takeover by
Silicon Valley giant HewlettPackard (HP) in 2011.
The deal was hailed as a
landmark for the British
technology sector and netted a fortune for Autonomy’s
founder, Mike Lynch. Little
over a year later HP slashed
the value of its acquisition
by $8.8bn and alleged massive fraud by Hussain and Dr
Lynch, who had left the
company. The fraud was un-
covered by HP after years of
public disputes between Autonomy’s leadership and
City analysts who raised
doubts over its rapid growth
rate. Dr Lynch has not been
charged and will not face a
criminal trial over HP’s allegations. However, the guilty
verdict against his righthand-man will be viewed as
a boost to HP in its pursuit of
the entrepreneur in British
civil courts. Hussain’s legal
team said he would appeal.
By Tom Rees
COLLAPSED retailer Conviviality rejected an 11th-hour rescue deal that
would have secured the final £18m
needed to save the Bargain Booze
owner, an investor has revealed.
Crystal Amber, the Aim-listed activist investor, made a written offer to the
company to help complete Conviviality’s £125m fund-raise in the days leading up to its collapse, but was rebuffed
by the firm’s management.
After an initial scramble to secure
funding fell short of its target, Crystal
Amber made the rescue bid on the con-
£18m
The shortfall that Crystal Amber says it
offered to make up in the fundraising
effort to save Conviviality from collapse
dition that it and other new investors
offering to back a turnaround effort
would have the option of buying more
shares in future at a discount.
“They raised £107m at 5p a share but
needed £125m,” fund head Richard
Bernstein told The Daily Telegraph.
“We said we’ll do the other £18m but
we want warrants and we think all the
new shareholders should also get warrants to get in at below 5p to compensate us all for the lack of existing
credible management.”
Conviviality plunged into administration earlier this year after rejecting
the deal from Crystal Amber, putting
thousands of jobs at risk. Boss Diana
Hunter had fallen on her sword days
earlier after stewarding the firm
through two profit warnings.
A representative from Conviviality
was unavailable to respond to a request
for comment.
2
Tuesday 1 May 2018 The Daily Telegraph
***
Business comment
The future of
retail belongs
to the bold and
imaginative
The £15bn deal makes eminent
sense amid a profitability crunch
driven by rising costs and the
growth of online shopping
L
ate on a gloriously sunny Saturday
morning, in and around the Catalan
food capital of Girona, mobile phones
began to ring, flash and vibrate. Small
groups sitting in the town square
enjoying coffee, golfing at the nearby
PGA Catalunya course, or cycling to Barcelona,
stopped their activity, read their phone screens
or took calls.
The group of former and current senior
leaders from the UK’s major retailers and
suppliers had come together to raise money for
the food industry charity. None seemed that
shocked to learn that the second and third
largest food retailers were planning a £15bn
merger, such is the upheaval in food retailing,
but they were surprised that it had been kept
so quiet.
There had been a few clues of something
going on; Mike Coupe, a long time supporter of
the charity event, had announced just days
before that he was now unable to come along,
and the journalist who broke the story was busily
calling around members of the group for
background the night before. Any doubt that this
might not be serious was dismissed by Andy
Clarke, the former chief executive of Asda, who
correctly predicted that the American owner of
Asda, Walmart, would not
lightly let this leak if it were
not true, and so discussions
would be at a very advanced
stage and in his view it
would happen.
Perhaps the merger talks
had been forced and
encouraged by the relative
ease with which the £3.6bn
takeover of the wholesaler
Booker by Tesco had taken
place the year before.
The move had further strengthened the
buying power of the market leader and
provided more avenues for them to sell their
products through.
Justin King, the former chief executive of
Sainsbury’s, noted however that there was no
precedent for a merger of this kind, and it
would take a long while to go past the
competition watchdog, maybe years, and the
teams would have to make sure it wasn’t a
distraction. The Sainsbury’s team, he noted,
were already running hard to absorb the
purchase of Argos.
Suppliers expressed a concern that they
would be pressed to reduce their prices to the
new larger entity but couldn’t see where
volume growth would come from in the
combined business, and that points of
distribution or manufacturing efficiency
seemed unlikely to change in the short term.
Meanwhile, leaders from M&S and Waitrose
mulled over how Sainsbury’s might move
more upscale, attacking their customer base,
leaving Asda to fight the discounters,
particularly in the North where Asda has a more
powerful presence.
It was clear to all that the logic behind the
merger was to reduce costs. Sainsbury’s had
shown an ability to do that through their
£1.6bn acquisition of Argos, and there will be
an inevitable squeeze on suppliers’ pricing. But
there is more. Argos has a more natural affinity
with the Asda customer base and so there is a
large opportunity to extend its reach, both
through Asda shops and Walmart globally.
George clothing at Asda and Tu clothing at
Sainsbury’s are both sub scale but a
combined George offer will improve pricing
still further and provide a threat for Primark,
M&S and many others. Over recent years Asda
has seen its profits shrink by
a quarter in the UK and the
likelihood of any short-term
revival seems unlikely. The
focus of Walmart is now on
the Far East and South
America, and the merger is
an elegant way for them to
redirect capital to rapidly
expanding fronts.
There have been rumours
in the food industry that
things have been getting
tougher for Sainsbury’s over the last few years.
The return to form of Tesco and Morrisons will
not have helped, and growth slipping
behind their rivals and below the rate of inflation
will have been a catalyst for action. Growth
matters in food retailing.
But it will be the challenge around
profitability that will have been the main driver
for this merger. The high street is in a period of
unprecedented change and challenge. The
growth of online shopping, with its much lower
margins as retailers pick, pack, charge and
deliver at the same cost as when customers did
that for themselves, is eroding profitability. But
at the same time, and as a consequence, people
are using shops less but store costs are going up,
through upward-only rents and increased rates.
Labour costs are growing through the living
wage and apprenticeship levy, the price of goods
have increased through sterling’s devaluation
since the Brexit referendum, and the sugar tax
has drained consumer confidence.
Against this backdrop two retailers looking
to merge to reduce their costs and extend
their product offer looks a creative and
proactive solution.
The future belongs to the bold and
imaginative. That’s just what this
move represents.
‘Sainsbury’s
ex-CEO
Justin King
noted there is
no precedent
for a merger
of this kind’
‘It will be the
challenge
around
profits that
will have
been the
main driver’
Lord Price is a former trade minister and former
managing director of Waitrose
Suppliers, not customers, should
fear the Asda-Sainsbury’s merger
The moment Mike
Coupe, the
Sainsbury’s chief
executive, was
caught on camera
singing ‘we’re in
the money, the sky
is sunny’ from the
musical 42nd Street
while waiting for an
ITV interview
JULIET SAMUEL
MUEL
W
e’re in the money,
the sky is sunny,”
Mike Coupe sang to
himself, rather
unwisely, while
waiting to be
interviewed by ITV yesterday. But are
all of us? Yes, if you believe the
corporate guff surrounding the
Sainsbury’s takeover of Asda.
Customers, employees, shareholders
and suppliers all stand to win, they
declared yesterday, despite the fact
that this is, if not impossible,
mathematically rather unlikely.
Management has to play a tricky
game. If they make the market share
benefits and cost efficiencies of the
deal sound too lacklustre,
shareholders won’t see the point. If
they talk them up too much, it makes
things awkward with the Competition
& Markets Authority, which will
almost certainly be asked to examine
the tie-up. Given the massive 32pc
market share of the combined group,
this is a deal “very high regulatory
risk”, as Jefferies’ analysts put it.
Sainsbury’s shareholders certainly
weren’t disappointed. The stock shot
up by 14.5pc. Usually, in a takeover
situation (which this is, despite talk of
a “merger”, since Sainsbury’s investors
will end up with 58pc of the share
capital), the buyer falls and the seller
rises. But Walmart, the owner of Asda,
will end up with a 42pc share in the
combined business, and its shares rose
yesterday. Surely that means there are
winners all round?
Not quite. Most supermarket
suppliers aren’t listed, but those that
are weren’t exactly delighted by the
news. Greencore fell 1pc; Bakkavor by
1.6pc, and these are two of the largest
businesses in the sector with
healthier margins than most. In its
announcement, Sainsbury’s declared
that the deal will “create significant
opportunities for suppliers”. But it had
Business
Insight
Carpetright
T
he bad news
continued for
embattled
high street retailer
Carpetright on Monday
after it warned that its
full-year losses would
be even worse than
expected, writes Lucy
Burton.
Releasing its fourth
profit warning in five
months, the company
said that it now expects
to make losses of
between £7m and £9m
this year – down from the
“small” loss it had
forecast in March.
The business said that
continued weakness in
consumer confidence
and disruption to trade
arising from publicity
over its restructuring
activities resulted in
a slightly odd definition of
“opportunity”. Suppliers would be able
to “develop differentiated product
ranges”, grow along with the
combined business (as you’d expect)
and, uh, “become more streamlined”.
We shouldn’t feel too sorry for these
companies, according to Mr Coupe,
chief executive of Sainsbury’s, because
they’re mostly major multinational
businesses with their own economies
of scale. That’s true in that 85pc of the
combined purchases made at
Sainsbury’s and Asda come from just
100 businesses. But it’s the suppliers to
those wholesalers and the other 15pc
who tend to struggle most.
Squeezing suppliers is, of course,
one of the rationales for the deal. The
group will cut costs by £500m a year,
mostly due to “buying benefits”. The
two supermarkets plan to go through
every identical product for which they
pay different prices and demand that
all contracts switch to the lower price.
Judging by Sainsbury’s share price,
many investors think the synergies
will be better than they’re letting on.
Cost savings will probably be
“significantly in excess” of the figure
given by management, said Amisha
Chohan, an analyst at the investment
manager Quilter Cheviot.
The squeeze on suppliers is the
biggest competition issue raised by the
deal, and yet most of the commentary
will inevitably focus on the risk posed
to consumers. The supermarket “big
four” will now become the “big three”,
and the newly combined group will
account for nearly a third of the
market. Rebecca Long-Bailey, the
shadow business secretary, was quick
to conclude the deal is bad news. “It
will be British shoppers that suffer
from rising prices,” she declared.
This ignores the enormous changes
in the groceries market over the past
10 years. With the market share of
German discounters Aldi and Lidl now
over 13pc and growing, it makes less
and less sense to talk of a “big four”.
Add in new competitive threats posed
by online services such as Amazon
Fresh and the added choice provided
by a growing range of delivery
sales falling by 10.5pc in
the final quarter of its
financial year compared to
this time a year ago. Sales
have dropped 3.6pc for the
full year, it said.
The flooring retailer is
in the midst of a sweeping
overhaul, with hundreds
of jobs at risk amid plans
to close 92 stores. The
plan, a company voluntary
arrangement (CVA), was
Today
42.5p
High May 2017
224p
Wilf Walsh
Chief executive
approved on Monday.
Chief executive Wilf Walsh
said: “The CVA proposal
will enable us to take the
tough but necessary
actions needed to restore
our profitability. Having
now received approval
from both shareholders
and creditors, we
will press ahead with
our plans.”
‘Judging by
Sainsbury’s
share price,
many
investors
think the
synergies
will be better
than they’re
letting on’
services and it’s hard to see consumers
being made to suffer. In fact,
customers are more discerning and
price-sensitive than ever. Sainsbury’s
and Asda claim that the deal will
enable them to cut prices on “many
products” by 10pc, which is another
reason to think that it’s suppliers, and
not shoppers, who stand to lose out.
The exception to this rule is, of
course, those who live in remote areas
served by only a few supermarkets.
The CMA should focus on local
competition, rather than national, in
its efforts to protect consumers.
Sainsbury’s and Asda have a decent
case to make: their geographical
footprints don’t overlap much and,
when the regulator cleared the
Tesco-Booker deal, it took a broad
view of the options available to
consumers, stating: “A large number of
retailers compete against Tesco,
including supermarket multiples,
symbol group retailers, and [Aldi and
Lidl].” Also, nearly everyone in the UK
now has the option of ordering online
from further afield, so supermarkets
must work harder to keep business.
That, after all, is the trend behind a
general consolidation among retailers.
Far from threatening consumers, it is
supermarkets threatened by our
changing habits. We’re moving our
purchases online, buying goods from
smaller outlets and focusing on price
over branding. These pressures are
why Tesco bought Booker, why Wm
Morrison has agreed to start supplying
Safeway products to other retailers,
and why the Co-operative Group has
agreed to buy Nisa Retail. The CMA
took a look at both the Tesco and
Co-op deals, but cleared them, seeing
that the market is changing.
Sainsbury’s and Asda could well be
forced into large asset disposals to
assuage the regulator, but their
decision to try their luck with this deal
suggests they think any remedies
required will be worth it. In such an
environment, it’s unsurprising large
players feel they have to take dramatic
action to stave off decline. In the end,
not everyone will benefit, but we
needn’t worry about the customer. As
usual, it’s suppliers who will face the
biggest squeeze.
Share price
PA WIRE/PA IMAGES
Mark Price
rice
250
p
200
150
100
Low Apr 2018
50
34.5p
0
2017
2018
Strengths
Threats
 Britain’s biggest
flooring retailer
 Chief executive is
focused on modernising
the business
 Continued weakness in
consumer confidence
 Publicity associated
with the restructuring
could further dent sales
 Competition from
rivals such as Tapi
Weaknesses
Opportunities
 Oversized property
estate, many badly located
stores on high rents
 Company in the midst of
major restructuring
 Losses expected for
this year
 If property market
picks up then demand for
new flooring will likely
increase
 Improved focus on
online shopping could
boost sales
Hundreds of jobs are at risk as Carpetright seeks to close stores
Selling in May and going away could well make sense
MATTHEW LYNN
YNN
I
t is the oldest stock market adage in
the book: “Sell in May and go away”.
Old City hands say one of the best
ways to play the markets has always
been to clear out your portfolio on the
first day of this month, head off down
to the country, and not bother doing
anything for the next six months.
As it happens, it doesn’t always
work. For the last five years, the
benchmark S&P 500 index has been
up in May and you’d have lost out by
selling too early. This year, however, it
is likely to be good advice. There are
four good reasons why the next six
months are likely to be very choppy
for equity markets. We are deep into
one of the longest bull markets in
history, there are clear signs that the
global economy is slowing down,
interest rates are still heading up, and
president Trump’s trade wars are quite
rightly going to rattle investors.
No one is quite sure where the “sell
in May” mantra originated. It might
well have its roots in the Victorian
City, when well-to-do bankers and
brokers preferred to get away from the
heat of London for most of the
summer, and paid more attention to
the horse racing and cricket than the
economy. Over the decades, however,
it has proved to have a slight but
significant statistical under-pinning.
Most gains in the equity markets tend
to come between November and April,
while the summer months are flat at
best and sometimes catastrophic.
There are big variations within that,
of course. In 1974, you’d have lost 21pc
on the S&P 500 between May and
November, in 2008 you’d have been
down 25pc and in 2002 by 27pc,
according to the Stock Trader’s
Almanac. But in 2009 you would have
lost out on a 23pc gain by sitting out
those six months, in 1958 you’d have
lost 17pc and in 1982 15pc. So it is a
mixed bag. On average, summer does
worse than winter, but that isn’t true
every year and sometimes stocks surge
ahead. It isn’t a hard and fast rule.
Given that it is May 1, how is this
year likely to work out? It looks like it
is going to be a rough for few months
for equities. Here’s why.
First, we are already a long way into
a bull market. There are different ways
of measuring it, but if you take the S&P
500 as the benchmark, the bull market
celebrated its ninth birthday on
March 9. That is a heck of a run. At
110 months, it is second only to the
epic bull run that ended when the
dotcom bubble burst early in 2000. If
it can stagger through to the end of the
year, it will be the longest bull run on
record, at least by duration rather than
percentage gain (even though the
index has tripled in value since 2009,
it still has some way to go to beat the
400pc gain of the Nineties or the
nearly 500pc run up in the Dow Jones
index from 1921 to 1929.) Bull markets
don’t necessarily die of old age or
exhaustion, so there is no reason why
the markets can’t still go up a bit more.
But it does mean everything is already
very expensive, with no bargains. That
makes it more likely equities will be
flat at best and may well see a sharp
correction over the summer.
Next, there are clear signs that the
global economy is slowing, especially
in Europe. There have been a string of
poor numbers out of Germany,
confirmed by yet another drop in retail
sales reported yesterday.
What is meant to be the motor of the
eurozone economy is spluttering, and
while most mainstream economists
dismiss that as a blip, with the terrible
winter weather largely to blame,
poor figures out of France suggest
something more serious is happening.
In this country, growth has already
slipped to a negligible 0.1pc.
Commodity prices are starting to
surge globally, led by oil, which will
put even more pressure on economies
that are starting to struggle. Over the
summer, investors may start to work
out that the recovery that started in
2009/10 is petering out, and that the
eurozone is not about to stage a
sustained upturn. And once they
figure that out, the only response will
be to start selling the markets.
Thirdly, interest rates are still going
up in the US. The Federal Reserve has
already increased rates six times, with
the latest rise last month taking them
to 1.75pc. It has indicated that rate rises
may accelerate from here on. The new
chairman, Jerome Powell, has a
‘There are
four good
reasons why
the next six
months are
likely to be
very choppy
for the equity
markets’
reputation as a hawk, and clearly does
not see supporting the stock market as
part of his job. There will be no
“Powell Put”, and certainly nothing to
match the “Greenspan Put”, which
meant the Fed was minded to cut rates
every time the S&P 500 wobbled.
That might be the right decision for
the American economy. It is
recovering faster than any of its major
rivals, and President Trump’s tax cuts
will give it an added stimulus. But it
does mean the markets will be under a
lot more pressure – because rising
rates are often bad for equities.
Finally, watch out for global
tensions. While geo-politics usually
matters far less to the markets than
most pundits assume, Donald Trump’s
determination to rip up the global
trading system could be hugely
damaging. He has already imposed a
range of tariffs, provoking the Chinese
to retaliate. The European Union may
well hit back with levies on US goods,
and if that happens the world may be
plunged into a full-scale trade war.
That matters. The integration of
global supply chains has been the key
driver of growth over the last two
decades, and any disruption will
wreak havoc with corporate profits.
The statistical record on selling in
May is mixed. Sometimes it saves you
from big losses, other times you miss
out on major gains, even though there
is a slight bias against the summer
months. But in 2018, it may well prove
great advice. The markets should have
calmed down by November, and they
could also be a lot cheaper.
The Daily Telegraph Tuesday 1 May 2018
***
Business
Interserve bemoans ‘self-inflicted mistakes’
Chairman admits lack of
discipline over contracts as
outsourcing giant enforces
turnaround plan
By Rhiannon Curry
INTERSERVE’S chairman has blamed
“self-inflicted mistakes” and a lack of
discipline over contracts for the company’s dire performance, as it revealed
it made a loss of £244m last year.
Reporting a slew of writedowns and
spiralling debt, Glyn Barker said that
the outsourcer had been faced with a
“number of significant challenges”
including market conditions, but that
many of its problems had come from
within. Mr Barker, who became chairman in March 2016, admitted: “Overall
the group’s financial performance in
2017 was extremely poor.”
The latest wave of writedowns included a £77m impairment cost, £86m
after a review of contracts, a further
£35m from a delayed energy-fromwaste project, which has already cost it
£160m, and £33m in restructuring.
Interserve’s net debt increased to
£502.6m, from £274.4m in 2016, while
revenue rose slightly to £3.25bn.
Shares in the company plunged 12.3pc
yesterday to 93.75p.
Interserve is one of the UK’s largest
providers of cleaning and construction
services, with major clients including
the Ministry of Defence, Thomas Cook
and London Underground. It employs
80,000 people, including 25,000 in
the UK.
Chief executive Debbie White, who
joined the company last autumn, has
spent weeks negotiating with lenders
to extend the company’s loans in order
to give it the financial clout to move
forward. The talks had been made
harder by the collapse of fellow construction and support services firm
Carillion in January, which meant
banks were more hesitant to lend.
The new facilities, which give Interserve £834m available to borrow
until 2021, were signed off by shareholders on Friday.
Ms White said that the new management team had been “awfully busy”
trying to get the company back on
track. Her turnaround plan, dubbed Fit
for Growth, is designed to deliver £15m
of benefit this year and between £40m
and £50m by 2020, and she said those
savings were on track.
“My outsider view of Interserve was
that it had dedicated and loyal employees supported by a very stable customer base,” she said. “We have a good
workload of £7.5bn lined up and we
have continued to win new contracts.”
Since joining, Ms White has implemented more management oversight
of contracts and monthly business
reviews, neither of which had been
happening under her predecessor
Adrian Ringrose, who left at the end of
2016, she explained.
She said she would be concentrating
on winning contracts in areas where
the business performs well. “For con-
struction, that’s in the health and education space,” she said.
“For support services, it’s about
increasing our capability and standardising what we do – no one is asking us
to reinvent the wheel.”
Interserve is expected to make a
small pre-tax profit of around £35m
this year as it offloads some of its more
troublesome contracts.
Andrew Nussey, analyst at Peel
Hunt, said he expected that a few small
divisions could be sold but that the
cost-saving plan appeared to be working. “The new management has successfully navigated the first stage of the
turnaround,” he said.
In February, Interserve announced
it would close its power business as
part of the restructuring.
Rank appoints
sector veteran
John O’Reilly
as its new chief
GAMBLING industry stalwart John
O’Reilly will take over as boss of Grosvenor Casinos and Mecca Bingo owner
Rank just months after incumbent
Henry Birth announced his resignation.
Mr O’Reilly, who has stepped down
from the board of William Hill to take
the job, has been in the betting and
gaming industry for 25 years including
stints at Ladbrokes and Gala Coral.
Rank has been on the hunt for a new
chief executive since March when Mr
Birch, who joined the company in 2014,
resigned to head up Shop Direct, the
retailer behind Littlewoods and Very,
which is owned by the proprietors of
The Daily Telegraph.
The change atop Rank comes as the
FTSE 250 firm said earlier this month it
expected full-year operating profits of
£76m to £78m, compared with previous analyst estimates of around £85m.
Revenues from Rank’s casinos open
for more than a year dropped 9pc in the
13 weeks to April 1 compared with the
same period the previous year, which it
said was partly down to its high-rolling
players winning more regularly, while
revenue at its bingo halls slumped 2pc
in the same period compared with the
previous year.
That was partly offset by a 17pc hike
in revenues from its websites, but
group like-for-like revenues were
down 2pc overall.
Mr O’Reilly, who takes up his new
role on May 7, previously ran Ladbrokes’ digital operations and was an
executive on its board until 2010. In
2011, he joined Gala Coral to relaunch
the Coral brand online and last year
joined the board of William Hill as a
non-executive director.
Rank also promoted Alan Morgan,
the retail manager for the Mecca bingo
estate, to the board as an executive
director, with effect from May 7.
Rank shares closed 0.23pc higher at
175p yesterday.
AFP/GETTY
By Bradley Gerrard
Engine for change A woman practises reversing in Riyadh, Saudi Arabia, ahead of the lifting of a ban on female drivers in
the country in the summer. The shift, announced by royal decree last September, is due to come into force in June.
Aviva to compensate those who lost out selling during ‘prefs’ row
By Lucy Burton
AVIVA has promised to compensate
around 2,000 people who lost money
after selling their high-paying preference shares in the company last month
when the insurer unsuccessfully tried
to cancel them.
Shares in the so-called “prefs”
crashed after the FTSE 100 giant said it
might scrap £450m worth of shares to
save money, leading to a paper loss of
around £1bn for investors.
It later reversed on that plan amid a
furious backlash from MPs, fund managers and pensioners. Fighting to
rebuild trust among its investors, Aviva
said yesterday that it would offer a “discretionary goodwill payment” to those
who sold the shares between March 8
and 22. It will pay out around £14m.
“We recognise that, while we were
considering our options for the preference shares, this caused uncertainty
and led some investors to sell their
shares,” said Mark Wilson, Aviva’s chief
executive. “We hope this goodwill payment goes some way to restoring trust
in Aviva.”
Aviva has appointed KPMG to man-
age the process, with the company giving eligible shareholders up to six
months to make a claim.
“Preference shares remain an industry-wide issue and it is clear now that
the best way forward is to seek a regulatory solution before the 2026 deadline when the shares no longer count as
regulatory capital under Solvency II,”
Mr Wilson said.
WPP plans to sell off minority stakes to avoid break-up
By Christopher Williams
WPP IS planning to cash in billions of
pounds worth of stakes in media and
marketing businesses following Sir
Martin Sorrell’s abrupt exit, in an
attempt to steady his struggling empire
and quell speculation of a split.
The advertising giant rebuffed speculation it could be broken up as it
unveiled first quarter results in line
with low expectations.
But Chairman Roberto Quarta and
WPP’s interim executive leadership,
joint chief operating officers Mark
Read and Andrew Scott, confirmed
they were looking at sales of minority
shareholdings.
WPP owns stakes in AppNexus, an
online advertising technology specialist, and Vice, the youth media brand.
Mr Scott told investors that WPP was
open minded on the future of the
investments, which have a book value
of £2.5bn but are estimated by analysts
to be worth more than twice as much.
Mr Quarta added: “We will be keeping an open mind and will always go
where value is for shareholders. But
the starting point is not a break-up.”
WPP shareholders have privately suggested that Kantar, the company’s marketing data arm, should be sold to
private equity for more than £4bn.
Some analysts believe its value as part
of WPP is far lower than the price it
would fetch, and chief executive Eric
Salama has reportedly held talks over
leading a management buy-out.
Mr Salama is also mooted as a potential long-term replacement for Sir Martin, however.
WPP is under pressure to overhaul
its strategy following the resignation of
Sir Martin amid a personal misconduct
investigation. The 73-year-old came
under intense scrutiny as WPP’s business deteriorated in the face of massive
technology shifts.
Its first-quarter report showed the
tough trends continuing. Like-for-like
sales were up just 0.8pc on last year,
including a 1.1pc decline in North
America, WPP’s biggest market. The
performance was slightly better than
City forecasts, and, combined with
raised hopes of asset sales, helped lift
WPP shares more than 7pc.
WPP has blamed its slowdown on
budget cuts by major advertisers in
Investors bet against Metro
Bank on cash-call concerns
INVESTORS have been ramping up
bets against Metro Bank since the start
of the year, as expectations rise that the
challenger bank may need a further
cash call within months.
Billionaire hedge fund manager
Crispin Odey and US investment bank
JP Morgan both took short positions
in the lender last Wednesday, helping to push the firm’s stock down
7.3pc on disappointing first quarter
results. Other investors to place bets
against Metro Bank in April include
Crispin Odey is
among those to take
short positions on
Metro Bank
prolific short seller and hedge
fund Marshall Wace – which made
£19m out of the collapse of outsourcer Carillion.
The moves mean that 4.64pc of
Metro Bank’s shares were out on loan
as of last week, up from 1.5pc at the
start of the year, according to data from
the Financial Conduct Authority.
The remaining investors with short
positions in Metro Bank are Blackrock, CZ Capital and Parvus Asset Man-
agement. Parvus’s position was taken
last summer.
Metro Bank followed up on its first
annual profit for 2017 with a six-fold
increase in pre-tax profits for the first
three months of the year to £6.4m
last week.
But its core capital ratio – a measure
of a bank’s strength, which weighs capital against assets – fell to 13.6pc, down
from 18.1pc, raising City concerns that
an earlier cash call would be needed.
The bets against Metro Bank put it
in the top 40 most shorted stocks
in the UK.
While the proportion of short positions is still not very high, City watchers say they are significant as Metro
Bank’s share register is still skewed
towards US investors close to chairman
and founder Vernon Hill that participated in the 2016 float.
Craig Donaldson, chief executive at
Metro Bank, told The Daily Telegraph
last week that the short positions were
“part of the normal course of business”.
He said the first quarter capital hit
was the result of a £500m purchase of
a book of mortgages and denied that
the bank would need to do an equity
raise this year, saying it would raise
debt instead.
Mr Donaldson said that he was
pleased “momentum and growth continued well” in the first quarter and
insisted the bank could be “profitable
as we grow”.
Holland & Barrett
bucks dismal trend
on high street
By Hannah Boland
ASIM HAFEEZ/BLOOMBERG
By Iain Withers
response to shareholder activism. Sir
Martin resisted suggestions that the
rise of direct dealing by big brands
with Google and Facebook, as well as
competition from consultants such as
Accenture, were important factors.
The details of the allegations against
Sir Martin have been closely guarded.
WPP has said only that they involved
alleged misuse of company funds and
personal misconduct. Mr Quarta said
Sir Martin, who denied the claims,
decided to resign before the board had
considered the results of an investigation and determined whether to act.
Growing field Pakistanis in rural areas such as Sujawal in
Sindh province, above, are turning to solar energy to
circumvent the unreliable power supply.
HOLLAND & Barrett shrugged off the
misery hitting the high street to post its
ninth consecutive year of like-for-like
sales growth as customers continued to
opt for healthier products. The largest health food chain in
Europe posted revenue growth of 7.1pc
in the year to Sept 30 to £656m, with
like-for-like sales up 4.5pc and online
sales rising 23.6pc.
Retailers have been struggling with
lower footfall, causing a wave of big
names to shutter stores and slash jobs.
But Holland & Barrett said activity in
the year was “satisfactory” and that it
was continuing to expand its portfolio
“where strategically appropriate”. Analysts Nielsen said recently that
Europeans were increasingly buying
more health-focused products.
Holland & Barrett said it was continuing to invest in its store estate and
online capabilities, to differentiate its
business from others in the health
food sector.
The company’s pre-tax profit
slipped to £72m from £115m due to
exceptional costs relating to a subsidiary and higher finance expenses.
Some of the costs incurred related to
the acquisition of Holland & Barrett last
August by retail investment fund L1
Retail. The fund is part of the LetterOne group, controlled by Russian
tycoon Mikhail Fridman.
3
4
Tuesday 1 May 2018 The Daily Telegraph
FINAL
Technology Intelligence
Former Google executive to launch ‘pure Android’ phone in UK
By Margi Murphy
A FORMER Google executive and the
co-founder of Android is eyeing British
shoppers with a launch of his struggling smartphone in the UK.
The Essential smartphone is now
available to buy directly from its website, costing $449 (£327), but will not be
stocked by larger carriers like Vodafone, O2 or Carphone Warehouse.
Google bought Android Inc, of
which Andy Rubin was chief and
co-founder, in 2007. Rubin was
instrumental in turning the operating system into a legitimate rival to
Apple’s iOS, going on to become the
most widely used smartphone system
in the world.
Yet Essential has failed to make a
splash. It launched the PH-1 handset in
the US last year to disappointing
reviews when the camera failed to
deliver images on a par with competi-
Andy Rubin, the
co-founder of
Android and CEO at
Essential, will offer
the PH-1 handset for
£327 in the UK
tors. But the company hopes it will be
second time lucky pushing its “pure
Android” device into new markets
including the UK, Japan, France and
Canada. Upon leaving in 2014, Mr Rubin was succeeded by Sundar Pichai,
who went on to become Google’s chief
executive. Mr Rubin founded a $300m
fund hardware incubator, Playground
Global, which is focused on robotics. Google has since created its own
premium smartphone, the Google
Pixel and Pixel 2, which has benefited
from extensive marketing campaigns
and is currently stocked by UK carri-
ers. Essential is backed by Foxconn,
which makes iPhones, China’s Tencent
and Amazon.
Essential’s website describes itself
as “An entirely new type of company, creating delightful consumer
experiences”.
Mr Rubin was forced to take leave
from Essential in November last year,
following an investigation into alleged
“improper” behaviour surrounding a
relationship with a younger employee
while working at Google. Mr Rubin denied the allegations and insisted the
relationship was consensual.
Mr Rubin’s spokesperson, Mike Sitrick, said in November that Mr Rubin’s
relationship was consensual and “did
not involve any person who reported
directly to him.”
“Mr Rubin was never told by Google
that he engaged in any misconduct
while at Google and he did not, either
while at Google or since,” he added.
Tech Nation says it has
endorsed 231 people in the
last 12 months, down from
263 in the previous year
By James Titcomb
HUNDREDS of applications for technology visas were rejected last year as
the numbers of foreigners approved
for a special government scheme fell
for the first time.
Tech Nation, the official body in
charge of processing applications for
the technology visa, said that it had
endorsed 231 individuals in the last
12 months, down from 263 during the
previous year.
The fall comes despite Theresa May
recently doubling the number of
“exceptional talent” visas made available to tech workers outside the EU.
The Tech Nation visa was introduced by David Cameron in 2014 in an
effort to stimulate the technology sector and help plug a shortage of talent
available to the UK’s young internet
start-ups. Initially only a handful of
applications were received but demand
boomed after the rules were relaxed
the following year.
In January, the annual allowance for
exceptional talent visas, which cover
the tech visa as well as other key industries such as science and medicine,
doubled to 2,000.
The move was seized on by the tech
industry as a welcome show of support
amid fears that Brexit could result in a
shortage of qualified computer programmers and IT experts, and Mrs May
said it showed the sector had the “full
backing” of the Government.
However, the latest figures show
that fewer eligible candidates are being
awarded the visa.
The number of individuals applying
increased from 385 to 428 during the
last Home Office year, which runs to
April 6. But almost 200 were rejected
by Tech Nation, which reviews the
applications before passing them on to
the Government for approval. Almost
all tech visa endorsements are
approved by the Home Office.
A spokesman said that as awareness
about the scheme improves, more people are likely to apply, and that it was
important to “remain robust in our
standards”.
Around 13pc of digital workers in the
UK were born outside Britain, and in
London, the figure is much higher at
31pc. The most common sources of
tech visa applications are the US, Nigeria and India.
Gerard Grech, Tech Nation’s chief
executive, said: “As we look to keep the
UK at the forefront of the global tech
industry we need to work harder to target the best and brightest talent from
key tech markets around the world.
“The tech visa is the most heavily
‘Just because application
numbers are increasing
doesn’t mean it’s somehow
easier to get endorsed’’
used of all the exceptional talent
schemes and we expect interest in this
visa route to accelerate as it becomes
better known across the digital tech
community around the country.
“However, as you can see from the
numbers, just because application
numbers are increasing doesn’t mean
it is somehow easier to get endorsed.”
Last week, peers heard that technology entrepreneurs were being put off
applying for visas because the visa system is slow and complex.
The City of London Corporation’s
Catherine McGuinness told the Lords’
European select committee: “[The]
process is difficult, people are getting
very fed up with that and they are ringing home and saying, ‘I thought it was
great to come to London but it is such a
bore getting the visa’.”
MIKHAIL TERESHCHENKO/TASS
Technology visa
approvals fall as
entrepreneurs
‘put off’ by system
Digital resistance Thousands of people marched through Moscow throwing paper planes and calling for authorities to
unblock the Telegram instant messaging app. Protesters chanted slogans against president Vladimir Putin as they launched
the planes – a reference to the app’s logo – in anger at Russia blocking it for refusing to decrypt users’ messages.
American sues the French for seizing domain name france.com
By Matthew Field
FRANCE is being sued for millions of
dollars after it seized the website
france.com from an American who had
the domain name for 24 years.
Jean-Noël Frydman, a French-born
American, bought france.com in 1994,
using it as an information site for US
tourists. The domain, supplied by provider Web.com, was seized from Mr
Frydman in March, redirecting users to
france.fr, a tourism site run by the
French agency Atout France. Mr Frydman is suing the French foreign ministry, saying the loss of the domain will
cost him “millions of dollars in branding, marketing, and business development”. He said the French government
began to express an interest in france.
com in 2015, but made no attempt to
buy or licence the name.
He had worked with France on his
business for tourism and promotions
but, in September 2017, the French
court of appeal ruled the domain name
violated French trademark law. Mr Frydman accuses the French government
of “cybersquatting”, maliciously registering the domain name to take his traffic and visitors. The lawsuit claims the
French state had chosen to “hijack a
valuable asset without paying the cost”.
The lawsuit adds: “Defendants misused the French judicial system to seize
the domain from the plaintiff without
compensation, under the erroneous
theory that the defendants were inherently entitled to take the domain
because it included the word France.”
Mr Frydman said that web.com gave up
the domain name without consulting
him, which he said could affect other
small businesses.
“I’m probably [one of web.com’s]
oldest customers,” he told Ars Technica. “There’s never been any cases
against france.com, and they just did
that without any notice. I’ve never
been treated like that by any company
anywhere in the world. If it happened
to me, it can happen to anyone.”
WhatsApp’s founder to depart Ex-BT finance chief loses bonus
amid reports of Facebook clash shares over failure to detect scam
THE FOUNDER of Facebook-owned
WhatsApp, Jan Koum, has said he is
stepping down from the group, after
reports emerged of clashes with the
social network over its use of personal
data and attempts to weaken
encryption.
In a post on Facebook, Mr Koum said
he was “taking some time off to do
things I enjoy outside of technology,
such as collecting rare, air-cooled
Porsches, working on my cars and
playing ultimate frisbee”.
The announcement came just hours
after The Washington Post reported he
was planning to leave, saying he had
clashed with the group over how it
protects users’ data, an issue which has
been thrust into the spotlight in recent
weeks in the wake of the Cambridge
Analytica scandal.
Facebook is still reeling from the
revelations that data from 87 million of
its users was harvested in 2014 and
then sold on, against its privacy rules.
WhatsApp’s popularity has, in part,
stemmed from the importance it puts
on privacy, having introduced end-toend encryption into its messaging
service in 2016. However, this privacy
has been pulled back in recent years
and last year Facebook changed the
terms of service on the messaging
87 million
Number of Facebook users whose
data was harvested in 2014 and then
sold on, against its privacy rules
service to allow access to user data.
According to The Washington Post, Mr
Koum left amid a “difference in
approach” with owner Facebook over
weakening encryption to allow
businesses to read users’ messages.
News that Mr Koum was exiting the
business came just months after fellow
co-founder Brian Acton left to invest in
a rival messaging business to
WhatsApp. Mr Acton hit the headlines
in March after he publicly joined the
campaign
to
delete
Facebook,
tweeting: “It is time. #deletefacebook.”
However, whilst Facebook has
endured a wave of criticism from
regulators, politicians and its users in
recent weeks, after revelations about
how it protects people’s data, the social
network will today face a different but
equally-hostile crowd.
This evening Mark Zuckerberg will
open Facebook’s annual F8 conference,
a jamboree for the software developers
whose apps and games are built on top
of the social network.
Developers are pushing for answers
after Facebook launched an investigation into apps collecting large amounts
of user profile data in March, leading
the firm to freeze approval of new apps.
The company has been forced to rein
in its developer community in the
wake of the Cambridge Analytica scandal and suspended reviews for apps.
Continued from Page 1
chief executive, is not in line for more
punishment. Last year the company
scrapped bonus shares due to him
worth £338,000 when they were
awarded in 2015 and 2016.
Mr Chanmugam had already retired
from BT when the first suggestion of
accounting problems in Italy was disclosed in October 2016. He had won a
City fan club for his relentless cost cutting and pugnacious style.
Yet when the full scale of the wrongdoing on his watch was revealed three
months later it triggered the biggest
ever fall in BT’s share price, wiping
more than £7bn from its stock market
value in a single session.
BT was forced to write down the
value of its Italian unit by £530m and
slash cash flow forecasts for two years
as it unravelled the fraud.
The disaster heralded a long decline
in the BT share price to less than £2.50,
a level last seen more than five years
ago.
BT’s new chairman Jan du Plessis
has backed Mr Patterson to steer the
company through its slump, despite
lasting investor anger over Italy.
As well as the fallout from Italy, the
company has been grappling with its
£14bn pension deficit in tense negotiations with trade unions and pension
Gavin Patterson,
BT’s chief executive,
will avoid further
punishment after
being stripped of
£338,000 in shares
trustees.
A recent deal with the main BT union to close the company’s burdensome
final salary scheme has provided a
glimmer of light, although many investors are awaiting an agreement with
trustees with this summer on pension
top-up payments.
Increasing demands from politicians
and regulators for more investment in
broadband upgrades are also viewed as
a threat to the BT dividend.
In the background Mr Patterson and
an overhauled executive team have
also been replumbing BT by merging
divisions and shifting tactics in its expensive foray into sports broadcasting.
Global Services, the outsourcing division which includes the Italian unit, is
among the main targets for change.
Mr Patterson has cut thousands of
jobs and BT has been working with
bankers on potential sales of troublesome overseas network assets.
It is understood that former Global
Services executives have explored bidding for some of the businesses with
private equity backing.
BT is meanwhile aiming to shift the
communications and IT services it provides to multinational corporates to the
internet. The move should mean it is
able to continue serving big clients
without owning so much physical infrastructure abroad.
BT declined to comment.
Facebook tackles fake news
by reducing its prominence
By Margi Murphy
AP PHOTO/RICHARD DREW
By Matthew Field
and Hannah Boland
Shades of joy T-Mobile boss John Legere wearing
“Sprint-yellow” sunglasses after the US telecoms
giants agreed to a $26bn (£18.9bn) merger.
FACEBOOK is shrinking the appearance of fake news on its website in the
hope this will stop people spreading
misinformation.
Articles that have been flagged as
inaccurate by fact checking sites will
appear smaller in the social network’s
news feed than links from reputable
media outlets, the social network said.
It hopes that by making misleading
news stories less visible, they are less
likely to be clicked on or shared. Facebook has been reluctant to banish fake
news sites directly, fearing the company will be seen as taking an editorial
stance it has so far avoided.
News stories on Facebook are typically presented with big pictures and
with bold fonts and shading. Those disputed by fact checking agencies will
carry just a small thumbnail picture
and plain text, according to the technology website TechCrunch.
It is not the first time the social network has put measures in place to stop
people sharing fabricated media
reports. It was forced to scrap an initiative that produced “red flags” next to
disputed stories because the warning
icons made reports appear more
believable to users, resulting in them
being shared more than before.
Politicians are putting pressure on
Facebook over concerns such stories
are a risk to democracy. Facebook said
as many as 126m Americans saw content from Russia-based agents on the
site in the past two years.
The Daily Telegraph Tuesday 1 May 2018
***
5
Sainsbury’s-Asda megamerger
1869
1965
1991
1999
2004
2007
2016
Sainsbury’s founded in London.
Almost 150 years ago, Mary
Anne Staples and John James
Sainsbury opened a dairy shop
on London’s Drury Lane. J
Sainsbury expanded quickly,
taking on dozens more stores.
First Asda opens. Having
travelled to the US to visit
Piggly Wiggly, thought to be
the world’s first supermarket,
Peter and Fred Asquith tried a
similar approach in the UK,
and Asda was born.
Having run into financial
trouble following a takeover of
a rival, Asda hired Archie
Norman as CEO. Norman and
his protégé Allan Leighton are
credited with turning around
the chain’s fortunes.
Norman’s changes paved the
way for Walmart to swoop on
Asda. After a takeover battle
with B&Q owner Kingfisher,
the US giant triumphed and
took the supermarket chain
under its wing for £6.7bn.
Sainsbury’s was in need of its
own makeover after losing out
to rival Tesco in a battle for
market share. It hired Justin
King to lead a turnaround –
lowering prices and improving
the quality of its food.
Sainsbury’s faced a takeover
bid from investment groups
including KKR, Blackstone and
CVC. King fended off the
attempt but Qatar’s sovereign
wealth fund emerged with one
quarter of Sainsbury’s shares.
Facing tough competition and
thinner margins, King’s
successor Mike Coupe
decided to bolster Sainsbury’s
non-food firepower in an
unexpected £1.4bn deal to buy
catalogue retailer Argos.
JULIA BRADSHAW
HAW
T
all, lean and
bespectacled, Mike
Coupe looks more like a
university professor
than the chief executive
of a FTSE 100 company.
But his mild manner, soft voice and
endearing smile belie a savvy
business mind and a man who likes to
get things done.
This became apparent soon after he
took the helm at Sainsbury’s in 2014
when he quickly set about negotiating
the supermarket’s £1.4bn takeover of
Argos – a bold move that surprised
many in the City.
Now, however, Coupe is about to
embark on the biggest gamble of his
career. Faced with an increasingly
tough retail environment in which
discount chains Aldi and Lidl are
stealing market share from the
traditional supermarkets, the decision
to combine with Asda is a defensive
move that will pit Sainsbury’s/Asda
against Tesco/Booker.
It will also set Coupe against Dave
Lewis, Tesco’s boss, and Charles
Wilson, the former Booker chief now
in charge of Tesco UK and Ireland,
who together make a formidable team.
“This is a big job and Dave Lewis is a
class act,” says Bill Grimsey, former
chief executive of Iceland.
“So it will be tough for Mike, there is
no question about that. This was an
inevitable move, because Sainsbury’s
was going to be marginalised by
Tesco, which is growing stronger
under Dave. And now with Charles
Wilson, these are two of the best
retailers in the sector by miles teamed
up together. Time will tell if Mike is up
to the job.”
While his family home is in
Yorkshire, where he lives with his wife
and two daughters, Coupe grew up in
the West Sussex countryside. His
mother was a housewife, while his
father was an inventor, entrepreneur
and scientist who ran his own medical
equipment company.
Friends say Coupe is a thinker, but
he does have gravitas and he can lead.
He certainly has the experience
required for the task: a retailer
through and through, he has spent his
entire career working in various roles
within the sector.
After graduating from Birmingham
University in 1982 with a degree in
physics, he cut his teeth at consumer
goods giant Unilever before moving
on to Tesco and then Asda. In 2002, he
was recruited into The Big Food
Group – a company formed from a
merger between Iceland and
wholesaler Booker – to be managing
director of Iceland. Two years later he
left to follow friend and former Asda
colleague Justin King to Sainsbury’s.
While high-flying leadership roles
such as that of a FTSE boss might not
have come naturally to Coupe – one
reason why he left Iceland as
managing director was because a lack
of experience meant he struggled with
the job – he spent a decade at
Sainsbury’s effectively being schooled
in the role of chief executive as King’s
heir apparent.
And as commercial director of
Sainsbury’s, Coupe was very much the
man behind the scenes, developing
trading strategies and paying attention
to the detail of retail. Having started
Asda’s online business in 1999 when he
was trading director at the
supermarket, he boosted Sainsbury’s
own online offering and is credited
with launching its price-match
promotion strategy.
Coupe took charge at Sainsbury’s
just as 33 consecutive quarters of sales
growth was coming to an end. In his
first results update to the market as
chief executive, he had to explain why
revenues had fallen for the third
quarter in a row – and has been facing
an uphill battle to turn them around
ever since.
The big question now is how long
Sainsbury’s and Asda will continue to
operate as two separate entities – and
how long Coupe will remain in the top
job. Despite assurances from the
grocers that they will be independent
of each other, some industry
commentators believe this is
unsustainable.
Indeed, one thing Coupe might have
learnt from his stint at Iceland was that
this model often doesn’t work in the
long term. “They are saying no job
Mike Coupe, top,
Sainsbury’s chief
executive, shuns
flashy cars and
private jets for
public transport
and a bicycle. Left,
Tesco’s Dave Lewis
is likely to prove a
formidable rival
BLOOMBERG/HEATHCLIFF O’MALLEY FOR THE TELEGRAPH
The quiet man
making a bold
move to be the
king of retail
losses, two brands, no store closures
– that is clearly nonsense,” says
Grimsey. “They will inevitably go to
one buying team, one distribution
network, one finance department etc,
and will save a lot of money for their
shareholders in that process.
“Mike knows I tried running The
Big Food Group with one company
operating two separate brands, and it
just doesn’t work. The two end up
operating like fiefdoms.”
However, other retail experts say
the likelihood is that the Asda and
Sainsbury’s brands will remain
The deal in numbers The
making of a retail giant
330,000
£51bn
2,800
47m
combined staff numbers
combined revenues last year
combined stores
combined customer transactions per
week
£500m
annual savings the companies hope to
make from the deal
In store and in pocket, the effects
of supermarket tie-up for shoppers
By Ben Woods
SAINSBURY’S and Asda have revealed
more about their shock £15bn tie-up,
which – if approved by shareholders
and regulators – would create the
biggest grocer in the UK.
The deal would shake up the retail
industry and make a real change in
how people shop. But what precisely
will the impact be?
Sainsbury’s and Asda aren’t
about to disappear soon
The deal will see both brands kept on
for now, with Sainsbury’s and Asda
operating under the control of a
single company.
The group plans to keep Asda’s head
office in Leeds and Sainsbury’s in
Holborn, London, maintaining the two
brands’ independence.
Food prices may fall
Sainsbury’s and Asda say the deal will
lead to a 10pc drop in prices on
products customers regularly buy.
It is an attempt to go toe-to-toe with
German discounters Aldi and Lidl,
which have taken customers away
from both supermarkets. Where these
price cuts will fall, and whether they
will be able to match the discounters
across the board, remains to be seen.
The merger is also likely to trigger
another price war across the sector, as
Tesco, Morrisons and Waitrose
consider how to respond. This will be
looked upon with horror by hardpressed suppliers, who will be asked
to push down costs once again.
You may see Argos in Asda
A key part of the deal will see Argos
concessions being rolled out into
Asda stores.
Sainsbury’s has already been
encouraging customers to buy Argos
products online and pick them up at
the supermarket. The move, it claims,
has encouraged customers to spend
more money in its stores.
Plans are also afoot to take Argos
global, with Walmart – the owner of
Asda – eyeing the prospect of
putting Argos in some of its
international stores.
Proportion of Asda stores with a
Sainsbury’s in the same postcode
South West
London
Eastern
Yorks and Humber
UK
West Midlands
South East
North West
Wales
Scotland
NI
East Midlands
North East
Your local supermarket is
not going to close – just yet
Sainsbury’s and Asda are insisting
there will be no store closures as part
of the deal. However, analysts and
politicians believe they will be forced
to sell or shut stores by the
competition watchdog. They expect
the Competition and Markets
Authority (CMA) to hone in on areas
where Sainsbury’s and Asda are the
only supermarkets in town.
The CMA, under its new boss, the
former Tory MP Andrew Tyrie, will
have a tough job on its hands. The
retail sector is under pressure and
there may not be willing buyers for
some stores on the hit list. That could
mean they stay in Sainsbury’s and
Asda’s hands, with regulators
conceding the threat to competition
rather than risk closures and job
losses.
The two firms believe the CMA will
give the deal the green light, without
any stores or jobs being lost.
You’ll see familiar brands
across both stores
0(%)
25
50
DATA: TELEGRAPH
The merger will present opportunities
for the company to sell brands
exclusively across the wider group.
The two supermarkets have already
said they would aim to sell George and
Tu clothing to a bigger pool of
customers, across Sainsbury’s, Asda
and Argos.
‘They are saying there will
no job losses, two brands,
no store closures – that is
clearly nonsense’
separate, but under one umbrella,
leading to substantial cost savings,
although these savings will take time
to be realised.
“The probability is that there will be
dozens of store divestments, but either
way the combined group will be a
powerful unit,” say Jonathan Pritchard
and John Stevenson, retail analysts at
Peel Hunt. “There will be plenty of
cost savings to be found, such as head
office rationalisation, and the
combined group will surely buy better.
We suspect that both fascias will
remain but it will take a long time
before the deal is signed off and longer
still before the deal benefits emerge.”
Professor John Colley, an M&A
expert at the University of Warwick,
says: “The enormous job of integrating
the two organisations will take several
years. During that period it is likely
that significant distraction will cause
the loss of further market share.”
Whatever happens, Coupe is not a
typical chief executive. He is a talented
musician who likes strumming out
tunes on his guitar, although, when
asked, he describes his musical skills
as “average”. An avid photographer
and cyclist who chooses public
transport over flashy cars and private
jets, he’s understated, but not to be
underestimated.
Beneath his calm exterior, his
friends say, is a man with true mettle,
who has the resolve and determination
to (politely) get his way.
6
Tuesday 1 May 2018 The Daily Telegraph
***
Business
Nichols is no bargain but it
has a long record of growth
in profits and dividends
Questor
Stock Picks
Vimto maker has no
debt, makes high
margins and returns
on invested capital,
and generates
plenty of cash,
says Russ Mould
Nichols
 Market value:
£563.8m
 Turnover (Dec
2018 estimate):
£137.5m
 Pre-tax profits
(Dec 2018 est):
£31.2m
 Yield (Dec
2018 est): 2.3pc
 Most recent
year’s divi: 33.5p
 Net debt (Dec
2017): £33.1m net
cash
 Return on
capital (Dec
2017): 30.7pc
 Cash
conversion ratio
(Dec 2017): 59pc
 p/e ratio (Dec
2018 est): 22.2
18
16
14
PATIENCE is going to be required with overall, even if Africa continues to
shares in Nichols, as suggested when
progress nicely.
this column first analysed the soft
Yet the absence of fresh bad news
drinks maker in January, but the early
looks like good news and the company
signs are encouraging.
continues to generate operating
Last week’s trading update,
margins north of 20pc and to
Nichols
which accompanied the
throw off cash.
annual meeting, featured
Profit growth is likely
Hold
no fresh shocks and this
to be modest at best this
cash-generative, highly
year, and possibly next,
profitable firm looks like
but the balance sheet has
A worthy pick for
investors able to
a worthy pick for any
no debt so management
stomach risks of
investor prepared to take
and investors have time
smaller stocks
on the risk of investing in
on their side.
smaller companies for the
The valuation is
long term.
admittedly no bargain, at more
Nichols, whose key brands include
than 20 times earnings, but that
Vimto, appears to be coping with the
reflects both the solidity of the balance
introduction of the sugar tax quite
sheet and the high returns on capital
nicely. In the first quarter of this
that the company generates, while the
year the company’s sales growth
dividend is more than twice covered
in Britain outpaced the wider
by earnings.
market’s 2.6pc advance.
This is a well-run company with a
The bigger challenge lies with
solid record of long-term growth in
the international operations.
profits and dividends.
Understandable problems in
Questor says: hold
Yemen are persisting,
Ticker: NICL
holding back sales
Share price at close: £15.40
12
10
8
2013
2014
2015
2016
Update: Devro
Shares in Devro, the sausage skin
maker, have risen by more than 10pc
since Questor first tucked in early last
year, and last week’s trading update
suggested that the firm was capable of
serving up further appetising capital
gains and dividends.
After 2016’s pair of profit warnings,
a trading update that passes
without incident still qualifies as
good news and it is pleasing that
management felt able to leave profit
expectations unchanged.
Investors must now remain on
the alert for trends in input costs,
2017
of 9p a share is thinner than ideal
at around 1.6 times, according to
consensus analysts’ forecasts.
Questor says: hold
Ticker: DVO
Share price at close: 212.5p
Key
numbers
Close: £15.40
20
£
2018
Update: Royal Dutch Shell
Judging by the muted share price
response, Shell’s first-quarter results
did not please everyone, but they
looked perfectly satisfactory to Questor,
and income seekers can continue to
view the oil giant as a core holding.
Even after a capital gain of
almost 30pc since our first tip in
October 2016 the shares still offer a
pleasing 5.3pc yield.
Sceptics will argue that the
consensus earnings per share figure of
173.2p ($2.43) and forecast (unchanged)
dividend of 133.6p ($1.88) make earnings
cover skimpy at 1.3 times. But once
first-quarter operating profit is adjusted
for depreciation and working capital,
and once tax and capital investment are
taken off, Shell generated some $6bn
of free cash in the first quarter, a sum
that covers the $4bn quarterly dividend
payment with plenty to spare.
Any reversal in oil prices could
cap capital gains but the yield looks
well underpinned.
Questor says: hold
Ticker: RDSB
Share price at close: £26.015
signs of efficiency improvements at
the American factory, and, above all,
progress in China, where Devro is
now looking to push through some
welcome price increases.
Modest operating profit increases
should be complemented by lower
interest bills as the group continues to
generate cash and cut debt.
A forward price-to-earnings ratio
of 15 represents a big discount to
its Spanish peer Viscofan, and a
prospective yield of more than 4pc
means investors can afford to wait and
see if its “Devro 100” turnaround plan
really does deliver, even if earnings
cover for the forecast 2018 distribution
Russ Mould is investment director at
AJ Bell, the stockbroker
Read Questor’s rules of investment before
you follow our tips: telegraph.co.uk/go/
questorrules; twitter.com/DTquestor
Share prices www.telegraph.co.uk/shares
© 2018 Tradeweb Markets LLC. All rights reserved. The
Tradeweb FTSE Gilt Closing Prices information contained
herein is proprietary to Tradeweb; may not be copied or
re-distributed; is not warranted to be accurate, complete or
timely; and does not constitute investment advice. Tradeweb
is not responsible for any loss or damage that might result
from the use of this information.
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-¾
—
-9.2
437
223
-⅛
116¼
116¼ Raven R CnvPref
117½
— 5.5
—
309
41
31¼ RDI REIT ●
37⅛
-⅝ 7.1
—
Travel & Leisure +0.30%
553
383¾ Safestore ●
548
— 2.6
—
429⅜
330⅞ St Modwen ●
410¼ +2⅜ 1.5 15.2
1046
837 Savills ●
982½* +4 3.1 16.7
654¼
477¼ Segro
646¼* -¾ 2.5
—
1055
920 Shaftesbury ●
1011 +4 1.6
—
318¾
266 Town Centre
292
+1 3.9
—
151⅜
104¾ Tritax Big Box ●
149¾
-¼ 4.5
141
833½
618 Unite ●
833½* +8 2.7
—
325
237 Urban&Civic
319
-½ 1.0 66.5
105¼
97 Warehouse REIT
100
— 2.5
97
1118
840½ Workspace Gp ●
1109 +31 2.1
—
Retailers +1.24%
361
163¾ Brown N
204⅝ -11¼ 7.0 46.4
235
31⅞ Carpetright
42½
708½
571⅞ Dairy Farm
-⅛
—
42.5
611⅜* +3¼ 2.5 28.2
-⅜ 12.6
5.8
2777
734⅞ Dignity
1091 +26 2.2
9.4
349⅝
145¾ Dixons Carph ●
203
-1⅛ 5.5
8.0
760
503 Dunelm
270
150 Findel
52⅜
20 Debenhams
●
23⅛
564
+2 4.7 13.1
255
-5½ —
365
282 REA Hldgs
292
-0.1
755
660 British Empire Trust ● 717
+3 1.7
804
796½
522⅝ Tate & Lyle ●
574⅝ -7¾ 4.9 10.4
796
681 Brunner
775
+6 2.1
846
4077½ +26½ 3.2 21.5
3020
2488 Caledonia ●
2715 -15 2.0 3358
1400¼ 1041 Greggs ●
144
111⅞ Candover #
115½
—
156
386¾
201
176¾ City Merchants HY 193¼* +¾ 5.2
190
596¾
282 Howden Joinery ●
476¾ +¼ 2.3 15.9
130⅝
106 City Nat Res H Yld
118¼* -¼ 4.4
139
369¾
285¼ Kingfisher
303¾ +1¾ 3.6 13.7
4557½ 3678½ Unilever
P/E
—
1190* +40 2.6 19.4
3387
Price (p) +/- Yld
32
839⅜ Vitec
-2.89
52 week
High Low (p) Stock
Hummingbird
1696 Weir ●
-0.51
Aerospace & defence -0.08%
⅜
2326
0.05
The share prices, price-earnings ratios and dividend yields
below are supplied by Interactive Data (Europe) Ltd. The
yields are calculated using historic dividend payments divided
by the closing share price multiplied by 100.
40
1320
Japan
—
Gas & Water -0.31%
—
1.4
545
491
Food producers +0.22%
0.6
471 Mucklow A J
88 JPM Mlti-Ass
-2.15
-½ 2.4
564
438½ JPM Russian
-2.38
63¾
968* +2½ 2.4 26.1
561¾
–
61¼ DowDuPont $
639 UBM ●
103½
+0.23
77⅛
981
657⅜* -¼ 3.0 25.0
0.79
2.5
319¾* -1 3.0 38.0
-5 1.9 1283
1136½* +5½ 3.8 40.9
0.56
1.4
—
590½ RSA
Germany
-1⅜ 2.6
120¼ +¼ 1.9
-1 3.4
1279½ 1051 St James Place
France
65¼
83¼ Dr Pepper $
—
266½
+8 3.3 14.4
2.9
64⅞ Colgate Palm $
126⅝
190¼ +1¼ 4.0
428
T-Bonds
77⅞
162¼ LondonMetric ●
900* +3½ 1.9 17.6
Spread vs
1.1
192¼ McKay Secs
400 Castings
Bunds
1.1
-⅛ 3.1
191⅜
1240
Spread vs
-⅜ 3.5
39⅜
289
1003 JPM Mid Cap
Yield%
126¼
36⅛ Coca-Cola Euro $
3.7
1260
—
102½ Chevron $
44¾
+⅛ 6.8
1874½* +9½ 2.5 20.1
59 Severfield
133⅞
1378 +5½ 0.9 33.9
469
1684 Mondi
0.4
65¼ Trinity Mirror
462
787*
Price (p) +/- Yld
145½ +¾ 2.1
11⅜ Sky
251⅝* -3⅛ 2.8 13.0
719 Phoenix ●
52 week
97¾ Caterpillar $
121¾
185½ Old Mutual
34.5
2.2
173¼
3.1
1402
260¼
820
—
P/E
337⅛ -3¾ 2.0
483
8.7
—
728½ Bodycote ●
132.43 123.14 Treas 8% 21
Price (p) +/- Yld
175½ Boeing $
Tobaccos -0.70%
486
1381 -2½ 6.7
672½
52 week
High Low (p) Stock
371⅝
+1 1.1
270* +1⅝ 5.7
1043
Flat Rdm
Price (£) +/- Yield Yield
P/E
422½ -2½ —
596
244¼ Legal & General
490
52 week
High Low (£) Stock
Price (p) +/- Yld
4565
542½ Lancashire Hldg ●
279⅞
1992½ 1692 Prudential
52 week
High Low (p) Stock
1399 RELX
773½
3.7
Government securities
P/E
+4 2.3 11.0
375
3873 Rightmove ●
-8.5
— 6.4 -22.9
Price (p) +/- Yld
1784
+3 3.9
1176½ SSE
52 week
High Low (p) Stock
4595
316*
842¾ +1⅛ 5.3
Engineering / Industrial +0.19%
P/E
99
218 Drax Group ●
733 Nat Grid
8.5
Price (p) +/- Yld
826
368¾
1174⅜
1554
+1 1.8 -22.8
52 week
High Low (p) Stock
305⅜ Halfords ●
-3.8
2.2
8.1
6.9
29½
12¾ Gen Electric $
14⅛
207⅝
144¼ Home Depot $
186⅞ +⅜ 2.2
1.8
165⅛
129 Honeywell $
146⅛
-¾ 2.0
0.8
24¾
17⅛ HP $
21½
-⅛ 2.6
2.7
1765⅞ 1396½ Compass
1560 +5½ 2.2 21.9
171⅛
139⅛ IBM $
146⅛
-⅜ 4.3
1.0
1698⅝ 1136 easyJet
1590 -16½ 2.6 20.5
97⅝
79⅝ Inger Rand $
85
-1⅛ 2.1
2.9
154½
76⅛ FirstGroup ●
112⅞
-¾
55¾
33¼ Intel $
51½
-1¼ 2.3
2.0
1124
889¼ Fullers ‘A’
940
-16 2.0 15.9
67
50 Intl Paper $
51¾
-¾ 3.7
2.9
2004
1310 Go-Ahead Grp ●
1941
-7 5.3
9.3
119⅜
81⅝ JP Morgan Ch $
109⅞ +½ 2.0
2.8
996
729½ GVC Hldgs ●
892½* -7½ 3.3 -78.3
148⅜
122⅛ Johnson&John $
128
-⅜ 2.6
0.1
680⅝
543½ IAG Intl Cons Air
630¼
136⅞
94⅞ Manpower $
96⅞
… 1.9
4.6
5435
4427 Carnival
4725
-7 2.8 18.0
—
— 3.0
12.1
7.5
4944
3656 Intercont Hotels
4589* +12 1.6 22.6
19½
10½ Marathon Oil $
18¼
+⅛ 1.1
4.8
211⅜
104⅜ Mandarin
174¼* +¼ 1.2 54.9
178¾
139¾ McDonalds $
166 +7⅝ 2.4
1.6
147¾
95⅞ Marston’s ●
107⅞ +⅛ 7.0
7.6
66⅜
52⅞ Merck $
59⅝
+⅛ 3.2
0.5
284¾
219⅞ Mitchells&But ●
282 +2¾ 1.8 18.7
97⅞
67⅛ Microsoft $
93¾
-2⅛ 1.8
0.9
414⅛
337¼ National Ex ●
392¼* -4¼ 3.4 15.3
39⅜
31⅝ Pfizer $
36⅞
-⅛ 3.7
2.6
8967
6027⅜ PaddyPwrBet
7180* +65 2.8 27.8
94⅝
72 Procter & Gamble $ 72⅜
-⅜ 4.0
1.3
1020
670 Playtech ●
810⅝ -3⅜ 3.9 12.6
210¾
151¾ Rockwell $
166⅛
-⅛ 2.2
1.9
250
167⅜ Rank Group ●
175
+⅜ 4.3 10.8
139¼
109⅛ United Tech $
121
-1⅜ 2.3
2.0
381¾
229¼ Restaurant Gp
303⅜ +10¼ 5.7 18.5
110
73⅛ Wal Mart Strs $
88⅝ +1⅜ 2.3
1.6
1357⅞ +11⅞ —
115⅞
96¼ Walt Disney $
100⅞ +1⅝ 1.7
4.2
37⅜
27⅛ Xerox $
31⅜
… 3.2
0.7
1798⅝ 1253¾ Ryanair
217⅝
124⅜ Stagecoach ●
132¼
87¾ Thomas Cook ●
156
14.7
-2¼ 7.6 28.4
123⅝ +3⅝ 0.5
—
Europeans +0.35%
1687⅞ 1098 TUI AG
1645½ +6 3.5 17.1
1219* +13 2.6 21.5
1346⅛
1164 +24 1.0 22.6
81¾
71⅝ Akzo Nobel €
74⅞
-1½ 3.3
1.3
378¾ -2⅝ 4.7 13.2
4340
4281 +27 2.4 17.9
97½
77⅛ BMW €
92½
+1 4.3
2.6
17
953 Wetherspoon ●
3499⅞ Whitbread
+⅛ 2.7
1.4
221¼ -2¼ 2.0
3.3
65½
-⅛ 5.6
2.7
67⅛
+⅛ 2.8
1.8
31⅛ Deutsche Post €
36⅛
… 3.2
1.9
12¾ Deutsche Tele €
14½
… 4.5
0.9
79⅝ Heineken €
87¼
-⅛ 1.7
2.3
211⅞ LVMH €
289¼ +4⅞ 1.7
2.0
682½
533½ BAE Systems
611* -2⅜ 3.6 22.8
219
162 Chemring
209
-1½ 1.4 87.1
150¼
110 Cobham ●
115⅛
—
32.9
947¼
577⅜ Pennon Gp ●
692¼ -7¾ 5.2 17.4
444⅝
392 City of Lon ●
425* +1½ 4.2
417
131½
78½ Lookers
101¼ +1¼ 3.8
8.4
1600
1225 Arbuthnot
1470* — 2.2 33.5
76½
59 Daimler €
322⅞
190¼ Qinetiq ●
230½ +2¾ 2.6 10.7
2575
1664 Severn Trent
1940 -20½ 4.3 13.3
498
330¼ Dunedin Ent
370*
— 5.1
434
397¾
262 Marks & Spen
287¾ +1⅛ 6.5 40.0
2580
1790 BrooksMacdonald
1885 +35 2.3 43.9
72⅛
62½ Danone €
994½
800 Rolls-Royce
840*
+⅝ 1.4
1078
648⅝ Utd Utilities
743¼ -5⅝ 5.3 11.7
786
608 Edinburgh Inv Tr ●
681
+4 3.9
747
254⅜
203¼ Morrison (WM)
243⅛ +3⅛ 2.5 18.3
1¼
1
0
41⅜
310⅜
210¾ Senior ●
295⅜ +¾ 2.4 20.5
820
544 Edin Worldwide
784
+2
—
751
137⅛
345½
2⅝ Central Asia Met
289* +6½ 5.7 13.7
18⅛
2180
1138 Ultra ●
1408* +25 3.5 21.3
— 1114
5355
3565 Next
5256 +26 4.7 12.6
16
8¼ Ceres Power
13¼
91⅜
603¼
235¾ Ocado ●
538⅜ +10¼ —
—
1270
780 Churchill China
285⅞
-¼ 5.3
7.8
460
3¼ Cohort
350 +1½ 2.1 38.5
60
50⅜ LafargeHolcim SFr
55⅜
+⅜ 3.6
2.7
857½ +5½ 0.6 16.6
31¼
15¾ Lufthansa €
24⅛
-⅜ 3.3
4.8
5
… 3.8
1.7
—
-3.7
177¼ Barclays
119¾ Centrica
153¾ +1 7.8 25.6
General financial +0.10%
2793½
820 ElectraPrivEq
830
—
331
286 EP Global Opp
314
-4 1.7
+1 4.2 21.9
1360
1192 European Assets
-1 2.0 27.8
974
853¼ The Europ InvTr
914
400 +12 1.2
+4 1.0
447¼
318⅞ Ashmore ●
411¾ +1¾ 4.0 16.4
399⅜
320¼ Brewin D ●
361
207¼ -1¾ 3.1 -20.1
433
315 Charles Stanley
343
Banks +0.59%
220⅛
213
334
1242½* +12½ 6.3 1212
13 Mothercare
+¼
18¼
—
3.8
AIM +0.35%
Cambria Africa
1⅛
…
—
—
— -13.2
1052½* -15 2.3 18.0
29*
213⅞
108 Saga ●
135⅞ +1⅝ 6.6 11.0
878½
409
339⅞
222⅜ Sainsbury J
309 +39¼ 3.3 23.2
4¼
1
280
2347
1635 Smith WH ●
1951
-4 2.5 18.7
66
40 Elecosoft
62½*
— 1.0 25.0
130⅞
111⅝ Michelin €
116½ +½ 3.0
2.6
-3
+½ 2.4 18.2
141⅞
112⅛ Pernod Ricard €
137½
-⅜ 1.5
2.2
484¾ Dart Group
1715
1315 Close Bros ●
1536 +7 4.0 12.0
1935
1258 Hargreaves L
1789½ +14 1.7 40.0
408¼
352 Fidelity Asian V
635⅝ HSBC
725⅜ +5¾ 5.1 20.8
868½
539½ IG Group ●
830 +1½ 3.9 18.0
263
191⅛ Fidlty Chna Sp Sits ● 242
73⅝
62¼ Lloyds Bk Gp
64⅝*
-⅛ 4.7 14.7
1204
779½ Intermediate C ●
1086
— 2.6 14.6
235
199¾ Fidelity Euro V ●
213½* +1½ 2.0
241
424⅜
280¼ Sports Direct ●
402¾
10.2
130
98¾ Finsbury Food
129*
304¼
239⅝ Ryl Bk Scot
270¼ +1¾ —
42.9
649⅜
451¼ Investec ●
577⅜
-⅝ 4.1 11.4
—
166
242¾
165⅜ Tesco
235⅞ -2¼ 1.3 16.0
62½
21⅝ Futura Medical
38¾ +1¼ — -12.0
541¾
387⅛ Santander
471⅞* +5⅝ 3.3 13.6
158⅜
99¾ IP Group ●
133¾ -5⅜ —
+3 1.8
268
14⅞
5½ Gaming Realms
106 Fidelity Japan V
150½ +1
274
228 Fidelity Sp V
265
—
Support services -0.28%
Deltex Medical
1⅜
8
2075* +5 3.8 19.3
620
425 Liontrust
578
-2 2.8 38.2
778
695¼ Finsbury Gwth ●
764*
— 1.9
764
339
138 Gattaca
864¼
688⅝ Standard Ch
767* +5¼ 1.0 45.0
47
41 Lon. Fin. & Inv.
44
— 2.5 12.6
678
560½ Foreign & Col ●
656*
+2 1.6
670
994½
638⅝ Aggreko ●
732⅜* -1¾ 3.7 17.6
181
130⅜ Highland Gold
333
250¼ Virgin Money ●
278¾* +7¾ 2.2
4371
3305½ Lon Stock Ex
4300 -18 1.2 29.4
338
305 F&C Cap & Inc
326
-3 3.3
327
2185
1476 Ashtead Gp
2033 -22 1.4 20.2
37
219¼
148⅝ Man Group ●
181¼* +2⅝ 4.4 16.1
152¼
133⅞ F&C ComProp ●
147* +2⅝ 4.1
142
1030
604 Babcock Intl ●
735¾ -5¼ 3.9 11.9
70⅜
1018
5⅝ NEX Group ●
988
+1 1.1
211⅜
181 F&C Mgd G
201
+3
—
200
230
145¼ BCA Marketplace ● 190⅝
181½
523
+7 3.0 12.1
146
127 F&C Mgd I
135
— 4.1
134
2472
1918½ Bunzl
2111 +13 2.2 22.4
545
373 James Halstead
386
665
-5
349
⅞
2477¾ 1485¼ Secure Trust Bk
7.4
Beverages +1.16%
2735½ 2224 Diageo
2589 +31 2.4 24.4
556
320
249½ -13 2.8 47.4
2402⅞ 312⅛ Provident Fin ●
155½ Stock Spirits
2842
Chemicals -0.77%
4691
3612 Croda
4461* -39 1.8 24.7
3511
2681 Johnson Mat
3294
2772
1826 Victrex ●
2622 -56 2.1 22.5
-7 2.3 16.4
Construction -0.07%
400¼ Paragon ●
2254 Rathbone Bros ●
3316 +3 4.0
8.9
8.7
354
90½
247 Boot H
74 Breedon Group
494½
419½ Costain
648½
429¾ Crest Nicholson ●
2955
27 CRH
287*
+1 2.8
8.9
98*
— 5.0
109
173¾
149
827½
376½ Hunting ●
-½ 4.7
107
2012½ 1812 RIT Cap Ptnrs ●
1990* — 1.7 1856
862⅛
4¼ Petrofac ●
305
265 Hend Alt Strat
279
— 1.7
335
242
218⅜ Ruffer Inv Pref
228½
-1 0.8
227
104½
42¾ Premier Oil
97⅝
86⅜ Hend Div Inc Tst
91¾
-1⅜ 4.8
88
383⅛
284 Schroder Asian TR
350*
+4 1.4
344
2579½ 1996 Royal D Shell A
186
383
339½ Scot American
366
— 3.0
350
2617
2038 Royal D Shell B
2601½ +5½ 5.2 22.7
973½
771 Scot Invest ●
833*
-6 2.4
923
150
87⅛ Soco Intl
104¾ +4⅞ 5.0
Pharmaceuticals -0.20%
Healthcare -0.03%
349⅛
181⅜ ConvaTec Grp ●
217¼* +2¼ 1.9 37.4
201½
165 Hend High Inc
183* +1½ 5.2
3728
1940 NMC Health
3568 -32 0.4 54.0
904
733½ Hend Smaller Co
902
235
1481½ Burberry
148¼ McBride
129 +1½ 7.8
-3 1.2 21.6
1110
890 Hend Opp
1032½ +12½ 1.9 1248
480
372⅜ Scot Mortgage
474⅝
— 0.6
461
1396* +4 1.8 21.9
1265
939¼ Herald Inv ●
1235 -10 — 1406
177¼
155½ Sec Tst of Scot
166½ +1¾ 3.6
177
671
1930
Household goods +0.62%
2024
+4 2.1 1005
109 PremierGlblInfra
1823½ +1½ 2.2 27.9
150
-2 2.9 30.6
1476½ HgCapital
1905* +15 2.4 1880
179⅞
167 Seneca Global
174¾ +¾ 3.6
173
431 Stand Life Eq Inc
478
+3 3.9
484
784
540 BTG ●
684
330¼ TR Property ●
402 +1½ 2.7
415
2840
1636 Dechra Pharma ●
2742 -18 0.8 97.6
312
257 Invesco Asia Trust
286
+3 1.5
328
830
655 Tmpletn Em Mt ●
738
+5 1.1
845
260 Invesco Inc Gth Tr
280
+1 3.9
323
83½
72⅝ Troy Inc & Gr
76½*
+⅜ 3.5
76
84⅛
73½ InvesPerp Enhc Inc 76⅜*
-⅝ 6.5
74
180
150 UIL Ord
166
— 4.5
260
487
-3⅝ 6.8
2102
1505 -16 2.0 18.5
144
129 InvesPerp Bal Rk
-½
—
141
159¼
153¼ UIL Fin ZDP 18
159
—
—
194½
167 InvesPerp Sel UK E 183½* +1½ 3.5
186
145
133⅛ UIL Fin ZDP 20
143
—
—
681½ Grafton Gp ●
752
486⅝
360¼ Marshalls ●
428⅝ +1⅝ 3.3 19.9
25
1520
1040 Morgan Sindall
1252* -14 3.6 10.5
570
379⅞
252 Nth Midland Con
205⅜
310
— 1.9 42.4
17⅛ BSD Crown
139½
-5.0
155
466¼
246½ Indivior ●
453⅛ -7⅝ —
78.0
130
243¾
29 Premier Vet
127⅞
109¾ UIL Fin ZDP 22
126½ +1
—
112
5021
539
234⅝
194⅞ Utilico Emerg
214 +2½ 3.3
244
Property +0.60%
— 1.3 24.5
419¼
363½ JPM American ●
394½* +2½ 1.4
416
1118
975 Witan ●
1058 +10 2.1 1071
196⅞ +1⅜ 0.6 12.5
381⅞
304 JPM Asian
358* +4½ 4.3
397
355
304⅝ Witan Pacific
327 +2½ 1.7
2707
2285 Worldw HealthTr ● 2465
565
73½
2214 Persimmon
2715 -15 8.7 10.6
512
310 Microgen
446
536 Redrow ●
627½* +1 3.2
2970½
26¾ Micro Focus Intl
1253 -21 5.9 23.2
346¾
217¼ JPM Chinese
211⅞
173 Taylor Wimpey
191¾* -2¼ 7.9 11.3
825¼
536¼ Sage Gp
635¼ -5¾ 2.4 22.8
760
131
1⅛ Spirent
119* -2¾ 2.5 34.5
833⅜
121
104 JPM ElecManInc
113
103
98 JPM ElecManCsh
100½
— 1.4 27.2
Insurance +0.17%
514 +21 —
1288* -36½ 1.9
206
421 CML Micro
—
59 JPM Brazil Inv
2530 -28 1.0 47.0
1461⅜ -3¾ 5.5 46.5
-1 4.0
111¾ Laird
78.6
814¼ Hikma ●
+2 3.3
-5.5
—
2000
190 InvesPerp Sel Gbl E 204*
—
-½
1724½ 1179⅜ GlaxoSmKline
457 InvesPerp UK Sm Co 518
—
2901
Electricals +0.01%
1652 Genus ●
527½
20
673½
8.9
2648
214
— 2.1 13.9
5103 +20 4.0 29.7
406½
309½
851
-3.0
502
6.5
1438 Superdry ●
-½ 5.4 22.1
-2.6
963
246¼ +2⅜ 3.4 16.0
Information technology -1.16%
2531
—
147
5702* +44 2.9
7.4
-¾
-6 2.5
854
8110⅜ 4973⅜ Reckitt Benck
2581* +10 2.3 13.0
94¾
719 ICG Enterprise Tst
— 3.0 14.8
199¾ PZ Cussons ●
— -67.3
133 HICL Infrastructure ●145⅜ +1 5.4
-¼
367¾
4260 AstraZeneca
-7
175½
83¾
21.1
5520
801
603⅝* -2⅝ 4.6 -97.8
866
460*
—
P/E
106
1173 Smith & Nep
4072 +7 2.7
Price (p) +/- Yld
99 F&C UKRealEstInv
495⅜ Mediclinic Int
3031 Berkeley Grp
Low Stock
94½ F&C UKHighIncTst
1442
2718 Bellway ●
High
109
890⅛
4270
NAV
108
7.6
3805
52 week
Price (p) +/- Yld
2530 +10 4.2 12.4
139½
9.1
52 week
High Low (p) Stock
3301* +12 3.4 15.3
294¼* +4¼ 1.2 12.1
-4 7.7
1375 +10 0.9 1372
1870 S & U
115 Alumasc
558*
380½* — 3.7
1255 F&C Glob SmCo ●
3069 Schroders
252½ Balfour Beatty ●
6¼ Barratt Dev
307 F&C Priv Eq Ord
1420
— -10.0
3784
311¾
705½
384
2354* +14 2.6 25.4
2567
191¼
— 5.2
2.8
380
2940½ Shire
36⅜
-⅛
—
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3866 -28 0.7 11.3
721
127⅝ Capita ●
191½ +4⅝ 5.8
-2.4
228¼
12½ Carillion #
14¼
—
0.5
299
219⅝ Charles Taylor
262*
-6 4.2 19.9
73
46¼ Communisis
61¼*
-¾ 4.3 10.9
711½
438⅛ De La Rue
7762½ 6445 DCC
— 1.7 28.7
441*
+7 4.7 10.1
1428 Experian
1667
-1 1.9 24.9
5722
4427 Ferguson
5580* -36 2.0 17.9
342⅝
233¾ G4S
258⅞ -2¾ 3.7 17.0
179¼ -1⅛ 1.9 20.6
206¼
155 Hays ●
872
665½ Homeserve ●
740
5470
4052 Intertek Group
4901 +3 1.5 27.4
392
188⅞ IWG ●
247¾* -1¾ 2.3 20.0
151¾
1⅜ Johnson Serv
-6 2.1 30.8
139*
-¾ 2.0 19.9
-1 3.2 42.1
186¼ CLS Hldgs ●
250* +6½ 2.5
6.5
-¼ 6.9
—
767
day’s close see www.Morningstar.co.uk.
256⅜
821
Media +1.96%
62¾
50 Cap&Regional
— 4.1
116
251⅞ Capital&Count ●
288¼* +2½ 0.5-2883.0
318
216⅜ BT Group
249½ +1½ 6.2 13.0
102
52 week
High Low (p) Stock
326⅛
— 0.3
3203
2574 Derwent Ldn ●
3190 +31 4.2
—
865
334¼ Inmarsat ●
376⅛* -3½ 11.2 13.0
—
Price (p) +/- Yld
P/E
53*
Telecommunications +0.46%
+½ 2.9
8.2
104⅜
83¼ Thales €
105
+¾ 1.7
50.3
52⅛
42¼ Total €
52⅜
+¼ 4.9
1.2
+1 3.4 21.9
19¾
15¼ UBS AG SFr
16¾
+⅛ 3.9
1.3
—
191¾
128 Volkswagen €
169⅜ +¼ 2.3
2.6
P/E
Kellan Gp
¾
—
5.8
230½ Numis
402 +3½ 3.0 14.7
152 Oakley Capital
173
+1 2.6
243
—
27.1
— 4.5 20.3
10
+¾
—
-1.4
103½
74⅞ Prime People
77½
— 6.5
5.9
602
411 Restore
567
+2 0.9 82.2
45
8
OneView Group
28
17¾ Rockhopper Exp
26¼
-⅛
29
22⅛ Share
27
— 1.5
35
14⅜ Sinclair Ph
15
-2¼ — -1500.0
32
+1⅝ —
19 SRT Marine Sys
188
118 StatPro
16
12½ Sterling Energy
13
—
94½
67 Tribal Gp
80
-1½ 1.2 61.5
⅛
⅛
Union Jack Oil
115 Walker Green
1⅞ Xtract Resources
1590
1286 Young & Co - A
⅛
116½
2
—
—
—
-⅛
—
1324⅜ 1010 Young & Co - N/V 1220 — 1.6 22.1
The Alternative Investment Market is for young and growing
companies. Shares may carry higher risks than those with a full
quotation, and may be difficult to sell.
Americans -0.31%
52 week
36¾
+¼ 1.0
51⅝
…
—
—
103
76 Amer Express $
99¾
+¼ 1.4
2.5
33
22⅛ BankAmerica $
30¼
+⅛ 1.6
3.4
757⅞ JPM Emerg Mkt ●
864
+8 1.3
979
192
150 Bloomsbury
177
-1½ 3.8 18.0
856½
660 Gt Portland Est ●
697⅜ +11¾ 17.3
111¼
85¼ KCOM Group
100
+4 5.2 15.1
448
346½ JPM Eur Sm Cos
409
— 1.1
449
769
500 Daily Mail ‘A’
674
+2 3.4
6.9
385¼
247¼ Grainger ●
313⅜ +⅜ 1.6 17.4
220
88⅝ TalkTalk ●
5820
3217 Renishaw ●
4716
-6 1.1 33.4
610
436⅛ Beazley ●
591½ -11½ 1.9 30.3
339
287⅛ JPM Eur Gwth
305 +1½ 2.2
338
1358
1025 Euromoney ●
1314 +20 2.3 34.7
283¾
188⅞ Intu Props ●
195¼* -1½ 7.2
—
1342
1035 Telecom Plus ●
1082 +4 4.6
3750
2375 XP Power
3500 -50 2.3 23.6
411¼
340 DirectLineIns
374¼* +½ 9.5 11.8
178
147½ JPM Eur Inc
162¼
-½ 3.6
175
773
638 Informa
739* +2¼ 2.8 19.6
52338 430⅜ Hammerson ●
+3 4.6
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239⅝
190⅛ Vodafone
211⅝ +1 6.2 -10.7
9.1
—
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Bold FTSE100 Stocks
* Ex-dividend
§ Ex-rights
●
FTSE250 Stocks
† Ex-scrip
# Suspended
‡ Ex-all
Cover relates to the previous year’s dividend.
Yields are net of basic rate tax.
29½ Alcoa $
935
529*
102½
-0.1
24¾ 21st Cent Fox A $
1993 -2½ 5.7 17.0
482¼ Aviva
103¼ UIL Fin ZDP 26
1590 +15 1.2 25.8
39⅛
1766 Admiral
550
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62⅜
2184
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423
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128¾ -1⅛ 3.1 21.1
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—
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Price +/- GrsYd Cvr
1341
132
170½* -2 1.7 -47.4
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435
105 KRM22
—
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—
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480 Dialight
549
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175
4
— 1.4
2.7
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410
-16 1.7 16.6
+1 3.7
1.1
185
714
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… 5.4
153 MS Intl
142⅞ +¾ 2.6 -14.1
792½
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220
119⅝ SIG ●
723¼ JPM ElecManGth
10⅝ Suez Environ €
1633⅝ +2¾ —
380½ Robt Walters
— -4812.5
17
Price (p) +/- Yld
184⅞
-¼
1.3
-2.0
59½ IQE
—
1641⅛ 1495¼ Cablevision Hldgs
742
96¼
+⅛ 4.8
227½ -2½ —
245⅜
1269* -1 3.6 13.6
1.8
45½
78 Mpac Group
8.3
82¼ Serco Group ●
105⅝ +⅛ 3.5
41⅞ Societe Gen €
237⅞
-2 2.1 20.3
1192 Travis P ●
99¾ Siemens €
52¼
52 week
High Low (p) Stock
+½ 1.3
123⅝
133½
— 2.5
952
1709
6.0
146¾* -4¾ 7.1 10.1
— 2.9 14.7
307*
—
1.9
48*
691 Ricardo Gp
—
4.1
-⅛ 2.3
380
248¾ Rentokil
921½ -3½ 3.2
+⅛ 2.6
35¼
290 M&C Saatchi
1030
672⅜* +⅜ 4.5
20⅜
29¼ Philips (Kon) €
34¾ Miton Group
338¾
659½ JPM Claverh’se
— 0.9 2446
Net Asset Values © 2018 Morningstar Estimated at previous
16½ Peugeot €
36⅛
51
-3.5
77
21
-3.1
430
636
337
3¾ Nokia OYJ €
Recent issues
183⅜ -2¾ 0.7
— 1.2
-5¾ 14.3
6
154½ +2½ 1.7 10.7
619 Menzies J
+4 0.5
—
-1.6
+½
½
146¾ MITIE Gp
65¾
-⅛
—
126 LPA Gp
183
313½
292
140
—
25½
19 Hornby
750
589 Brit Land
695
+5 4.7 13.5
405¼ Essentra ●
722 Big Yellow Gp ●
936½
59⅝
530
7000
588½
—
56⅝ Assura ●
—
1708
-⅜ 4.2
67¼
-⅜ 3.8 36.7
1099
+5 2.1 79.8
186½ Continental AG €
20 Pendragon
798⅝
160
15½ Carrefour €
257⅜
39¼
+2 2.5 1037
19.0
23⅝
Data is provided for information purposes only and is
not intended for trading purposes. Speak with a
financial advisor before using any data to make
transactions.
The Daily Telegraph Tuesday 1 May 2018
7
**
Business
Glencore tarnished by $3bn lawsuit
BRADLEY
GERRARD
ORT
MARKET REPORT
Results roundup
Company
Pre-tax (£)
EPS (p)
DIV (p)
Pay day
Diversified Gas & Oil $
Fin 41.8m (17.1m)
4.7m (32.5m)
7.00 (42.00)
3.450 (1.990)
May 31
May 10
Fidelity Special Values
Int – (–)
2.9m (4.5m)
1.07 (1.67)
1.850 (1.800)
Jun 19
May 10
Fin 3.3bn (3.2bn)
-244.4m (-94.1m)
-176.00 (-71.20)
n/a (n/a)
–
–
Fin 167.6m (133.7m)
12.3m (9.1m)
6.20 (4.60)
0.000 (0.300)
–
–
M
Luceco
iner Glencore plumbed the
depths after fears about its
copper production in the
Democratic Republic of Congo
surfaced amid a $3bn (£2.17bn) lawsuit.
Israeli businessman Dan Gertler
served freezing orders on Glencore’s
key copper and cobalt assets in the
African country as part of his legal
claim that Glencore did not pay
royalties it owed from the Katanga and
Mutanda mines.
Glencore denies any wrongdoing
but its shares fell roughly 18.3p – or
5pc – to 350.7p after brokers reviewed
their stance on the stock. Analysts at
Royal Bank of Canada slashed their
predictions for earnings before
interest, taxes, depreciation and
amortisation by 10pc for 2018 to
$16.6bn and by 18pc for 2019 to
$15.5bn. The move is a blow for the
company just weeks after Glencore
and its mining peers opened
negotiations with the DRC over a new
mining code that could impose tough
new conditions and higher royalties
on the metals they produce.
These woes at Glencore helped
sentiment in rival miners Antofagasta
and Anglo American, which rose
strongly, up 18.4p to 972.4p and 10.2p
XD
Randall & Quilter Inv Hldgs
Fin 185.0m (60.9m)
9.8m (6.4m)
10.50 (9.90)
n/a (n/a)
–
–
Ranger Direct Lending $
Fin – (–)
20.5m (17.8m)
125.00 (118.00)
tba (26.930p)
–
–
Sainsbury [J]
Fin 28.5bn (26.2bn)
409.0m (503.0m)
13.30 (17.50)
7.100 (6.600)
Jul 13
Jun 07
Seplat Petroleum Dev Co $
1Q 180.6m (47.3m)
58.8m (-18.3m)
3.00 (-3.00)
n/a (n/a)
–
–
Telit Communications $
Fin 374.5m (370.3m)
-56.8m (17.9m)
-41.90 (13.40)
0.000 (4.900)
–
–
Int – (–)
3.6m (3.4m)
1.25 (1.17)
0.660 (0.650)
tba
tba
Troy Income & Growth
British Gas owner to trial Investor group scolds
blockchain tech project Deutsche Bank chairman
Winners and losers (pc)
Turnover (£)
Interserve
BUSINESS BULLETIN
Ç Media
1.96
Ç Retailers
1.24
Ç Beverages
1.16
Ç Household goods
0.62
Ç Property
from “hold” last week helped maintain
the momentum into Monday’s session.
Elsewhere, the economy suffered its
weakest growth since 2012 in early
2018, with heavy snow only partly to
blame, prompting investors to slash
their bets on a Bank of England rate
rise next month. The dour outlook
weighed on consumer-facing highstreet stocks, including Card Factory
which dipped 4.6p to 230.4p.
But the UK’s biggest tour operator
Thomas Cook gained extra altitude
after analysts at Jefferies gave the
company a “buy” rating on the
expectation it could sweep up a decent
amount of summer bookings. The
broker initiated coverage on the
company with a positive outlook and
set a price target of 180p, suggesting
there are gains to be made from its
124p level now after rising 3.6p on
Monday.
Deustche Bank’s chairman may not
have acted in its shareholders’ best
interests when John Cryan was ousted
as the bank’s chief executive, advisory
firm Glass Lewis’s German subsidiary
said ahead of the bank’s annual general
meeting next month. Ivox Glass Lewis
said investors should “carefully
consider” a motion to remove chairman
Paul Achleitner.
Prince Alwaleed sells
Mövenpick hotel chain
Fitbit partners with
Google on healthcare
French hotelier AccorHotels snapped
up a Swiss rival owned by the
investment vehicle of Saudi Arabia’s
Prince Alwaleed bin Talal. Prince
Alwaleed’s Kingdom Holding and fellow
investors have agreed to sell Mövenpick
Hotels and Resorts for CHF 560m
(£411m) in a deal Accor said would
improve earnings within the first year.
Fitness device group Fitbit said it has
signed a deal with Google to move its
services to Google’s cloud platform,
allowing it to better integrate Fitbit data
with electronic medical records. News
of the collaboration comes just months
after Amazon entered into a healthcare
joint venture with Berkshire Hathaway
and JP Morgan.
0.6
Ç Banks
0.59
Ç Telecommunications
0.46
Ç AIM
0.35
Ç Europeans
0.35
www.theice.com/data
to £17.09 respectively. These jumps
helped the wider FTSE 100 rise 7.09
points to 7,509.
Benefiting from rivals’ woes was a
theme which extended into other
sectors too. Virgin Money flew out the
blocks in early trading and ended the
session up 7.7p to 278.7p as troubles at
TSB entered their second week. The
bank still appeared to be grappling the
IT issue which beset it last week and
the fortunes for challenger banks were
made potentially even brighter as
Lloyds acknowledged on Monday
afternoon some of its customers were
having difficulty signing into their
online accounts. This knocked its
shares marginally by 0.13p to leave the
stock trading at 64.6p.
There was also cheer at Irish
bookmaker Paddy Power Betfair
whose 65p rise to £71.80 after an
upgrade from broker Numis to “add”
British Gas owner Centrica is set to trial
a blockchain technology project later
this year, seeing if the technology can
be used for a range of energy trading
transactions such as peer-to-peer
trading. It is working with LO3 Energy
on the project, which it said would
allow it to “test blockchain technology
beyond the theoretical and put it
into practice”.
È Pharmaceuticals
-0.20
È Support services
-0.28
È Transport
-0.29
È Gas & Water
-0.31
È Americans
-0.31
È Tobaccos
-0.70
È Chemicals
-0.77
È Information technology
-1.16
È Mining
-1.22
Hummingbird Mali gold Firm Botox demand lifts
mine hits full production Allergan’s earnings
Hummingbird Resources said its new
gold mine in Mali is up and running at
full capacity within three months of its
completion. Dan Betts, boss of the
miner, said he was “totally delighted” to
hit full commercial production, with
output of 18,785 ounces in the first
quarter. The group spent £64m
developing the mine.
Botox-maker Allergan lifted its
guidance for 2018, after reporting
first-quarter profit ahead of analyst
expectations. Allergan posted adjusted
earnings of $3.74 (£2.72) per share,
compared to expectations for $3.36. It
said a rise in sales of medical aesthetics
products was behind the rise, with
Botox sales up 15pc in the quarter.
Market data
Unit trusts & open-ended investment companies prices www.telegraph.co.uk/funds
World market indices
Name
Index
Init chge
Mid
Sell
Change
Buy on day
Change
Mid
Change
Buy on day
Mid
Change
Buy on day
Mid
Change
Buy on day
Mid
Change
Buy on day
Discretionary Unit Fund
Multi-Mgr Inc&Gwth A Acc
5.00
176.4000
+1.00
JPM Global Uncons Eq A Acc 3.00
1331.0000
+9.0000
Jupiter Emerg Euro Opps
–
209.07
+0.83
M&G Episode Growth A Inc
4.00
61.63
+0.29
Multi-Mgr Inc&Gwth A Inc
5.25
154.3000
+0.80
JPM Global Uncons Eq A Inc 3.00
98.8500
+0.6500
Jupiter European
–
2175.23
+6.12
M&G Episode Income A Inc
4.00
131.0
+0.59
Multi-Mgr Mangd A Acc†
5.00
*279.6000
+2.00
JPM Japan A Acc
3.00
467.6000
+1.5000
Jupiter Euro Inc Acc
–
81.59
+0.56
M&G Episode Income A Acc
4.00
171.32
+0.76
Multi-Mgr Mangd A Inc†
5.00
*272.5000
+2.00
JPM Japan A Inc
3.00
112.6000
+0.4000
Jupiter Euro Inc Inc
–
55.98
+0.39
M&G Global Dividend A Inc
4.00
*203.9
+1.01
Sterling Bond Acc†
4.25 *220.2600 229.7600
…
JPM Multi-Asset Income A Acc 3.00
95.1400
+0.3300
Jupiter Euro Special Sits
–
418.67
+2.31
M&G Global Dividend A Acc
4.00
*280.09
+1.39
Sterling Bond Inc†
4.25 *64.7600 67.5400
…
JPM Multi-Asset Income A Inc 3.00
65.6700
+0.2200
Jupiter Fin Opp
–
620.96
+3.42
M&G Glbl Emrgng Mkts A Inc 4.00
268.44
+4.26
Strategic Bond A Inc
4.00
*122.5000
+0.20
JPM Multi-Asset Inc A Mth Inc 3.00
65.19
+0.22
Jupiter Fund Of Inv Trusts
–
255.82
+1.50
M&G Glbl Emrgng Mkts A Acc 4.00
290.59
+4.62
UK Absolute Return A Acc
5.00
158.3000
+0.20
JPM Multi-Man Gwth A Acc
3.00
1004.0000
+7.5000
Jupiter Global Emg Acc
–
71.60
+0.81
M&G Glbl High Yld Bd A Inc
3.00
50.2
+0.01
UK Alpha A Acc†
5.25
153.8000
+0.60
JPM Multi-Man Gwth A Inc
3.00
919.0000
+7.3000
Jupiter Global Eq Inc Acc
–
71.49
+0.21
M&G Glbl High Yld Bd A Acc
3.00
131.33
+0.02
UK & Irish Small Co A Acc
5.00
670.5000
+4.50
JPM Natural Res A Acc
3.00
630.3000
+1.0000
Jupiter Global Eq Inc Inc
–
62.58
+0.18
M&G Global Macro Bd A Inc
3.00
83.0
+0.34
UK Equity Income A Inc
5.00
*643.3000
+1.60
JPM Natural Res A Inc
3.00
44.1700
+0.0700
Jupiter Global Managed Acc
–
232.38
+1.20
M&G Global Macro Bd A Acc
3.00
125.29
+0.52
UK Index A Acc
–
635.0000
+5.20
JPM Sterling Corp Bd A Grs Acc 3.00
92.6700
+0.1600
Jupiter Global Managed Inc
–
223.36
+1.15
M&G Global Themes A Inc
4.00
881.39
+5.55
UK Tracker A Acc
–
285.5000
+2.60
JPM Sterling Corp Bd A Grs Inc 3.00
55.5800
+0.1000
Jupiter Growth & Inc
–
104.60
+0.62
M&G Global Themes A Acc
4.00
1370.17
+8.63
US Growth A Acc
5.00
1010.0000
+4.00
JPM UK Dynamic A Acc
3.00
207.7000
+0.9000
Jupiter Income
–
581.52
+5.31
M&G Managed Growth A Inc 4.00
111.52
+0.61
JPM UK Dynamic A Inc
3.00
163.7000
+0.6000
Jupiter India Fd
–
126.53
+1.71
M&G Optimal Income A Inc
3.00
*149.78
-0.05
JPM UK Equity Core E Acc
–
367.1000
+2.8000
Jupiter Int Financials
–
96.77
+0.90
M&G Optimal Income A Acc
3.00
*211.65
JPM UK Equity Core E Inc
–
62.8300
+0.4900
Jupiter Japan Inc Fd Acc
–
118.02
+0.38
M&G Property Portfolio A Inc
Name
Init chge
Sell
Mid
Change
Buy on day
All Ordinaries
6071.60
+28.70
+0.47pc
No 1, Poultry, London EC2R 8JR. 020 7415 4130
È Brazil
Bovespa
86115.49
-329.17
-0.38pc
Maitland Discretionary Inc
Æ China
Shanghai Composite
3082.23
CAC General
5520.50
+37.31
+0.68pc
DAX
12612.11
+31.24
+0.25pc
Hang Seng
30808.45
+527.78
+1.74pc
+52.85
+0.56pc
Ç Australia
Ç France
Ç Germany
Ç Hong Kong
3.00 2366.69 2524.47 +15.49
closed
AXA Investment Managers UK
Limited
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
Ç India
S&P CNX500
9496.50
Æ Japan
Nikkei
22467.87
È Russia
RTS
1153.96
-13.16
-1.13pc
Straits Times
3613.93
+36.72
+1.03pc
Amer Gwth Acc
5.25
597.3
+2.60
Ç Spain
Madrid SE
1012.57
+5.79
+0.58pc
Biotech Acc
5.50
173.0
+0.70
Ç Switzerland
SMI Index
8886.26
+43.24
+0.49pc
È USA
Dow Jones
24163.15
-148.04
-0.61pc
Emerg Mkts Acc
5.25
272.4
+2.90
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
È USA
Nasdaq
7066.27
-53.53
-0.75pc
European Acc
5.25
895.6
+5.90
Unit Trust
Financial Acc
5.25
*684.1
+5.50
Global Opp Acc
5.25
*1416.0
+8.00
Global Opp Inc
5.25
*1250.0
+7.00
Global Tech
5.25
107.9
-0.40
Health Acc
5.50
1805.0
+16.00
Ç Singapore
closed
Commodities summary
Price
È Gold
per troy oz
È Silver
Change
-7.65
$1315.77
per oz
È Krugerrand
-0.58pc
£11.86
-0.11
-0.94pc
£959.63
-3.26
-0.34pc
È New Sovereign
£219.98
-1.08
-0.49pc
Japan Acc
5.25
603.9
+2.10
È Maples
£954.19
-3.27
-0.34pc
Managed Balanced Acc
5.25
391.6
+2.20
£647.72
-6.38
-0.98pc
Managed Income Inc
5.25
*142.0
+0.10
È Platinum
per oz
È Palladium
Ç Copper
Ç Tin
Wealthbuilder
3.50
136.8
+0.9
Cash Fd Y
–
100.03
…
Cash Fd Y Accum.Units
–
100.36
+0.01
per oz
£698.76
-3.08
-0.44pc
£4952.45
+15.14
+0.31pc
Managed Income Acc
5.25
*995.1
+1.20
Enhanced Inc Fd
3.50
108.9
+0.8
high grade
£15384.06
+163.36
+1.07pc
Monthly Inc Inc
5.25
*258.9
+0.70
Extra Income Fd
3.50
27.63
+0.01
£1679.25
-21.12
-1.24pc
£2265.14
-10.72
-0.47pc
Monthly Inc Acc
5.25
*627.9
+1.60
Moneybuilder Bal
–
49.65
+0.29
high grade
£1633.51
+20.48
+1.27pc
UK Growth Acc
5.25
307.1
+2.20
Moneybuilder Inc
–
36.54
+0.02
£9928.13
-128.41
-1.28pc
UK Select Opps R Inc
5.25
*1939.0
+10.00
UK Select Opps R Acc
5.25
*3558.0
+19.00
UK Smllr Cos Acc
5.25
308.4
+1.00
È Nickel
È Baltic Dry Index*
Ç Wheat
Ç Brent Crude
1341.00
-20.00
-1.47pc
per tonne
£143.50
+0.60
+0.42pc
Jun settlement
$75.17
+0.53
+0.71pc
*Copyright Baltic Exchange Information Services Ltd.
AXA IM Funds www.axa-im.co.uk
Sell
Income Funds
special high grade
Ç Aluminium
Init chge
†Available as an ISA
Investment Funds (OEIC)
grade A
È Lead
È Zinc
Fidelity International
Name
Growth & Income Funds
J.P. Morgan Asset Management
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
Name
Init chge
Sell
£ > € Rate 1.1400 Change unch¢ £ > $ Rate 1.3774 Change -0.23¢
Tourist £1= Sterling £1=
1 Euro =
Pan Euro HY Bond Inc
5.25
*32.32
+0.02
Pan Euro HY Bond Acc
5.25
*104.8
…
1 Dollar =
Init chge
Sell
Name
Init chge
-0.07
+0.02
3.00
145.6000
+0.8000
Jupiter Japan Inc Fd Inc
–
92.41
+0.29
M&G Recovery A Inc
4.00
143.53
+0.74
130.6000
+0.8000
Jupiter Merlin Bal Prtfo Acc
–
183.54
+0.73
M&G Recovery A Acc
4.00
335.75
+1.72
JPM UK Higher Inc A Acc
3.00
1108.0000
+8.0000
Jupiter Merlin Bal Prtfo Inc
–
128.22
+0.51
M&G Strategic Corp Bd A Inc 3.00
75.49
+0.06
JPM UK Higher Inc A Inc
3.00
576.4000
+3.9000
Jupiter Merlin Conserv Prtfo Acc–
58.03
+0.17
M&G Strategic Corp Bd A Acc 3.00
116.75
+0.1
JPM UK Sm Cos A Acc
3.00
494.4000
+0.8000
Jupiter Merlin Conserv Prtfo Inc–
50.19
+0.14
M&G UK Inc Distribution A Inc 4.00
797.56
+10.33
JPM UK Sm Cos A Inc
3.00
94.3900
+0.1600
Jupiter Merlin Grth Prtfo Acc –
407.17
+1.88
M&G UK Inc Distribution A Acc 4.00
7256.36
+94.02
JPM America Eq A Acc
3.00
89.1600
+0.2200
JPM UK Strat Eq Inc A Acc
3.00
193.0000
+1.4000
Jupiter Merlin Grth Prtfo Inc –
395.71
+1.83
M&G UK Infl Lkd Corp A Inc
3.00
*115.04
-0.01
JPM America Eq A Inc
3.00
89.1500
+0.2200
JPM UK Strat Eq Inc A Inc
3.00
115.2000
+0.9000
Jupiter Merlin Inc Prtfo Acc
–
*297.89
+1.14
M&G UK Infl Lkd Corp A Acc 3.00
*118.67
…
JPM Asia Growth A Acc
3.00
210.3000
+3.3000
JPM Uncons Bond A Acc
3.00
72.1200
-0.0100
Jupiter Merlin Inc Prtfo Inc
–
*133.85
+0.51
N.A.A.C.I.F. Inc
–
87.06
+0.41
–
8577.08
+40.48
3.50
257.1
+2.2
JPM Asia Growth A Inc
3.00
115.9000
+1.8000
JPM Uncons Bond A Inc
3.00
57.1400
…
Jupiter Merlin WW Prtfo Acc –
291.47
+1.26
N.A.A.C.I.F. Acc
–
79.77
+0.48
JPM Div Gth A Net ACC
3.00
261.7000
+0.5000
JPM US A Acc
3.00
*1036.0000
…
Jupiter Merlin WW Prtfo Inc –
291.46
+1.27
†CAR - Net Income reinvested.
Jupiter Monthly Inc Acc
–
116.98
+0.57
Jupiter Monthly Inc Inc
–
31.13
+0.15
Jupiter N.American Inc Acc
–
148.89
+0.47
Jupiter N.American Inc Inc
+0.39
3749
117.37
3.00
Moneybldr Gwth
3.50
117.37
JPM UK Equity Gwth A Inc
Moneybldr Div
American
–
Sell
JPM UK Equity Gwth A Acc
Growth Funds
Exchange rates
Name
+16
Natwest Investment Funds
(RBS Collective Investment Funds Ltd)
PO Box 249, York YO90 1ZY
0117 940 3848
Australia
Amer Sp Sits
3.50
1524
+8
–
124.05
Aus $
1.7250
1.8247
1.6005
1.3248
Canada
Can $
1.6836
1.7657
1.5489
1.2819
European
3.50
2252
+12
Jupiter Responsible Inc Fd Acc –
*116.52
+0.70
Balanced Inc
5.00
*328.90
Denmark
Krone
8.0379
8.4937
7.4505
6.1666
European Opps
3.50
516.7
+3.2
Jupiter Responsible Inc Fd Inc –
*73.92
+0.44
Balanced Acc
5.00
*422.00
…
Global Special Sits
3.50
3858
+18
Jupiter Strategic Bond Acc
97.48
+0.18
Equity Income
5.00
*349.80
…
Japan
3.50
368.9
+1.1
Jupiter Strategic Bond Inc
–
64.59
+0.12
Extra Income
5.00
*108.60
…
Japan Smaller Cos
3.50
323.4
+1.0
Jupiter Strategic Res Acc
–
53.64
+0.15
Growth
5.00
*392.70
…
Global Focus
3.50
1947
+11
Jupiter Strategic Res Inc
–
52.21
+0.14
High Yield
5.00
*126.60
…
109.1500
+0.9800
Jupiter UK Growth
–
337.03
+3.27
Intntl Growth
5.00
*499.60
…
4034
+15
Jupiter UK Smaller Cos
–
369.83
+0.80
Euro
€
1.0825
1.1400
…
0.8277
HK $
10.2500
10.8098
9.4823
7.8483
India
Rupee
80.4600
91.9244
80.6353
66.7400
Israel
Shekels
4.4489
4.9555
4.3470
3.5979
Hong Kong
Japan
Kuwait
New Zealand
Yen
143.0400
150.7165
132.2073
109.4250
Dinar
…
0.4145
0.3636
0.3010
NZ $
1.8115
1.9548
1.7147
1.4192
Norway
Krone
10.4600
11.0341
9.6790
8.0111
Pakistan
Rupee
149.7300
159.1804
139.6317
115.5700
Saudi Arabia
Riyal
4.8235
5.1654
4.5310
3.7502
$
1.6981
1.8237
1.5998
1.3240
South Africa
Rand
15.9200
17.1945
15.0829
12.4838
Sweden
Krona
11.3800
12.0421
10.5633
8.7430
Singapore
Switzerland
Franc
1.2948
1.3635
1.1961
0.9899
Baht
38.8000
43.4691
38.1308
31.5600
Dirham
4.7414
5.0592
4.4379
3.6732
Thailand
UAE
UK
£
…
…
0.8772
0.7260
USA
$
1.3138
1.3774
1.2082
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
Inflation
BNY Mellon Fund Managers
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Index UK A Acc
–
BNY Mellon Investment Funds (ICVC)
Special Sits
3.50
Sterling Income Shares
South East Asia
3.50
1378
+18
Jupiter UK Special Sits Inc
–
*195.63
+1.69
UK Select Acc
3.50
294.1
+1.7
Jupiter US Sm&Md Inst I Acc –
72.47
+0.54
Jupiter US Sm&Md Cap Ret Acc –
66.86
+0.49
Boston Co US Opp Fund
0%
119.99
-0.12
Insight Corporate Bd
0%
92.9
+0.17
Target Funds
Liontrust Investment Funds
Insight Eq Inc Fund
0%
177.97
+1.33
Target 2020
Insight Eq Inc Booster
0%
130.07
+0.61
†CAR - Net income reinvested
3.50
65.84
+0.20
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
Insight Glob Abs Ret Inc
0%
111
+0.20
Glob Income
5.00
159.29
167.79
+1.41
Insight Glob Multi-Strat Fd
0%
*123.74
+0.47
Growth Fd
5.00
422.55
447.4
+2.75
Insight Inflat-Link Corp Bd
0%
*107.47
+0.10
Long-Term Global Equity
0%
252.94
+1.79
Fundsmith LLP
Newton Asian Income
0%
195.19
+2.54
PO Box 10846, Chelmsford, Essex, CM99 2BW.
0330 123 1815
www.fundsmith.co.uk enquiries@fundsmith.co.uk
Marks & Spencer Unit Trust
Management Ltd
Kings Meadow, Chester, CH99 9UT
0870 333 1835
Change on month
Year
+3.3pc
Newton Cont European
0%
267.74
+2.07
Newton Global Dyn Bd
0%
101.75
+0.05
Newton Glb High Yld Bd
0%
60.13
+0.34
Fundsmith Equity T Acc
–
357
+1.91
JPM Emg Euro Eq A Acc
Newton Glb Inc Stg Inc
0%
192.75
+1.66
Fundsmith Equity T Inc
–
331.45
+1.77
JPM Emg Euro Eq A Inc
3.00
Newton Glb Opps
0%
281.86
+2.13
JPM Emg Markets A Acc
3.00
Newton Intnl Bond
0%
232.12
+0.88
JPM Emg Markets A Inc
3.00
Newton Multi-Asset Bal
0%
194.2
+1.19
JPM Emg Mkts Inc A Acc
3.00
Newton Mult-Asset Div Ret
0%
155.08
+0.95
JPM Emg Mkts Inc A Inc
3.00
Newton Mult-Asset Gwth
0%
831.89
+3.97
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
Newton Oriental
0%
666.68
+9.96
Newton Real Return A
0%
113.05
+0.46
RPI (1987=100)
Mar 278.30
+0.10
RPIX (Target 2.5pc)
Mar 278.80
+0.20
+3.4pc
CPI (2015=100 target 2pc)
Mar 105.00
+0.10
+2.5pc
Halifax house price index
Mar 737.50
1.5pc
+2.7pc
Money
Bank Rate
0.50pc
Nationwide Base Mortgage Rate
Overnight
0.47pc
US Fed Funds
7 day
0.49pc
US Long Bonds Yld
3.10pc
1 month
0.51pc
European repo rate
1.25pc
3 months
0.71pc
European base rate
0.00pc
6 months
0.81pc
2.50pc
1.50-1.75pc
Major price changes FTSE 100
Mid
Change
Buy on day
197.6000
+0.9000
JPM US A Inc
43.6400
+0.1900
JPM US Eq Inc £ Hdg A Inc
224.3000
+3.2000
JPM US Eq Inc A Acc
95.5400
+1.3800
JPM US Eq Inc A Inc
73.9800
+0.8300
JPM US Select A Acc
59.1100
+0.6700
JPM US Select A Inc
218.1000
+0.9000
JPM Euro Dyn (ex-UK) A Acc 3.00
223.7000
+1.7000
JPM Euro Dyn (ex-UK) A Inc
3.00
100.4000
+0.8100
JPM Europe A Acc
3.00
1465.0000
+9.0000
JPM Europe A Inc
3.00
81.4100
+0.5000
…
JPM Euro Smaller Co A Acc
3.00
779.6000
+3.5000
3.00
101.0000
+0.5000
Name
Janus Henderson Investors
PO Box 9023 Chelmsford, CM99 2WB
Enquiries: 0800 832 832
Website: www.janushenderson.com
Init chge
3.00
Sell
Mid
Change
Buy on day
High Income Inc
–
113
113
+0.2
*143.4000
…
High Income Acc
–
257
257
+0.4
3.00
117.6000
+0.4000
UK Select Port Inc
–
352
352
+3.1
3.00
171.4000
+1.2000
UK Selection Port
–
638
638
+5.7
3.00
138.6000
+1.0000
UK 100 Co’s Fund Inc
–
*222.7
222.7
+3.4
3.00
161.0000
+0.6000
UK 100 Co’s Fund Acc
–
*384.3
384.3
+6.1
3.00
158.9000
+0.6000
W’wide Man Inc
–
505.2
+6.9
JPM US Sm Cos A Acc
3.00
639.7000
+2.0000
W’wide Man Acc
–
810.5
+11.1
JPM US Sm Cos A Inc
3.00
167.6000
+0.6000
Name
Init chge
3.00
Sell
Newton UK Equity Fund
0%
874.47
+6.33
Close
Change
Fallers 42
Volume
Close
Change
Newton UK Inc
0%
67.5
+0.49
Asia Pac Cap Gwth A Acc
5.00
145.42m
309
14.53pc
È Glencore
56.62m
350¾
-4.96pc
0%
330.23
+1.57
Asian Dividend Income Inc
5.00 108.7100 114.2100
1247½
8.62pc
È Micro Focus Intl 1.39m
Newton UK Opps
11.71m
1253
-1.65pc
Ç Antofagasta
4.33m
972⅜
1.93pc
È Coca-Cola HBC
0.71m
2444
-1.41pc
Cautious Managed A Acc
5.00
268.2000
+1.10
JPM Euro Smaller Co A Inc
Ç Pearson
3.97m
833¾
1.41pc
È Old Mutual
11.85m
251⅝
-1.22pc
Cautious Managed A Inc
5.00
154.6000
+0.70
JPM Global Bd Opps A Grs Acc –
*54.1600
+0.0100
17.88m
151⅝
1.37pc
È Taylor Wimpey 13.66m
Jupiter Unit Trust Managers Ltd
191¾
-1.16pc
China Opps A Acc
5.00
1462.0000
+23.00
JPM Global Bd Opps A Grs Inc –
*48.9100
+0.0100
Ç Morrison (Wm) 55.57m
1.29pc
È Ashtead Group
1.64m
2033
-1.07pc
The Zig Zag Building, 70 Victoria Street, London,
243⅛
SW1E 6SQ
020 3817 1000
Risers 55
Ç Sainsbury
Ç WPP
Ç ITV
Volume
Ç Diageo
5.08m
2589
1.21pc
È Severn Trent
0.94m
1940
-1.05pc
Ç Just Eat
4.02m
773¾
1.02pc
È Easyjet
1.62m
1590
-1.03pc
Ç Evraz
3.21m
458¼
1.01pc
È G4S
4.07m
258⅞
-1.03pc
Ç PaddyPwrBet
0.25m
7180
0.91pc
È Tesco
93.87m
235⅞
-0.92pc
22.18m
725⅜
0.81pc
È Sage Group
3.26m
635¼
-0.90pc
Ç Hargrve Lans
0.76m
1789½
0.79pc
È NMC Health
0.29m
3568
-0.89pc
Ç Reckitt Benck
1.53m
5702
0.78pc
È Croda Intl
0.60m
4461
-0.87pc
10.28m
529
0.76pc
È Barclays
57.93m
207¼
-0.81pc
Ç Standard Chart 10.95m
767
0.70pc
È Rio Tinto
4.45m
3946
-0.80pc
Ç HSBC
Ç Aviva
Ç Royal Bk Scot
Ç Unilever
Ç Whitbread
11.18m
270¼
0.67pc
È Brit Amer Tob
3.94m
3999
-0.78pc
3.35m
4077½
0.65pc
È Randgold Res
0.48m
5868
-0.78pc
–
Carvetian Capital
Management Limited
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Enquiries: 0845 850 0255
1114.0000
+21.00
M & G Securities Ltd
Emerg Mkts Opps A Acc
5.00
209.2000
+1.80
JPM Global Bond A Gross Acc 3.00
262.4000
+0.4000
European Growth A Acc†
5.25
235.0000
+1.40
JPM Global Bond A Gross Inc 3.00
203.6000
+0.3000
1646.0000
+5.00
JPM Global Eq Inc £ Hdg A Acc 3.00
83.3300
+0.2600
Jupiter Abslt Rtn
–
54.42
…
JPM Global Eq Inc £ Hdg A Inc 3.00
56.0500
+0.1800
Jupiter Asian Fd
–
PO Box 9039, Chelmsford, CM99 2XG
Enq: 0800 390 390. UT Deal: 0800 328 3196
Charibond Inc
–
123.55
+0.21
Charibond Acc
–
3968.23
+6.67
+0.04
Charifund Inc
–
1620.08
+8.77
921.44
+10.83
Charifund Acc
–
24801.59
+134.18
+0.05
FENIX Balanced Fd
5.00
*157.7
+1.6
European Sel Opps A Acc
5.00
Generation Fd
5.00
782.2
+7.50
Fixed Int Mthly Inc A Inc
4.25 *21.8200 22.7600
Consistent Unit Trust
Management Co Ltd
Global Care Growth A Inc
4.50
*290.0000
+1.30
JPM Global Eq Inc Fd A Acc
3.00
97.7600
+0.5900
Jupiter Asian Inc Fd Acc
–
131.12
+1.96
M&G Corp Bond A Inc
3.00
*40.31
Global Equity Inc A Inc†
5.25
*60.9400
+0.44
JPM Global Eq Inc Fd A Inc
3.00
79.6300
+0.4800
Jupiter Asian Inc Fd Inc
–
121.20
+1.81
M&G Corp Bond A Acc
3.00
*69.58
+0.1
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Growth Acc
4.25 3026.2900 3156.6499
…
JPM Global HiYld Bd A Grs Acc 3.00
110.3000
+0.1000
Jupiter China Acc
–
139.79
+2.34
M&G Dividend A Inc
4.00
61.43
+0.33
Jupiter China Inc
–
134.32
+2.25
M&G Dividend A Acc
4.00
683.98
+3.64
Jupiter Corp Bond Inc
–
56.53
+0.07
Global Strategic Cap Acc†
5.00
239.6000
+2.20
JPM Global HiYld Bd A Grs Inc 3.00
36.8800
+0.0400
Global Technology A Acc
5.00
1681.0000
+1.00
JPM Global HiYldBdAGrsMthInc3.00
36.54
+0.05
0.63pc
È Utd. Utilities
2.45m
743¼
-0.75pc
1.50m
2111
0.62pc
È Shire
8.32m
3866
-0.72pc
Unit Tst Inc
5.00
51.98
52.82
+0.49
Multi-Mgr Abs Ret A Acc
5.00
*141.7000
+0.40
JPM Global Macro Bal A Acc
3.00
72.5200
+0.1000
Jupiter Dstrbtn Acc
–
102.09
+0.29
19.83m
153¾
0.62pc
È Barratt Dev
5.92m
558
-0.71pc
Unit Tst Acc
5.00
134
136.3
+1.2
Multi-Mgr Active A Acc†
5.00
*224.8000
+1.80
JPM Global Macro Bal A Inc
3.00
63.5600
+0.0900
Jupiter Dstrbtn Inc
–
59.15
+0.17
Ç BHP Billiton
6.15m
1544
0.61pc
È Ferguson
0.65m
5580
-0.64pc
Practical Invest Inc
5.00
*236.6
253.4
+4
Multi-Mgr Distbn A Inc
5.25
135.5000
+0.80
JPM Global Macro Opps A Acc 3.00
74.09
-0.02
Jupiter Dstrbtn & Grth Inc
–
*123.63
+0.73
This charge in percentage terms is included in the purchase
price of the units. It is levied by the unit trust manager to cover
administrative costs and commissions.
Ç Anglo Amer
5.13m
1709⅜
0.60pc
È Smith (DS)
2.25m
522⅜
-0.57pc
Practical Invest Acc
5.00
*1252
1342
+21
Multi-Mgr Divrsfd A Acc
–
*85.5600
+0.35
JPM Global Macro Opps A Inc 3.00
73.4
-0.02
Jupiter Eco Inc
–
*378.78
+0.97
* Denotes Ex-dividend
Ç Bunzl
Ç Centrica
0.69m
4281
Initial charge:
…
8
Tuesday 1 May 2018 The Daily Telegraph
***
Business
Canary in the coalmine raises fears over growth
TOM REES
US may be at tipping point
after the 10-year Treasury
bond yield hit 3pc for the
first time since 2014
A
nother warning sign is
blaring in bright amber
on the credit markets
dashboard. With the near
decade-long stocks bull
run in its autumn years,
the US 10-year Treasury yield flickered
above the feared 3pc mark for the first
time since 2014 a week ago, then made
a more sustained push above the
milestone last Wednesday, tripping up
markets still reeling from a year of
trade war tensions and rate rise fears.
The 10-year Treasury yield acts as a
barometer and global benchmark for
borrowing costs. Movements can send
shock waves “across rates and bond
markets extending from core rates to
corporates and emerging markets”,
says ING global head of debt and rates
strategy Padhraic Garvey.
He adds that the yield crucially
provides a long-term indication for
where the Federal Reserve’s interest
rate will go. When the Fed moves, the
world often moves with it.
Higher borrowing costs could choke
global growth as corporate earnings
shrink and consumers tighten belts.
Credit markets have proven to be a
canary in the coal mine in the past.
The Treasury yield curve inverting
– when short-term bonds have higher
yields than long-term bonds – is an
indication that credit markets expect
the Fed to imminently cut rates in
response to an economic downturn,
US 10-year Treasury yield
3.2
%
2.8
2.4
2.0
1.6
1.2
2013 2014
2015
2016
2017 18
and has predicted numerous
recessions and the financial crisis.
JP Morgan highlighted earlier this
month that the forward curve for the
one-month Overnight Index Swap rate
– a Fed rates proxy – had “inverted” at
the two-year point, a very rare
recession omen which indicates that
the “smart money” believes that Fed
rates will have fallen by then. The
bank’s grim note warned: “In our
mind, two potential fundamental
explanations stand out: that markets
have started pricing in a Fed policy
mistake or have started pricing in
end-of-cycle dynamics.”
Neither would bode well for
investors, but the Morgan analysts
leaned towards the former.
Fears in February that the Fed
would have to accelerate its plan to
normalise interest rates to battle
resurgent inflation sent government
bond yields surging and stocks sliding
into correction territory.
Jitters over rising oil and metal
prices prompting a spike in inflation
pushed the yield above the 3pc mark
last week.
Analysts believe 3pc is the tipping
point where bonds begin to become
more enticing than stocks.
The move above 3pc is unlikely to
shock investors given the “underlying
economic fundamentals”, according to
Liontrust Asset Management’s David
Roberts. He says that as central banks
wind down quantitative easing, or
bond-buying programmes, demand
for bonds will fade.
Some fixed income experts insist
that the 3pc mark is just another
number, a psychological barrier
broken by investors. Others point out
that yields are still low historically.
The jump above 3pc has grabbed
headlines but is just the “latest move
in an upward trend that has been
going on for several months now”,
according to Capital Economics. Its
economist Andrew Hunter points out
that other market interest rates have
also surged in recent months.
The Libor-OIS spread – a closely
watched gauge indicating how much
banks are charging each other to lend
money – has widened to its highest
level since the financial crisis. Some
analysts blame temporary distortions
rather than ominous signs of stress,
but these higher costs feeding through
FCA ‘failure’
to ban Staley
has deterred
whistleblowers
to businesses and consumers could
still blow global growth off course.
“Interest rates on several categories
of consumer borrowing have started
to rise more markedly,” Mr Hunter
warns. Corporate bond yields are yet
to be infected by signs of higher
borrowing costs, however.
Although consumer spending is
likely to keep growth buoyant in 2018,
rising rates will start to take their toll
when the labour market begins to slow
and the impact of fiscal stimulus fades
next year, Mr Hunter predicts. With
the bull run one of the longest in
history and the Fed stepping up plans
to tighten monetary policy, investors
will be watching credit markets for
signs that the ship is about to sink.
A bumper batch of earnings from US
corporate heavyweights helped stocks
quickly forget last week’s bond yield
milestone.
But this year’s credit market
wobbles could prove to be the first
tremors before the earthquake.
The smartphone
power is strong
John Boyega, the
Star Wars actor,
paid a visit to
Imperial College,
London, to lend
his support to
Vodafone
Foundation’s
DreamLab app.
The technology
aims to speed up
cancer research
by using the
processing power
of mobiles when
they lie idle
overnight.
By Iain Withers
WOULD-BE whistleblowers at financial firms have been deterred from raising complaints after the City watchdog
decided not to ban Barclays boss Jes
Staley for trying to unmask a whistleblower in 2016, it has been claimed.
One of Britain’s leading support
groups for whistleblowers, Whistleblowers UK (WUK), told The Daily Telegraph it believed the Financial Conduct
Authority had “failed so badly” in its
first big test of rules designed to police
bank bosses’ conduct.
Whistleblowing lawyers were left
dismayed after Mr Staley was fined by
the FCA for his misconduct earlier this
month, but was spared the sanction of
being barred from running a bank.
“Many of the whistleblowers we
have spoken to since the finding have
expressed their complete dissatisfaction with the FCA and are unanimous
in stating that they are deterred from
pursuing their disclosure,” said Georgina Halford-Hall, CEO of WUK.
Mr Staley was slapped with a yet-tobe-determined fine for failing to act
with due skill for instructing his security team to track down the source of
personal allegations made about a colleague in 2016. But he was cleared of
acting with “a lack of integrity”, which
could have seen him stripped of his
right to run the bank.
Record dollar-based debts risk
financial crunch as US rates rise
By Tim Wallace
THE risk of a global financial crunch is
rising as borrowing in dollars surges
despite looming US interest rate rises.
Emerging market economies increased borrowing in dollar-denominated bonds at the fastest rate on
record in 2017, said the Bank for International Settlements (BIS), a global
group for central banks.
Bond issuance in the third and fourth
quarters was up by 22pc on the year,
increasing total emerging market dollar debts to over $1.6 trillion (£1.2 trillion). This carries particular risks
because companies borrowing in foreign currencies are vulnerable to sharp
changes in the exchange rate, which
can send their repayments soaring.
It also comes at a time of rising US
interest rates, which could force up the
dollar. As a result the world risks a
repeat of the “taper tantrum” of 2013
when international investors pulled
cash out of emerging markets and put
it in the US, in anticipation of higher
interest rates. The Institute for International Finance (IIF) fears there are
already signs of this happening, as volatility picks up in financial markets.
“The rise in US bond yields towards
3pc – in tandem with a stronger dollar
– has prompted a sharp downturn in
our daily measure of portfolio flows to
emerging markets, triggering a ‘rever-
$1.6 trillion
Emerging market dollar borrowing in the
fourth quarter of last year. A strengthening
dollar could send debt repayments soaring
sal alert’,” the IIF said. “Total outflows
since mid-April amount to $5.6bn,
equally split between debt and equity,”
it said, counting flows to April 25.
This sensitivity to US financial conditions is “reminiscent of the taper tantrum”, the Institute said, warning that a
one percentage point rise in short-term
Avant aims to double sales
with aid of low-cost housing
By Rhiannon Curry
NORTHERN
housebuilder
Avant
Homes has unveiled plans to more than
double its turnover in the next five
years as it takes advantage of strong demand in the low-cost housing market.
The company is expected to meet its
target of reaching £500m turnover
and building 2,000 homes this year,
Colin Lewis, Avant’s
chief executive, said
it was encouraged by
cross-party support
for tackling the
housing shortage
one year earlier than planned. It hopes
to hit £1bn of turnover and 4,000
homes by 2023, it said yesterday.
Completing this many homes in a
year would make it around the same
size as listed rival Bovis, which sits in
the FTSE 250.
Colin Lewis, Avant’s chief executive,
said he planned to meet the target by
expanding into new areas of the UK and
focusing on building more low-cost
homes, which is where demand is
strongest. Last year, Avant’s average
selling price for its homes was £257,000.
He said the market was in a good
position for Avant to expand. “The land
market is benign, planning is supportive – although we would like it to be
easier – mortgage rates are at an all-time
low and we have Government support
with things like Help to Buy,” he said.
“More broadly, the group remains
encouraged by the cross-party support
for tackling the UK’s housing shortage.”
The company builds throughout the
Midlands, the north of England and the
central belt of Scotland, with five
regional offices. Mr Lewis said he
wanted to add two more regional bases
in the coming years.
In the year to April 27, Avant
increased its revenues by 21pc to
£447m, building 1,903. Its pipeline of
land stands at 7,492 plots.
Analysis of house prices by Nationwide showed last week that prices are
rising more slowly than before the 2016
European Union referendum, but a
shortage of homes for sale is expected
to continue to shore up the market.
US interest rates could hit emerging
market investment flows to the tune of
$43bn over 2018.
“With more than $900bn of emerging market bonds due through end2018, countries with high external
financing needs such as Turkey,
Poland, and Argentina remain particularly exposed to sudden shifts in global
risk sentiment,” the IIF warned.
The scale of these effects could even
have implications for the pace of interest rate hikes in the US, as the Federal
Reserve may be forced to consider the
rest of the world when setting monetary policy.
Economist Dario Perkins, at TS Lombard, said the trends could give the Fed
cause for caution on rate rises. “When
there was a 20pc appreciation of the
dollar a couple of years ago, it had a
much more powerful effect on the
global economy than everyone expected. The Fed ignored it … but then
they saw these powerful spillovers into
emerging markets, then into oil prices,
and then back into US again.”
Pub chains warned
by watchdog over
beer-tie disputes
By Bradley Gerrard
THE pubs regulator has told the largest
pub chains it is “concerned” about
their persistent refusal to reveal details
about rulings involving tenant disputes
over the centuries-old beer tie.
The Pubs Code Adjudicator (PCA) has
called on the six companies it oversees,
including Enterprise Inns, Punch Taverns and Heineken’s Star Pubs & Bars,
to waive their right to keep the disputes
with their tenants confidential.
The PCA was created in 2016 as part
of the Pubs Code, which gave thousands of tenants the right to seek a
“market rent only” or MRO option,
freeing them of the beer tie. Tenants
can appeal over MRO offers to the PCA.
It is these arbitration rulings that pub
companies have refused to make public, thus preventing the tenant population learning about the judgments.
All six pub companies except for
Punch declined to comment. It is
understood
the
PCA
received
responses by its April 19 deadline.
Punch’s James Richards said it was
“working with the PCA office to explore
a way of addressing this”.
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