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The Daily Telegraph Business - May 4, 2018

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Business
**
Friday 4 May 2018
telegraph.co.uk
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Market report page 7. Questor page 6
Gold
Don’t
panic
Why the
world
really can
live without
Iran’s oil
Andy
Critchlow
Eastern
promise
Chinese
phone
giant
Xiaomi
plans $10bn
Asian
listing
Page 2
Page 4
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Page 7
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Page 7
Europe’s central banks to
delay monetary tightening
in the face of mounting
concerns for economy
By Tim Wallace and Anna Isaac
INTEREST rate hikes in Europe could
be off the table for many months as inflation is sliding rapidly and economic
growth is weakening, removing pressure on British and eurozone central
bankers to tighten monetary policy.
The Bank of England is no longer
expected to raise its base rate from
0.5pc to 0.75pc, with markets anticipating a pause until August or November’s
policy meetings.
The National Institute of Economic
and Social Research (NIESR) has
slashed its growth forecast for the UK
economy to 1.5pc for 2018, down from
an earlier prediction of 1.9pc, because
of the miserable 0.1pc expansion in the
first three months of the year.
It believes the Bank will move its
planned rate rise back to August,
though even this delayed increase will
only happen if there is a rebound in
growth before then.
So far there is little sign of that happening, despite an improvement in the
weather in April, which had raised
hopes of a recovery from the cold snap
that was partly to blame for the first
quarter’s crunch.
An influential business survey out
yesterday, the purchasing managers’
index (PMI) from IHS Markit, indicated
only a modest recovery took place last
month. The all-sector index rose from
51.9 in March to 53.2 in April – not far
above the 50 level that indicates no
change in business output, and failing
to return even to February’s level.
“The slight pick-up in the services
PMI in April will do a little to assuage
fears that the economy has suffered a
loss of underlying momentum and
makes the chance of an interest rate
hike next week extremely slim,” said
Paul Hollingsworth at Capital Economics. At the same time, the European
Central Bank’s plan to cut back quantitative easing (QE) is likely to be postponed by its failure to push inflation
up towards its target, further delaying the longer-term aim of raising
interest rates.
Growth in consumer prices for the
year to April was 1.2pc, down from
1.3pc in the previous month and still
well below the European Commission’s
expectation for an annual rate of 1.5pc
in 2018. Core inflation, another closely
watched measure, which excludes
some more volatile prices such as food,
fell to just 0.7pc in April, down from 1pc
in March. This is the lowest level since
March 2017.
The weak figures will intensify the
debate among policymakers at the
European Central Bank about ending
its bond buying programme in September this year.
The €2.55 trillion (£2.25 trillion) effort from the bank to support inflation
by buying up bonds began three years
ago but has still not brought rates close
to the target of just below 2pc. Currently, the bank is purchasing €30bn
worth of bonds each month.
Luigi Speranza, of French bank BNP
Paribas, said he continued to expect
interest rates to rise in mid-2019, but
that the “recent soft data increase the
risks of a more dovish monetary policy
stance”. Mr Speranza also still believed
bond buying activities would cease by
the end of the year.
GDP growth in the eurozone has
peaked, NIESR believes, predicting a
slowdown from 2.5pc in 2017 to 2.3pc
this year, 1.9pc in 2019 and an average
of 1.4pc from 2020 to 2024.
Economist Garry Young said the eurozone’s 0.4pc growth rate in the first
quarter of the year, a slump from 0.7pc
in the previous quarter, may be a sign
of things to come. “It is a bit of a sudden
loss of momentum in the first quarter.
We’re not yet sure if that was due to the
bad weather across Europe. Or it may
Continued on Page 5
REX/SHUTTERSTOCK
Growth fears
and sliding
inflation to
halt rate rises
Cars and stripes In this spectacular aerial view taken by a drone, newly-manufactured Baojun E100 electric cars are seen
lined up at the SGMW plant in Liuzhou city, south China. SGMW is a three-shareholder joint venture formed between
SAIC Motor and Liuzhou Wuling Motors from China and General Motors from the US. The E100 is its first electric car.
MPs voice supply chain concerns over Sainsbury’s-Asda deal
By Ben Woods
PRESSURE on the £15bn merger of
Sainsbury’s and Asda has intensified
after two parliamentary committees
demanded close scrutiny of how suppliers will be affected by the tie-up.
The business, energy and industrial
strategy, and the environment, food
and rural affairs committees have written to the competition watchdog amid
concerns the deal may harm the grocery supply chain. If the businesses
Ex-VW boss faces US ‘dieselgate’ charges
By Alan Tovey
VOLSKWAGEN’S former chief executive Martin Winterkorn – who headed
the German car giant when the “dieselgate” scandal was exposed – has been
charged with conspiracy and wire
fraud in the US.
Mr Winterkorn is the most senior
person involved in the scandal to face
criminal charges following revelations
the company fitted 11 million of its diesel cars with “defeat devices” allowing
them to cheat pollution control tests.
When news of the deception broke
in the US in September 2015, Mr Win-
terkorn clung on to his job for five days
before quitting. Stepping down from
the role as it emerged that cars around
the world were affected, Mr Winterkorn said he was “utterly sorry” for the
crisis that engulfed VW, and wiped
tens of billions off its market value.
However, he denied any knowledge
of the VW cheating emissions tests, but
said as chief executive he “accepted responsibility for the irregularities”.
He added that his decision to quit
was “in the interests of the company
even though I am not aware of any
wrongdoing on my part”. The former
car boss was charged in a Michigan
court with conspiring to defraud the
US and violate the Clean Air Act. According to court papers unsealed yesterday, he was briefed months before
the scandal broke on the emissions issue and how US regulators were threatening to delay certifying cars for sales
in the US.
VW has paid more than $20bn in the
US in fines and compensation, after
pleading guilty to violations there, and
two other executives have been jailed
there. Other VW staff face criminal
charges in the US but cannot be extradited under German law. VW did not
respond to requests for comment.
PM in crunch talks over nuclear site
By Jillian Ambrose
PRIME Minister Theresa
May faced crunch talks yesterday over the future of a
new nuclear power station,
as fresh faults reduce the
amount of energy Britain’s
ageing fleet of reactors can
generate.
The Japanese conglomerate behind plans to build a
new reactor at the Wylfa
nuclear site in Wales was
expected to call on the Gov-
ernment to take a direct
stake in the new plant, or
risk the £27bn project falling through.
The
last-ditch
talks
between Hitachi chairman
Hiroaki Nakanishi and the
prime minister took place on
the same day that fresh
cracks in one of the UK’s oldest nuclear plants underlined the need for new
investment in low-carbon
power. A string of power
plants, including the falter-
ing Hunterston nuclear site,
are to close by 2025.
Hitachi’s 2.9-gigawatt nuclear project could help to
fill the gap created by the
closures, but the group is not
willing to take on the full
risk burden. It is planning to
back away from the project
unless the UK agrees to help
finance it or take a stake in
the plant alongside investments from the Japanese
government, according to
local media reports.
merge they would control 2,800
stores and have a combined revenue of
about £51bn. The retailers say joining
forces would mean cost savings for
customers as they would have greater
clout to negotiate deals with suppliers,
the majority of whom are multinational
companies. In a letter to the Competition and Markets Authority (CMA), the
chairmen of the committees wrote:
“Our committees have concerns over
the impact that this merger would have
on the grocery supply chain, particu-
larly as the new business and its next
largest competitor, Tesco, would dominate the groceries retail market. In addition, we have concerns about the
impact of the merger on the competitiveness of suppliers and on consumer
choice in particular locations.”
The committees have also asked the
CMA to outline how long a potential
investigation into the deal may last.
The CMA has said the deal is “likely” to
be earmarked for review, with Sainsbury’s and Asda pushing for it to be ac-
celerated to an in-depth investigation.
Sainsbury’s chief executive Mike
Coupe has moved to reassure MPs that
the merger will not put the supermarket’s retirement scheme at risk.
In a letter to Labour MP Frank Field,
chairman of the work and pensions
committee, he said Sainsbury’s pension covenant would be strengthened
by the deal, helping to protect members of the defined benefit scheme.
Ryan Bourne: Page 2
TSB’s Post Office advice angers customers
By Lucy Burton
EMBATTLED TSB sparked further anger yesterday after suggesting that customers pop to their local Post Office to
access their bank accounts. The bank is now deep into the second week of a major IT crisis which has
left thousands of customers unable to
access their online bank accounts as
well as being shown other people’s account details or incorrect balances.
In a bruising Treasury committee
hearing on Wednesday, the bank’s
bosses said they did not know when the
problems would be fixed. TSB then
1.3bn
The number of customer records that TSB
unsuccessfully attempted to switch
over to an updated software system
posted a tweet yesterday suggesting
that customers use the Post Office to
cash in cheques, pay in cash or check
their bank balances.
The announcement angered customers, with London-based coffee
roaster Mission Coffee Works respond-
ing: “Post Office? It’s 2018 last time we
checked.” The meltdown is the UK banking
sector’s biggest technology fiasco in
years and came after TSB tried to
switch over 1.3bn records to an updated software system run by its parent
company Sabadell. It is a PR disaster for
TSB, which has been trying to distinguish itself from bigger players since it
split from Lloyds Bank four years ago.
“The wrong thing to do would be to
give a date [when the problems will be
fixed] because that could be misleading,” Richard Meddings, the TSB chairman, admitted on Wednesday.
2
Friday 4 May 2018 The Daily Telegraph
***
Business comment
A ‘no’ to AsdaSainsbury’s will
see shoppers
pay the price
Halting the merger for the wrong
reasons – anything but protecting
local competition – goes against
the very essence of capitalism
P
lenty of politicians and commentators
think having very big companies
operating within sectors means bad
economic outcomes. Shadow business
secretary Rebecca Long-Bailey best
exemplified this view discussing the
Sainsbury’s-Asda merger this week. In a Radio 4
interview, she claimed the deal risked suppliers
being squeezed, workers laid off and shoppers
facing higher prices, all at the same time. The
combined market power of the companies would
boost profits at consumers’ and suppliers’
expense. Labour want a Competition and Markets
Authority investigation, with a remit far beyond a
narrow focus on consumer welfare.
Long-Bailey is right about one thing – the deal
is mindful of the bottom line. But her analysis
makes a whacking great assumption, which drives
her fears about the merger’s effects: that the
supermarket sector would be neither competitive
nor contestable post merger.
Counting the market share of firms across the
whole country is not a good proxy for economic
welfare, nor true competition. Using it in this way
makes three errors in one. It misunderstands how
competitive pressure operates, assumes higher
concentration must always be bad for consumers,
and misjudges how to define a market.
According to Kantar Worldpanel, the merger
would result in an instantaneous 31.4pc share of
the UK grocery sector for Sainbury’s-Asda, larger
than Tesco’s 27.6pc. But the first indicator that
should assuage fears about the consequences of
this is why the merger is happening.
Walmart, Asda’s US parent company, appears
willing to sell because they need cash to invest at
home to compete with Amazon. The internet
giant is growing rapidly in the sale of retail
products, and has recently acquired Whole Foods
in the States. It is investing heavily in
revolutionising the US grocery market, including
online and through highly automated stores. No
doubt the UK sector is in its sights too.
But this merger is not just about Amazonproofing. Here, Sainsbury’s and Asda have seen
slower recent sales growth than rivals – up 0.2pc
and 1.4pc respectively in the
past 12 weeks, versus
2pc-plus growth for Tesco
and Morrisons. Though
starting from a small base,
low price stores such as Aldi
and Lidl have been growing
quickly and now occupy
12.7pc of the grocery market.
Competition in the sector,
in other words, is fierce. It
doesn’t require hundreds of
small firms, or even equalsized ones. Provided markets are contestable with
reasonably low barriers to entry, even the threat
of future competition forces incumbents to
improve efficiency and deliver low prices. Make
no mistake: that threat is real, and will remain.
One might have previously bought a TV from
Sainsbury’s, but now you can buy from Amazon if
Sainsbury’s jacks up the price. The web is crushing
entry barriers in retail market after retail market.
With competitors in groceries breathing down
their neck, Sainsbury’s-Asda want to protect profit
margins, yes, but also market share. Given the
competitive market, efficiency savings from more
power over suppliers would largely be passed on
to consumers in the form of lower prices. In fact,
this is exactly what has been promised: not store
closures or job cuts, but economies of scale
delivering up to 10pc price cuts on some items.
That’s not to say a CMA investigation shouldn’t
happen. One may be necessary to help assuage
the fears of consumers, if not the likes of LongBailey. She admitted that she would oppose a
merger even if it delivered lower prices if
suppliers were adversely affected. But this implies
preserving the grocery sector and supply chains
in aspic, totally ignoring the major structural
changes to the sector occurring worldwide.
In the Fifties and Sixties, major supermarkets
didn’t dominate and, with far fewer cars, markets
were incredibly localised. Many villages saw, in
effect, local monopolies in the form of one
butcher, one baker, and a fruit and veg store.
Though the nationwide sectoral concentration is
now higher, in lots of places actual competition,
between local stores, several supermarkets and
internet-based retailers, is stronger than ever.
The real issue the CMA has to consider then is
whether this merger compromises local
competition to consumers’ detriment. There are
good reasons to think this will not be a huge
problem overall. Sainsbury’s tends to appeal to a
wealthier demographic and is more regionally
concentrated in London and the South East, while
Asda obtains over 60pc of revenues in the rest of
the country. Internet-only sellers are adding a
whole new layer of competition too.
But experts do suggest there are 75 local
markets where Asda and Sainsbury’s operate
simultaneously. The CMA might suggest a
proportionate divestiture of certain stores where
there is little other competition, but that would
not be grounds for blocking the merger entirely.
There is little ex-ante reason to suspect, as
Long-Bailey seems to, that the merger will be
detrimental to consumer welfare. Unfortunately
her reaction highlights a worrying trend of seeing
oligopolistic power everywhere, and advocating
using competition policy to ensure nobody at all
suffers from structural change within an industry.
Such attempts to stem the natural adaptations of
companies to new realities, as technologies and
consumer demands change, goes against the very
essence of capitalism itself. If adopted, we would
all pay the price – in this case literally.
‘There is
little reason
to suspect the
supermarket
tie-up will
harm
consumers’
Ryan Bourne is the R Evan Scharf chair for public
understanding of economics at the Cato Institute
US must focus on the big picture
before entering Iran’s oily waters
ANDY
CRITCHLOW
W
B
enjamin Netanyahu has
spent the last week
pushing US President
Donald Trump off his Iran
sanctions ledge. Crude
prices jumped to multiyear highs after Trump dismissed the
international nuclear deal with Tehran
as “insane”. The White House can’t
turn a blind eye to Israeli nuclear
intelligence but America’s commander
in chief would look economically
reckless to ignore oil market warnings
and jump.
Trump’s timing on Iran couldn’t be
worse for major oil consumers. After
16 months of enforced production cuts
by Opec and its allies, oil inventories
have reached a critical inflection point.
Stocks held by companies in
developed nations are nearing
five-year moving averages. For the
Vienna-based group, this implies
mission accomplished but for major
consuming nations, Iran’s crude is
once again in high demand.
The problem is no one can
accurately predict Trump’s next move
when the latest opportunity to act on
Iran arrives on May 12. However,
crude should be a major factor in his
thinking. Opec’s third-largest
producer after Saudi Arabia and Iraq is
now pumping out more than 3.8m
barrels a day (b/d) of oil and its output
is growing. Without the shackles of
tougher US sanctions dragging it back,
S&P Global Platts Analytics expects
Iran to add another 220,000 b/d of
production by the end of 2019.
Some experts argue that reimposing tougher embargoes on
Tehran could remove about a quarter
of the country’s current output. But
who needs it anyway? Since the
original nuclear deal was struck with
six world powers in 2015, Iran has
regained its lost share of the global oil
market, much to the annoyance of its
Middle East rival, Saudi Arabia. Most
of its crude currently heads to China’s
Business
Insight
Inmarsat
B
osses at satellite
communications
group Inmarsat got
a bloody nose this week
with a 60pc rebellion at
the AGM from investors
over pay, an issue which
has historically been
troublesome for the
FTSE 250 business,
writes Alan Tovey.
There was no denying
investor anger at chief
executive Rupert
Pearce’s £1.9m pay,
especially with the share
price almost halving in
the past year, falling way
below the peak of more
than £11 in 2015.
The pay furore did
mask better-thanforecast first-quarter
numbers from the
company, with its
REUTERS
Ryan
Bourne
refiners, followed by customers in
Europe, India and South Korea.
“US allies including South Korea
and Japan would likely reduce their
purchases and a couple [of ] hundred
thousand barrels a day of crude
exports could be at risk by the first half
of 2019,” said Paul Sheldon at S&P
Global Platts Analytics.
Opec isn’t helping Trump to make
up his mind either way. The cartel has
been discussing extending its
production cuts with Russia and a
group of smaller producers beyond
this year. These talks have pushed up
prices and raised fears that kingpin
Saudi Arabia wants a return of $100
oil. Imposing renewed sanctions on
Iran at a time when US gasoline prices
are testing multi-year highs close to $3
a gallon could be just as politically
damaging from the Trump perspective
as would ignoring the justifiable
geopolitical concerns about Iran.
The security of higher US
production probably won’t help make
Trump’s decision any easier either.
Domestic output is projected to exceed
11m barrels a day by the end of the
year. Despite America’s growing
influence as a producer, the president
has already pointed the finger at Opec
for allegedly engineering higher
prices. Still, America’s motorists will
probably blame the group if they are
hit with rocketing fuel costs this
summer instead of any presidential
decision to isolate Iran.
Of course, some of Trump’s closest
oil-rich allies in the Middle East could
help mitigate the risks. Saudi Arabia
has at least 2m barrels a day of spare
production capacity on tap, which it
could deploy instantly to make up for
any loss of Iranian barrels.
Riyadh would also be foolish to miss
the opportunity of seizing back market
share from Tehran even if it endangers
its long-term collaboration with Russia
and the rest of Opec. A decision not to
waive oil-related sanctions on Iran
next month could irreparably fracture
Russia’s alliance with Opec if the
kingdom opens its spigots.
However, even if Trump attempts to
toughen up on Iran with new
sanctions, their impact on the
country’s oil industry could be
ineffective. China would be unlikely to
shun Iran as an energy supplier.
Meanwhile, European policymakers
would also likely seek a compromise
to keep energy links with Tehran
open. Trump could also soften the
blow by giving crude buyers an
adjustment period of 180 days.
“Any sanctions are unlikely to be as
effective as those in 2012 given
changed international views regarding
Iran,” said Jamie Webster, senior
aviation unit’s near 40pc
revenue growth helping
drive up group revenues
by 4.8pc to $345m
(£254m). However, lower
demand for government
communications, a highly
profitable business, meant
overall earnings slipped.
With the public almost
unable to put down their
mobiles, Inmarsat’s
strength in the nascent
‘Even if
Trump
attempts to
toughen up
on Iran with
sanctions,
their impact
on its oil
industry
could be
ineffective’
Share price
Today
376.1p
Rupert Pearce
Chief executive
in-flight calling and Wi-Fi
sector points to a strong
future for the business,
which has invested heavily
in satellites.
If regulators decide
flights no longer offer a
refuge from the ring of a
mobile phone, and the
aviation unit really takes
off, it could ease pressure
on Inmarsat’s other units.
Israeli prime
minister Benjamin
Netanyahu has
raised concerns
over Iran’s nuclear
capabilities
director at the Boston Consulting
Group’s Centre for Energy Impact.
Europe’s international oil companies
(IOCs) are also watching Trump’s
decision. Despite the president’s well
documented distrust of the Iranian
regime, they have been cautiously
willing to do business and gain access
to the world’s fourth-largest reserves
of crude and a share of the biggest
offshore natural gas field on the planet,
South Pars. Starved of international
capital and hard cash, Tehran
desperately needs to attract
investment from IOCs to develop new
fields and update its ageing energy
infrastructure. However, a rush by oil
majors to return to Iran didn’t happen
after the 2015 nuclear deal was struck.
Shell signed a preliminary deal in
December to develop Iranian oil and
gas fields but plays down its
commitment. Italy’s Eni has also
committed to study potential projects.
Even BP, which won the first
concession in 1901 to search for oil and
gas in Persia, has recently opened a
small office in Tehran.
However, it is French oil major Total
that is the most exposed. Last July, it
signed a major deal with an initial
investment of $1bn to develop the
South Pars gas field in the Persian Gulf.
Iran’s oil minister Bijan Zanganeh has
warned Total its deal would be
expensive if it suddenly pulled back in
response to unilateral US sanctions.
“If Total, without the enforcement
of (UN) Security Council sanctions,
announces that it has the intention to
leave the contract, no capital will be
returned to this company and no sum
will be transferred to the company,”
Zanganeh was quoted as saying last
November by the Iranian oil ministry’s
news service. Of course, Tehran can
easily cause issues for Trump by
stirring up trouble in the Middle East,
where over a fifth of the world’s oil is
produced. The Islamic republic is
already acting behind the scenes in
Yemen and Syria. An escalation in both
war zones could threaten the region’s
major energy supply arteries such as
the Strait of Hormuz, which is used to
ferry 18.5m barrels a day.
These are the oily issues Trump’s
team must weigh before he jumps off
the ledge on Iran.
Ariane rocket lifts off carrying Inmarsat’s S-band satellite last June
900
p
800
700
High Jun 2017
600
844.5p
500
Low Apr 2018
400
336.4p
300
2017
2018
Strengths
Threats
 Global coverage with a
variety of services
 Established player with
enviable track record
 Works in industry
with a long-term growth
trend
 Loss or damage to
satellite either in service
or during launch
 New systems such as
low-orbit small satellites
taking away business
 Investor rebellions
Weaknesses
Opportunities
 Markets can be cyclical
with demand often related
to military activity
 Huge investments
required in satellites
 Loss of service flows
into revenues quickly
 Providing affordable
satellite broadband to
remote areas
 Finding applications
for data collected by
satellites
 In-flight phone services
Gold might offer peace of mind, but don’t bank on it
GARRY WHITE
E
A
n Egyptian billionaire has put
half his $5.7bn (£4.2bn) net
worth into gold, betting on an
equity market crash that will send the
metal’s price soaring. This is enough to
give any professional portfolio
manager a major case of palpitations –
and the move seems all the more
curious since the outlook for gold
actually appears pretty mixed.
The billionaire in question is Naguib
Sawiris, Egypt’s second-richest man.
In an interview with Bloomberg
earlier this week he revealed his gold
trade, arguing that stock markets were
overvalued and were about to slump.
He predicted the price of the
precious metal would rally to about
$1,800 from $1,300 now, as equity
markets floundered.
Gold is regarded as a “safe haven”
investment and store of value over
time, so global economic and
geopolitical uncertainty tend to make
the metal more attractive.
It has significant allure for many on
the US libertarian Right, who believe
that the current “fiat money” system,
where currencies are not backed by
hard assets such as gold, will unravel
with devastating effects. In theory, the
price tends to outperform in equity
market downturns, but during the
sell-off at the height of the financial
crisis 10 years ago the gold price fell
too – as investors liquidated holdings
to meet margin calls elsewhere.
Putting such a huge amount of one’s
wealth into one asset class is risky.
However, it is clear that Sawiris likes
to play things as risky as he can.
The billionaire has made significant
investments in North Korea, a rogue
state that has been subject to sanctions
for a very long time. Among other
things, he helped found Koryolink,
North Korea’s first telecoms operator,
which has helped mobile phones
become a regular sight on the streets
of the country.
However, political tensions and
sanctions mean he has struggled to
repatriate profits and exercise full
control over the business. CNBC
reported that he invested about $250m
in Koryolink alongside Pyongyang. So
Sawiris has built a career – and a
fortune – making punchy moves.
Many gold bugs are obsessive. For
them, gold isn’t really an “investment”
as such, it is a mindset – one that is
clearly demonstrated in the myriad of
websites that extol gold’s virtues.
Gold bugs are utterly alarmed by the
ethical and practical implications of
government fiat money. In fact, they
treat gold as if it is some sort of
financial teddy bear. In times of
market trouble, gold bugs take their
gold holdings and given them a cuddle
to feel better about the world – but the
fear aspect means they rarely sell
when worry (and, in theory, the gold
price) is high. The price then falls to a
level at which they will not sell
because they don’t want to lose their
psychological crutch. It is therefore,
arguably, an odd form of investment.
So what lies in store for the gold
price now? Will another risky move
for Sawiris pay off?
From a market point of view,
predictions of a crash seem premature.
Equity markets recovered from their
recent wobble in April and the low
level of inflation in the developed
world does not suggest the type of
overheating one would expect to see at
the tail end of an economic cycle.
Real rates are still in negative
territory and, while the Federal
Reserve is tightening policy gradually,
the dovishness of central banks in
Europe, Japan and China is likely to
ensure financial conditions remain
supportive globally.
One issue for gold bugs is the dollar.
After being weak against major
currencies for some time, it appears to
have turned and has been
strengthening. Because commodities
are priced in dollars, movements in
the US currency have an impact.
A rising greenback makes gold more
expensive for buyers in other
currencies and can therefore hit
demand. This is why the gold price
and the dollar tend to have an inverse
relationship – gold falls as the dollar
rises.
With the US expected to continue to
raise interest rates to a greater extent
than in other developed markets, the
outlook for the dollar could be
positive. However, foreign exchange
‘In times of
trouble, gold
bugs take
their
holdings and
give them a
cuddle to feel
better about
the world’
markets are notoriously unpredictable.
There are also issues on the demand
side. This week, the World Gold
Council (WGC) released its quarterly
report, which showed waning demand
for the precious metal in the first
quarter of 2018. Demand for gold fell
7pc year-on-year between January and
March to 973.5 tons and exchangetraded fund (ETF) purchases fell 66pc
compared with the equivalent period
of 2017. Overall, gold investment fell
27pc, the WGC said.
The gold mind-set is the precursor
to that of the current cryptocurrency
bulls – the so-called “crypto bros”.
Indeed, it is possible that digital
currencies may eventually hit demand
for gold as well. This is unlikely to
happen soon as currencies such as
Bitcoin do not have a track record as a
store of value because of their youth
and volatility. But, over time, this will
be interesting to watch.
If gold acts as a psychological
insurance policy and eases an
investor’s fear of the unknown, it’s fine
for it to have a small place in an
investment portfolio. But it is a
non-yielding asset which can have
significant storage costs.
If financial Armageddon doesn’t
arise and the global fiat money system
doesn’t collapse, its value as an
investment is questionable – and I
certainly wouldn’t stick half my wealth
in it.
Garry White is chief investment
commentator at wealth manager
Charles Stanley
The Daily Telegraph Friday 4 May 2018
**
3
Business
By Alan Tovey
ROLLS-ROYCE has shrugged off the
estimated £1bn cost of fixing problems
with its latest generation of jet engines,
and maintained its profit and cash generation forecasts.
In an update ahead of the blue-chip
engineer’s annual meeting at its Derby
base yesterday, Rolls said it was making
good progress in dealing with troubles
related to its Trent 1000 engines that
power Boeing’s 787 Dreamliner jets.
Turbine blades are wearing much
faster than expected in the Trent 1000
engines, of which Rolls has about 500
in service.
The problem was first identified almost two years ago but the full scale of
it only became clear last month when
Rolls warned that it was having to
launch an emergency inspection programme to identify affected engines
and make repairs if necessary. The
problem can lead to engines shutting
down in flight. In response, aviation
regulators placed restrictions on aircraft powered by the engines, meaning
they cannot make long flights over
remote areas where no emergency
landing facilities are available.
This has led to some airlines grounding their 787s and recalling older aircraft into service to replace them, with
the bill potentially going to Rolls.
In its annual results in March, Rolls
put a £300m price tag on sorting out
the problem in this year’s accounts on
top of £170m last time round, but the
extra inspections pushed up the cost.
Analysts think that by the time all the
problems have been ironed out the bill
could be £1bn. Warren East, the chief
executive, said that the company was
“reprioritising” spending to account
for the higher costs, allowing Rolls to
maintain its financial forecasts. Updating on the repairs ahead of the annual
meeting, Mr East said: “Roughly two
thirds of the initial programme of
accelerated inspections has now been
completed, with the remainder of initial inspections scheduled to take place
within the next six weeks.
“We sincerely regret any disruption
these inspections may cause. We continue to work closely with Boeing, our
customers and the regulatory authorities to minimise this.”
Looking across the business, the
chief executive said trading was in line
with expectations, and likely to repeat
the pattern of previous years with
heavy spending in the first half and
profit weighted towards the end of the
‘We continue to work closely
with Boeing, our customers
and regulatory authorities
to minimise this’
year. Rolls is targeting £450m of free
cash flow – the cash a company generates after essential spending to keep
the business running – this year, with a
target of £1bn by 2020.
Mr East believes free cash flow is a
better measure of the company’s performance than profit. This is because of
Rolls’s high expenses such as R&D and
the company’s multi-billion “hedge
book” of foreign currency to insulate it
from changes in foreign exchange
rates. The hedge book led to the company reporting a paper loss of £4.6bn
for 2016, largely due to changes in currency hitting its hedge book. Mr East
said his efforts to simplify Rolls and cut
costs are going well. Rolls shares fell
0.8pc to close at 830p.
MAGNUS NEWS
Rolls-Royce on
course for cash
forecasts despite
engine problems
Nosing ahead An Airbus A319 is dismantled at Air Salvage International (ASI), based near Cirencester, Glocs. ASI’s facility –
Europe’s largest, at Kemble-Cotswold airport, strips each aircraft into 2,000 component parts, which are sold on for recycling.
Trinity Mirror blames ‘Beast from the East’ for revenue fall
By Jack Torrance
TRINITY Mirror has become the latest
company to blame the so-called “Beast
from the East” for poor trading as it revealed a 9pc drop in revenues in the
first four months of the year.
The Daily Mirror publisher said
print advertising sales had picked up in
March and April but that was offset by
the torrid weather, which led to a drop
in newspaper sales.
The company, which also publishes
Scotland’s Daily Record and regional ti-
tles including the Manchester Evening
News, suffered a 17pc drop in print adSimon Fox, the
Trinity Mirror chief
executive, said he
was pleased with
the company’s
financial strategy
vertising revenues over the four
months but said the decline was only
15pc in the second half of the period
amid “improved national advertising
performance”.
It suffered a major slowdown in digital display advertising revenues, falling
from growth of 18.2pc across last year
to 7pc. The numbers exclude the finances of rival titles including the
Daily Express and the Daily Star that
Trinity Mirror bought from Richard
Desmond, the media tycoon, in a £127m
deal earlier this year.
The new assets had suffered a 5pc
drop in like-for-like sales, with a 40pc
surge in online revenues failing to
make up for an 8pc slump in print.
Trinity Mirror has been forced to
keep the two parts of the business formally separate for now after the Competition and Markets Authority and
media regulator Ofcom decided to investigate the merger at the behest of
Matt Hancock, the Culture Secretary.
Simon Fox, the Trinity Mirror chief
executive, said: “I am pleased with the
actions we have taken to protect print
profitability whilst continuing to build
our digital revenue.”
House of Fraser in talks with pension authorities over stake sale
By Ben Woods
HIGH street struggler House of Fraser
is in talks with pension authorities
over its retirement fund after revealing a major ownership shake-up and
restructuring drive.
The Pensions Regulator (TPR) confirmed that discussions with the company were taking place, as control of
the retailer shifts to the Hamleys toy
shop owner C.banner International
Holdings.
House of Fraser has two pension
schemes with around 4,000 members. The firm had assets of £705.1m
and liabilities of £608.2m to March
this year.
Companies undergoing a change of
ownership are encouraged to seek
clearance for the deal from the TPR
and explain how they will protect the
pension fund going forward.
The Daily Telegraph understands
that the troubled retailer is also in
talks with the Pension Protection
Fund, the safety net for retirement
funds when companies collapse.
China’s C.banner is buying a 51pc stake
in House of Fraser from the majority
shareholders Nanjing Cenbest and
plans to invest £70m of fresh capital
into the business.
However, store closures and potential job losses are front and centre of
the deal, with House of Fraser looking
to shore up its fortunes by launching a
company voluntary arrangement
(CVA).
A CVA, a type of insolvency process
that allows companies to shut stores
and drive down rents, could lead to
£70m
The amount of fresh capital that China’s
C.banner International Holdings plans to
invest in House of Fraser
swingeing cuts to the retailer’s
59-strong store estate and trigger hundreds of job losses.
House of Fraser employs around
6,000 people and 11,500 concession
Gloo hands cash to investors
as scheme comes unstuck
GLOO Networks, a listed takeover
vehicle that aimed to buy up and turn
around struggling print media brands,
has given up after failing to seal a deal
in almost three years.
The company, backed by Marwyn,
the private equity fund that made a
strong return on Peppa Pig maker
Entertainment One, said it would hand
back the remainder of the money it
raised and enter liquidation.
Gloo, led by former magazine executive Rebecca Miskin, attracted investment from institutions including
Standard Life and Invesco. It initially
raised £30m on Aim to pay salaries and
for due diligence on takeover targets,
but had support from shareholders to
seek deals worth up to £1bn, due to be
raised by issuing new shares.
Hopes were further raised when it
appointed a big-name chairman, Vivendi chief executive Arnaud de Puyfontaine, who had worked with Ms
Miskin at Hearst, the magazine publisher behind Cosmopolitan.
Mr de Puyfontaine said after in-depth
discussions with 11 targets, “given the
likely time frame to a possible acquisition, the board concluded that shareholders would be best served through
the return of Gloo’s remaining capital”.
Shareholders are in line to get back
47p per share, of an original investment at 120p. The shares had slumped
to around 35p after Gloo said in March
that a planned reverse takeover would
not go ahead. Gloo’s decision repre-
By Jack Torrance
47p
The amount per share that shareholders
are likely to have returned, from an
original investment of 120p per share
sents a quick result for the head of activist investor Crystal Amber, who
disclosed a stake last month and called
for remaining cash to be returned.
Richard Bernstein, who bought a
personal stake in Gloo, said yesterday:
“I think this is the right decision. It’s
good to see a board accept that its
efforts didn’t yield results and to take
on board the views of shareholders.”
retailer in December after flagging
risks to its capital structure.
Victor Garcia, the Moody’s analyst,
said: “The CVA would allow House of
Fraser to reduce its rent bill and to exit
long dated lease agreements in unprofitable locations.
“This, along with the injection of
fresh capital in the business, will facilitate and accelerate the transformation of the company towards a more
credible omnichannel retailer while
alleviating
near
term
liquidity
concerns.”
Smith & Nephew revises
down revenue expectations
GETTY
By Christopher Williams
staff. A decision on whether to progress with the overhaul will be confirmed in early June, with the deal set
to completed by the end of that month.
House of Fraser is 89pc owned by
Nanjing, a subsidiary of China’s Sanpower. Nanjing will hold on to a “significant minority interest” in the
retailer once the transaction is
complete.
Moody’s said the deal and CVA plans
had helped ease concerns over the financial state of the business. The
credit ratings agency downgraded the
Glass act Supermodel and entreprenuer Christie Brinkley
and mixologist JR Starkus at the launch of Brinkley’s new
Bellissima drinks range at Caesar’s Palace in Las Vegas.
OLIVIER BOHUON, Smith & Nephew’s
chief executive, will depart on a low
note after changes to US medical
insurance and spending cuts in Europe
forced the medical devices maker to
warn its revenues would be lower than
expected this year.
The FTSE 100 firm, specialising in
artificial hips and knees, revealed 5pc
growth in revenues to $1.2bn (£880m)
in the three months to March, but said
the growth was mostly due to foreign
exchange movements, meaning sales
were flat on an underlying basis.
It now expects full-year revenue
growth of between 2pc and 3pc, down
from previous estimates of between
3pc and 4pc, with a trading profit margin “at or above” the level achieved last
year.
The disappointing results came despite a 15pc surge in revenues from
emerging markets, as the company was
held back by a 12pc sales decline in its
bioactives division, which makes
dressings for complex wounds such as
ulcers and burns, and a 2pc drop in hip
sales. Mr Bohuon, who will stand down
on Monday having doubled Smith &
Nephew’s value since taking the helm
in 2011, said the company “delivered a
mixed performance” in the quarter but
that he was confident it would improve.
Namal Nawana, his replacement,
who previously ran US diagnostics firm
Alere, will have to convince Smith &
Nephew’s investors, which include Elliott Advisors, that he can get the busi-
5pc
The growth in revenues revealed by Smith
& Nephew in the three months to March,
mostly due to foreign exchange
ness’s growth back on track.
Elliott called for the company to be
broken up last year, after which Mr Bohuon unveiled a cost-cutting plan
which he said would deliver $160m of
savings by 2022.
Analysts at Bernstein said: “S&N’s
overall performance on both growth
and margins has remained disappointing. From here it is all about execution.”
4
Friday 4 May 2018 The Daily Telegraph
**
Technology Intelligence
By Matthew Field
CHINESE smartphone giant Xiaomi
has filed for an anticipated $10bn
(£7.3bn) listing on the Hong Kong
stock exchange in what would be the
world’s biggest flotation since 2014.
The phone maker, founded in 2010,
would be the biggest float since Chinese online retail behemoth Alibaba
listed in 2014, potentially valuing the
Beijing-based company at $100bn.
A relative unknown to the UK smartphone market, Xiaomi has grown into a
powerhouse of phone sales as the
world’s fourth largest smartphone
company. It is one of the top players in
China’s smartphone market, recording
strong sales that far outstrip US rivals
like Apple.
Its models have proved a hit, with
mid-range prices that undercut profitable premium phones from Samsung
and Apple, although they have limited
availability in the UK. Three confirmed
that it will stock Xiaomi’s phones in the
UK in the future.
The listing is anticipated to raise
$10bn, while its filing
ng has revealed the
young company’s financial results for
the first time. Xiaomi
mi recorded profits
of $1.9bn, with $18bn
bn of revenue
last year. The float is expected
in the second half of this year.
The company saw
aw its sales
slow in 2016, but in
n 2017 they
rebounded by almost
ost 70pc. “As
far as we know, apart
part from Xiaomi, there has never
ver been another smartphone
e company
that has successfully
ssfully rebounded after a decline in
sales,” said founderr and chairman Lei Jun.
The float would make Mr Lei,
the company’s founder,
nder, one of
China’s richest businessmen.
sinessmen.
Mr Lei already has
as a net
worth of $12.5bn, but the
float could add to that.
hat.
Mr Lei, 48, has been
compared to Steve
e Jobs,
although he has previously said that while
ile he
would have been “honoured” by the compariparison as a 20-year-old,
-old,
now he “[doesn’t]
sn’t]
want to be considered
red
second to anyone”.
The company has
also said it will
ensure value by setetting a profits cap of
5pc, a highly unusual move. In its listing documents, Mr Lei said if its net
margin exceeds 5pc, it will return the
excess to its users.
While popular in China, Xiaomi has
also grown into the top smartphone
brand in India. It has also begun to
market its phones in Europe through
stores in Spain, and its filing said it
plans to target Europe for future
growth. Xiaomi reported a surge in
revenues last year, although it has lost
ground in the Chinese smartphone
market to other local rivals.
“For Xiaomi, the timing is right,” said
Sammy Li, a Hong Kong-based partner
at Hogan Lovells. “Hi-tech companies
tended to go to Nasdaq because it was a
more mature market and there was a
bit more flexibility in rules over voting
rights. Until recently Hong Kong did
not allow these more unusual
structures.”
Meanwhile, souring US relations
with China may cause more Chinese
tech companies to look for funding in
their domestic market. Smartphone
company ZTE was recently blocked
from selling its phones in the
t US, while
Huawei saw its plans for a deal with US
networks fall through.
“The ZTE
saga will
Z
not have
hav helped in
terms of sentiment,” Mr Li added,
“although
Xiaomi
“althou
will have
ha been planning their move
long before
this.”
be
The listing would
be a boon for the
Hong
Hon Kong stock
exchange,
which
exch
has relaxed its
rules to make it
easier
for comeasi
panies
to list.
pan
While
the Asian
Wh
rival to the New
York
stock
exchange
had a
exch
slow 2017, investors and bankers
hope the market
could see up to
$500bn of technology floats, as Chinese tech
firms mature and choose their
local market for a listing. Three
Mobile said it is set to sell Xiaomi’s phones in the UK after the
a deal
smartphone maker signed
s
company CK
with its parent c
Hutchison Holdings.
REUTERS
China phone
giant Xiaomi
plans $10bn
Asian listing
A Xiaomi store in Beijing. If the float goes ahead it will be the biggest since Alibaba listed in 2014, potentially valuing the smartphone maker at $100bn
The chief executive who is intent on conquering
the global smartphone market on profits of 5pc
By Matthew Field
FOUNDED in 2010, Xiaomi has
grown into one of the world’s top
smartphone companies in just eight
years under the leadership of
entrepreneur Lei Jun.
Launched by Mr Lei and seven
co-founders, Xiaomi made its mark
with popular smartphones offering
premium features, while selling
them at cheap prices to undercut
rivals such as Apple.
At 48, Mr Lei has long been a prolific
investor and entrepreneur. He spent
more than a decade with software
company Kingsoft, becoming its chief
executive and leading its float.
He also founded Joyo.com, an online
book store, which he sold to Amazon
for $75m (£55m) in 2004. In 2010 he
Lei Jun criticised corporate ‘greed’ and said
he will return excess profits to customers
launched Xiaomi, along with several
former Google and Motorola
engineers. Mr Lei said in his letter to
investors the company was started to
design a “very cool smartphone that
we would personally love”.
He is known internally as a micromanager, obsessing over the intricate
details of the company’s new
smartphones.
The company now sells its phones
in 70 markets around the world and
employs about 15,000 people.
Mr Lei’s entrepreneurial aims still
resonate at Xiaomi. In his letter to
investors, he said the company was
planning to incubate “100 other
‘Xiaomis’” to build a tech ecosystem.
It has expanded into other tech
advancements like the internet of
things, virtual reality, action cameras
and software, while it has also invested
heavily in other tech start-ups.
Xiaomi has, unusually, set a profit
cap of 5pc in its listing documents, and
in an interview with the Chinese press
Mr Lei spoke out against “greed” when
chasing profits.
The company claims it will give
back any excess to users. “We are
confident that maintaining reasonable
profits will inevitably become an
industry trend,” he said. He added that
this would ensure its products would
always be “priced honestly”.
But he also expressed the aim that
Xiaomi would grow far beyond China
to become a global company. Mr Lei
said: “We have changed how hundreds
of millions of people live, and we will
become a part of the lives of billions of
people globally in the future.”
Musk attacks ‘boring’ banker questions as Tesla posts record loss
By Matthew Field
TESLA boss Elon Musk has paid the
price for attacking “boring, bonehead”
questions from analysts, with his comments wiping $4bn (£3bn) off the company’s market value.
The billionaire grew agitated while
taking questions from bankers after
the electric car maker’s quarterly
results, and instead opened the floor to
comments posted on Tesla’s YouTube
channel. When asked by a Bernstein
analyst about the company’s future
capital requirements, Mr Musk replied:
“Excuse me, excuse me. Next, next.
Boring, bonehead questions are not
cool. Next.”
Mr Musk shut down a subsequent
line of questioning about how many
customers are spending on upgrades to
cars, instead answering queries posted
online by retail investors.
The unusual move hit Tesla’s market
value, with the shares only starting to
fall in after-hours trading once Mr
Elon Musk’s personal
wealth dropped by
around $300m
following the decline
in Tesla’s share
price this week
Musk began taking questions. In early
dealing yesterday morning, the company’s shares were 8pc lower, cutting
Tesla’s market value by a sum of $4bn.
The decline also reduced Mr Musk’s
personal wealth by about $300m as
he is a major shareholder in the business. Mr Musk is now worth about
$19.5bn in total.
Tesla has struggled to meet ambitious targets for production of its
Model 3 electric car, with problems
related to automation at its factories,
which are causing bottlenecks.
During the call Mr Musk also repeatedly cut off the company’s chief financial officer, Deepak Ahuja, interjecting
and interrupting the executive. “Sorry,
these questions are so dry,” Mr Musk
said. “They’re killing me.”
His comments came as Tesla posted
first-quarter results that revealed the
company’s biggest-ever quarterly loss,
with the business coming in at $709.6m
in the red.
However, it was still better than analyst expectations.
The company’s revenue hit $3.4bn,
which was ahead of Wall Street analysts’ forecasts of around $3.32bn. Mr
Cambridge Analytica
bosses establish new
technology businesses
SEVERAL directors and executives of Cambridge Analytica, the British political
consultancy that said it was
shutting down on Wednesday night, have established
new corporate entities in recent months.
Filings show that Alexander Tayler and Julian Wheatland, who had both run
Cambridge Analytica before
it began insolvency proceedings, are listed as directors of
Emerdata Limited, a company established in August
of last year. Its ousted chief
Twitter urges all users
to change passwords
after discovering bug
executive Alexander Nix was
also a director before being
removed in April, while Jennifer and Rebekah Mercer,
the daughters of the US billionaire and Cambridge Analytica backer Robert Mercer,
are also listed as directors.
A separate company at the
same address, Firecrest
Technologies, also lists Mr
Tayler as a director and
Emerdata as its owner.
Mr Nix was also a director
before being removed in
April.
A Cambridge Analytica
spokesman did not respond
to a request for comment.
By Hannah Boland
REUTERS
By James Titcomb
Musk is renowned for his work rate,
reportedly sleeping in the office as
Tesla tries to meet his ambitious
targets.
However, he is also becoming
known for his unpredictable behaviour, such as committing to producing
branded flame-throwers for his “Boring Company” tunnelling firm.
The billionaire also deleted Tesla
and his rocket company Space X’s
Facebook pages after a reporter asked
him to on Twitter.
Life at the new coal face An employee exercises due care and attention as he carries out
maintenance on bitcoin mining computers at the Bitminer Factory in Florence, Italy.
TWITTER has urged all users to change their passwords after it discovered
a bug that had exposed some
of them on an internal system, putting those passwords at risk.
The Silicon Valley company usually stores passwords on its system after
“hashing”, or encrypting,
them, meaning they cannot
be read but it can validate
users’ account credentials.
However, Twitter said it
recently discovered that,
“due to a bug, passwords
were written to an internal
log before completing the
hashing process”.
It did not elaborate on
how many passwords were
exposed. Twitter said it had now
fixed that glitch, and that its
investigation showed “no indication of breach or misuse
by anyone”.
Because of this, the group
said it was not forcing a password reset.
“Out of an abundance of
caution, we ask that you consider changing your password on all services where
you’ve used this password,”
Parag Agrawal, the chief
technology officer, said. Mr Agrawal added that
Twitter was not sharing the
information because it had
to, but because the company
“believes it’s the right thing
to do”.
He later clarified that he
“should not have said we
didn’t have to share. I have
felt strongly that we should.”
However, the news that
passwords had been exposed spooked investors last
night, sending shares in
Twitter down 1.1pc in afterhours trading.
The tech industry is still
reeling from a series of highprofile data breaches, with
Facebook still embroiled in a
privacy storm after it said
earlier this year that data
from around 87 million users
may have been harvested in
2014 and later sold on to
Cambridge Analytica.
Meanwhile, Uber late last
year revealed around 2.7 million UK users were affected
by a hack in 2016 and,
last month, Under Armour
said personal details of
around 150 million users of
its MyFitnessPal nutrition
app and website were accessed in a breach.
The Daily Telegraph Friday 4 May 2018
***
5
Business
Big problem or
bad data … we
need to master
productivity
Cheap labour and a
lack of investment
are blamed for dire
UK output, but a
service-led economy
could work against
us, says Anna Isaac
B
ritain continues to lag other
major economies when it
comes to productivity. In
2016, workers in the UK
were 16.3pc less productive,
on average, than those in
other G7 nations.
In only two quarters since the
financial crisis has productivity in
Britain beaten the 0.5pc average
growth rate achieved before 2007-08.
Repeated downgrades to the UK’s
productivity growth rates by the Office
for Budget Responsibility dominated
autumn headlines and have had
major implications for balancing the
UK’s books.
Poor growth led to forecasters
adding a £90.5bn funding gap to the
Government’s finances over the next
five years last November. Admittedly,
there was a slight positive revision to
the number in May, but it remains a
major problem. Lower productivity
means lower profits for businesses,
smaller wage packets and a smaller
haul for the taxman.
In short, productivity is the UK’s
economic bogeyman.
Three main issues are blamed for
output per hour having grown so
slowly: slow adoption of technology,
shortages in investment, and a lack of
the right management or technical
skills in the labour market.
One of those factors has been put
under close examination in fresh
analysis from the Office for National
Statistics (ONS), and the findings
are stark. Over a 20-year period, from
1995 to 2015, the UK had the lowest
average rate of business investment of
all Organisation for Economic
Co-operation and Development
(OECD) nations. With just 14.6pc of
GDP being invested in businesses, the
next lowest was economic basket-case
Greece at 15.8pc.
Cheap labour might be behind the
problem of low investment and the
low productivity that often comes with
it. The UK may be experiencing a “jobs
miracle” with unemployment sinking
to a historic low of close to 4pc, but
low productivity could be the price of
this. A champion of this theory is
Karen Ward of JP Morgan. Ward’s logic
is that staff, which might be cheap to
hire and quick to fire, have been more
attractive to companies than investing
in one-off irreversible costs such as
expensive computer systems.
Businesses may have been reluctant
to invest but they have not been
reluctant to hire. Weak wages have
made it an attractive trade-off. Ward
believes that as the labour market
tightens and wages pick up then
businesses may choose a more
investment-heavy form of expansion.
This should coincide with higher
productivity, she argues.
When it comes to the productivity
problem, “investment is certainly part
of the issue”, says Mark Franklin of
the ONS.
Aside from cheap labour, the
structure of the UK economy might
also, in part, explain why investment
has been so low. While manufacturers
have to keep up to date with the
latest production equipment in order
to maintain margins, it’s a more
complex affair when it comes to
services companies.
According to the ONS’s analysis of
OECD data, countries with a larger
manufacturing base – services account
for 80pc of UK economic activity –
such as Germany often see higher
levels of private investment.
South Korea is a prime example of
this. Business investment there was at
26.1pc of GDP, compared to 18.5pc in
Germany, and 14.6pc in the UK. There
is an inverse relationship between the
proportion of an economy that is
related to services and the amount
‘There
could be a
downward
measurement bias
to the figures
for the UK
relative to
other
economies
that are less
focused on
services’
businesses invest. The effect of cheap
labour, companies afraid of making
irreversible investments following the
financial crisis, and a service-heavy
economy could help to explain why
the UK’s rates of productivity growth
have been especially hard hit.
There are other issues at play,
however, which strike at the heart of
why output per hour and investment
rates might not help understand the
full picture of the productivity puzzle.
The trouble is, some kinds of
investment in productivity are easy to
measure, while others, which might
have a similar impact, are hard to
quantify. For example, spending on
improving the road network delivers
an easy-to-see boost, while the
software has a less visible effect.
Steps have been taken to include
spending on research and
development in official statistics by the
ONS and OECD. When it comes to
productivity measures, however, the
output per hour metric, useful for
working out how quickly a UK
worker might build a dollhouse versus
their French equivalent, falls down
EDF bolsters wind division with
deal for Scottish offshore project
By Jillian Ambrose
THE energy giant behind the UK’s
nuclear revival will accelerate its ambitions to expand in wind power with a
major deal to buy a controversial Scottish wind project.
EDF is understood to have paid
around £500m to buy the Neart Na
Gaoithe wind farm just months after its
developers won a three-year legal battle to move the project forward.
Mainstream Renewable Power was
first granted permission for the farm in
2014 but faced a barrage of opposition
from the RSPB, which claimed the project’s 64 turbines would endanger local
bird life off the coast of Fife.
The developer claimed victory in
November last year after reducing the
number of turbines to 54. It said yesterday that it was “delighted to be handing
over” the project.
EDF will need to spend around
£1.8bn in total to construct the turbines, which are expected to generate
enough electricity to power 375,000
homes. The French state-owned energy giant said the project will be open
to other investors looking to grab a
stake, and it hopes to have its turbines
spinning by 2023.
Bruno Bensasson, EDF’s renewables
boss, said the deal represents the
group’s “strong ambition” to become a
leading global player in the offshore
£500m
The amount EDF is thought to have paid
to buy the Neart Na Gaoithe wind farm
from Mainstream Renewable Power
wind industry. “It confirms EDF
Group’s wider commitment to renewables in countries where EDF already
has a strong footprint, such as the
United Kingdom,” he added.
Energy asset deals are likely to outpace corporate M&A activity among
energy producers in 2018, according to
Glencore upbeat on profits
amid booming metal prices
By Jillian Ambrose
THE multi-year surge in global metals
markets is expected to drive Glencore’s
trading profits towards the $3bn
(£2.2bn) mark as the mining and commodities giant brushes off geopolitical
woes in Russia and central Africa.
The global mining kingpin says it
will follow its “strongest” year on
record with earnings at the top end of
its target range of between $2.2bn and
$3.2bn from supplying and trading
metals, minerals and oil.
Ivan Glasenberg, the FTSE 100 giant’s billionaire chief executive, delivered shareholder dividends of $2.9bn
for 2017 earlier this year after a global
surge in the prices of cobalt and copper, which are expected to be in high
demand for electric vehicles.
Glencore is planning to ramp up its
production of copper and zinc later in
2018, and confirmed yesterday that its
sprawling production of over 50 different commodities across 90 countries
will remain in line with expectations
this year.
The update helped assuage investor
jitters about the group, which is
exposed to geopolitical upheaval following US sanctions against aluminium producer Rusal and ongoing
political risk in the Democratic Republic of Congo. Glencore holds a minority
stake in Russian state-backed Rusal,
and is also the producer’s largest single
buyer of aluminium.
The sanctions crackdown against a
swathe of Russian companies and oligarchs prompted Mr Glasenberg to
step down from the Rusal board and
triggered a 5pc sell-off of Glencore
shares, which plunged to four-month
lows of 329p.
In addition, Mr Glasenberg is hoping to avoid international arbitration
with the DRC, where it mines copper
and cobalt, over a new mining charter
that could impose steep royalties on
the industry.
Glencore revealed yesterday that the
Katanga mine in the DRC produced
just over 27,000 tons of copper and
500 tons of cobalt, which analysts at
Barclays said suggested efforts to hit its
150,000-ton target were going well
“However, we believe the market’s
focus will remain on issues in the DRC,”
the bank’s analysts warned.
City sources. London-based oil producer Ophir Energy said separately it
will double its oil production at a stroke
with a $205m (£151m) deal to snap up a
package of oilfields in south-east Asia
from Australian group Santos.
The oilfield binge includes major
producing assets in Vietnam and Indonesia, plus fields in Malaysia, Vietnam
and Bangladesh, which are still being
appraised, to kick-start growth for the
group as it struggles to move its longawaited Equatorial Guinea gas project
over the line.
Mark Wilson, an analyst with Jefferies, said the “arguably unexpected”
deal is none the less a “necessary and
positive step for a company that is
struggling to make the final organic
growth step with its main portfolio
project”.
Nick Cooper, Ophir’s chief executive, said that the deal will help to
accelerate the company’s “declared
strategic objective” to overhaul its
asset base and drive cash flows back
into the business.
Trump’s tax cuts and
trade wars ‘threaten
the world economy’
Continued from Page 1
be that you are getting to the full capacity growth rate a bit early,” said Mr
Young. “We wouldn’t expect growth in
the medium term to be much stronger
than that.”
Europe’s official economic forecasters have warned that there are mounting risks to growth, citing US tax cuts
and rising protectionism as major
threats.
GDP was still expected to expand by
2.3pc in the eurozone, but “risks to the
outlook have increased and become
more negative”, the EU said.
Major US tax cuts had raised the
prospect of faster interest rate rises and
threatened to overheat the world’s
largest economy. Increasing trade tensions also presented an “unambiguously negative risk” to global economic
health. Should trade spats escalate further between the US and other nations,
the eurozone’s economy would be left
“particularly vulnerable”.
If the risks to global growth are realised then rate normalisation in the
eurozone will be pushed from mid2019 towards the end of the year, said
Oliver Rakau of Oxford Economics.
when looking at a modern, servicebased economy. As Franklin explains,
the reason UK productivity grew so
fast before the financial crisis was
because clever people were inventing
new products in a wide range of
areas, from phone designs to new
financial products.
A good idea can take a short time,
but generate lots of output if easily
replicated. Capturing the complexity
of the investment, though, and the
Volkswagen cars
are retrieved by an
automated palette
from a storage
tower in Wolfsburg.
Slow adoption of
tech is one factor
used to explain UK
productivity lagging
behind countries
such as Germany
How UK Government investment compares to other
OECD countries
% of GDP invested
7
Top 10%
6
5
4
3
2
OECD Average
Bottom 10%
UK
1
1995
SOURCE: ONS
2000
2005
2010
2015
productivity payoffs from such
intellectual property, is a whole
separate puzzle. Such intangible
assets mean “there could be a
downward measurement bias to
the figures for the UK relative to
other economies that are less focused
on services”, says John Hawksworth
of PwC. Quality, not just quantity, is an
important factor here and that’s not
something the latest ONS analysis
can reveal.
“The US, for example, has also had
relatively low investment rates but
some of this has been well targeted on
areas such as digital technology that
have helped to support US economic
growth,” says Hawksworth. There is
no question that boosting business
confidence and encouraging
investment in different forms of
infrastructure, from software to
training, both within and without
government could help improve
productivity, however.
Whether or not we would be able to
fully measure either the full input, or
the full output involved, is a much
bigger problem for economists.
6
Friday 4 May 2018 The Daily Telegraph
***
Business
Our Income Portfolio
remains on track to deliver
on its 5pc yield target
Questor
Income Portfolio
Richard Evans
Investors can take
comfort from our
latest performance
summary, which also
shows healthy
capital gains
The full Questor Income Portfolio
Ticker Stock/bond
IT’S time to publish our monthly
par value. This gives us a capital
summary of the performance of
gain of 24.3pc in addition to the
our Income Portfolio. As shown in
interest of £6.50 per bond every year,
the table, our stocks and bonds are
representing an annual yield of 8pc.
performing in line with our
requirements: the annualised
Update: Inheritance
Premier Oil
yield is 5.5pc, which is
Tax Portfolio
retail bonds
better than our 5pc target,
We introduced our
and we have capital gains
£100.65
portfolio of Aim-quoted
of 5pc, again annualised,
shares, which can
on top.
Price they reached
this week. They
normally be passed on
One of the notable
once traded at
free of inheritance tax,
developments among our
£38.50
because we realised that
holdings is the continuing
there was strong demand
improvement in the price of
among certain readers for a
our Premier Oil retail bonds.
simple means to avoid, completely
The company got into such
legally, one of Britain’s least
trouble with its debts that the bonds’
liked taxes.
terms had to be amended last year
Subject to certain restrictions,
as part of a broader financial
there is no IHT to pay if qualifying
restructuring. The price had
Aim stocks had been held for at
gone as low as £38.50 in January
least two years at the time of death.
2016 but had recovered to £81 by
The main restrictions are that the
the time of our purchase for the
companies must trade, as opposed to
portfolio in October of that year.
being investment vehicles, and that
This week they reached a
the stock cannot be quoted on any
post-restructuring high
other exchange. The concession is
of £100.65 – above
Purchase Price
date
paid
BVT
Baronsmead Venture Trust 21/10/16
83p
CRST Crest Nicholson Holdings 11/11/16
435p
DCG
Dairy Crest
28/10/16 605p
FCPT F&C Com Property Trust
13/1/17
136p
IVI
Invesco Income Growth
28/10/16
273p
LGEN Legal & General
06/1/17
247p
LLOY Lloyds Banking Group
09/12/16
62p
NG
National Grid
07/10/16 £10.58
NVT
Northern 2 VCT
21/10/16
68p
NXT
Next
06/1/17 £40.89
OSB
OneSavings Bank
11/11/16
322p
RGL
Regional Reit
07/10/16
103p
RMG
Royal Mail
02/12/16
455p
RNWH Renew Holdings
25/11/16
396p
SCF
Schroder Income Growth 15/12/16
264p
ULS
ULS Technology
17/3/17
99p
NRZ
New Res Invest (NY listed) 02/3/17 $16.88
Price Capital
now gain
83.5p 0.4%
487p 8.2%
538p -7.3%
144.2p 4.8%
282p 2.2%
273.3p 8.1%
64.7p 3.1%
845.8p -12.8%
67p
-2.8%
£51.80 20.2%
393p 15%
100p -1.9%
593.4p 21.5%
415p 3.3%
294p 8.3%
144.5p 40.7%
$17.67 3.6%
Divi/
interest
5.1%
8%
3.1%
3.7%
3.2%
7.9%
6.1%
2.7%
13.1%
7.1%
4.3%
2%
4.8%
1.6%
3.8%
2%
11.5%
Total
rtn
5.5%
16.2%
-4.2%
8.5%
5.4%
15.9%
9.2%
-10.1%
10.3%
27.3%
19.3%
0.2%
26.2%
4.9%
12.1%
42.7%
7.2%
Fixed interest
40OS Tesco 6% 2029
14/10/16
BOI
Bank of Ireland Perp 13.375% 04/11/16
LAD2 Ladbrokes 5.125% 2022
19/1/17
LIV1
LendInvest 5.25% 2022
28/7/17
NBSP Newcastle BS Pibs 10.75% 11/11/16
PAG2 Paragon 6.125% 2022
19/1/17
PMO1 Premier Oil 6.5% 2021
14/10/16
£124.50 7.8%
217p
6.8%
£105.70 1.9%
£101.10 1.1%
168p
6.7%
£107
1.8%
£100.65 15.6%
7%
6.8%
5.8%
2.6%
7.2%
6.8%
7.2%
14.8%
13.6%
7.7%
3.7%
13.8%
8.6%
22.8%
5.5%
10.2%
£111
197p
£103
£100
153p
£105
£81
Overall portfolio
5%
Gains are annualised. Figures may not add to total
shown because of currency effects
officially known as business property
relief and applies to “unlisted” shares.
Although Aim stocks are traded on
the stock market, from a legal point of
view they count as unlisted, so qualify
for relief.
However, there are growing fears
that this tax break, which we must
Source: Sharesight
admit is generous, may be amended
or scrapped.
The Government recently asked the
Office for Tax Simplification to carry
out a review of inheritance tax and
some experts in the field suspect that
the OTS could recommend a scaling
back or abolition of the Aim share
concession. Accountants at RSM said
that among the “distinct possibilities”
was “a restriction of business property
relief to unquoted companies”. They
said this would have “a dramatic
impact on the use of qualifying Aimlisted shares for investors wishing to
build up an IHT-free portfolio”.
Politically it is hard to see any
government that did scrap the relief
getting into much trouble. Both major
parties have recently been aiming
their tax rises at the better off, and a
relatively small group of fairly wealthy
individuals who seek to avoid IHT are
unlikely to arouse much sympathy,
Questor feels.
As abolition is only a matter of
speculation at the moment we will
continue to recommend Aim stocks
for our IHT-free portfolio. However,
investors should be aware that should
the tax break be scrapped there is
every likelihood that the prices of
their Aim shares will fall because a
major reason for holding them would
disappear and many holders would
probably sell.
This is all the more likely in view
of the rise in the number of asset
management firms that now offer Aim
portfolios to avoid IHT; another one
joined their ranks only this week.
The OTS has started a consultation
on the matter and readers may wish to
respond. Visit tinyurl.com/IHTsurvey.
Yesterday’s graph was incorrectly
labelled. It showed the performance of
Manchester & London investment trust.
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.
52 week
High Low (p) Stock
Price (p) +/- Yld
P/E
Electricity -0.09%
368¾
1174⅜
1554
1150 Hiscox ●
1510
1468
1095 Jardine Lloyd ●
— 1.9
P/E
—
52 week
High Low (p) Stock
Price (p) +/- Yld
NAV
52 week
High Low (p) Stock
Price (p) +/- Yld
P/E
161
-¼ 3.6
176
773
638 Informa
756⅝* -⅝ 2.7 20.0
52338 430⅜ Hammerson ●
552 +3⅝ 4.6
—
292¾ JPM Gbl Gth & Inc
310
-5 3.9
308
211⅜
141 ITV
150⅛* -1½ 5.2 14.7
386½
285 Helical
378½
120¼ JPM GEMI
127
-½ 3.9
134
843
563 Pearson
830* -3¾ 2.0 16.6
608¼
483⅝ H K Land
541¼* +⅞ 2.7
178
147½ JPM Eur Inc
1270* — 2.7 22.6
397⅜
604 +5½ 1.8 -22.7
143
Price (p) +/- Yld
P/E
52 week
High Low (p) Stock
-8.4
773½
542½ Lancashire Hldg ●
733 Nat Grid
845¾ +¾ 5.3
3.7
279⅞
244¼ Legal & General
273¼* — 5.6
102¾
94 JPM GL Conv
98
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99
1784
1399 RELX
1556* -5 2.5 18.9
1217
900¼ Land Secs
982¾ +1⅛ 4.3
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8.8
260¼
185½ Old Mutual
249¾ -3¼ 2.8 12.9
786
644 JPM Indian ●
717
—
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4603
3873 Rightmove ●
4567 -12 1.3 29.1
34½
29¾ Local Shopp REIT
32½
—
820
719 Phoenix ●
779*
-8 6.4 -22.7
462
337 JPM Japanese ●
447
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491
1402
11⅜ Sky
1366
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191¾
162¼ LondonMetric ●
188⅝ +1 4.1
—
492
-1 6.8
1176½ SSE
1386
8.6
52 week
High Low (p) Stock
Price (p) +/- Yld
P/E
Tobaccos -0.57%
-3 2.3 11.1
313* -1¾ 3.9
+⅜
3.1
5643⅝ 3553 Brit Am Tob
3898* -21½ 5.0
—
3791½ 2298 Imp Brands
2595 -17 6.6 17.6
42
Transport +0.09%
2.1
52 week
High Low (p) Stock
Price (p) +/- Yld
P/E
324
-¼ 2.1
2.2
97¾ Caterpillar $
140
-3⅞ 2.2
1.2
133⅞
102½ Chevron $
124⅜ -1⅛ 3.6
1.1
1.1
371⅝
175½ Boeing $
173¼
44¾
36⅛ Coca-Cola Euro $
38⅛
-¼ 3.3
77⅞
63 Colgate Palm $
63⅛
… 2.7
1.4
126⅝
83¼ Dr Pepper $
119
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2.5
1883½* -4½ 2.5 20.2
469
324½ JPM Japan Sm Cos
426 +1½ —
121¾
65¼ Trinity Mirror
85½
3.7
289
192¼ McKay Secs
263
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—
370⅜
290 BBA Aviation ●
320¼* -3¼ 3.1 37.4
77⅛
61¼ DowDuPont $
62
-1⅜ 2.4
0.6
1043
728½ Bodycote ●
907* -12 1.9 17.8
672½
591⅜ RSA
640* -9⅝ 3.1 24.3
1270
1003 JPM Mid Cap
1240 -10 1.9 1292
989
639 UBM ●
989* +1½ 2.4 26.7
564
471 Mucklow A J
552
+2 4.1
—
3475
1950 Clarkson ●
2430 -25 3.0 23.3
89¼
72⅛ Exxon Mobil $
75⅞
-1 4.3
1.4
490
400 Castings
420
— 3.3 14.1
1279½ 1051 St James Place
1151* -11 3.7 41.4
103½
88 JPM Mlti-Ass
94⅞ +1⅜ —
101
1762
1074 WPP
1274
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52⅝
41⅜ Raven Russia
45
+½
—
7.0
543½
300 Northgate
367⅜ +1¼ 4.8
25
10⅛ Fiat Chrysler $
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448⅝
349⅜ StndrdLifeAber
367¾* +⅝ 5.8 12.3
561¾
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494
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156
127 Raven R C R Prf
143
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593⅜ +4¾ 3.9 21.6
77¾
28⅜ Foot Locker $
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Investment trusts -0.81%
1254⅞
883 JPM Small Cos
1185 +5 1.9 1379
20
—
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252
29½
12¾ Gen Electric $
13⅞
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247 JPM US Sml
288*
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207⅝
144¼ Home Depot $
181¾ -4⅛ 2.3
1.8
141⅞ -1⅛ 2.1
0.8
-½ 2.6
2.7
1992½ 1692 Prudential
Government securities
Flat Rdm
Price (£) +/- Yield Yield
Price (p) +/- Yld
1537
218 Drax Group ●
Engineering / Industrial -1.54%
52 week
High Low (£) Stock
52 week
High Low (p) Stock
132.43 123.14 Treas 8% 21
122.00 +0.23 6.56 0.79
90
59½ Coats Group ●
78¾
132.85 123.92 Treas 5% 25
125.06 +0.49 4.00 1.18
1975
1350 Cropper J
1435
— 0.8 28.4
153.80 142.35 Treas 6% 28
144.49 +0.81 4.15 1.45
624½
279 Fenner ●
609
-1
—
34.6
52 week
139.32 105.24 Treas 4¼% 32
132.39 +0.83 3.21 1.66
2128
1510 Goodwin
1800 +40 2.4 21.3
High Low (p) Stock
363.52 133.71 Treas 4¼% 36
138.28 +1.01 3.07 1.74
1453
1004 IMI ●
1060* -69 3.7 17.7
975
798 3i
156.85 146.14 Treas 4¾% 38
151.17 +1.11 3.14 1.77
5192⅛ 4403⅞ Jardine Mthsn
4432¼* -35 2.7
—
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-9.4
91
Index Linked Securities
261⅞
373.15 360.81 Treas 2½% IL 20 361.85 +0.38 2.29 0.00
2145
372.89 354.79 Treas 2½% IL 24 360.06 +1.19 1.96 0.00
88
51 Low&Bonar
2⅛ Melrose Ind
1684 Mondi
59 Severfield
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8.8
293
1870
950⅛ Anglo Amer
1732* -25⅜ 4.4
115¼* — 6.1
120
1071
11⅛ Antofagasta
983⅝* +3⅜ 3.8 17.5
-1 2.2
336
1662⅜ 1103 BHP Billiton
1558
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180⅞
130⅝ Centamin ●
156¾ +1⅜ 5.9 11.0
490 +14 9.0 13.5
9.5
29
19 Raven R Wts
121
121 Raven R CnvPref
119½
41
31¼ RDI REIT ●
36⅜
-¼ 7.3
—
553½
383¾ Safestore ●
541
-1 2.6
—
429⅜
330⅞ St Modwen ●
416¾ +1¼ 1.5 15.5
1046
837 Savills ●
970*
Price (p) +/- Yld
NAV
140⅛
109 J Laing Infra ●
938¾ -12⅝ 1.7
704
342
296 Jup UK Gwth IT
272⅜
201½ 3i Infrastructure ● 219½ +¼ 4.5
211
1845
1633¾ Keystone Inv Tr
125
113½ Aberdeen Diversified 121¾
-¼ 4.6
124
652
549⅞ Law Debenture
604
673
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169¾ Evraz
231⅛* -¾ 1.8 -192.6
547
408 Aberdeen New India 455
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531
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1440 Lowland Inv
1540 -12½ 3.2 1645
1746
1150½ Fresnillo
1296½* +16½ 2.3 23.1
654⅜
477¼ Segro
638¼* +¼ 2.6
1894½ -141½ 2.9 15.5
774
680 Alliance Trust ●
-8 1.8
768
311
270 Majedie
290
— 3.4
324
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165⅛
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4427 Carnival
4699 -58 2.8 17.6
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1765⅞ 1396½ Compass
1558½ -11½ 2.2 21.9
171⅛
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318
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159⅛ -1⅝ 2.5
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Spread vs
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364
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271
Yield%
Bunds
T-Bonds
0.76
+0.23
-2.18
Germany
0.53
–
-2.41
Japan
0.04
-0.49
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3387
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2695
Great Britain
1.39
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154
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2.94
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2711
2137 Coca-Cola HBC
2450
Aerospace & defence -1.02%
52 week
High Low (p) Stock
P/E
2.9
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1446¼ 1155 BlackRock Small
234 Pacific Assets
258½
1720 Pantheon ●
1985 -15 — 2327
551⅜
437 BP
543⅞ -3½ 5.4
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156
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190
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142
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219
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648⅝ Utd Utilities
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313⅜
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1138 Ultra ●
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202¾ -2¾ 3.2 -19.7
1535 -10 4.0 12.0
119¾ Centrica
154⅛ -1½ 7.8 25.7
+9 5.1 17.8
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447¼
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220⅛
213
318⅞ Ashmore ●
398 -15¼ 4.2 15.9
399⅜
320¼ Brewin D ●
361¾
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433
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350
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829
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331
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854 The Europ InvTr
352 Fidelity Asian V
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927
637 HSBC
721¼ -8½ 5.2 20.3
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836½ -9½ 3.9 18.1
263
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73⅝
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387⅛ Santander
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262
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2681 Johnson Mat
3272 -52 2.3 16.3
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4297 -77 1.2 29.4
338
305 F&C Cap & Inc
330 +1½ 3.2
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133⅞ F&C ComProp ●
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142
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419½ Costain
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2955
27 CRH
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High Low (p) Stock
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Price (p) +/- Yld
NAV
High
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8.0
760
503 Dunelm ●
567
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270
150 Findel
259
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1400¼ 1041 Greggs ●
1233* +2 2.6 21.8
386¾
305⅜ Halfords ●
376⅝ +¼ 4.7 13.1
596¾
282 Howden Joinery ●
510
369¾
277¼ Kingfisher
278¾ -11¾ 3.9 12.6
131½
78½ Lookers
101⅝
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397¾
262 Marks & Spen
285¼
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254⅜
203¼ Morrison (WM)
242⅝ +2⅞ 2.5 18.2
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5355
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213⅞
108 Saga ●
135⅝ -1¼ 6.6 11.0
339⅞
222⅜ Sainsbury J
302
2347
1635 Smith WH ●
1949 +5 2.5 18.7
424⅜
280¼ Sports Direct ●
405¼ +1¼ —
242¾
165⅜ Tesco
239⅛ +2½ 1.3 16.2
-3 3.4 22.7
10.3
Price (p) +/- Yld
P/E
994½
638⅝ Aggreko ●
724⅝* -7 3.7 17.4
2185
1476 Ashtead Gp
2052 -11 1.4 20.4
1030
604 Babcock Intl ●
717⅜ -11 4.0 11.6
230
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2472
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2157
721
127⅝ Capita ●
199 +1⅝ 5.6
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228¼
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14¼
131½
844
376½ Hunting ●
777½ -50½ — -64.2
299
219⅝ Charles Taylor
275* +14 4.0 20.9
604⅝* -9¼ 4.6 -96.3
73
46¼ Communisis
63⅝* +1¼ 4.2 11.3
711½
438⅛ De La Rue
Healthcare -3.83%
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148
305
265 Hend Alt Strat
277½ -2½ 1.7
334
2025
1812 RIT Cap Ptnrs ●
2005 -10 1.6 1850
827
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87
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218⅜ Ruffer Inv Pref
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181⅜ ConvaTec Grp ●
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184½ -2¼ 5.1
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172
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161
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339½ Scot American
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915
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102
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890 Hend Opp
1040
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486⅝
376½ Scot Mortgage
481¾ -4¼ 0.6
464
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1265
947⅞ Herald Inv ●
1240 -10 — 1426
177¼
155½ Sec Tst of Scot
165½
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177
1940
1496 HgCapital
1925
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179⅞
167 Seneca Global
175¾
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173
5520
4260 AstraZeneca
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133 HICL Infrastructure ●144¼ -1⅝ 5.4
502
431 Stand Life Eq Inc
484
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784
540 BTG ●
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2024
1481½ Burberry
235
138¼ McBride
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199¾ PZ Cussons ●
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413⅛
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312
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309½
260 Invesco Inc Gth Tr
282
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129 InvesPerp Bal Rk
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210¾
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167⅜ Rank Group ●
172⅜
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109⅛ United Tech $
117
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229¼ Restaurant Gp
307⅝
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73⅛ Wal Mart Strs $
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1723
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1143
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3499⅞ Whitbread
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71⅝ Akzo Nobel €
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257⅜
186½ Continental AG €
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1588
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66⅜
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2580
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72⅛
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Price (p) +/- Yld
237⅞
78 Mpac Group
216
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1661½ +7
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153 MS Intl
184
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159⅞
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748 +4½ 2.1 31.2
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3843 -51½ 0.7 11.0
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720
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530
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414
1118
977½ Witan ●
1054 -12 2.1 1079
512
310 Microgen
440½
-2 1.4 26.9
381⅞
307½ JPM Asian
356* -5½ 4.3
396
355
304⅝ Witan Pacific
329½
2707
2285 Worldw HealthTr ● 2430 -40 0.9 2427
2970½
26¾ Micro Focus Intl
1249 -9½ 6.0 22.7
73½
65¼
-½ 1.2
75
825¼
536¼ Sage Gp
633⅝ -3¾ 2.5 22.8
346¾
217¼ JPM Chinese
293
-1 0.5
341
131
1⅛ Spirent
111⅜* -5¼ 2.7 31.8
760
659½ JPM Claverh’se
748*
-6 3.7
770
833⅜
730 JPM ElecManGth
792½
— 1.4
121
104 JPM ElecManInc
113
— 4.1
-1 1.7
384
67¼
56⅝ Assura ●
34⅞
—
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184⅞
120½ SIG ●
60
-⅜ 4.2
—
123⅝
82¼ Serco Group ●
937
1192 Travis P ●
1⅞ Xtract Resources
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—
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108½ +1 4.0
1⅞
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1590
1580 +10 1.2 25.7
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1709
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247
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6.4
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318
216⅜ BT Group
232⅛ -10⅛ 6.6 12.1
279¼* — 0.5-2793.0
865
334¼ Inmarsat ●
376⅛* -15⅛ 3.9 12.7
High
Low Stock
Price +/- GrsYd Cvr
111¼
85¼ KCOM Group
100⅜ -2⅝ 6.0 20.7
39⅛
24¾ 21st Cent Fox A $
36¼
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220
88⅝ TalkTalk ●
132¾ -2¼ 3.0 21.8
62⅜
29½ Alcoa $
53¼
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103
76 Amer Express $
96
-1⅝ 1.5
2.5
33
22⅛ BankAmerica $
28¾
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3.7
day’s close see www.Morningstar.co.uk.
256⅜
186¼ CLS Hldgs ●
828
Media -0.35%
62¾
50 Cap&Regional
117
326⅛
251⅞ Capital&Count ●
P/E
3241
2574 Derwent Ldn ●
3067 -88 4.4
—
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852⅞
660 Gt Portland Est ●
698¼ +¾ 17.3
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435
250¾ discoverIE Grp
427
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2184
1766 Admiral
1980½ -9 5.8 16.9
103
98 JPM ElecManCsh
100½
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102
52 week
High Low (p) Stock
1341
1064 Halma
1241
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550
482¼ Aviva
535* -1¼ 5.1 15.3
935
757⅞ JPM Emerg Mkt ●
860
-10 1.3
980
192
150 Bloomsbury
177
5820
3362 Renishaw ●
4696 -84 1.1 33.2
610
440¾ Beazley ●
601
-3 1.8 30.8
448
354 JPM Eur Sm Cos
413 +2½ 1.1
454
769
500 Daily Mail ‘A’
687 +9½ 3.3
7.0
385¼
247¼ Grainger ●
316⅜
-⅜ 1.5 17.6
1342
1035 Telecom Plus ●
1070 -10 4.7
3750
2375 XP Power
3480 -20 2.3 23.5
411¼
340 DirectLineIns
363½* -2¼ 9.7 11.4
339
287⅛ JPM Eur Gwth
307½
339
1358
1025 Euromoney ●
1314 -14 2.3 34.7
283¾
188⅞ Intu Props ●
195*
+⅛ 7.2
239⅝
190⅛ Vodafone
209
—
9.0
-3¾ 6.3 -10.5
98
6.5
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.
1281½* -3½ 3.6 13.8
—
-0.1
-⅛ 2.6 -14.3
1286 Young & Co - A
+1
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+2 3.1
722 Big Yellow Gp ●
589 Brit Land
Price (p) +/- Yld
Union Jack Oil
—
671¾* +2⅜ 4.5
943
695
Net Asset Values © 2018 Morningstar Estimated at previous
99
⅛
105½ Walker Green
—
27.0
1329* +3 1.9
29 Premier Vet
—
—
—
814¼ Hikma ●
2940½ Shire
—
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246½ Indivior ●
5021
Recent issues
430
2000
184
2.6
-2½ — -11.6
471½
130
-⅝ 3.0
37½
270
112
1.7
21⅝ Futura Medical
155
—
… 3.9
62½
—
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4⅞
138¼ +¾ 1.5
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—
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117½
159
—
4.8
6
112⅛ Pernod Ricard €
166½
143
2.7
-⅜ 3.3
111⅝ Michelin €
150 UIL Ord
126½
-¼ 3.6
24½
141⅞
153½ UIL Fin ZDP 18
109⅞ UIL Fin ZDP 22
55⅝
15⅞ Lufthansa €
130⅞
159¼
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31¼
-½ 0.9 26.4
45
1⅜ Johnson Serv
60
66*
1689
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128½ -1½ 2.4 18.1
5556 -36 2.0 17.8
77.5
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40 Elecosoft
1428 Experian
-2 3.9 29.7
86⅜
211⅞ LVMH €
98¾ Finsbury Food
4427 Ferguson
— 1.9 24.8
79⅝ Heineken €
292⅞
131⅜
1708
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91⅜
68
5722
-4 5.1
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-6 1.0 22.2
180
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— 2.2
1020
250
74
127⅞
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448⅝ -8¾ 4.6 10.3
405¼ Essentra ●
7.6
140
145
—
-7 4.8 13.2
588½
151¾
185
59 JPM Brazil Inv
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7305 +50 1.6 30.0
1452⅝ -7⅜ 5.5 46.3
206
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519
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1724½ 1179⅜ GlaxoSmKline
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39150 -150 1.4 38681
167 InvesPerp Sel UK E 184½* — 3.5
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204
109 PremierGlblInfra
190½ InvesPerp Sel Gbl E 204*
480 Dialight
145¾ Dixons Carph ●
38700 Personal Ass ●
214
1099
349⅝
173¾
194½
Electricals -1.59%
1207 +59 2.0 10.4
41680
-5.3
8.9
734⅞ Dignity
107
—
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2777
110
19½
627*
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17⅛ BSD Crown
192⅞* +2¼ 7.8 11.3
24⅝ +1⅛ 11.8
+1 4.9
25
173 Taylor Wimpey
20 Debenhams
40.8
106
747½ +2½ 2.1 13.9
536 Redrow ●
52⅜
—
100*
437¾ +⅜ 3.2 20.3
211⅞
621* -1¾ 2.5 28.2
99 F&C UKRealEstInv
360¼ Marshalls ●
673½
40¾
571⅞ Dairy Farm
94½ F&C UKHighIncTst
681½ Grafton Gp ●
+6 1.9 43.2
31⅞ Carpetright
708½
109
486⅝
316
-⅜
224¾
108
851
2732 +21 8.6 10.7
193⅞ -3⅝ 7.3 44.0
2670 +85 3.9 13.1
1494
252 Nth Midland Con
163¾ Brown N
3330* -26 3.4 15.5
2102
2214 Persimmon
Retailers -0.07%
1870 S & U
487⅜ +3¾ 6.8
2901
—
3069 Schroders
5560* -60 3.0
379⅞
97
-2 2.1
3784
8110⅜ 4973⅜ Reckitt Benck
7.4
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1098
2670
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2624* -15 2.3 13.1
100
840½ Workspace Gp ●
Support services -0.22%
201
378½ -5½ 3.7
Household goods -1.00%
8.8
—
307 F&C Priv Eq Ord
9.2
9.0
—
127 F&C Mgd I
561⅜* +6¾ 7.7
3343 +7 4.0
202
389
495⅜ Mediclinic Int
4123 +32 2.6
181 F&C Mgd G
146
1173 Smith & Nep
3031 Berkeley Grp
211⅜
-9¼ —
635
1442
2718 Bellway ●
90½
2254 Rathbone Bros ●
2.8
528½ +½ 3.0 12.3
890⅛
4270
247 Boot H
400¼ Paragon ●
2402⅞ 312⅛ Provident Fin ●
-8 1.1
980
7.5
-1 5.3
3805
354
556
5⅝ NEX Group ●
297¾* -2¼ 1.2 12.2
138
—
-8 2.0 23.1
Construction +0.25%
6¼ Barratt Dev
-⅝
219¼
2842
3511
705½
170
19.1
Chemicals -1.43%
115 Alumasc
—
590 +20 2.7 38.9
1018
252½ Balfour Beatty ●
—
135
Beverages +0.01%
311¾
151¾
99¾ IP Group ●
305⅞* +3⅛ 2.0
189⅞
243
425 Liontrust
250¼ Virgin Money ●
3612 Croda
279
158⅜
315
4691
106 Fidelity Japan V
-4 1.0
620
742⅜* -19 1.1 42.8
155½ Stock Spirits
160
409
2000* -2½ 4.0 18.6
688⅝ Standard Ch
320
573¾ -16⅝ 4.1 11.3
121
468⅞* -6⅛ 3.4 13.4
864¼
2735½ 2234 Diageo
451¼ Investec ●
331
216½* -1½ 2.0
97 Warehouse REIT
1135
137⅛
+2 2.5 1043
396½ -2½ 1.3
798⅝
304¼
—
404
105¼
361
2000
413⅞ BlkRk Throg Tst
—
-⅝ 5.8 -123.1
268
536
670½ Hilton Food
558½ Vedanta Res ●
1417½ -7½ 1.8 1570
-3 1.9 23.8
4557½ 3678½ Unilever
Price (p) +/- Yld
⅜
3254
France
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
Americans -1.29%
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.
52 week
2.2
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 Friday 4 May 2018
7
**
Business
Debenhams has best day in two years
TOM REES
PORT
MARKET REPORT
Results roundup
Company
Centamin $
Elektron Technology
Lancashire Holdings $
Pre-tax (£)
EPS (p)
DIV (p)
Pay day
XD
11.12 (10.31) 11.100 (10.300)
Fin – (–)
2.4m (2.4m)
Jun 26
May 31
1Q 172.5m (140.7m)
65.4m (29.5m)
3.17 (1.17)
n/a (n/a)
–
–
1Q – (–)
-1.4m (-1.3m)
0.00 (-1.00)
n/a (n/a)
–
–
Dalradian Resources C$
EMBATTLED department store
Debenhams enjoyed its best
intraday surge in just under two
years on hopes that store closures
at rival House of Fraser could ease
the pressure mounting on the high
street struggler.
With huge stores located in town
centres hard hit by the
“Amazonification” of retail, Debenhams
and House of Fraser have become
symbols of the UK high street decline.
Chinese firm C.banner International
Holdings confirmed on Wednesday
that it had snapped up a controlling
stake in House of Fraser, a deal that
hinges on the department store
entering a CVA to cut costs by closing
underperforming stores and
renegotiating rents.
The shake-up, which also puts
thousands of jobs at risk, could “be
overdue good news for Debenhams”,
Peel Hunt told clients.
The market value of Debenhams
has dwindled from over £1.1bn to
around £300m in just three years as
its more nimble and cheaper online
rivals grab market share. A profit
warning in January and its “Spring
Spectacular” promotion being
knocked by the cold snap have ramped
Wizz Air wins permission Blockbuster European
for UK-based subsidiary deal ‘should be blocked’
Winners and losers (pc)
Turnover (£)
Aberdeen New Thai IT
BUSINESS BULLETIN
Fin 29.8m (26.8m)
2.7m (-600k)
1.10 (0.00)
n/a (n/a)
–
–
1Q 215.8m (196.5m)
42.4m (28.7m)
21.00 (15.00)
n/a (n/a)
–
–
www.theice.com/data
up the pressure on the department
store. Peel Hunt also argued that
House of Fraser dumping some of its
large stores will catch the eye of
Debenhams’ top shareholder Sports
Direct, which has ambitions of
becoming the “Selfridges of sport”.
Despite Peel Hunt cautioning that it
“wouldn’t overplay” the impact of
House of Fraser’s struggles on peers,
investors piled into Debenhams, lifting
it 1.1p, or 4.7pc, to 24.6p. Sports Direct
inched 1.3p higher to 405.2p.
Elsewhere, BT shares endured
their worst day of trading in 2018
after Barclays analysts warned that
the FTSE 100 firm’s wholesale
business in the UK looks vulnerable
to competition.
In a downgrade to “equal weight”,
analyst Maurice Patrick highlighted
the impact of wholesale-only firm
Open Fiber in Italy as a possible
warning sign for BT.
FTSE 250 transport company
Go-Ahead plunged 219p to £17.35 after
Deutsche Bank analysts predicted that
the Southern Rail operator will not
have the cash to cover its dividend
over the next three years. After its
shares were buoyed by a read across
from private equity firm Apollo’s bid
for rival FirstGroup, Deutsche
questioned its value for investors.
Sainsbury’s slipped back 3p to 302p
after MPs urged the competition
watchdog to investigate the impact of
its proposed mega-merger with Asda.
On London’s junior market,
Bahamas Petroleum skyrocketed
2.1p to 3.2p after bagging a tie-up with
an undisclosed “major international
oil company”.
Focus on markets returned to
simmering trade tensions between the
US and China as Donald Trump’s team
arrived in Beijing for crunch talks.
With the US president calling for a
“level playing field” on trade, and
China vowing to “stand up” to the US,
dwindling hopes of a breakthrough in
talks sent global stocks sliding.
The FTSE 100 closed 40.51 points
lower at 7,502.69, while Wall Street
was hit hard by a disappointing batch
of earnings.
Ç Construction
0.25
Ç Transport
0.09
Ç Gas & Water
0.06
Ç Beverages
0.01
È Travel & Leisure
-0.72
È Food producers
-0.74
È Investment trusts
-0.81
È Information technology
-0.86
È Household goods
-1.00
È Aerospace & defence
-1.02
È Banks
-1.09
È Americans
-1.29
È Chemicals
-1.43
È General financial
-1.43
È Engineering / Industrial
-1.54
È Electricals
-1.59
È Telecommunications
-2.45
È Healthcare
-3.83
No-frills airline Wizz Air has won
permission to set up a UK-based
subsidiary as an insurance policy to
make sure it can keep planes in the air if
Brexit negotiations make it more
complicated to operate across the
Continent. József Váradi, chief
executive, said the move was “a key
part” of the Hungarian carrier’s Brexit
contingency plan.
A group representing the glass fibre
industry in Germany has called for an
expected European merger between
Vodafone and Liberty Global to be
blocked, saying it would create a
monopoly. The pair revealed they were
in early stage talks over a European
asset deal in February. The tie-up is
expected to be announced as soon as
next week, according to Reuters.
Standard Life Aberdeen
weighs up capital return
Esure echoes rivals on
‘Beast from the East’ hit
Standard Life Aberdeen has signalled it
is considering a “substantial” return of
capital to shareholders once it has
completed the sale of the majority of its
insurance business to Phoenix Group.
The pair said they were “actively
progressing” with the separation for the
planned deal, which is now expected to
complete in the third quarter.
Esure joined rivals Direct Line and
Hastings in bemoaning the effect of the
heavy snow earlier this year, when the
“Beast from the East” rolled in,
recording £8m in home insurance
claims costs for the first three months of
the year, £6m ahead of its prior
expectations. But esure benefited from a
stronger motor insurance performance.
Mark Wahlberg burger
Richemont tech chief to
chain to enter UK market leave after four months
The burger chain owned by Mark
Wahlberg, Wahlburgers, is seeking to
break into the UK burger market,
having signed a deal to open its first
European site in London, with plans to
open up 50 across the UK in the next
five years. Casual dining has suffered
high-profile casualties in recent weeks,
such as Byron Burger and Prezzo.
The chief technology officer at Swiss
watch firm Richemont, Jean-Jacques
Van Oosten, is stepping down from his
post “for personal reasons”, after having
only joined the group in January. News
of his departure comes as Richemont
attempts a takeover of luxury retailer
Yoox Net-a-Porter in a bid to ramp up its
presence online.
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
Name
Init chge
Sell
Mid
Change
Buy on day
+0.82pc
No 1, Poultry, London EC2R 8JR. 020 7415 4130
È Brazil
Bovespa
83288.14
-1258.94
-1.49pc
Maitland Discretionary Inc
Ç China
Shanghai Composite
3100.86
+19.68
+0.64pc
CAC General
5501.66
-27.56
-0.50pc
DAX
12690.15
-112.10
-0.88pc
Hang Seng
30313.37
-410.51
-1.34pc
-55.85
-0.59pc
È Hong Kong
È India
S&P CNX500
9388.65
Æ Japan
Nikkei
22472.78
È Russia
È Singapore
closed
RTS
1128.22
-8.34
-0.73pc
Straits Times
3575.68
-39.60
-1.10pc
3.00 2383.55 2541.85 +19.48
AXA Investment Managers UK
Limited
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
Amer Gwth Acc
5.25
601.0
+1.80
Biotech Acc
5.50
170.2
-1.10
Fidelity International
È Spain
Madrid SE
1017.95
-4.83
-0.47pc
È Switzerland
SMI Index
8842.29
-53.99
-0.61pc
Ç USA
Dow Jones
23930.15
+5.17
+0.02pc
Emerg Mkts Acc
5.25
271.3
-1.60
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
È USA
Nasdaq
7088.15
-12.75
-0.18pc
European Acc
5.25
905.0
+3.30
Unit Trust
Financial Acc
5.25
*680.8
-1.40
Commodities summary
Price
Ç Gold
per troy oz
Change
+7.89
$1312.09
+0.60pc
Change
Buy on day
Mid
Change
Buy on day
Mid
Change
Buy on day
JPM Global Macro Opps A Acc 3.00
73.61
-0.29
Jupiter Dstrbtn Inc
–
*59.13
+0.06
M&G Corp Bond A Acc
3.00
*69.51
+0.08
5.00
177.0000
+0.20
JPM Global Macro Opps A Inc 3.00
72.92
-0.29
Jupiter Dstrbtn & Grth Inc
–
*123.88
-0.17
M&G Dividend A Inc
4.00
61.66
-0.18
Multi-Mgr Inc&Gwth A Inc
5.25
154.9000
+0.20
JPM Global Uncons Eq A Acc 3.00
1330.0000
-1.0000
Jupiter Eco Inc
–
*379.16
+2.11
M&G Dividend A Acc
4.00
686.62
-2.01
Multi-Mgr Mangd A Acc†
5.00
*279.9000
-0.10
JPM Global Uncons Eq A Inc 3.00
98.7800
-0.0800
Jupiter Emerg Euro Opps
–
206.74
+0.09
M&G Episode Growth A Inc
4.00
*61.16
-0.09
Multi-Mgr Mangd A Inc†
5.00
*272.7000
-0.10
JPM Japan A Acc
3.00
475.0000
+4.1000
Jupiter European
–
2216.98
+9.14
M&G Episode Income A Inc
4.00
*129.73
-0.01
Sterling Bond Acc†
4.25 *220.0700 229.5700
…
JPM Japan A Inc
3.00
114.4000
+1.0000
Jupiter Euro Inc Acc
–
82.32
+0.19
M&G Episode Income A Acc
4.00
*171.04
-0.01
Sterling Bond Inc†
4.25 *64.7000 67.4900
…
JPM Multi-Asset Income A Acc 3.00
*94.8600
-0.1600
Jupiter Euro Inc Inc
–
56.48
+0.13
M&G Global Dividend A Inc
4.00
*203.82
-0.16
Strategic Bond A Inc
4.00
*122.4000
…
JPM Multi-Asset Income A Inc 3.00
*64.7200
-0.1100
Jupiter Euro Special Sits
–
422.69
+0.91
M&G Global Dividend A Acc
4.00
*279.98
-0.21
UK Absolute Return A Acc
5.00
158.4000
…
JPM Multi-Asset Inc A Mth Inc 3.00
64.69
-0.11
Jupiter Fin Opp
–
*624.49
+0.47
M&G Glbl Emrgng Mkts A Inc 4.00
267.32
-0.72
UK Alpha A Acc†
5.25
154.7000
-0.30
JPM Multi-Man Gwth A Acc
3.00
1008.0000
-1.0000
Jupiter Fund Of Inv Trusts
–
*256.87
+0.22
M&G Glbl Emrgng Mkts A Acc 4.00
289.38
-0.78
UK & Irish Small Co A Acc
5.00
676.0000
+0.90
JPM Multi-Man Gwth A Inc
3.00
922.2000
-0.9000
Jupiter Global Emg Acc
–
70.96
-0.63
M&G Glbl High Yld Bd A Inc
3.00
*49.92
-0.02
UK Equity Income A Inc
5.00
*646.0000
-0.10
JPM Natural Res A Acc
3.00
637.3000
+6.3000
Jupiter Global Eq Inc Acc
–
71.31
-0.06
M&G Glbl High Yld Bd A Acc
3.00
*131.18
-0.05
UK Index A Acc
–
635.8000
-0.40
JPM Natural Res A Inc
3.00
44.6600
+0.4400
Jupiter Global Eq Inc Inc
–
62.43
-0.05
M&G Global Macro Bd A Inc
3.00
*82.86
+0.39
285.6000
-0.20
JPM Sterling Corp Bd A Grs Acc 3.00
*92.5600
+0.0400
Jupiter Global Managed Acc
–
232.25
-0.90
M&G Global Macro Bd A Acc
3.00
*125.99
+0.6
1014.0000
…
JPM Sterling Corp Bd A Grs Inc 3.00
*55.2400
+0.0200
Jupiter Global Managed Inc
–
223.23
-0.87
M&G Global Themes A Inc
4.00
883.52
+0.85
Multi-Mgr Inc&Gwth A Acc
+50.30
È Germany
Mid
…
–
6187.00
È France
Change
Buy on day
Init chge
Multi-Mgr Divrsfd A Acc
All Ordinaries
Ç Australia
Mid
85.6500
Name
Discretionary Unit Fund
Global Opp Acc
5.25
*1431.0
+4.00
Wealthbuilder
Global Opp Inc
5.25
*1262.0
+3.00
Investment Funds (OEIC)
3.50
137.5
+0.8
UK Tracker A Acc
–
US Growth A Acc
5.00
Sell
Name
Init chge
Sell
Name
Init chge
Sell
Name
Init chge
Sell
£12.13
+0.09
+0.76pc
Global Tech
5.25
110.5
+1.10
JPM UK Dynamic A Acc
3.00
208.6000
+0.2000
Jupiter Growth & Inc
–
*103.00
-0.16
M&G Global Themes A Acc
4.00
1373.47
+1.31
Ç Krugerrand
£972.16
+22.82
+2.40pc
Health Acc
5.50
*1800.0
-1.00
Cash Fd Y
–
100.00
…
JPM UK Dynamic A Inc
3.00
164.5000
+0.2000
Jupiter Income
–
581.91
-1.23
M&G Managed Growth A Inc 4.00
*110.33
-0.34
Ç New Sovereign
£223.03
+2.42
+1.10pc
Japan Acc
5.25
610.1
+5.10
Cash Fd Y Accum.Units
–
100.36
…
JPM UK Equity Core E Acc
–
*367.6000
-0.2000
Jupiter India Fd
–
124.55
-0.96
M&G Optimal Income A Inc
3.00
*149.62
+0.1
Ç Maples
£967.73
+18.39
+1.94pc
Managed Balanced Acc
5.25
393.2
+0.30
Income Funds
JPM UK Equity Core E Inc
–
*62.9200
-0.0300
Jupiter Int Financials
–
97.78
+0.35
M&G Optimal Income A Acc
3.00
*211.43
+0.15
JPM UK Equity Gwth A Acc
3.00
146.3000
+0.2000
Jupiter Japan Inc Fd Acc
–
119.25
+1.01
M&G Property Portfolio A Inc
JPM UK Equity Gwth A Inc
3.00
131.2000
+0.2000
Jupiter Japan Inc Fd Inc
–
93.38
+0.79
M&G Recovery A Inc
4.00
145.21
JPM UK Higher Inc A Acc
3.00
1111.0000
+1.0000
Jupiter Merlin Bal Prtfo Acc
–
183.81
-0.17
M&G Recovery A Acc
4.00
339.68
+1.2
JPM UK Higher Inc A Inc
3.00
578.0000
+0.2000
Jupiter Merlin Bal Prtfo Inc
–
128.41
-0.12
M&G Strategic Corp Bd A Inc 3.00
75.38
+0.04
Ç Silver
per oz
Ç Platinum
per oz
Ç Palladium
Ç Copper
Ç Tin
£706.56
+2.29
+0.33pc
Managed Income Inc
5.25
*142.1
+0.10
£5069.79
+56.92
+1.14pc
Managed Income Acc
5.25
*995.4
+0.60
Enhanced Inc Fd
3.50
high grade
£15711.54
+206.73
+1.33pc
£1677.87
+2.74
+0.16pc
Monthly Inc Inc
5.25
*260.3
+0.50
Extra Income Fd
£2222.51
-20.30
-0.91pc
Monthly Inc Acc
5.25
*631.2
+1.10
Moneybuilder Bal
special high grade
È Aluminium
high grade
-1.13pc
108.7
…
3.50
27.55
-0.01
–
49.49
…
–
36.45
…
UK Growth Acc
5.25
308.5
-0.50
Moneybuilder Inc
UK Select Opps R Inc
5.25
*1942.0
-8.00
Growth & Income Funds
+0.80pc
UK Select Opps R Acc
5.25
*3563.0
-14.00
+0.35pc
UK Smllr Cos Acc
5.25
*311.1
+0.40
£10268.81
-0.32
0pc
1376.00
+30.00
+2.23pc
per tonne
£144.70
+1.15
Jul settlement
$73.62
+0.26
Ç Baltic Dry Index*
Ç Brent Crude
-19.28
£1686.73
È Nickel
Ç Wheat
+0.98pc
per oz
grade A
Ç Lead
È Zinc
+6.36
£655.61
†Available as an ISA
*Copyright Baltic Exchange Information Services Ltd.
AXA IM Funds www.axa-im.co.uk
J.P. Morgan Asset Management
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
£ > € Rate 1.1329 Change -0.44¢ £ > $ Rate 1.3541 Change -0.58¢
Tourist £1= Sterling £1=
1 Euro =
1 Dollar =
Pan Euro HY Bond Inc
5.25
32.22
-0.11
Pan Euro HY Bond Acc
5.25
104.9
…
JPM UK Sm Cos A Acc
3.00
498.9000
+2.1000
Jupiter Merlin Conserv Prtfo Acc–
58.22
+0.15
M&G Strategic Corp Bd A Acc 3.00
116.58
+0.06
-0.0300
JPM UK Sm Cos A Inc
3.00
95.2400
+0.3900
Jupiter Merlin Conserv Prtfo Inc–
50.36
+0.14
M&G UK Inc Distribution A Inc 4.00
799.14
+0.13
JPM America Eq A Inc
3.00
89.2300
-0.0200
JPM UK Strat Eq Inc A Acc
3.00
*193.8000
+0.2000
Jupiter Merlin Grth Prtfo Acc –
406.73
-0.66
M&G UK Inc Distribution A Acc 4.00
7270.76
+1.21
Jupiter Merlin Grth Prtfo Inc –
395.28
-0.65
M&G UK Infl Lkd Corp A Inc
3.00
*115.01
+0.09
Jupiter Merlin Inc Prtfo Acc
–
*297.84
-0.39
M&G UK Infl Lkd Corp A Acc 3.00
*118.64
+0.09
Jupiter Merlin Inc Prtfo Inc
–
*133.83
-0.17
N.A.A.C.I.F. Inc
–
*86.46
+0.05
Jupiter Merlin WW Prtfo Acc –
291.11
-0.40
N.A.A.C.I.F. Acc
–
*8596.46
+4.56
Jupiter Merlin WW Prtfo Inc –
291.09
-0.40
†CAR - Net Income reinvested.
256.8
-0.2
JPM Asia Growth A Acc
3.00
210.4000
-0.5000
JPM UK Strat Eq Inc A Inc
3.00
*114.0000
+0.1000
Moneybldr Gwth
–
79.93
+0.02
JPM Asia Growth A Inc
3.00
116.0000
-0.3000
JPM Uncons Bond A Acc
3.00
*71.9900
-0.0200
3742
-6
Australia
Aus $
1.7127
1.8047
1.5929
1.3327
Amer Sp Sits
3.50
1503
-13
Jupiter Monthly Inc Acc
–
*117.02
-0.33
Canada
Can $
1.6637
1.7467
1.5417
1.2898
European
3.50
2273
+5
Jupiter Monthly Inc Inc
–
*31.02
-0.10
Denmark
Krone
8.0370
8.4401
7.4497
6.2328
European Opps
3.50
521.3
+1.2
Jupiter N.American Inc Acc
–
147.57
-1.02
€
1.0830
1.1329
…
0.8367
Jupiter N.American Inc Inc
-0.86
Euro
Hong Kong
HK $
10.1200
10.6296
9.3824
7.8497
India
Rupee
79.8100
90.1999
79.6156
66.6100
Israel
Shekels
4.4437
4.9104
4.3342
3.6261
Yen
141.9000
147.6769
130.3480
109.0550
Dinar
…
0.4081
0.3602
0.3013
Japan
Kuwait
New Zealand
3.50
3874
+4
–
122.95
3.50
369.6
+1.2
Jupiter Responsible Inc Fd Acc –
*116.70
-0.17
Balanced Inc
5.00
*328.90
Japan Smaller Cos
3.50
322.8
+1.0
Jupiter Responsible Inc Fd Inc –
*74.04
-0.11
Balanced Acc
5.00
*422.00
…
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Global Focus
3.50
1953
+2
Jupiter Strategic Bond Acc
–
*97.45
+0.08
Equity Income
5.00
*349.80
…
Index UK A Acc
–
109.3000
-0.0500
Jupiter Strategic Bond Inc
–
*64.01
+0.06
Extra Income
5.00
*108.60
…
BNY Mellon Investment Funds (ICVC)
Special Sits
3.50
4060
-5
Jupiter Strategic Res Acc
–
53.56
+0.04
Growth
5.00
*392.70
…
South East Asia
3.50
1378
-4
Jupiter Strategic Res Inc
–
52.14
+0.04
High Yield
5.00
*126.60
…
3.50
296.9
-0.5
Jupiter UK Growth
–
342.50
+1.97
Intntl Growth
5.00
*499.60
…
Jupiter UK Smaller Cos
–
371.79
+1.05
Jupiter UK Special Sits Inc
BNY Mellon Fund Managers
NZ $
1.8027
1.9284
1.7022
1.4241
10.5000
10.9482
9.6635
8.0849
Pakistan
Rupee
147.9400
156.4991
138.1351
115.5700
Riyal
4.7652
5.0784
4.4825
3.7502
Sterling Income Shares
Boston Co US Opp Fund
0%
121.41
+0.30
UK Select Acc
Insight Corporate Bd
0%
92.79
+0.09
Target Funds
Insight Eq Inc Fund
0%
178.57
+0.10
Insight Eq Inc Booster
0%
129.6
+0.04
Target 2020
Insight Glob Abs Ret Inc
0%
110.81
+0.01
†CAR - Net income reinvested
Insight Glob Multi-Strat Fd
0%
*123.59
+0.04
Insight Inflat-Link Corp Bd
0%
*107.38
-0.01
Long-Term Global Equity
0%
253.44
-0.50
South Africa
$
1.6894
1.8054
1.5936
1.3333
Rand
16.1000
17.2350
15.2126
12.7275
Sweden
Krona
11.5500
11.9976
10.5898
8.8599
Switzerland
Franc
1.2906
1.3533
1.1945
0.9993
Thailand
Baht
38.5200
42.8588
37.8297
31.6500
UAE
Dirham
4.6836
4.9740
4.3903
3.6732
UK
£
…
…
0.8827
0.7385
USA
$
1.2978
1.3541
1.1952
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
Inflation
Change on month
Year
3.50
66.01
+0.17
196.76
+0.45
Fundsmith LLP
Glob Income
5.00
159.07
167.59
+0.37
+1.40
Growth Fd
5.00
423.65
448.3
-0.8
Newton Global Dyn Bd
0%
101.71
-0.01
PO Box 10846, Chelmsford, Essex, CM99 2BW.
0330 123 1815
www.fundsmith.co.uk enquiries@fundsmith.co.uk
+3.4pc
CPI (2015=100 target 2pc)
Mar 105.00
+0.10
+2.5pc
Newton Glb High Yld Bd
0%
59.77
-0.03
Halifax house price index
Mar 737.50
1.5pc
+2.7pc
Newton Glb Inc Stg Inc
0%
191.82
-1.01
Fundsmith Equity T Acc
–
355.67
-2.42
JPM Div Gth A Net ACC
Newton Glb Opps
0%
282.31
-0.52
Fundsmith Equity T Inc
–
330.21
-2.26
JPM Emg Euro Eq A Acc
0.47pc
US Fed Funds
0.49pc
US Long Bonds Yld
3.12pc
1 month
0.51pc
European repo rate
1.25pc
3 months
0.69pc
European base rate
0.00pc
6 months
0.79pc
1.50-1.75pc
Major price changes FTSE 100
Risers 27
Volume
Close
Change
Fallers 68
Volume
Close
Change
Ç Evraz
4.00m
490
2.94pc
È Smith&Neph
12.16m
1302½
-7.00pc
Ç Randgold Res
0.59m
6108
2.35pc
È Mondi
2.16m
1894½
-6.95pc
Ç TUI AG
0.99m
1723
1.44pc
È BT Group
45.71m
232⅛
-4.17pc
Ç Fresnillo
0.85m
1296½
1.29pc
È Kingfisher
20.39m
278¾
-4.06pc
Ç Barratt Dev
5.79m
561⅜
1.23pc
È NMC Health
1.32m
3512
-3.04pc
Ç Morrison (Wm) 19.09m
242⅝
1.21pc
È G4S
4.55m
258⅝
-2.56pc
Ç Taylor Wimpey 10.37m
192⅞
1.15pc
È Standard Chart 10.48m
742⅜
-2.50pc
Ç Tesco
+0.33
270.61
+3.3pc
7 day
67.06
0%
+0.10
Overnight
Jupiter US Sm&Md Cap Ret Acc –
0%
+0.20
2.50pc
+0.36
Newton Cont European
Mar 278.30
Nationwide Base Mortgage Rate
-0.29
72.69
Newton Asian Income
Mar 278.80
0.50pc
*195.54
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
RPIX (Target 2.5pc)
Bank Rate
–
Jupiter US Sm&Md Inst I Acc –
Liontrust Investment Funds
RPI (1987=100)
Money
Name
Mid
Change
Buy on day
3.00
*260.4000
-0.8000
3.00
194.6000
Init chge
Sell
Name
Init chge
Sell
Mid
Change
Buy on day
JPM Uncons Bond A Inc
3.00
*56.6100
-0.0200
+0.1000
JPM US A Acc
3.00
*1036.0000
…
Marks & Spencer Unit Trust
Management Ltd
Kings Meadow, Chester, CH99 9UT
0870 333 1835
Newton Intnl Bond
0%
233.76
+1.52
JPM Emg Euro Eq A Inc
3.00
42.9800
+0.0100
JPM US A Inc
3.00
*143.4000
…
High Income Inc
–
*112.1
112.1
+0.3
Newton Multi-Asset Bal
0%
194.67
+0.21
JPM Emg Markets A Acc
3.00
224.5000
-0.7000
JPM US Eq Inc £ Hdg A Inc
3.00
*114.7000
-1.2000
High Income Acc
–
*257.8
257.8
+0.7
Newton Mult-Asset Div Ret
0%
155.27
+0.08
JPM Emg Markets A Inc
3.00
95.6100
-0.2900
JPM US Eq Inc A Acc
3.00
*169.9000
-0.9000
UK Select Port Inc
–
353.9
353.9
+1.3
Newton Mult-Asset Gwth
0%
837.42
+0.73
JPM Emg Mkts Inc A Acc
3.00
*73.8100
-0.1200
JPM US Eq Inc A Inc
3.00
*136.7000
-0.7000
UK Selection Port
–
641.4
641.4
+2.5
Newton Oriental
0%
671.25
+1.13
JPM Emg Mkts Inc A Inc
Newton Real Return A
0%
113.18
+0.05
Newton UK Equity Fund
0%
875.94
-2.64
Newton UK Inc
0%
67.56
-0.16
Newton UK Opps
0%
331.71
-1.04
Carvetian Capital
Management Limited
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Enquiries: 0845 850 0255
Janus Henderson Investors
3.00
*58.3800
-0.1000
JPM US Select A Acc
3.00
160.3000
-0.5000
UK 100 Co’s Fund Inc
–
222.8
222.8
+0.6
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
219.5000
-0.4000
JPM US Select A Inc
3.00
158.2000
-0.5000
UK 100 Co’s Fund Acc
–
384.4
384.4
+1.1
JPM Euro Dyn (ex-UK) A Acc 3.00
225.2000
+0.3000
JPM US Sm Cos A Acc
3.00
649.2000
+6.8000
W’wide Man Inc
–
507.4
+0.1
JPM Euro Dyn (ex-UK) A Inc
3.00
101.1000
+0.2000
JPM US Sm Cos A Inc
3.00
170.0000
+1.7000
W’wide Man Acc
–
814.1
+0.1
-2.00
JPM Europe A Acc
3.00
1479.0000
+2.0000
…
PO Box 9023 Chelmsford, CM99 2WB
Enquiries: 0800 832 832
Website: www.janushenderson.com
Asia Pac Cap Gwth A Acc
5.00
1116.0000
Asian Dividend Income Inc
5.00 *108.1900 113.6600
JPM Europe A Inc
3.00
82.1800
+0.1000
Cautious Managed A Acc
5.00
*268.1000
-0.30
JPM Euro Smaller Co A Acc
3.00
787.8000
+2.9000
Cautious Managed A Inc
5.00
*152.9000
-0.10
JPM Euro Smaller Co A Inc
3.00
102.0000
+0.3000
China Opps A Acc
5.00
1473.0000
+3.00
JPM Global Bd Opps A Grs Acc –
*54.0700
-0.0300
Emerg Mkts Opps A Acc
5.00
208.5000
+0.10
JPM Global Bd Opps A Grs Inc –
*48.8400
-0.0200
Jupiter Unit Trust Managers Ltd
M & G Securities Ltd
The Zig Zag Building, 70 Victoria Street, London,
SW1E 6SQ
020 3817 1000
PO Box 9039, Chelmsford, CM99 2XG
Enq: 0800 390 390. UT Deal: 0800 328 3196
34.85m
239⅛
1.06pc
È Smurfit Kappa
0.94m
3022
-2.45pc
Ç Intertek
0.27m
4985
0.97pc
È Lon Stock Ex
0.89m
4297
-1.76pc
FENIX Balanced Fd
5.00
*157.7
…
European Growth A Acc†
5.25
237.2000
+0.20
JPM Global Bond A Gross Acc 3.00
262.2000
+0.1000
Ç Utd. Utilities
3.82m
770
0.97pc
È Vodafone
54.62m
209
-1.74pc
Generation Fd
5.00
782.2
…
European Sel Opps A Acc
5.00
1660.0000
+2.00
JPM Global Bond A Gross Inc 3.00
203.4000
+0.1000
Ç Royal Mail
3.54m
593⅜
0.82pc
È Croda Intl
0.40m
4457
-1.72pc
Ç PaddyPwrBet
…
JPM Global Eq Inc £ Hdg A Acc 3.00
*82.6900
-0.3000
Charibond Inc
–
*122.82
0.81pc
1.68m
1613
-1.59pc
Ç Berkeley Gp Hdgs 0.68m
4123
0.78pc
È Johnson Matt
0.49m
3272
-1.56pc
Consistent Unit Trust
Management Co Ltd
4.25 *21.6900 22.6300
6855
È Easyjet
Fixed Int Mthly Inc A Inc
0.26m
Global Care Growth A Inc
4.50
*290.6000
-0.30
JPM Global Eq Inc £ Hdg A Inc 3.00
*54.9800
-0.2000
Jupiter Abslt Rtn
–
54.62
+0.16
Charibond Acc
–
*3967.13
+3.7
Ç Persimmon
0.81m
2732
0.77pc
È RSA Ins
5.36m
640
-1.48pc
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Equity Inc A Inc†
5.25
60.9200
-0.05
JPM Global Eq Inc Fd A Acc
3.00
*97.6300
+0.0500
Jupiter Asian Fd
–
918.39
-5.13
Charifund Inc
–
*1607.5
+1.58
Global Growth Acc
4.25 3041.2600 3172.2600
…
JPM Global Eq Inc Fd A Inc
3.00
*78.6400
+0.0400
Jupiter Asian Inc Fd Acc
–
131.35
+0.41
Charifund Acc
–
*24895.39
+24.42
Global Strategic Cap Acc†
5.00
240.8000
+0.40
JPM Global HiYld Bd A Grs Acc 3.00
*110.1000
+0.1000
Jupiter Asian Inc Fd Inc
–
121.41
+0.38
M&G Corp Bond A Inc
3.00
*40.28
+0.05
Ç DCC
Ç Lloyds Bk Gp
Ç Rentokil Initial
Ç Glencore
(RBS Collective Investment Funds Ltd)
PO Box 249, York YO90 1ZY
0117 940 3848
Global Special Sits
Krone
Singapore
Natwest Investment Funds
Japan
Norway
Saudi Arabia
…
+0.51
89.2300
3.50
3.50
117.38
3.00
Moneybldr Div
American
117.38
JPM America Eq A Acc
Growth Funds
Exchange rates
–
0.40m
7305
0.69pc
È Royal Bk Scot
9.79m
268½
-1.47pc
165.75m
64⅝
0.54pc
È Anglo Amer
5.47m
1732
-1.45pc
4.26m
314⅝
0.45pc
È Barclays
50.08m
202¾
-1.34pc
35.07m
359¼
0.39pc
È 3i
1.70m
938¾
-1.32pc
Unit Tst Inc
0%
52.52
53.27
-0.08
Global Technology A Acc
5.00
1705.0000
+6.00
JPM Global HiYld Bd A Grs Inc 3.00
*36.2900
+0.0300
Jupiter China Acc
–
139.89
-0.97
Unit Tst Acc
0%
135.4
137.4
-0.2
Multi-Mgr Abs Ret A Acc
5.00
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…
8
Friday 4 May 2018 The Daily Telegraph
***
Business
Analysis
Should firms praise or raise to engage workers?
rank highest. But comparable data is
key here; as I reported last month, pay
is not the main area of employee
discontent in the retail and hospitality
worlds – far from it. Good career
development, having your views
heard, being trusted with
responsibility and feeling a sense of
pride in your work all score lower on
the engaging.works satisfaction scale.
Remember that these sectors are
going through great change and staff
want to feel like they’re actively
involved in shaping their future with
it. Simply putting a few extra pounds
in someone’s pay packet is not the
answer to that.
Cutting it by sector again, we asked
employees: “Do you feel recognised
when you do something well?”
Those working in education feel
most that this is not the case, followed
by insurance. Those who feel most
recognised work for industrial goods
Money does not
equal happiness,
with workplace
research showing
the most and least
satisfied sectors
when it comes to pay
and recognition
MARK PRICE
E
COMMENT
I
n most staff happiness surveys,
answers about pay score lowest
of all. A candid employee once
told me that the reason for this
was that staff reckoned if they all
scored low, management would
be forced to do something and raise
pay levels higher. What can cloud the
issue further is that most employee
surveys are too inward-looking; they
offer managers no point of comparison
to similar data from their sector or
outside it.
A higher salary, however, is not the
biggest issue in securing the
satisfaction and engagement of staff;
recognition of a job well done is much
more important.
Business management psychologist
Frederick Herzberg said as such with
his theory of motivation in the
workplace, which concluded that pay
and working conditions can only ever
minimise an employee’s dissatisfaction
with work. Neither one is enough to
promote happiness or engagement on
their own merits.
Employees are instead motivated by
a range of other factors, according to
months of data from my engaging.
works website, which surveys the
workplace happiness of thousands of
individuals. The most notable, we’ve
found, are having responsibility, being
recognised for one’s achievements,
feeling a sense of pride in one’s work,
and that an organisation is interested
in one’s well-being and development.
In other words, if you want fully
engaged employees – and to reap all
the commercial advantages that come
with that – you can’t just throw money
at the issue. Achieving a happy and
effective workforce runs much deeper.
For many, it’s recognition rather
than pay that’s a more motivating
factor. I read recently that, on average,
people are praised at work only once
every four and a half months.
According to Maslow’s Hierarchy of
‘Companies that recognise
staff have a 31pc lower
voluntary turnover than
firms with a poor culture’
Needs, two of the most valuable
psychological needs that we have as
humans are the desires to be
appreciated and to belong. This tells
us that acknowledgement is crucial.
Companies that regularly and properly
recognise their staff have a 31pc lower
voluntary turnover (employees who
willingly choose to leave their jobs)
than companies with a poor
recognition culture. Saying “thank
you” and praising a job well done goes
a long way. On a biological level, it
releases oxytocin, a hormone that
makes us more relaxed, collaborative
and happy. So what can the engaging.
works data tell us about pay and
recognition by sector, age, gender and
management level?
Cutting by industry, I’m sure the
results won’t surprise that employees
in public services, retail and
hospitality feel the least rewarded for
their work, making up the bottom
three of 20 sectors. Meanwhile, those
working in the marketing and
advertising, industrial goods and
automotive, and legal services sectors
and automotive companies (first),
and not-for-profits (second). The case
of those working in the latter is, I
think, the most revealing feature of
this research.
We know that not-for-profits are not
as high-paying as other sectors, so you
would expect it to be bottom of the
pile when it comes to feeling fairly
rewarded, but it scores ninth out of 20
sectors. This should tell other
companies that a greater sense of
recognition could lead to employees
feeling less dissatisfied with their pay.
What else does the data tell us?
There are wide gaps when it comes to
pay and recognition satisfaction
between managers and non-managers,
and young and old. You’re most likely
to be happy about your pay and being
acknowledged for a job well done as
you get older.
Aside from the revelation that high
levels of recognition can offset
discontent over pay, we also found
that feeling rewarded and feeling
recognised are both notable and
significant predictors of self-reported
workplace happiness. In other words,
if staff scored highly in both categories
for their engaging.works survey, they
were more likely to say that they’re
happy overall (in response to the
question “do you feel happy at work?”)
– and, of the two, feeling recognised is
a stronger determinate. Praise
therefore must come before raise in
engaging a workforce.
Mark Price is a businessman, writer
and was previously minister of state
for trade and managing director of
Waitrose
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