| Stock markets worldwide staged a new year rally thanks to economy-boosting moves in China, but the pound sank lower on ongoing Brexit uncertainty. The People’s Bank of China pumped $115billion (£87.6billion) into the country’s financial system to help reignite economic growth. The Dax in Germany finished 1% ahead and France’s Cac 40 lifted 1.1%. Across the Atlantic, the Dow Jones Industrial Average was nearly 190 points up at the time of close in London, with indices following Asia’s lead overnight after the Hang Seng Index jumped 1.3%. The closely-followed IHS Markit/CIPS purchasing managers’ index signalled the manufacturing sector shrunk at its fastest pace in almost seven-and-a-half years in December. | |
 | Tullow Oil (TLW) shares fell 7% after the oil explorer revealed disappointing drilling results for its well off Guyana. The group said it found oil, but that the reservoir it are drilling is smaller than first thought. In early trading shares dropped by more than a fifth, before paring back losses. |
| Team17 (TM17) was enjoying better fortunes after it announced a deal to snap up rival Yippee Entertainment for £1.4million. The Yorkshire-based company behind the popular Worms series said the deal would allow it to increase studio capacity and gain access to a new talent pool in the North West of England. | |
| Bitter blow for retailers hoping for a positive end to a difficult year. Following a lacklustre two weeks before Christmas, footfall dropped by an average of 4% on all but one day between December 26 and January 1, retail analysts Springboard said. December 30 saw footfall increase across all destinations by 11.1% but this was likely to be because the day fell on a Monday rather than a Sunday in 2018, allowing for longer trading hours. | |
 | The late-night launch of Greggs (GRG) vegan steak bake was met with 20-minute queues, after over 300,000 people signed up to take part in Veganuary. KFC and Subway are also among a number of companies releasing snacks free from meat and animal products, as they attempt to emulate the huge success of Greggs’ vegan sausage roll last year. Wednesday night’s release event in Newcastle for Greggs’ new pastry – filled with pieces of meat substitute Quorn, diced onions and gravy – saw over 100 queue to be the first to try the product. |
| Manufacturers suffered one of their toughest months for a decade at the end of 2019 as demand plunged in the face of political turmoil and an industrial recession across much of the eurozone. British factory activity dropped in December at one of its fastest rates since Europe’s sovereign debt crisis of 2012, according to IHS Markit’s purchasing managers’ index survey (PMI). The influential index dropped to 47.5 in December, marking the ninth consecutive month in contractionary territory. Any score below 50 indicates activity is falling. | |
| Embattled Tullow Oil (TLW) shares tumbled more than 8% after it revealed disappointing results from early testing of a key well – meaning £2.1bn has now been wiped off the business in the past two months. Results from the Carapa-1 well offshore of Guyana suggest it is less commercially attractive to extract oil from than previously thought. Analysts had been closely watching the well as a potential route for Tullow to recover following a disastrous trading update last month when production forecasts were slashed and the dividend axed. The announcement sent shares plunging 72% in a single day. |
 | China has halted listings on a recent landmark scheme between the Shanghai and London stock exchanges amid signs of increasing political tensions and the fallout from protests in Hong Kong. The Shanghai-London Stock Connect has been promoted as a significant deepening of economic ties between the China and UK. It was launched last June at the London Stock Exchange Group (LSE) by senior political figures, including Philip Hammond, the former chancellor, and Hu Chunhua, vice premier of China’s state council. The scheme was initially announced in 2015 as part of a “golden era” when David Cameron’s government was seeking to develop relations with Xi Jinping, the Chinese president. |
| Germany’s farming lobby has urged the European Union to strike a soft trade deal with Britain to stave off losses that could run to billions of euros in the event of a hard Brexit. The UK is one of the German agricultural industry’s most lucrative customers, importing €4.5 billion of goods a year while sending only €1.3 billion in the other direction. No other country furnishes Germany with such a big surplus in food and drink. The German Farmers’ Association (DBV) is worried that its profits could be deeply harmed by the tariffs, customs checks and regulatory niggles that could spring up between the two states if talks break down this year. It fears that its agri-food trade balance with the UK could halve if Britain emerges from the Brexit transition period at the end of 2020 without a viable agreement. | |
| Footfall across Britain’s shopping destinations fell over the crucial post-Christmas trading period even as retailers slashed prices to lure customers. Total customer visits declined by an average of 4% year-on-year for the period between Boxing Day and New Year’s Day, according to Springboard, the retail analyst. The figures point to a painful start to 2020 for bricks-and-mortar retailers, which had been hoping for an improvement in footfall after a lacklustre two weeks in the lead-up to Christmas. The results of the December trading period will determine whether ailing stores will survive this year. It comes after a miserable year for the retail sector. More than 140,000 retail jobs were cut in 2019 and about 16,000 shops were shut permanently, according to the Centre for Retail Research. | |
 | Imagination Technologies Group (IMG) has signed a contract with Apple, three years after the iPhone maker cut the company adrift, forcing it to seek a buyer. Imagination Technologies, which designs graphics processors for smartphones and tablet computers, yesterday unveiled a licensing agreement with the Silicon Valley giant. The multi-year arrangement will allow Apple to use a wider range of Imagination’s patents and designs in its mobile devices than under a deal from 2014. The contract will give a significant lift to the Hertfordshire-based company and marks a dramatic turnaround in its relationship with the world’s largest technology company. |
| Another disappointing drilling result off Guyana helped to send Tullow Oil (TLW) shares tumbling by as much as a fifth. The oil explorer said that the Carapa exploration well had encountered less oil than had been estimated before drilling began. The result comes after a disastrous end to 2019 for Tullow, which lost 70% of its value in two months after it admitted that previous discoveries off Guyana might not be viable, slashed its production forecasts for its African fields and ousted its chief executive. |
| Investors in the frozen £2.5 billion M&G property fund will remain trapped indefinitely after the fund manager said the suspension would continue. M&G PLC (MNG), which is required to update investors every 28 days, said yesterday that the fund would reopen “once cash levels have been sufficiently restored”, but put no date on when that would be. M&G was forced to gate the fund last month because of a wave of redemption requests that could otherwise have pushed it into fire sales of assets and so disadvantage investors sticking with the fund. The fund manager said that it was working hard to improve its cash position. Since the end of November it had exchanged contracts on or completed on £70.4 million of assets. Another £67.2 million of property sales were under offer or in solicitors’ hands. |
| The UK economy ended 2019 in stagnation, under pressure from long-term uncertainty, mounting business costs and a global economic slowdown, according to a business survey. The British Chambers of Commerce’s (BCC) latest quarterly economic snapshot, based on a poll of 6,500 firms across the country in November, painted a gloomy picture of the economy at the end of the last decade. The service sector, which accounts for almost 80% of economic output, worsened in the final quarter of the year. Indicators for factories’ export and domestic orders were negative for two consecutive quarters for the first time in a decade, and manufacturers’ investment plans hit an eight-year low. Cash flow, a key indicator of the health of businesses, improved slightly from its lowest level in eight years but remained very weak across the manufacturing and service industries. Suren Thiru, the BCC’s head of economics, said: “The UK economy limped through the final quarter of 2019. “The fourth quarter was characterised by a broad-based slowdown in the dominant services sector with all key indicators weakening in the quarter, amid sluggish household expenditure and crippling cost pressures. “Despite some improvements, indicators in the manufacturing sector remain very weak by historic standards. A faltering service sector together with listless manufacturing activity points to a downbeat outturn for UK GDP growth in the fourth quarter of 2019.” | |
| Greggs (GRG) will end speculation about its hotly anticipated new vegan snack by launching a meat-free version of its popular steak bake. Since the runaway success of its meatless sausage roll, the chain – which serves more than 6 million customers a week from its 2,000 outlets – has been working to develop vegan versions of its other bestselling items. The new product arrives on Greggs’ shelves at the start of Veganuary – a growing movement that encourages people to embrace plant-based diets during January. The vegan steak bake has been created to mirror some of the original snack’s features, including 96 thin layers of puff pastry but without the egg glaze. The filling is made with pieces of the fungi-based protein Quorn instead of beef, mixed with diced onions and meat-free gravy. Costing from £1.55, it will go on sale in 1,300 shops from Thursday before being rolled out to the remaining 700 outlets on 16 January. Greggs’ chief executive, Roger Whiteside, said: “Our vegan sausage roll launch was a huge success and we’ve been working tirelessly to expand our vegan-friendly offering and provide more delicious savoury food on-the-go options for people looking to reduce their meat intake.” |
 | Capita (CPI) to invest in tech start-ups in shift away from outsourcing. Company takes stakes in 5 new ventures as part of strategic overhaul |
 | Lloyds Banking Group (LLOY) customers hit by system outage. Thousands of people unable to access online services at Halifax, Bank of Scotland and Lloyds |
   | Hundreds of bank branches are set to close this year as lenders seek to shift their customers online. In a bitter blow to many who rely on their local branch, Britain’s biggest banks are expected to continue to shut sites. Troubled lender TSB has already announced it will shutter 82 branches in 2020 and new Royal Bank of Scotland Group (RBS) boss Alison Rose has said she will need to make ‘tough choices’. Lloyds Banking Group (LLOY) was last year accused of trying to hide the scale of its closures, as it shut locations in dribs and drabs, and has not ruled out further cuts. HSBC Holdings (HSBA) has said it has no more closures planned after slashing 444 branches in five years. But the former chief executive of Barclays (BARC), Antony Jenkins, has predicted that bank branches will be obsolete ‘in a few years’ time’. Critics have branded the closures ‘outrageous’ at a time when some towns and villages have been left with no access to basic financial services. High Street lenders axed 405 branches last year, taking the total over the last five years to 3,372. The UK has now lost more than a third of its bank branches since the beginning of 2015, and has 6,430 left. Gareth Shaw of Which? said: ‘Bank branches play a crucial role within communities, serving consumers and businesses alike. The industry must ensure no-one is left behind by the digital transition and that when banks shut their doors they don’t shut their customers out of important banking services.’ |
| The FTSE 100 index could smash through the 8000 mark for the first time this year, according to stock market experts. Having risen by 12.1% in 2019 and 39.3% in the last decade, analysts believe the blue-chip benchmark will break records. That would boost millions of savers with money in the stock market through pensions, ISAs and other investments. The FTSE 100 closed down 44.61 points at 7542.44 yesterday, some way off the all-time high of 7903.5 in May 2018. But Helal Miah, analyst at The Share Centre, tipped it to reach 8100 this year while Russ Mould, at AJ Bell, went for 8000. Emma Wall, head of investment analysis at Hargreaves Lansdown, predicted 7884. With Boris Johnson pledging to take Britain out of the EU on January 31, the US presidential election in November, and trade tensions ebbing and flowing, it looks set to be an eventful year. | |
| Google is to end its use of a tax loophole which is estimated to have saved US companies hundreds of billions of dollars. The so-called ‘double Irish’ loophole allowed Google to channel international profits through Ireland to tax havens like Bermuda, delaying payment of US income tax. President Donald Trump has now made the arrangement redundant by abolishing income tax on profits made abroad when returned to the US. Prime Minister Boris Johnson has risked angering Trump by promising to make tech titans pay more tax in the UK. And France recently approved a 3% levy on large tech companies’ local revenue. |
| Beijing moved to shore up flagging Chinese growth on Wednesday as its central bank pumped an extra 800 billion yuan (£86.7bn) into the world’s second biggest economy. The People’s Bank of China’s decision to cut the level of reserves to be held by its commercial lenders – opening the door for extra credit growth – comes amid concerns the Chinese economy could weaken further still in 2020 after its worst year for nearly three decades. The export powerhouse is bearing the economic scars of hundreds of billions of dollars in import tariffs by US President Donald Trump over the course of a protracted 18-month trade war, although the two countries are poised to sign an initial “phase one” trade agreement. | |
| Thousands of customers of Lloyds Bank, Halifax and Bank of Scotland were unable to use online banking services on New Year’s Day due to an IT outage. Problems with the online banking services of Lloyds Banking Group (LLOY) began around 3am, according to complaints collected by the website Downdetector. The banks directed customers to use telephone banking for any urgent transfers yesterday morning. A spokesman for Lloyds said the issue had been resolved by the afternoon: “Internet and mobile banking is now back to normal. We’re sorry that some of our customers had issues with it this morning.” The outage is not thought to have been due to a cyberattack. |
| Royal Bank of Scotland Group (RBS) has recruited a network of social media influencers to post photographs promoting its new digital banking app in a bid to gain customers. Sponsored Instagram posts from online celebrities including a model, an interior designer and a woman popular on viral video app TikTok, all promote NatWest owner RBS’s new digital banking app Bó. The Bó app, released in November, competes with challenger banking start-ups such as Monzo and Revolut and allows customers to manage their current account through an app. The social media campaign was jointly run between RBS and card provider Visa. |
| Questor: a good year for our investment trust tips – 26 risers and just one faller. Questor investment trust bargains: as with our stock selections, our trusts have made money for readers, with average gains of almost 10% |
| Boris Johnson was urged to boost growth as the British Chambers of Commerce warned that the economy stagnated in the final quarter of last year. The latest survey by the business lobby group found conditions in the services sector deteriorated compared with the third quarter and that manufacturing activity was “listless” in the three months to the end of December. The BCC is one of the country’s most influential business groups and its quarterly survey is closely-watched. It was based on responses from 6,478 companies in manufacturing and services employing more than 800,000 staff. They were surveyed between November 4 and November 25, before the general election last month that delivered an 80-seat Tory majority. | |
| Buckling to Washington on food standards risks shortening British lives and piling pressure on to the NHS, the country’s largest farming union has claimed. Weeks before transatlantic trade negotiations are due to begin, the agriculture lobby is escalating warnings over the “very dangerous” prospect of a two-tier system of regulations for food produced domestically and overseas. Minette Batters, president of the National Farmers Union, said that a failure to set a fair baseline for British and foreign agricultural goods could drive UK farms out of business. Theresa Villiers, the environment secretary, has said that Brexit will lead to “a bright new future” for producers. |
| Almost 3 million workers in Britain are to receive a pay rise of more than four times the rate of inflation from April, after the government said it would increase the official minimum wage. In an announcement designed to woo low-paid workers in the immediate aftermath of Boris Johnson’s election victory earlier this month, the government said the national living wage for over-25s would increase from £8.21 an hour to £8.72 from the start of April. Johnson said the increase was the “biggest ever cash boost” to the legal pay floor. “Hard work should always pay, but for too long people haven’t seen the pay rises they deserve,” he said. |
     | JD Sports Fashion (JD.) has been crowned the best blue-chip stock of the past decade. Shares in the chain, which calls itself the ‘King of Trainers’ and sells brands including Nike and Adidas, have risen 3,200 per cent from around 25p at the start of 2010 to 832.2p last night. A saver who bought £1,000 of JD Sports shares ten years ago would now be sitting on £33,000. Someone who bought them at the turn of the century would now have an investment worth nearly £113,000. The performance is even more eye-catching given the crisis that has engulfed the High Street in recent years. While JD Sports shares have rocketed, other retailers have struggled amid fierce competition from online rivals. Marks & Spencer Group (MKS) was this year relegated from the FTSE 100 for the first time since the index was set up in 1984. Its shares are down 43% since 2010. And JD Sports, which has 2,420 stores and more than 50,000 staff in 19 countries, has left arch-rival in its wake. Shares in Sports Direct, which is led by Mike Ashley and which was recently renamed Frasers, have halved in value since peaking in 2014, although they are still nearly five times higher than at the start of the decade. Russ Mould, investment director at broker AJ Bell, said: ‘JD Sports is a great example of how retailers can still rise above all of the challenges thrown at them by changes in fashion, wage regulations and workers’ rights, and technology, to name but three.’ City commentator David Buik, of Core Spreads, said: ‘To keep producing results of this magnitude is extraordinary. ‘This group has gone from strength to strength, despite the ferocious competition from Sports Direct. JD Sports has focused on vogue brands, which have universal appeal.’ According to analysis by AJ Bell, the next biggest gains after JD Sports came from the equipment rental firm Ashtead Group (AHT), and the property website Rightmove (RMV), which delivered returns of 3,120% and 1,260% respectively. Mould said: ‘Such firms have been like gold dust for the past decade. The big question is, will they remain so?’ He said that only one stock in the top ten – the London Stock Exchange Group (LSE) – started the decade as a FTSE 100 company. ‘In other words, if you are looking for the really big winners, you are probably better off by starting to look in the FTSE 250,’ he said. ‘This harks back to Jim Slater’s assertion that ‘elephants don’t gallop’. The established giants simply can’t grow fast enough to necessarily generate these sorts of returns.’ In the FTSE 250, marketing firm 4Imprint Group (FOUR) delivered the highest returns, at 2,950%. The second-biggest was from retailer Games Workshop, at 2,620%. |
| Around £33trillion could be wiped off the value of global stock markets because of climate change, according to one of Britain’s largest fund managers. Aviva Investors, which looks after £350billion of pensions and savings, said shares could fall by as much as 30% if global warming is not controlled. Businesses in the firing line include oil firms whose operations would be hit as governments and consumers demand cleaner energy. But the impact could be greater, because of damage to everything from food supplies to transport links caused by rising sea levels and disasters such as floods, droughts and fires. A collapse in share prices would hit the pensions and savings of millions of families all over the world. | |
| The future is looking a little hazy for Big Dish (DISH), which wanted to be the next big thing in restaurants. Bigdish is developing an app which allows customers to get money off their food if they book a table at non-peak times. But in its half-year report, it said it had only enough funding to last until the third quarter of 2020. Boss Tom Sumner believes he can pull more restaurants on board, and said 2020 ‘will be a turnaround story’. | |
 | AstraZeneca (AZN) rounded off a stellar decade as it announced its lynparza ovarian cancer treatment has now been granted approval in the US to treat pancreatic cancer. The nod from the US Food and Drug Administration (FDA) marks the first time that a drug of this kind, which blocks the DNA repair mechanism so cancer cells fail to replicate, has been approved to treat the condition. This was the company’s second big win this month after another drug, to treat breast cancer, won FDA support four months ahead of schedule. Astrazeneca executive Dave Fredrickson said: ‘Patients with advanced pancreatic cancer historically faced poor outcomes due to the aggressive nature of the disease and limited treatment advances over the past few decades. Lynparza is now the only approved targeted medicine in biomarker-selected patients with advanced pancreatic cancer.’ The company is still up 163% over the past decade, compared to a 41% rise in the FTSE 100. |
 | Centamin (DI) (CEY), which is being stalked by Canadian suitor Endeavour, propped up the mid-cap index as investors anticipated an increased bid. Endeavour made a £1.5billion approach for Centamin this month, but has been snubbed by the British miner, which claims it undervalues the company. Shareholders must endure another two weeks of wrangling before Endeavour will have to reveal, by January 14, whether it plans to increase its offer or not. |
| Bosses at Lloyds Banking Group (LLOY) have raked in £1.2million after selling shares when the stock market opened after Christmas. Chief executive Antonio Horta-Osorio, chief operating officer Juan Colombas and chief risk officer Stephen Shelley sold 1.8m shares in the bank last Friday, filings revealed yesterday. Colombas cashed in the most, selling 1m shares for £630,000. He still owns a stake in the bank worth £6.8million. Horta-Osorio, 55, who some predict will leave in the next year, flogged 782,045 shares for £492,688. He also bought 31,426 shares into an ISA in his name, while Ana bought 31,436 into her ISA for £39,779. Horta-Osorio’s remaining 0.03% stake is now worth £13million. Over the course of 2019, he has cashed in shares worth £4.9million. This comes on top of his £1.3million base salary for the year, his £1.1million of fixed share awards, £419,000 pension, £157,000 of benefits and maximum £5million of performance-based rewards. |
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