Citigroup has issued an explicit recession warning for the United States, advising clients to wind down exposure to risky assets and prepare to ride out the storm. The bank’s global investment team said the US Federal Reserve over-tightened monetary policy last year, waiting too long to stop raising interest rates or to slow the pace of quantitative tightening (reverse QE). The economy is already shot below the waterline and will mostly likely succumb to the textbook pathologies of a fading expansion. “The US economy seems to be transitioning into a stagnation phase after a brief period of goldilocks on a sugar high of fiscal stimulus. We advise investors to prepare for recession,” it said.
Debenhams delivers ultimatum to Mike Ashley in battle for department store chain. Debenhams (DEB) lenders have told Mike Ashley to either support a rights issue, make a firm takeover bid for the embattled department store or face being wiped out. The company has snubbed the Sports Direct tycoon’s previous efforts to seize control, including a recent £61m takeover approach, because it said the offer did not provide “a solution to the group’s immediate working capital needs, and the board could find no way for the group to continue to trade until such time as the offer, if made and successful, had closed”. Instead Debenhams has ploughed ahead with a £200m refinancing that could be the first step in handing the 206-year-old retailer to a group of hedge funds.
AstraZeneca strikes £5.3bn deal for ‘transformative’ cancer drug. AstraZeneca (AZN) has agreed its biggest deal in more than a decade to develop and sell a potentially “transformative” cancer medicine, as the race to find the next blockbuster oncology drug heats up. The FTSE 100 drugmaker will pay Japanese firm Daiichi Sankyo up to $6.9bn (£5.3bn), starting with an upfront amount of $1.35bn, to help share the global cost of developing and commercialising the drug, which is known as trastuzumab deruxtecan. It follows a string of blockbuster deals in the pharmaceutical industry, including a similar $4.2bn cancer-focused tie-up between Britain’s biggest drugmaker, Glaxosmithkline, and Germany’s Merck in February.
Tui warns of €300m hit after grounding of Boeing 737 Max. TUI AG Reg Shs (DI) (TUI), the world’s biggest travel agent, has shocked investors by warning of a crippling €300m (£259m) hit from the grounding of Boeing’s 737 Max planes. The Anglo-German company, which has an order for 72 of the aircraft, said the costs were for finding replacement aircraft, additional fuel costs and disruption. Boeing has been plunged into crisis after an Ethiopian Airlines flight crashed earlier this month, killing 157 people. Aviation authorities around the world banned 737 Max in the wake of the disaster. It came just five months after a Lion Air crash in Indonesia, also involving a 737 Max, which cost 189 lives.
Travis Perkins names Atkins boss as new chief executive. Travis Perkins (TPK) has picked the boss of structural engineer Atkins to take over when its veteran chief executive John Carter steps down later this year. Mr Carter, who has spent four decades at Travis including five years at the helm, will hand over to Nick Roberts in August and will stay on as an employee of the company until the end of the year, “to ensure a smooth handover”. The announcement comes after Mr Carter set out plans to simplify the builders’ merchant, including selling off its plumbing and heating business and overhauling its management structure, last year.
Solar-powered forecourts promise to revolutionise electric car charging. Ultra-fast electric vehicle forecourts will accelerate across UK motorways this year with the start of a billion-pound project to build 100 solar-powered sites. Taxis, buses and delivery vehicles will be able to charge up in under 30 minutes at forecourts equipped with their own solar panels and battery packs. Meanwhile passenger vehicles will be able to recharge in less than 10 minutes. The developer, Gridserve, plans to build around 24 charging bays at each forecourt, which will also come equipped with facilities including supermarkets and coffee shops so drivers can make the most of their time.
Corbyn causes National Grid concern. National Grid (NG.) three-month rally was blown off course after nationalisation fears were reignited by a mysterious BBC article appearing to reveal that Labour wants to seize control of the electricity and gas network giant. Traders blamed the FTSE 100 company’s tumble on a BBC article quickly removed from the broadcaster’s online site entitled “Labour to outline National Grid ownership plans”. A preview of the article remained available on search engines and appears to reveal that the opposition will unveil a policy paper outlining plans to take the company under the control of a publicly-owned “National Energy Agency”.
Franco Manca owner dangles dividend after dodging casual dining crunch. The company behind restaurant chains Franco Manca and The Real Greek is poised to start paying dividends despite the ongoing malaise in the casual dining sector. The Fulham Shore (FUL) said both sales and profits were expected to be ahead of the previous year, steadily increasing each quarter. The company toasted “a particularly strong trading performance” in the final few weeks of its financial year to March and said it will now “consider formulating a dividend policy”, which reflected “continued confidence” in its future. Thursday’s optimistic trading update came as many chains continue to suffer from a so-called “casual dining crunch”.
Oleg Deripaska’s EN+ bounces back despite US sanctions. The energy and metals giant backed by Russian billionaire Oleg Deripaska has reported a surge in profits despite being under the threat of US sanctions for nearly a year. En+ Group (Reg S) (ENPL), which listed in London in 2017, could soon restart dividend payments after chalking up a 40% jump in pre-tax profit to $2.3bn (£1.8bn) last year, on revenues broadly flat at $12.3bn. President Donald Trump imposed sanctions on Mr Deripaska, EN+ and its subsidiary Rusal last April in a move intended to punish allies of his Russian counterpart Vladimir Putin. The action sent shockwaves through the aluminium market, as the company is responsible for about 7pc of global supply.
Questor: Next (NXT) extraordinary long-term plan shows its readiness to beat the crisis in retail. Questor Income Portfolo: the group set out in detail how it might evolve over the next 15 years – and generate £12bn in cash in the process
