Equity markets tumbled yesterday as fears mounted over global economic growth and Washington received the green light to impose tariffs on European goods worth $7.5 billion. Weak US employment and manufacturing data intensified fears over the impact of President Trump’s trade war with China. The FTSE 100 endured its worst day in almost four years. Political fears also rattled investors as Mr Trump attacked Democrats preparing an impeachment inquiry and Britain submitted new Brexit proposals to Brussels only four weeks before it is due to leave the European Union.
Metro Bank (MTRO) has raised £350 million from a bond sale after its founder bowed to investor pressure and agreed to leave the lender’s board. The challenger bank was successful yesterday in its second attempt to sell new debt that it needed to raise by the end of the year to meet EU rules. The sale came hours after it had announced that Vernon Hill would step down as chairman and would leave the board altogether by the end of the year. Mr Hill had said previously that he would “probably die” before leaving.
One of Tesco’s biggest shareholders has said it is “irresponsible” for Dave Lewis to step down as chief executive before delivering the benefits from the supermarket’s takeover of Booker, the cash-and-carry group. Tesco (TSCO) surprised the City yesterday when it said that Mr Lewis wanted to stand down next summer after more than five years in charge. Ken Murphy, former chief commercial officer at Walgreen Boots Alliance, was named as his replacement. David Samra, fund manager at Artisan Partners, the fifth biggest shareholder, said that Mr Lewis had done an “incredible job”, but questioned the timing of his departure.
The consolidation of the gambling industry gathered pace when the companies behind Paddy Power and Poker Stars announced an all-paper merger to create the world’s biggest online betting group. Flutter Entertainment (FLTR) is tying the knot with The Stars Group, the Canadian player that bought Sky Bet last year, in a deal that at last night’s closing prices valued the combined company at £9.8 billion, or £14.2 billion including debt.
Barclays (BARC) has indicated that it will no longer use off-payroll contractors as it prepares for a government clampdown on tax avoidance linked to the use of self-employed private sector workers. A leaked internal email sent to line managers at the bank said that they must no longer use freelancers “who provide their services via a personal services company, limited company or other intermediary”. Barclays said that it would expect the recruitment agencies it used to move contractors to the PAYE system through which direct employees were paid. The bank told staff the move was designed to prepare for a reform of the IR35 rules.
QinetiQ Group (QQ.) is to more than double its operations in the United States by acquiring a business that has been helping American soldiers to see in the dark. Quinetiq is paying $105 million for the Virginia-based Manufacturing Techniques, known as MTEQ, which last year made $11 million of profits on revenues of $167 million. One of MTEQ’s biggest contracts has been Webs, the US army’s warrior enabling broad sensor system, its next-generation night-vision technology. It also can be used to detect unconventional explosives used against troops in the Middle East and Afghanistan.MTEQ is also on the DAGRS (deployable adaptive global responder support) programme delivering sensor technology to counterterrorism and cybersecurity projects in the US.
Martin Gilbert ended months of speculation yesterday by announcing that he was leaving Standard Life Aberdeen (SLA). Mr Gilbert co-founded Aberdeen Asset Management in 1983 and is deputy chairman of the combined group. He said that he would go on to a four-day week from January, would not seek re-election to the board at the annual meeting in May and would retire in September. Mr Gilbert told The Times that he was getting old and wanted to spend more time skiing and playing golf. “I already knew I was the longest-serving FTSE chief executive and then I read I was the second oldest and I thought, ‘Oh my God.’ ”
Twelve years after entering the then booming car market in China, Inchcape (INCH), said yesterday that it was shifting into reverse and leaving the country. The British-based global car retailer said that it was pulling out of its last three dealerships for Porsche, Mercedes-Benz and Lexus because it had been unable to expand. China has become a tough market for companies trying to sell upmarket cars. Slow economic growth excaerbated by a trade war with the United States, new vehicle emissions rules, the end of subsidies for foreign-built models and a knockback against conspicuous consumption have affected sales.
The chief executive of BP (BP.) said yesterday that the oil company’s board had yet to make a decision on his plans to leave next year. Bob Dudley is preparing to resign after a decade running the company, ending a tumultuous tenure in which it swung back from near-collapse in the wake of the Gulf of Mexico oil spill in 2010. At an energy conference in Moscow, he said that he had long planned to resign at the age of 65, which he will reach next September. However, he said that BP’s board had yet to confirm his resignation.
Jaywing (JWNG) rose as Lord Ashcroft threw more of his weight behind the digital marketing minnow. The billionaire is Jaywing’s biggest shareholder, with a 25.6% stake in the business. Along with another big investor — Lombard Odier, the Geneva-based asset manager — Lord Ashcroft, 73, has acquired a £5.3 million loan that Jaywing had with Barclays and they have pumped in an extra £3 million to help to clear its overdraft and bolster the balance sheet. The company said yesterday that the intervention of its two biggest backers had put it in a “much stronger financial position”.
Hastings Group Holdings (HSTG) was among the heaviest fallers losing 9p to close on 194½p. Analysts at RBC cut the stock to “underperform” and chopped their price target to 170p, arguing that claims are rising while premiums remain flat. “Hastings is most exposed to this, with circa 90% of premium from UK motor, and therefore faces an unavoidable trade-off between margin and volume,” the Canadian bank’s team said in a note to clients. “Either way, we believe the insurer’s earnings will suffer.”
Tempus – Convatec Group (CTEC): Buy. Realistic recovery plan from a market leader in its field whose shares are almost certainly undervalued
Tempus – Hochschild Mining (HOC): Hold. Acquisition has potential but feasibility study crucial
