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| Monday December 19 2016 |
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By Martin Waller
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Though much of the City would appear to have started the holidays early, the deals keep coming. Electra Private Equity says that it has sold Parkdean Resorts, the UK’s biggest holiday parks operator, to another private equity group, the Canadian Onex Corporation. The sale has been well flagged, but it would seem to deprive the stock market of yet another new listing, after the series of floats that were pulled last month. The sale is for £1.35 billion, and Electra is booking a £405 million profit.
German business morale is running at its highest level since February 2014, according to the Munich-based Ifo institute. Its business climate index, based on a survey of about 7,000 firms, has risen to 111.0, from 110.4 in November. This suggests that the German economy is continuing to shrug off the various uncertainties —from Britain's impending departure from the EU to the doubts over the future policies of Donald Trump and the woes of Italian banks.
Speaking of which, Monte dei Paschi di Siena, which some reckon to be the world’s oldest bank, is still trying to raise the necessary €5 billion by the end of this year to stave off a collapse. The market seems to think a fundraising will be successful, but trading in the bank’s shares has been suspended this morning after they opened 8 per cent lower.
Ukraine’s largest bank, PrivatBank, has been declared insolvent. The bank has been brought under state ownership as the only way to protect the money of the 20 million customers and stave off a complete collapse of the financial system. Ukraine's central bank said that 97 per cent of PrivatBank’s loans went to companies linked to its own shareholders. Funny, that. The bank has been deemed “too big to fail”.
Finally, the investigation by the Russian competition watchdog into the activities of Mondi, the FTSE 100 packaging business, has been terminated. The company says this is due to “the absence of a dominating market position” — good news for the company’s shareholders in London and Johannesburg.
Have a nice afternoon. Keep up to date at thetimes.co.uk/business.
Martin
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| Market Snap |
Britain’s leading shares bounced back just before midday after slipping below 7,000 in quiet trading at the start of the day. The FTSE 100, which closed at a seven-week high on Friday, was trading up ten points at 7,022 at midday.
Leading the risers was Capita. Shares in the outsourcing group rose by 2.02 per cent to 500p after the BBC extended its partnership with the outsourcing group to collect the TV licence.
Vodafone also rose 1.3 per cent to 203p after the Financial Times reported that it had met European aviation authorities about using its network to track drones. Air control managers are worried about the impact on air safety from the increase in unmanned aircraft.
Also edging higher was BP, which announced its second deal in two days. This morning the company said that it would invest almost $1 billion in a vast natural gasfield off the coast of northwest Africa. It follows news on Saturday that Abu Dhabi will take a 2 per cent stake in BP in return for a portion of the emirate’s oil production until 2054. The shares rose 0.7 per cent to 493p.
Banking shares across the European Union retreated on doubts about whether Italy’s troubled lender, Monte dei Paschi, would be able to complete a €5 billion cash call. Barclays, Standard Chartered and HSBC were trading down between 1.15 per cent and 1.97 per cent.
A slide in copper prices to a 3½-week low — as inventories rose ahead of the year-end — hit Antofagasta, the miner, which fell 1.5 per cent to 659p. An increase in the prices of Brent crude to $55.36 a barrel weighed on Carnival, the cruise company, and easyJet, the budget airline. Carnival fell 1.4 per cent to £40.11 after Berenberg cut the stock to hold from buy on conerns over rising fuel prices and the strength of the dollar.
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Read the full story
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FTSE risers and fallers*
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Up
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Hikma Pharmaceuticals
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+3.013
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BT
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+2.030
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Capita
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+2.020
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Compass
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+1.555
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Merlin Entertainments
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+1.528
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Down
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Ashtead
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-2.297
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Barclays
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-1.709
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Standard Chartered
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-1.577
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AstraZeneca
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-1.500
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Carnival
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-1.401
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Markets
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FTSE100
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7022.59
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+0.16
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FTSE250
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17784.62
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0
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Cac
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4822.54
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-0.22
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Dax
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11402.77
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-1.24
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BrentCrude
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55.36
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+0.27
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Gold
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1138.47
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+0.4
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GBP/$
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1.2410
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-0.62
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GBP/€
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1.1899
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-0.43
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10Y Gilt
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100.520
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-0.02
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*As at noon
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US look ahead
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Janet Yellen, chairwoman of the Federal Reserve, will speak about the state of the job market at the University of Baltimore at 1.30pm EDT (6.30pm GMT). In her last major public appearance at a press conference last week, Ms Yellen batted away questions about the president-elect as she explained why the Fed was looking to take a more hawkish course with rate rises next year. She’s likely to have an easier ride today — she’ll be receiving an honorary degree from the university — but she may give some insight as to the Fed's thinking about the unexpected fall in unemployment.
There’s a smattering of earnings results this week, with the struggling smartphone maker BlackBerry trying on convince investors that it can forge a new path as a software and services company. It reports its quarterly financials tomorrow, as does Carnival, the cruise operator that owns P&O. FedEx and Nike also report quarterlies tomorrow. Accenture’s results land on Wednesday.
In terms of economic data, we have the third estimate for third-quarter GDP on Thursday. There will also be durable goods and personal income figures on that day. Existing home sales are on Wednesday and new home sales are on Friday, as is consumer sentiment.
James Dean
US Business Editor
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Quote of the day
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"Ireland did not give favourable tax treatment to Apple ... Ireland does not do deals with taxpayers"
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The Irish government sets out its grounds of appeal against the European Commission's ruling that the tech giant must pay €13 billion in back taxes
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Picture of the day
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Indonesia's central bank governor, Agus Martowardojo, shows off new designs of its rupiah banknotes. The country is seeking to cut three zeroes off the face value of the currency to simplify payments
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martin.waller@thetimes.co.uk
@martinwaller10
