Hong Kong dispute hits trade optimism

Garry White, Chief Investment Commentator, looks at the market-moving events that have shaped equity markets last week (25 – 29 November 2019).

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The general election on 12 December continued to dominate UK headlines, with sterling benefitting from a well-regarded poll that put the Conservatives on course for a solid win.

However, reports suggested that senior Tory sources are worried that Donald Trump’s presence in the UK next week at the NATO summit could be difficult for Boris Johnson should he make inappropriate comments. The Labour Party is currently trying to paint Mr Johnson as Mr Trump’s right-wing soul mate who collectively pose an unprecedented threat to the National Health Service.  The Conservative Party is also warning about complacency.

US markets were closed for part of the week for Thanksgiving but still hit new record highs. Concerns that a solution to the trade war had been stymied by the US’s strong reaction to protests in Hong Kong kept a dampener on gains.  

The FTSE 100 was flat over the week by mid-session on Friday, but the midcap FTSE 250 rose 2.3%.

Cyber security message from Charles Stanley

With Black Friday and Cyber Monday upon us, we are all getting emails with enticing ‘not to be missed’ offers. Please take care, at work and at home, with these emails as they may not always be as harmless as they first appear.

If something piques your interest, try to visit the site independently by going through a search engine or by carefully typing the address into your browser. Also remember the padlock symbol only means that your connection to the website is secure (encrypted), not that the website itself is secure, or indeed genuine. Fake websites can look just like the real thing and some come complete with their own padlock. 

Brexit/UK election

A poll using YouGov's multi-level regression and post-stratification (MRP) model, which correctly predicted the results of the 2017 election, indicated that the Conservatives would win a comfortable majority of 68, based on its responses. The news sparked a rally in sterling, which dampened gains in the FTSE 100. Further insight on the poll is available from YouGov’s website.

Overall investor sentiment toward UK equities is starting to change for the better. Morgan Stanley strategists described UK equity markets as “potentially the best global equity opportunity for 2020.” The strategists cited a much-reduced risk of no-deal Brexit, relative valuations at 30-year lows, and very low positioning from asset managers globally. Credit Suisse strategists share this view, arguing that British stocks are 14% undervalued according to their model based on leading indicators, sterling, crude prices and emerging markets. It particularly liked small caps.

Goldman Sachs agreed. The investment bank said UK stocks that are exposed to the domestic market were set to rally next year, as easing Brexit uncertainty and a jolt of government spending reinvigorated the sluggish economy.

How could the general election affect your investments? Rob Morgan takes a look here.

Trade war

China has reacted with fury to Donald Trump’s decision to sign bills in support of the Hong Kong protesters. The US President has approved legislation that threatens sanctions on Chinese and Hong Kong officials for human rights abuses in the territory. Beijing said the bill was “full of prejudice and arrogance”. Garry White argued that events in Hong Kong could mean the trade war is turning into a “forever war” here.

There were further complications for Beijing after Hong Kong’s democrats scored a landslide majority in district council elections at the weekend, beating Beijing-backed candidates by nine-to-one. There was a record turnout after six months of anti-government protests. Hong Kong’s pro-Beijing chief executive Carrie Lam said the government respected the results and wished “the peaceful, safe and orderly situation to continue”.

Global trade dropped sharply in September, according to data from the CPB World Trade Monitor. The volume of global trade fell 1.3% between August and September, reversing gains made in the previous two months. Trade contracted by 1.1% year-on-year.  

Before Donald Trump signed the Hong Kong act, China had offered an olive branch. The Chinese government released a document calling for more protection of intellectual property rights (IPR), one of the major issues at the centre of trade talks with the US. "Strengthening IPR protection is the most important content of improving the IPR protection system and also the biggest incentive to boost China's economic competitiveness," the document, released by the General Offices of the Communist Party of China (CPC) Central Committee and the State Council, said. However, it appears to be nothing more than some nebulous commitments.  You can read the English statement here.

US farmers must be hoping of a trade war solution soon. China’s imports of US soybeans contracted to the lowest level in three months in October as the world’s biggest buyer delayed unloading of American soybeans at its ports.

The US is not letting up in its campaign against Huawei. US. National Security Adviser Robert O’Brien called on Canada to reject Huawei Technologies equipment in its 5G network, warning that it would be used as a “Trojan horse” by the Chinese company.  He said that doing so would put in jeopardy intelligence sharing with the US and the Five Eyes Anglophone intelligence sharing service between Australia, Canada, New Zealand, the United Kingdom and the United States.

German Chancellor Angela Merkel called on European countries on Wednesday to agree on a common approach towards China and the rollout of the next-generation 5G mobile network. She said Europe should set up an agency that certifies components for the region’s fifth-generation wireless networks, in a bid to address safety. Mrs Merkel prefers security standards to be the main factor, rather than singling out individual companies. This follows a statement from a French minister who said France will not follow the US and exclude Huawei from its 5G network but will have the power to vet all equipment makers for any potential security threat.

The dispute with China is not only about trade – it’s much more fundamental than that. John Redwood takes a look at the issues here.    

Economics

US economic growth picked up slightly in the third quarter, rather than slowing as initially reported, amid a stronger pace of inventory accumulation and a less steep decline in business investment. Gross domestic product increased at a 2.1% annualised rate, the Commerce Department said in its second estimate of third-quarter GDP. That was up from the 1.9% pace estimated last month.

With the final 2019 meeting of Federal Reserve policymakers less than two weeks away, Chairman Jerome Powell signalled that interest rates were unlikely to rise anytime soon, saying that the central bank remains firmly committed to meeting its inflation goals.

Markets are still unsure about how Christine Lagarde’s tenure as head of the European Central Bank (ECB) will be defined. In a speech last week, she urged governments to take more responsibility, as it is widely known she supports a fiscal stimulus. However, she also unveiled a review of ECB strategy that will happen “in the near future”. Ms Lagarde put more emphasis on other policy areas, such as completing the digital single market, capital markets union and the single market in services. The US Federal Reserve is also carrying out its own public review of monetary policy, which it launched in November 2018.

Has the German economy hit a bottom? Some think so after data this week. German business confidence rose after the country managed to avoid slipping into a technical recession – albeit by a whisker. The Munich-based IFO Institute for Economic Research reported that its business climate index rose to 95.0, up from 94.7 in October. However, IFO also warned that Germany’s factory sector was still in a recession.

German unemployment also unexpectedly dropped, as the slump in manufacturing showed signs of stabilising and the trade tensions that have weighed on exporters eased. In a report that’s likely to dampen any expectations of German fiscal stimulus, the number of people out of work slid by 16,000, compared with estimates for an increase of 6,000. The jobless rate held at 5%, close to a record low.

Profits at China’s industrial companies shrank at their fastest pace in eight months in October, underscoring slowing momentum in the world’s second-largest economy. Industrial profits fell 9.9% in October to 427.56 billion yuan (£47.3bn), according to data released by the National Bureau of Statistics. This is the biggest drop since the January to February period.

Geopolitics

Congress has invited US President Donald Trump to its first impeachment hearing on 4 December. Jerrold Nadler, the Democratic chairman of the House Judiciary Committee, said Mr Trump could either attend or "stop complaining about the process". If he does attend, the President would be able to question witnesses.

Ahead of the NATO meeting in Hertfordshire on 3 and 4 December, German Chancellor Angela Merkel said maintaining the defence alliance is of utmost importance. The comments were interpreted as a rebuke to French President Emmanuel Macron, who recently said NATO was “experiencing brain death”. She said that Europe currently cannot defend itself on its own.

North Korea is flexing its muscles again. Breaking a month-long lull in missile tests, the rogue nation fired two short-range projectiles into the sea off its east coast on Thursday, which was Thanksgiving in the US. The test-firing came as the clock ticks down on the year-end deadline that Pyongyang had given Washington to show flexibility in their stalled denuclearisation talks.

Billionaire and former Mayor of New York Michael Bloomberg launched his bid for the Democratic presidential nomination. “We cannot afford four more years of President Trump’s reckless and unethical actions,” Mr Bloomberg said on his campaign website. “He represents an existential threat to our country and our values. If he wins another term in office, we may never recover from the damage.” John Redwood looks at the Democratic nominees here. Garry White argues that Elizabeth Warren’s plan to break up technology companies is dangerous here.

IPOs

Shares in Chinese e-commerce giant Alibaba surged in their Hong Kong trading debut – rising more than 6% on their first day of dealing. The online behemoth, which already has ADRs traded in the US, raised around $11.3bn in a secondary listing. The offering knocked Uber off the top spot as this year's biggest IPO.

After western institutions balked at participating in the float of Saudi Arabian oil behemoth Aramco, the country has turned to its own citizens and friendly neighbours to stump up the cash. Abu Dhabi is planning to invest as much as $1.5bn in the IPO. The Kuwait Investment Authority (KIA) also plans to invest in the IPO, reports suggested, although the size of Kuwaiti commitment was not immediately clear. Aramco also held investor meetings in Dubai after cancelling roadshows in western nations because of the numerous issues surrounding the floatation. These include a target valuation set by its de facto ruler Mohammed bin Salman, a lower dividend than western, more open, oil majors and Saudi’s geopolitical problems with Iran and Yemen that could lead to further attacks on its infrastructure. The retail portion of the IPO was oversubscribed, its lead manager said.       

Impossible Foods, the maker of the plant-based Impossible Burger and main rival to Beyond Meat, is in talks with investors about a new round of fundraising. It wants to raise between $300m and $400m and value the company at between $3bn and $5bn – compared with its last valuation of about $2bn at a fundraising in May. The fundraising could set the stage for an IPO for Impossible Foods as early as next year, the reports suggested.

Warnings

Banknote and passport printer De La Rue scrapped its dividend and warned there is “significant doubt” on its ability to continue to operate, as digital payments increasingly take over from hard cash. It also issued its third profit warning of the year. “We have concluded there is a material uncertainty that casts significant doubt on the Group’s ability to continue as a going concern,” it said today as it fell to a £9m loss.

Deere & Co issued a profit warning for 2020 after it reported lower fourth-quarter earnings. The company has been hurt by trade tensions as well as poor weather in the US farm belt that have slowed equipment purchases by farmers.

Australia’s largest regional airline Regional Express warned that its profits could be down 20%-30% for financial year 2020 due to “a very challenging economic environment ahead”. Management blamed the ongoing trade war which it said would lead to “sluggish” passenger numbers, while costs are expected to rise due to an “extremely weak” Australian dollar.

Fixed income

China took advantage of low global yields to raise $6bn in its largest-ever dollar bond sale. The deal found strong demand, showing that investors are eager to lend to China despite the challenges posed by the country’s slowing growth and trade tensions with the US. The mega-offering came after China sold $3bn of dollar debt last year and $2bn the year before.

Climate

Ahead of the UN COP25 Climate Change Conference in Madrid on 2-13 December, the European Parliament approved a resolution declaring a climate and environmental emergency in Europe and globally. In light of this announcement, we look at how Charles Stanley, investors and financial markets can all help with a greener, more sustainable world.

Clients are increasingly seeking out investments deemed ‘ethical’. We set out how Charles Stanley plans to meet these investment goals here.

Although still relatively niche, the rate of issuance of ‘green bonds’ has accelerated sharply this year. Adam Carruthers looks at the market that aims to fund a cleaner, greener world here.

Christine Lagarde wants to make tackling climate change a central tenet of her Presidency of the ECB. So, what exactly is green monetary policy? John Redwood takes a look at what it could mean here.

Adam Martell, an investment manager and charity champion at our office in Leeds, argues that sustainability is no longer an investment niche here.

Technology

A non-profit campaign group set up by World Wide Web inventor Sir Tim Berners-Lee launched his plan to “fix” the internet. Sir Tim said his “contract for the web” was backed by Facebook, Alphabet’s Google, Microsoft, and privately-owned Reddit. The contract comes with nine core principles, while underneath them is a total of 76 clauses. “Not every organization has to abide by all of them,” he insisted. “A good number of those 76 will be relevant.” To read the full “contract” click here.

FTSE 250 IT infrastructure and services provider Softcat said that it maintained "strong momentum" in the first quarter, with growth in revenue, gross profit and operating profit.

Online auction group eBay agreed to sell its ticket sales platform Stubhub to Viagogo in a deal worth $4.05bn, following pressure from activist investors to offload parts of its business. The group bought Stubhub for $310m in 2007, but in March this year, it launched a strategic review of its assets following pressure from activist investors Elliott Management and Starboard Value.

Xerox is preparing to take its $33.5bn offer to buy HP hostile after the printing giant's board rejected a second bid and accused the smaller rival of "aggressive words and actions". Xerox boss John Visentin sent a retaliatory letter to HP's board on Tuesday stating that it was taking its position to investors to win them over with the promise of cash returns.  Mr Visentin wrote: "While you may not appreciate our 'aggressive' tactics, we will not apologise for them."

Ride hailing

Uber was refused a new licence to operate in London. Transport for London (TfL) concluded that Uber was not a fit and proper company to hold a licence to operate private hire vehicles in the capital. TfL says it cannot renew Uber’s licence, due to a “pattern of failures” which put passenger safety at risk. This includes allowing unauthorised drivers to operate as Uber operatives, carrying out about 14,000 journeys. The company can keep on operating throughout its appeal.

Uber's rivals are coming. Indian ride-sharing firm Ola has begun signing up drivers in London ahead of plans to launch services in the capital "in the coming weeks". Bolt is on the verge of securing more than $100m in new funding. The Estonian ride-hailing app is working with Goldman Sachs on the new round of funding, just four months after raising £50m from new and existing backers. Formerly known as Taxify, it has a licence to operate in the capital.

Uber rivals including Kapten, ViaVan, Hailo, Wheely and Xoox are ready to expand should Uber lose its licence, which is now more likely because of the increase in competition compared with two years ago, when Uber’s licence was first put up for review.

Energy

Oil edged higher ahead of a key OPEC+ meeting in Vienna next week that may result in future production cuts. Brent crude futures rose 0.1 over the week by mid-session on Friday to trade at about $63.40 a barrel.

Is Saudi Arabia about to end its position as the swing producer in global markets – a move that would mark a drastic change in global oil markets? For the last year, the oil-rich nation has turned a blind eye to cheaters within the OPEC+ alliance, cutting its own output more than agreed to offset over-production from the likes of Iraq and Russia. Bloomberg reports that, now, Riyadh has had enough. Prince Abdulaziz bin Salman, who took over from Khalid al-Falih in September, will likely use his first OPEC meeting as Saudi oil minister next week to signal it will no longer step in to make up for other cartel members pumping more oil than they agreed. John Redwood argues that the oil market is caught between the need for higher prices to sustain the producers, and lower prices brought about by a current surplus of output here.

Petrofac was named as the multinational energy company accused by prosecutors of maintaining a fake set of accounts to disguise the payment of bribes to foreign government officials. It was known that the company has been under investigation by the UK’s anti-corruption agency, the Serious Fraud Office (SFO), for suspected bribery and money laundering. The allegations of corruption have emerged as part of a separate investigation by US prosecutors into another company, Unaoil.

Mining

Following some confusion, Mongolia’s mining minister confirmed Rio Tinto’s ongoing $7bn expansion of the massive Oyu Tolgoi underground copper-gold mine will “not be stopped.” Dolgorsürengiin Sumyaabazar said the project “would proceed directly forward,” adding that the country’s National Security Council will work with Rio on “improving” the investment agreements that underpin the underground expansion.

Rio’s copper expansion could be timely, as problems in Chile, the world’s top producing nation, continue. Codelco’s future standing as the world’s biggest copper producer may be under threat as the country’s protesters continue with a “citizens’ uprising”. Codelco had planned to spend $20bn over a decade to modernise its ageing mines and delay an impending production slump. However, protests to demand changes may jeopardise the state-owned miner’s push for needed government funding, analysts suggested.

Incoming BHP Group chief executive Mike Henry said the world's biggest miner is prioritising new developments in technology to cut costs and improve safety, including collaborations with tech start-ups and researchers. Mr Henry, who starts on 1 January, said that the area is likely to be a major focus of his tenure. “Whether it's automated haulage, robotics, drones, big data or artificial intelligence – we are changing the way we work," he said. The major miners have been at the vanguard of developments such as driverless trucks and trains in remote regions of Australia.

Anglo American is selling a 12% stake in its coking coal operations at Grosvenor in Queensland, Australia, to a group of Japanese partners for around $141m. The partners are Japan's biggest steelmaker Nippon Steel Corporation, Mitsui & Co, Nippon Steel Trading Corporation, Shinsho Corporation and JFE Mineral Co.

Media

Daily Mail & General Trust said it had acquired the 'i' national newspaper and website, from JPI Media Limited for £49.6m in cash. 

Almost a million new subscribers a day are signing up for The Walt Disney Co's paid-for digital streaming service, Disney+, less than two weeks after its initial rollout, according to data from research group Apptopia. Nevertheless, Netflix shares continue to rise from their October lows.

Supermarkets

Ocado announced a deal with Japan retailer Aeon to develop its online business. The company, which argues it is a technology company and not a grocer, said it will develop a national fulfilment network to serve Japanese consumers, with expected sales capacity of around 1 trillion yen (£7.1bn) by 2035. Shares in the company are up almost 75% this year.

US grocery behemoth Walmart may be desperate to offload its Asda operation in the UK but is expanding rapidly in China despite a trade war and economic slowdown. It unveiled plans to open 500 new stores in China over the next five to seven years. That would more than double its footprint in the country, which is expected to become the world's biggest grocery market by 2023. Having failed to merge with J Sainsbury after regulators rebuffed the transaction, a deal was signed last month to offload nearly £4bn of Asda’s pension liabilities, a move that is believed to have cleared the path for a stock market spin-off. The pensions deal was with Rothesay Life.

Food & drink

Shares in Compass Group, the world’s biggest catering company, slipped after management said deteriorating business and consumer confidence in Europe had hurt volumes and margins. “Our expectations for the group in 2020 are positive although we remain cautious on the macro environment in Europe," Compass said. The full-year results were slightly better than City expectations.

A global outbreak of African swine fever that has prompted a vast cull of infected pigs and lifted prices in China has given a boost to UK producer Cranswick. The mid-cap group which provides fresh pork, sausages, chicken and other foods said that export revenue surged 65% in the six months through September, fuelled by demand from China. Overall sales rose 7.1% in the period. Garry White looked at the issue earlier this year here.

UK meals delivery group Just Eat advised shareholders not to accept a 710p-a-share cash offer from investment group Prosus. It said the proposal was inferior to its agreed deal with Takeaway.com to create the largest food delivery player outside China.

The casual-dining sector’s woes continued. Shares in Restaurant Group fell after Wagamama, which it bought a year ago, reported a slowdown in sales growth. The restaurant chain reported a 6.3% like-for-like increase in sales growth during the second quarter of its financial year, but this was markedly slower than previous results.

Full-year profits at pub giant Marston's were obliterated by a £43.4m write down on the value of its properties. The company reported a £20m pre-tax loss for its full year compared to a £54.3m profit last year. The pub chain warned last month that annual profits would be lower than expected as an increase in spending on drinks was offset by a poor performance on food.

Profits at Britvic have dropped more than 30% after adjustments, which included writing down of its French assets, the soft drinks company said.

Other retail

British retailers saw a stronger-than-expected improvement in sales in November and are more upbeat about the month ahead, according to the Confederation of British Industry (CBI). The trade body’s monthly index of reported sales rose to minus 3 in November from October’s minus 10. “Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year,” CBI economist Anna Leach said.

UK consumer confidence remained subdued in November, putting it at the lowest level going into a general election since 2010. GfK said Friday that its key index of sentiment stayed at minus 14 in November. While expectations for the economy over the next 12 months increased, measures of expected major purchases and savings fell.

US post-Thanksgiving import “Black Friday” was on 29 November. However, just one in 20 Black Friday deals are genuine, according to damning research by Which? Magazine, that concluded the annual shopping event was “all hype”. The consumer group price checked 83 items on sale on Black Friday last year and found that nearly all were cheaper or available for the same price at other times of the year.

Regional shopping centre owner Intu Properties has reportedly called in PricewaterhouseCoopers (PwC) to help advise on the restructuring of its balance sheet. The shopping centre giant has hired PwC to work alongside its existing advisers as it prepares to ask investors for new capital.

There was good news from Pets at Home, which posted a jump in interim profit and said it was on track to deliver annual pre-tax profit towards the top end of current market expectations.

Topps Tiles posted a dip in profit for its full-year results, as it warned the upcoming general election had hurt customer demand. It warned that like-for-like sales had slumped 7.2% in the first two months of its new financial year, compared to a 1.9% decline in the equivalent period of last year.

As part of his strategy to move Sports Direct more upmarket and make it the “Selfridges of Sport”, founder Mike Ashley plans to rebrand the business as Frasers. This follows news that the company is planning to launch a chain of luxury high street stores named Frasers within the next financial year following the purchase of the House of Fraser brand.

Model railway brand Hornby narrowed its losses in the first half of the year as the company ramped up full-price sales and put the brakes on discounting. The retailer also outlined plans to boost its online offering by investing in its website and social media presence, saying its current digital platform has “a lot of dusty old faded boxes in the window”.

Consumer

LVMH, the world's biggest luxury goods company, finally struck an agreement to buy iconic US jeweller Tiffany & Co for more than $16bn. Tiffany has suffered falling jewellery sales, hit by lower spending by tourists and a strong US dollar. However, LVMH’s billionaire owner Bernard Arnauld said Tiffany had an "unparalleled heritage" and fitted with its other brands, Louis Vuitton and Bulgari.

British American Tobacco warned that the looming crackdown on e-cigarettes in the US would hit business this year, with revenues from the category at the “lower end of expectations”. However, as revenues from traditional tobacco grew, overall sales growth would be at the higher end of expectations at around 5%. 

J Sainsbury-owned Argos cut its ties with online white goods seller AO World and will now deliver televisions and fridges in-house. AO admitted its third-party logistics revenue was dented by “the loss of the contract”.

Healthcare

Drug stocks plunged in the US after federal prosecutors launched a criminal probe into whether some pharmaceutical companies purposely allowed painkillers to spread through US communities, fuelling the country’s opioid crisis. Donald Trump has made dealing with the opioid crisis a key pledge in his term as President. Shares hit included Teva, Amneal, Mallinckrodt, McKesson, and AmerisourceBergen. The WSJ noted that the drugmakers and distributors had received grand-jury subpoenas. Opioids have contributed to more than 400,000 deaths in the US since 1997.

Swiss group Novartis will buy US biotechnology company The Medicines Co for about $9.7bn, as it seeks to expand its portfolio of medicines against cardiovascular disease, adding cholesterol-lowering drug Inclisiran to its portfolio. The price represented a 24% premium over the group’s undisturbed share price.

Airlines & travel

Travel retailer On the Beach says profit dropped by 26% in the year to 30 September "reflecting the impact of the failure of Thomas Cook".

Troubled budget airline Norwegian Air will end flights from Copenhagen and Stockholm to the US and Thailand, while increasing the frequency with which it flies from several European cities to US destinations. “Scandinavia isn’t big enough to maintain intercontinental flights from Oslo, Stockholm and Copenhagen,” Senior Vice President Commercial Matthew Wood said in a statement.

Autos

An entire year of UK car production – 1.5 million vehicles – will be lost if Britain fails to secure a trade deal after leaving the European Union, according to trade body, the Society of Motor Manufacturers and Traders (SMMT). It calculated that standard WTO tariffs of 10% on vehicle exports and other levies on imported components for cars built in Britain will add £3.2bn to automotive production costs in the UK.

Renault-Nissan-Mitsubishi said on Friday that in the coming days it planned to appoint a General Secretary for the alliance in a bid to boost operational efficiency. "This Alliance executive will be key for coordinating and facilitating several major Alliance projects that are to be launched to accelerate business efficiencies for the respective companies," the group said in a statement.

The notoriously loose-tongued founder of Tesla, Elon Musk, said that the company had received 200,000 “orders” for its Cybertruck, despite an embarrassing debut that saw shatterproof windows break. A prospective Cybertruck owner must pay Tesla a refundable $100 “pre-order fee.”

Volkswagen’s luxury car unit Audi will cut 9,500 jobs by 2025 to free up capital to invest in electric vehicles and digital technologies.

German carmaker BMW said it would build fully electric models of its Mini cars at a new plant in China, as it kicked off a joint venture with Chinese partner Great Wall Motor.

Industrials

Rolls-Royce won a $1.2bn five-year contract with the US military. The MissionCare contract is to maintain AE 1107C engines on US Marine Corps, Navy and Air Force V-22 aircraft.

Testing and safety equipment maker group Intertek said it expected to deliver good organic revenue growth with solid margin progression after an upbeat first half of the year.

Eddie Stobart took aim at rival Wincanton for failing to make a takeover bid for the group, despite being granted access to its confidential books. Wincanton dropped out of the running on Monday afternoon, citing concerns about Eddie Stobart's finances. Stobart said it was "disappointed" with Wincanton.

Financials

Citigroup was fined a record £44m pounds by the Bank of England’s Prudential Regulation Authority for years of inaccurate reporting to regulators about the lender’s capital and liquidity levels.

A broker mega-combination was agreed in the US. Charles Schwab agreed to buy TD Ameritrade for $26bn, the companies announced Monday. The combined company will have 24 million customer accounts with more than $5 trillion in client assets. Schwab and TD Ameritrade have a combined annual revenue of about $25bn.

The London Stock Exchange has been given overwhelming approval from its shareholders to push ahead with a $27bn takeover of data giant Refinitiv from Thomson Reuters.

Virgin Money swung to a £194m loss and suspended its dividend in its latest full-year results, blaming payment protection insurance (PPI) charges and the costs of its £1.7bn merger with Clydesdale and Yorkshire Bank Group (CYBG). However, the shares surged after it beat market growth in both its business and personal segments, posting growth of 4.5% and 16% respectively,

Colombian billionaire Jaime Gilinski Bacal, one of the wealthiest people in Latin America, bought a 4.28% stake in troubled Metro Bank. The banker, once the biggest investor in TSB's Spanish owner Banco de Sabadell, is now one of Metro's top five shareholders.

Utilities

National Grid and SSE have transferred the ownership of their British operations to offshore companies to try and protect themselves against Labour’s plan for renationalisation should it win the 12 December general election in the UK.

National Grid agreed to pay $36m to end a dispute over gas supplies in New York after the state’s governor threatened to strip it of its licence to operate.

For more information please get in touch 020 3504 8307 or email us at madeforyou@charles-stanley.co.uk 

Garry White is Chief Investment Commentator at Charles Stanley & Co. Limited, which is authorised and regulated by the Financial Conduct Authority.

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