Citywire for Financial Professionals

View the article online at http://citywire.co.uk/money/article/a647550

Friday Papers: Blame flies over US budget

And Apple’s app advantage wanes as developers warm to Android.

 
Friday Papers: Blame flies over US budget

Top stories

  • Financial Times: The chances of a US budget deal before the end-of-year deadline are fading, with congressional leaders blaming each other, days before spending cuts and tax rises kick in.
  • Financial Times: Apple is at risk of losing one of its key competitive advantages over Google’s rival Android system as application developers say they are warming to Google’s smartphone platform.
  • Financial Times: The bleak prospects for as many as 350,000 retail shareholders in Bankia of recovering anything more than a token amount of their investment dimmed further on Thursday after it was revealed that the nationalised Spanish lender had a negative economic value of €4.15 billion.
  • The Daily Telegraph: Greece's four biggest banks need €27.5 billion in recapitalisation funds by the end of April, the national central bank said in a report released on Thursday.
  • Financial Times: Taking stock awards into account, total pay of Apple chief executive Tim Cook fell by 99% to $4.17 million for the year to 29 September, according to a filing on Thursday to the US Securities and Exchange Commission.
  • The Guardian: Goldman Sachs has disclosed that its senior staff in London received an average pay deal of £1.8 million in 2011.
  • Daily Mail: Banks in the western world are on the hook for even bigger losses on toxic loans than they have admitted so far, as lenders across many developed markets are ‘unwilling, or unable’ to write down asset values to more realistic levels and accept credit losses, Ernst & Young has said.
  • The Independent: Large companies - defined as those with an annual profit of more than £1.5 million - paid a total of £21 billion of corporation tax in the year to 31 March - £5 billion less – a decline of just over a fifth – than in the year to 31 March 2001.
  • The Daily Telegraph: Amazon and Google have seen their popularity drop after being accused of avoiding paying millions of pounds in tax.
  • Financial Times: Toshiba, the Japanese conglomerate, is seeking to offload a big stake in its Westinghouse atomic power unit amid global uncertainty over demand for nuclear reactors.
  • The Guardian: Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, three billionaire oligarchs who founded the controversial FTSE 100 miner Eurasian Natural Resources Corporation are being personally sued for $27 million by their former corporate finance adviser Kirill Stein.
  • Financial Times: A New York court handed Porsche a victory on Thursday in a $1.4 billion legal battle with hedge funds that accused the German sports car maker of misleading the market in the run-up to its announcement in late 2008 that it was seeking to take control of Volkswagen.
  • The Daily Telegraph: Ladbrokes chief executive Richard Glynn is closing in on the first £2 million of a potential £12 million bonus after steering the bookmaker's shares to a three-year high.

Business and economics

  • Daily Mail: Net lending by UK banks to companies fell £3.1 billion in November – the biggest fall since June and far bigger than the average monthly fall of £934 million over the previous six months, according to the British Bankers’ Association.
  • Financial Times: Iron ore prices have risen 60% in four months, prompting Fortescue Metals Group, one of the world’s biggest miners of the commodity, to resume the multibillion-dollar expansion it put on hold in September when prices crashed.
  • The Guardian: The eurozone crisis threatened to flare up again on Thursday as outgoing Italian Prime Minister Mario Monti held talks with centrist politicians over the agenda for reform which he published on Christmas Eve.
  • Financial Times: Portugal has only just hit the midway point of its three-year €78 billion bailout, but EU officials are warning that Lisbon’s rescue programme is heading into a critical period with tough austerity choices needed to win back the confidence of financial markets.
  • Financial Times: Private equity deals in France more than halved to €6.2 billion in 2012, from €15 billion the previous year as the country’s business leaders weighed the impact of fiscal changes being launched by the newly elected socialist president François Hollande.
  • Daily Mail: High-flying investment bankers face a ‘bleak’ bonus season that could see pay-outs slashed by up to 40%, according to Jonathan Evans, chairman of Sammons Associates.
  • The Independent: The dearth of women at the top of British companies can only be addressed by introducing boardroom quotas, according to the first female general secretary of the Trade Union Congress.
  • The Guardian: The number of mortgages approved for house purchase edged to a ten-month high of 33,634 in November 2012, but the ongoing trend for paying off mortgage capital and credit card debt continued.
  • The Independent: Cautious British consumers are paying back "virtually as much as they borrow" and putting more into savings accounts, according to the British Bankers' Association.
  • Financial Times: Record numbers of shoppers poured into many UK stores and malls on Boxing Day, but analysts are warning that 2013 is shaping up to be another tough year for British retailers as austerity continues to stalk the high street.
  • Financial Times: A jury has awarded $1.17 billion in damages against Marvell, the US semiconductor maker, for infringing hard drive-related patents owned by Carnegie Mellon University.
  • The Daily Telegraph: Jaguar Land Rover will recall around 1,400 vehicles worldwide because of problems with brakes and steering boxes.
  • The Guardian: Waitrose has revealed "record" Christmas sales, with like-for-like sales rising 4.3% in the seven weeks to 24 December and 7.3% in the final seven days to Christmas Eve.
  • The Daily Telegraph: Steinway Musical Instruments, the famous manufacturer of pianos, saxophones and trumpets, has decided not to sell itself following a 17-month-long exploration of strategic alternatives.

Share tips, comment and bids

  • Financial Times: Vinci, the French construction company, is to buy ANA, the state-owned Portuguese airports operator, in a deal worth €3.08 billion, defeating three rival bids from German, Swiss and Latin American-led groups.
  • Financial Times: Bank of Tokyo Mitsubishi, the core bank in the Mitsubishi UFJ Financial Group, is to take a 20% stake in VietinBank for $742 million, the largest investment in Vietnam to date by a Japanese lender.
  • Financial Times: SeaWorld Entertainment, the aquatic-themed amusement park operator controlled by the Blackstone Group and home to Shamu the killer whale, has filed for an initial public offering.
  • Financial Times: EastCoal will become the latest mining company to join Aim on Friday, when its shares begin trading on London’s junior market; the company raised £9.5 million through the placing of 78 million shares at 12.21 pence each.
  • Financial Times: Acquisitions of Japanese companies by foreign buyers fell to a 14-year low in 2012 as outbound deals touched new highs, highlighting the challenge facing the new government as it seeks to restore steady growth to the world’s third-largest economy.
  • The Daily Telegraph (Comment): The new Governor of the Bank of England can’t wave a magic wand – but more economic honesty from our politicians would help.
  • Daily Mail (Comment – Alex Brummer): Like lemmings, the Americans seem hell-bent on leaping off an economic cliff. The effect on us could be devastating.
  • Financial Times (Lex): A great corporate train wreck driven largely by management decisions.
  • Financial Times (Lex): MetLife is well-run, with an estimated return on equity of 11-12% this year, trading below its book value. It’s an ugly moment, but it could be an opportunity.
  • Financial Times (Lex): Oil and gas: Oil groups are set to continue their spending spree into next year, but returns from the E&P sector in 2012 have been poor.
  • Financial Times (Lex): European banks: As banks struggle to adapt to the post-crisis landscape in which authorities are seeking to limit risk the year ahead could bring further pain.

1 comment so far. Why not have your say?

Christopher

Dec 29, 2012 at 16:18

I don't really see the technical difficulty with the taxable duductions currently claimed by Amazon etc. It seems that as a business is established to make profit it cannot be logical that 100% of its normal profit can be paid out in group charges.

1. limit transfer payments to associates to lowest of cost charged, market value with a global cap on all such of a percentage of taxable profit, for example 25%.

2. Associates can be widely defined to include common control and other tests very familiar in tax legislation.

3. Transfer payments can be widely defined to include any payments like royalties interest etc. For goods supplied, say coffee to Starbucks, market value is not rocket science.

4. Any company with bearer shars to be deemed to be under 100% common ownership.

5. Payments to obscure entities like anstalts, partnerships etc to be non deductible.

6. For foreign corporations treat the branch and the home office as associated so that the local profit is left in UK.

Revenue should be actively enforcing the current transfer payment rules until any necessary tightening can be brought in.

I do not see this as the sort of rule that so upset Martin Sorrell and WPP as it is the local taxation in UK which is in issue, not the profitability or otherwise of the overseas operations.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

The Citywire guide to investment trusts

In association with Aberdeen Asset Management

Fund managers from Standard Life Investments quizzed on investment trusts


What can SLI bring to the table for those who want to put their money into investment trusts?

Today's articles

Tools from Citywire Money

From the Forums

+ Start a new discussion

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add noreply@emails.citywire.co.uk to your safe senders list so we don't get junked.

Read more...

The big new trust betting property party isn't over

by James Carthew on Nov 26, 2014 at 08:00

Sorry, this link is not
quite ready yet