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Thursday Papers: Shell warns of 40% slide in profits

And Goldman Sachs delivered improved results in investment banking and asset management even as it paid the biggest fine in its history.

 
Thursday Papers: Shell warns of 40% slide in profits

Top stories

  • Financial Times: Royal Dutch Shell led a sell-off across the energy industry after it warned fourth-quarter profits would tumble at least 40% from a year ago following a collapse in oil prices that has battered big producers.
  • Financial Times: Goldman Sachs closed the big US banks’ earning season in solid fashion on Wednesday, delivering improved results in investment banking and asset management even as it paid the biggest fine in its history.
  • The Guardian: Fears that the global economy could be heading for a repeat of the 2008 financial crash have sent shockwaves through financial markets – prompting a rush to safe havens by investors.
  • Financial Times: Barclays is preparing to announce more than 1,000 job cuts across its investment bank, hitting its Asian operations particularly hard, as new chief executive Jes Staley makes his first big strategic move.
  • The Guardian: Asda is considering cutting more than 1,000 store jobs under plans to close hundreds of staff canteens and shopfloor services such as photo processing units.
  • The Independent: The UK recorded a surprise fall in unemployment to its lowest level for more than a decade despite slowing wages growth; jobless rate unexpectedly fell from 5.2% to 5.1% in the three months to November.
  • Financial Times: The City’s largest law firms have assembled dedicated teams to advise on the widespread consequences of Britain’s potential exit from Europe, as companies begin to make their contingency plans.
  • Financial Times: As the smartphone market in China slows, Apple has taken a big step towards expanding its presence in India by applying for official government permission to launch its first flagship branded retail store there.

Business and economics

  • Daily Mail: The world’s biggest miner BHP Billiton led a fresh slump by the FTSE 100 index yesterday, with its shares dropping 7% as a glum trading update raised fears over a possible cut in dividends.
  • Financial Times: The flow of capital out of China and other emerging markets was significantly worse than previously thought in 2015, according to new estimates.
  • The Independent: China economic slump means some wedding marquees now cheaper to rent than container ships as the slowdown has caused the day-rates of container ships to crash.
  • The Guardian: Billionaire environmental activist Tom Steyer spoke out on Wednesday in support of an unconfirmed investigation by California into allegations that ExxonMobil spent decades lying to investors and the public about its knowledge of climate change.
  • Financial Times: The Bank of Canada cut its growth forecasts for the next two years, citing steep falls in the oil price - minutes after prime minister Justin Trudeau told an audience in Davos “there has never been a better time to look to Canada” for investment.
  • Financial Times: Italy’s banking sector came under intense pressure on Wednesday, with concerns over bad loans hitting share prices in a third straight day of losses.
  • Daily Mail: Holland & Barrett has turned the screw on suppliers by demanding they pay an extra 5% charge on invoices and a contribution towards a £3 million CCTV system.
  • The Guardian: JD Wetherspoon has said its annual profit will be at the low end of market expectations after increased labour costs ate into profit margins.
  • Daily Express: China's economy is in a far worse state and growing at a much slower rate than its authorities say, fear experts.
  • The Daily Telegraph: Alternative investments grew during the year despite investors pulling out of hedge funds in last three months of 2015.
  • The Independent: Social media network Twitter’s share price has slumped again following technology failures this week, leaving millions of users unable to use the website.
  • The Independent: Apple, the world’s biggest public company, has lost more than $200 billion in value in six months as the slump deepens for US technology stocks.
  • The Guardian: Sumner Redstone, the 92-year-old executive chairman of Viacom, received a reduction in salary in 2015 to a scant $2 million as a shareholder lawsuit alleged that he was incapable of continuing to run the company.
  • Financial Times: Zurich Insurance warned it expected $275 million of losses from winter storms and flooding in the UK and Ireland, in another setback for the Swiss insurer.
  • Financial Times: Pets at Home notched up strong growth in its third quarter as Britons gave their pooches a pampering in the run-up to Christmas.
  • Financial Times: Shares in Hyundai Merchant Marine sank on Wednesday on growing concern about its liquidity after a failed asset sale and credit downgrade.
  • Financial Times: Shares in Genel Energy, the oil producer chaired by Tony Hayward, the former BP chief executive, fell more than 13% on Wednesday after the company warned that production and revenues would fall this year.
  • The Independent: The UK High Court has ruled that KitKat cannot trademark the shape of its four-finger bars.
  • The Guardian: Uber is claiming a major victory after Transport for London (TfL) ditched a number of proposals that would have imposed restrictions on the car hire app’s business.
  • Financial Times: Ministers blocked Sheffield Forgemasters, the troubled steelmaker, from reaching a rescue deal with Chinese investors on national security grounds.
  • Financial Times: Netflix’s expansion into 130 new markets has run into trouble, after Kenya branded it a threat to national security and claimed its content showed “shockingly explicit eroticism” that could corrupt children’s morals.
  • Financial Times: Brussels has waded into the increasingly contentious issue of European steelmakers’ inability to fight off low-cost Chinese competition by opening a probe into €2 billion in assistance the Italian government provided the country’s struggling steelmaker, Ilva.

Share tips, comment and bids

  • The Daily Telegraph (Questor share tip): Sell JD Whetherspoon as profit margin slides.
  • Financial Times: Banco Popular is planning to raise as much as €8 billion through the sale of non-performing loans and real estate assets this year, in an attempt to shore up its balance sheet when market sentiment has turned sharply against Spain’s banking sector once again.
  • Financial Times: Orange’s potential merger with Bouygues Telecom would require approval only from French competition authorities, and not the European Commission, sources said - increasing the chances of a deal.
  • The Guardian: Rupert Murdoch’s News Corp said rumors about the company’s interest in buying microblogging site Twitter or building a stake in it were untrue.
  • Financial Times: PwC is to buy a consultancy specialising in cloud-based technology, in the latest move by a big professional services firm to try to reduce its reliance on lower-margin accountancy and audit work.
  • The Daily Telegraph: Anglo American is chasing disposal target with the latest mine sale to reassure investors it has its house in order.
  • Financial Times (Comment): Gazprom lost friends and ceded influence over European gas.
  • Financial Times (Lex): Shell: deals and dividends are what matter.
  • Financial Times (Lex): Carmakers: are manufacturers starting to run out of road?
  • Financial Times (Lex): Italian banks: another ECB inquisition into bad debt levels is the least of the sector’s problems.
  • Financial Times (Lex): Hong Kong property: commercial rents dive as shoppers desert high street.
  • Financial Times (Lex): IBM: lingering, unfathomable optimism despite evidence for despair.

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