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Tuesday Papers: East Coast mainline on brink of collapse, admits Grayling

And mounting concern over the impact of rising inflation sent stock markets tumbling last night.

 
Tuesday Papers: East Coast mainline on brink of collapse, admits Grayling

Top stories

  • Financial Times: The government is close to taking over operation of the East Coast mainline after admitting the Virgin-branded franchise is on the brink of financial collapse; Chris Grayling, the transport secretary, told the House of Commons the London-to-Edinburgh operation had breached a key financial covenant.
  • The Times: Mounting concern over the impact of rising inflation sent stock markets tumbling last night, the Dow Jones industrial average leading the way with its biggest percentage drop since 2011 and its biggest single-day points decline on record.
  • Financial Times: Broadcom has boosted its offer for rival chipmaker Qualcomm to about $146bn ahead of a key shareholder showdown that will decide the tech industry’s biggest-ever takeover attempt.
  • The Daily Telegraph: Britain’s biggest bank Lloyds has axed 930 jobs ahead of chief executive António Horta-Osório laying out the lender’s new three-year strategy later this month.
  • Financial Times: Greg Coffey, a star hedge fund trader who retired five years ago, is raising $2 billion for a new fund at a time when some of the industry’s best known names have shed assets or closed down.
  • The Times: Andrew Bailey, chief executive of the Prudential Regulation Authority, also warned that Europe could have more to lose than the UK if the country was to leave the EU with no deal.

Business and economics

  • Daily Mail: Speculators around the world dumped bitcoin yesterday as a leading central banker condemned it as no better than a Ponzi scheme; the digital currency slumped as much as 15% to lows of $7,500 – down from nearly $20,000 at its peak just before Christmas.
  • The Guardian: Pensions advisers repeatedly warned that Carillion was prioritising shareholder dividends over the funding of its pension scheme years before the government contractor’s collapse, according to documents released by the work and pensions committee.
  • The Times: BT is to close its defined-benefit pension scheme for 10,000 white-collar workers, which has deficit of £14 billion.
  • The Daily Telegraph: Activist investor Elliott Advisors has launched a fresh assault on BHP Billiton, urging it to unify its dual companies and generate $22 billion (£15.7 billion) in savings for shareholders.
  • Daily Mail: Ryanair’s boss has slammed the UK government for ‘underestimating’ the impact a no-deal Brexit will have on EU flights in a cautious trading update that sent shares in the budget airline down 3%.
  • The Daily Telegraph: Britain’s largest car builder Jaguar Land Rover has blamed the cost of R&D and new model launches on a 25% fall in pre-tax profits.
  • Financial Times: Nissan has announced a push into the world’s largest car market, with the Japanese carmaker and its Chinese joint venture partner planning to invest Rmb60 billion ($9.5 billion) into becoming a top-three China brand.
  • Daily Mail: Booker's boss Charles Wilson will head the supermarket’s retail and wholesale division in the UK and Ireland after it bought the cash-and-carry group for £3.7 billion.
  • The Guardian: Up to 40 Homebase and Bunnings DIY stores could be closed, putting hundreds of jobs at risk, after the group’s Australian owner said it was reviewing the future of its UK business.
  • The Times: Job losses at Carillion have risen to more than 800, after the official receiver said that it was laying off another tranche of workers employed by the failed contractor.
  • Financial Times: The chief executive of Randgold Resources, the biggest gold company listed in London, says he is prepared to take legal action if a new mining code in the Democratic Republic of Congo becomes law.
  • The Guardian: Waitrose is to close part of its loyalty scheme at the end of February after customers complained they found it too confusing.
  • The Daily Telegraph: The Serious Fraud Office is expected to deepen its corruption probe into Petrofac by questioning more members of its top management in connection with the Unaoil scandal.
  • Financial Times: Samsung’s de facto leader was set free from prison on Monday, five months after he was convicted on corruption charges, setting back hopes of reformers that Seoul had turned a corner in taking on its powerful chaebol conglomerates.
  • Financial Times: Chinese technology investors in Silicon Valley are being thwarted by the country’s capital controls, in a sign of the unintended consequences of Beijing’s move last year to curb cash outflows.

Share tips, comment and bids

  • The Times (Tempus share tips): BUY Woodford Patient Capital Trust; BUY Electrocomponents.
  • The Daily Telegraph (Questor share tips): BUY Relx.
  • The Times: EG Group, or Euro Garages, Europe’s largest fuel and forecourt operator is set to buy the Kroger Co’s American convenience stores in a $2.15 billion deal.
  • Financial Times: Australia is pushing to become the “Nasdaq of the Asia Pacific” after nearly doubling its technology listings in five years.
  • Financial Times: Dalian Wanda, the Chinese entertainment-to-properties conglomerate, will sell a $1.2 billion stake in its listed films unit to investors led by ecommerce group Alibaba, the latest in a string of divestments by the company over the past six months.
  • Financial Times: Most of Carillion’s Canadian business, including facilities management at airports, hospitals and defence sites, is to be taken over by the insurer Fairfax Financial Holdings for an undisclosed amount.
  • The Times (Comment): Wild west is no place for Nest investors.
  • Financial Times (Comment): Content kings bet that scale is key to survival; a Viacom-CBS reunion would be just the latest flight to scale.
  • Financial Times (Comment): The market sell-off points to benign causes; sliding bond and equity prices are not yet a reason for distress.

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Barnett eyes revival and 'refines' unquoted portfolio

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