Citywire for Financial Professionals

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Wednesday Papers: Morgan Stanley fails to lift debt trading

And the global financial system has become dangerously unstable and faces an avalanche of bankruptcies, warns former chief economist of BIS.

 
Wednesday Papers: Morgan Stanley fails to lift debt trading

Top stories

  • Financial Times: Morgan Stanley’s efforts to turn round its ailing debt-trading business have been a “failure”, chief executive James Gorman conceded on Tuesday, as the bank’s weak fourth-quarter results were salvaged by a strong performance in equities.
  • The Daily Telegraph: The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements has warned.
  • The Daily Telegraph: The world is set to "drown" in oil as Iran turns on the pumps and its rivals in the Middle East remain intent on smashing competitors out of a low price world, the IEA has warned.
  • The Guardian: The richest stand to gain more from the introduction of new technology than those in poorer sections of society, according to a UBS report which warns that policymakers may be required to intervene to tackle the widening inequality.
  • Financial Times: Renault is recalling more than 15,000 cars and offering to update hundreds of thousands more after the French government found that some of the company’s vehicles exceeded limits on emissions.
  • The Independent: Royal Dutch Shell has come under fire for being part of a consortium that accepted an “extraordinary” $3.3 billion tax break in Nigeria – twice the poverty-stricken country’s annual health budget.

Business and economics

  • The Independent: Fears that a wave of new oil would be unleashed on to the already flooded global market has caused shares in London-listed Qatar Investment Fund to sink further.
  • The Daily Telegraph: Britain is among the most enthusiastic regulators, so a Brexit vote will not reduce the burden on regulation on the City of London, say fund managers.
  • The Guardian: China’s economy grew at its slowest rate in a quarter of a century in 2015, data released on Tuesday showed.
  • Financial Times: Rio Tinto increased production of iron ore 11% last year to a new record and is forecasting a further 6.8% rise to 350 million tonnes in 2016, despite the collapse in the price of the key steel ingredient.
  • Financial Times: Bank of America became the latest bank to disclose damage done by the tumbling oil price, estimating a persistently low crude price could cost it about $700 million over the next two years.
  • The Guardian: The Bank of England governor has sent the pound into a nosedive after he ruled out an early rise in interest rates, saying UK growth was still too weak and pointing to recent turmoil in the global financial markets.
  • Financial Times: The UK in 2015 experienced the lowest level of inflation for half a century, official figures confirmed on Tuesday.
  • The Guardian: Netflix added more subscribers than expected at the end of last year and its sky-high share price soared another 9% on the news.
  • Daily Mail: Unilever CEO has warned the world’s middle classes are being squeezed and the company is under pressure to compete.
  • Financial Times: Volkswagen on Tuesday moved to dispel questions over the future of its newly-appointed chief executive, saying Matthias Müller’s job was never in doubt following a difficult trip to the US last week.
  • Financial Times: Prudential has signalled a pull-back from the UK annuity market, saying that the new Solvency II rules make it tougher to generate a decent return from the business.
  • Financial Times: Johnson & Johnson, the world’s largest healthcare company, said it would cut 3,000 jobs at its medical devices unit as part of a restructuring effort designed to save up to $1 billion a year in costs.
  • Financial Times: Next’s shareholders have been called to an extraordinary meeting next month after the fashion retailer admitted to an accounting error that infringed UK law on dividend payments.
  • The Guardian: More than 3 million people will become unemployed worldwide in the next two years, making existing jobs vulnerable and fuelling potential social unrest as the global economy slows.
  • The Guardian: The International Monetary Fund has added to concerns about the health of the global economy by cutting its growth forecasts for the next two years and warning that recovery from the financial crisis could be derailed altogether if key challenges are mishandled.
  • Daily Mail: A 72-day deadline has been set to save 4,000 jobs at a struggling Scunthorpe steel plant and other sites run by Tata Steel.
  • The Guardian: The crisis engulfing British steelmakers has deepened, after Sheffield Forgemasters unveiled plans to cut up to 100 jobs.
  • Financial Times: Goldman Sachs has joined forces with the Wellcome Trust, a British charitable foundation, in a £2 billion student accommodation joint venture that will become the closest competitor of the sector’s pioneer, Unite Group.
  • The Independent: A study by online retailer Baghunter has shown that it is better to invest in a Hermes’ Birkin bag than in gold or the stock-market.
  • The Daily Telegraph: Russian gas giant Gazprom has demanded Ukraine pay $2.6 billion within the next 10 days for gas the country declined to take.
  • Financial Times: Rocket Internet, the German start-up incubator, has raised $420 million for a fund to invest alongside it in fledgling internet companies.
  • Financial Times: IG Group, the UK-listed online brokerage and trading platform, has reported a drop in profits even as revenues increased in its first set of half-year results under chief executive Peter Hetherington.
  • Financial Times: Global banks will have to spend between €40 million and €120 million each to implement global regulators’ latest rules on trading book capital, a new study from consultants Oliver Wyman claims.

Share tips, comment and bids

  • The Daily Telegraph (Questor share tip): Unilever is delivering the goods in the midst of a bitter price war across Europe; Hold.
  • The Daily Telegraph (Questor share tip): Brickmaker Ibstock is building a steady return to listed life, but Questor would avoid the shares until US private equity group Bain has sold its 47% stake.
  • Financial Times: Billionaire Mukesh Ambani is set to launch India’s second-largest rights issue, raising up to Rs150 billion ($2.2 billion) to fund a portion of the costs of his hugely expensive forthcoming Reliance Jio wireless broadband venture.
  • Financial Times: EFG, a Swiss private bank owned by Brazil’s BTG Pactual is close to changing hands for the second time in a year — this time being sold to EFG International, which is controlled by the Greek billionaire Spiros Latsis.
  • The Guardian: The publisher of satirical news site the Onion has sold a minority stake to US Spanish-language broadcaster Univision.
  • The Guardian: Johnston Press is to seek to sell off some of its 220 titles to rivals as it looks to focus on the “gems” among its newspaper portfolio that fit criteria including focusing on wealthier readers with “more disposable income”.
  • The Guardian (Comment): China sends a shiver through Davos.
  • Financial Times (Lex): Emerging markets: there is more to the story than commodities and debt.
  • Financial Times (Lex): Crédit Agricole: a simpler organisational structure is just a start — those wanting a payout will have to be patient.
  • Financial Times (Lex): Bitcoin: totting up the accounts of the online currency.
  • Financial Times (Lex): Ocado: it will take time for the online grocer to become really profitable — but it may be bought first.
  • Financial Times (Lex): Rio Tinto: logic behind expansion is that survival is all about cost.

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FTSE narrows losses but pound plunges on 'Brexit'

by Daniel Grote on Jun 24, 2016 at 16:55

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