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Wednesday Papers: Valeant halves in value on default alarm

And US inflation rears its ugly head as global cycle nears danger zone.

Wednesday Papers: Valeant halves in value on default alarm

Top stories

  • Financial Times: Shares in Valeant lost half their value on Tuesday after the besieged Canadian drugmaker raised the prospect of defaulting on its $30 billion of debt and slashed full-year profit targets for the second time in five months.
  • The Daily Telegraph: The trigger for the next global recession is at last coming into view after a series of loud distractions and false alarms; the Atlanta Federal Reserve's gauge of "sticky-price" inflation in the US soared to a post-Lehman peak of 3% in February.
  • Financial Times: George Osborne will today admit he has broken two out of the three fiscal rules he set down after last year’s election, as he sets out a Budget constrained by slowing growth and weakening public finances.
  • Financial Times: Italy’s Gruppo Campari has agreed to buy the Grand Marnier group in a deal that gives the French distiller an equity value of €684 million and highlights the scope for consolidation in the still-fragmented spirits industry.
  • Financial Times: European banks were set to sell the most debt in 15 months, as the average investment grade rated bond yield fell further below 1%, registering its lowest level in nearly a year.
  • The Daily Telegraph: Barclays has paid its top bankers almost £9 million in shares, including an award worth £1.8 million for new chief executive Jes Staley as he slashes jobs and pares back dividend payments.
  • Financial Times: Royal Bank of Scotland has slashed almost 1,600 jobs in the past four weeks as part of a major drive to cut costs and restructure the lossmaking bank.
  • The Guardian: The Obama administration abandoned its plan for oil and gas drilling in Atlantic waters, after strong opposition from the Pentagon and coastal communities.

Business and economics

  • Financial Times: Antofagasta will not issue a final dividend following a steep fall in earnings, becoming the latest copper producer to sharply adjust its payout to investors following a slide in the price of the metal last year.
  • Financial Times: Legal & General has signalled an end to the days of rapid dividend growth as it said that future increases would be more in line with progress in the underlying business.
  • The Daily Telegraph: Sainsbury’s has toasted its first sales rise in more than two years as a deadline looms to make a bid for Argos owner Home Retail Group by the end of this week.
  • The Guardian: A government-commissioned report into financing Britain’s railways is expected to rule out privatisation of the network following warnings that a sell-off would lead to higher fares.
  • The Daily Telegraph: Heathrow is pushing ahead with its controversial proposal for a third runway by appointing four contractors to help with its expansion, even though the Government is yet to decide whether to give the airport’s plan the green-light.
  • Financial Times: UK motor insurer Hastings, which listed on the London Stock Exchange last year, revealed a one-fifth jump in pre-tax profits and declared its first dividend.
  • The Guardian: Online grocer Ocado has insisted it is growing in confidence, as it revealed a double-digit increase in sales but yet again failed to provide news on a much-awaited overseas partnership.
  • Financial Times: Balfour Beatty, the construction and infrastructure group that built the Channel tunnel and the Docklands Light Railway, has narrowed its losses and said it remained confident that a turnround programme was on track.
  • Financial Times: Avon is to relocate its corporate headquarters to the UK and cut 2,500 jobs as the US cosmetics company best known for selling beauty products door to door looks to reduce costs.
  • Financial Times: UK fraud prosecutors have dropped a criminal investigation into the foreign exchange market that focused on a group of traders in a chatroom called “the Cartel” because of “insufficient evidence”.
  • Financial Times: Altice, the acquisition-hungry telecoms group controlled by billionaire Patrick Drahi, has drawn a line under new purchases this year, pledging instead to improve operational performance and integrate its various units.
  • Financial Times: Gem Diamonds reported an incipient turnround in the diamond market but said it would suspend plans to expand its newest project until prices had more firmly recovered.
  • Daily Mail: Deutsche Boerse’s boss Carsten Kengeter, who will lead the combined company if its £20 billion merger with the LSE Group goes ahead, has been linked to the Libor ate rigging scandal.
  • Financial Times: Eurostar has posted a 38% fall in profits after a “tough” year that saw the cross-channel train operator affected by the Paris terrorist attacks and a strong pound.
  • Financial Times: Renault and Nissan have named Nicolas Maure as the new boss of AvtoVAZ, Russia’s largest carmaker.
  • Financial Times: Cairn Energy has upgraded the amount of oil it thinks it has discovered in Senegal, west Africa, saying that its best estimate of the reserves there has gone up by 20%.
  • The Daily Telegraph: Low-cost fitness club chain The Gym Group has enjoyed a 42,000 surge in membership numbers since the turn of the year, boosted by New Year’s resolutions to get fit after the Christmas party season.
  • The Guardian: French Connection shares slumped after falling sales of the fashion brand increased its annual loss almost fivefold, to £4.7 million.
  • The Guardian: Batman v Superman: Dawn of Justice is on course to be the first $1 billion movie of 2016, according to advance US ticket sales.
  • Daily Mail: Tullow Oil tumbled by 11% after the production at its Jubilee fields site in Ghana dropped.

Share tips, comment and bids

  • The Daily Telegraph (Questor share tip): AVOID French Connection as turnaround struggles.
  • The Daily Telegraph (Questor share tip): HOLD Mears as it is a good bet for dividend income.
  • The Times (Tempus share tips): BUY Legal & General; TAKE PROFITS out of Dechra Pharmaceuticals; AVOID Inchcape for now.
  • Financial Times: Société Générale of France said it had agreed to buy Kleinwort Benson and merge the wealth manager with Hambros, its private bank.
  • Financial Times: Former rivals Qube Holdings and Canadian asset manager Brookfield have teamed up to acquire Australian ports and rail operator Asciano for more than A$9 billion (US$6.7 billion).
  • The Times: Fidelity and Rabobank will invest in Anterra Capital, a business based in London and Amsterdam, to create a $125 million fund investing in technologies focusing on farmers and food.
  • The Guardian: Sony is to buy Michael Jackson’s 50% share in Sony/ATV Music Publishing from the dead singer’s estate for $750 million (£530 million).
  • Financial Times (Comment): End of Hong Kong IPO drought hardly a cause for celebration.
  • Financial Times (Lex): Jefferies: maybe one pure investment bank is all that is needed.
  • Financial Times (Lex): SocGen/Kleinwort: the French bank’s purchase is unlikely to shift the dial.
  • Financial Times (Lex): Valeant: a business model fails.
  • Financial Times (Lex): Sony/Michael Jackson: a shrewd deal for Sony’s music division risks being swamped by larger problems elsewhere.
  • Financial Times (Lex): Altice: the days of rapid expansion may be drawing to a close.

1 comment so far. Why not have your say?

Paul Pasternack

Mar 16, 2016 at 20:23

A lot of the IEA’s optimism is based on this recent rally, which is more linked to market sentiment than with the fundamentals. The “light at the end of the tunnel” better come quickly or it won’t come for a long time.

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