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Wednesday Papers: US on brink of losing top world economy status

Wednesday Papers: US on brink of losing top world economy status

Top stories

  • Financial Times: Barclays will next week announce the creation of a bad bank in a bid to transform its struggling investment banking operations, which were dealt a further blow yesterday with the departure of the highly regarded head of its US business, Skip McGee.
  • Financial Times: The US is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies.
  • Financial Times: Alstom’s board accepted a $12 billion-plus all-cash offer from GE for its energy arm on Tuesday night, but the engineering group left the door open for a rival bid from Germany’s Siemens in a sale process that could hinge on French politics.
  • The Guardian: Britain's economy picked up pace in the first quarter of this year but not quite as fast as economists had been expecting; Office for National Statistics said on Tuesday that GDP expanded by 0.8% in the first quarter after 0.7% growth in the final three months of last year.
  • The Guardian: The fallout from the Ukraine crisis has hit BP after the plunge in the value of the rouble knocked back underlying profits from the oil group's stake in Russia's Rosneft by 75%.
  • The Daily Telegraph: Scottish secession will result in between 20,000 and 40,000 jobs moving to England, providing "huge boost" to City of London, says Centre for Economics and Business Research.
  • Financial Times: Pfizer‘s chief executive flew into London on Tuesday to urge ministers to back its proposed £60 billion takeover of AstraZeneca which he said would create a scientific powerhouse with a big presence in the UK.
  • Financial Times: Wolfson Microelectronics, the UK semiconductor company, is to be acquired by American rival Cirrus Logic, in a takeover that will fuel the debate over the loss of British technology champions in cross-border deals.
  • Financial Times: Morgan Stanley, the US investment bank locked in an often uncomfortable 18-year marriage with retail finance, is to make a fresh push into consumer banking.
  • Financial Times: The Bank of England ushered in annual stress tests for UK lenders with details of a demanding exercise that will gauge their ability to cope with a sterling crisis, a property market crash and steep rises in unemployment.
  • Financial Times: Manufacturing will require almost 1 million more workers by 2020 to replace those retiring or leaving, but the quality and quantity of graduates is failing to match industry needs, a report has said.
  • Financial Times: European regulators unveiled a central plank in their attempt to restore credibility to the region’s banking sector, as they published details of the economic and financial shocks that lenders must show they would be able to weather in forthcoming sector health checks.
  • Financial Times: The growth outlook for central, eastern and southeastern Europe has weakened in recent months, according to the International Monetary Fund, and could deteriorate sharply if geopolitical tensions increase between Russia and Ukraine.

Business and economics

  • Financial Times: The new chief executive of Serco Rupert Soames is already facing a full in-tray when he takes up his post later this week, this was hammered home on Tuesday with a 20% fall in the share price following a vague and unspecific profit warning issued the previous evening, and news of a potential rights issue.
  • Financial Times: Samsung and Google’s Motorola will not be allowed to ignite new “patent wars” against Apple over the use of essential mobile technology, after Brussels ruled that such legal battles were anti-competitive, stifled innovation and hurt consumers.
  • Financial Times: Nokia unveiled a new chief executive Rajeev Suri, a revised strategy and fresh capital structure on Tuesday as it revealed its plans for life without its once dominant mobile phones business.
  • Financial Times: Whitbread rewarded shareholders with a 20% dividend increase on the back of double-digit rises in revenue and pre-tax profit, saying it was on track to hit targets for expansion of its budget hotels and coffee shops.
  • Financial Times: Jardine Lloyd Thompson has suffered an investor revolt over the appointment of former UK Treasury minister Lord Sassoon to its board in the latest sign of disquiet about ties between the insurance broker and its biggest shareholder.
  • Financial Times: British mobile phone users were targeted by more than double the load of malicious software than people from any other country in the first three months of 2014, according to a new report from cyber security company F-Secure.
  • Financial Times: Banco Santander sent a strong signal of confidence in emerging markets on Tuesday, with an offer to buy the 25% stake in its Brazilian operations that is listed on the stock market in an all-share deal worth €4.69 billion.
  • Financial Times: Energy Future Holdings, the Texas power company bought in 2007 by Goldman Sachs, KKR and TPG in the biggest-ever leveraged buyout deal, has filed for bankruptcy protection – virtually wiping out the $8 billion of equity the trio of investors paid.
  • Financial Times: Carphone Warehouse, the high street retailer of connected electrical devices, has stepped up its European expansion plans ahead of the £4 billion proposed merger with rival Dixons.
  • Financial Times: The number of BSkyB television subscribers has fallen for the first time in more than a decade, according to bearish estimates from two analysts.
  • Financial Times: London estate agent Foxtons warned that the sharp upturn in property sales in the capital had depressed lettings demand and rents, even as it reported a 44% rise in first-quarter earnings.
  • Financial Times: The leadership of William Hill’s Australian division is in doubt, barely a year after the gambling group entered the market; Michael Sullivan, chief executive of William Hill Australia, is in discussions with the parent company that may lead to his departure.
  • Financial Times: A Paris court opened the door to a proposed takeover of holiday operator Club Mediterranée by Chinese and French investors by rejecting a challenge to the deal by minority shareholders.
  • Financial Times: Apple, the world’s most valuable company, sold $12 billion in bonds yesterday, in a heavily subscribed offer that will help finance its aggressive stock buyback programme.
  • Daily Mail: The Co-op Group has sacked one of its directors, Stuart Ramsay, for leaking sensitive information, including details of a £6.6 million two-year pay deal for former chief executive Euan Sutherland.
  • The Guardian: Motorists are facing higher fuel prices with east-west tensions over Ukraine ending the long spell of prices staying below 130p a litre, motoring groups said.
  • The Guardian: Vince Cable has continued to contest claims that the government significantly undervalued Royal Mail, costing taxpayers £750 million on the day of the postal service was privatised in October.
  • The Guardian: Britain's seemingly insatiable appetite for coffee helped Costa owner Whitbread beat City forecasts for annual profits; the profits at the coffee chain's 1,755 shops in the UK and Ireland rose by 22% to £110 million with revenue at stores open a year or longer up 5.7%.
  • The Independent: Grosvenor Estates, the Mayfair landlord controlled by the Duke of Westminster, has sold off hundreds of millions of pounds worth of "super-prime" property in London because of fears about the capital's overheating market.
  • The Independent: Goldman Sachs’ London posted a slump in profits as the dollar’s weakness and eurozone's difficulties hit the banking giant; profits at its arm in the capital operation slumped by almost two-thirds last year to $298 million (£177 million).
  • The Daily Telegraph: eBay announced that it lost $2.33 billion in the three months that ended 31 March.
  • The Daily Telegraph: Bahrain SWF Mumtalakat boosts Russian President Vladimir Putin with deal to co-operate on investments snubbing US sanctions.
  • Daily Express: Tesco steps up in online price wars to win the internet shopping battle.

Share tips, comment and bids

  • Financial Times: Bank of Beijing is aiming for what could be Hong Kong’s biggest initial public offering in nearly four years, as Chinese lenders brace for slower growth by bolstering their balance sheets.
  • Financial Times: Deutsche Bank is prepared to raise equity in the next two months if regulatory pressure worsens, as the lender faces fresh questions over its capital strength.
  • Financial Times: Rolls-Royce is close to reaching an agreement to sell part of its energy division to Siemens in a deal valued at up to £1 billion.
  • Financial Times: WH Group has pulled its planned $2 billion Hong Kong float after failing to attract sufficient demand, even though the Sino-US pork producer had already halved the size of the offering last week.
  • The Independent: Botox maker Allergan is considering a takeover of drugs firm Shire as the deals frenzy in the pharmaceuticals industry intensifies.
  • Financial Times (Lex): Gazprom: eastern promises.
  • Financial Times (Lex): EU stress tests: banking on capital.
  • Financial Times (Lex): Energy Future Holdings: Texas fold ’em.
  • Financial Times (Lex): Twitter: gut check.
  • Financial Times (Lex): Tax arbitrage: wag the dog.
  • Financial Times (Lex): Baidu: biding its time.
  • Financial Times (Comment): Bank tests proving relatively stress-free.

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Profile: Kevin Doran's formula for success at AJ Bell

Profile: Kevin Doran's formula for success at AJ Bell

From a degree in theoretical physics to teaching and becoming one of the youngest chief investment officers in the UK, Kevin Doran has certainly had an interesting career.

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