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View the article online at http://citywire.co.uk/wealth-manager/article/a743155

Thursday Papers: Fed rejects Citi’s dividend and share buyback plan

by Himanshu Singh on Mar 27, 2014 at 04:03

Thursday Papers: Fed rejects Citi’s dividend and share buyback plan

Top stories

  • Financial Times: The Federal Reserve rejected the capital plans of five large banks including Citigroup as part of its annual stress test, clearing Bank of America and Goldman Sachs only after they agreed to lower buyback and dividend proposals.
  • Financial Times: King’s stock price fell more than 15% on its debut in New York, making the Candy Crush Saga maker the largest new US listing to flop so spectacularly on its opening day in 20 years.
  • The Daily Telegraph: Former head of the City regulator has expessed worries that economic recovery is built on same factors that led to financial crisis.
  • The Guardian: SSE, the UK's second-largest energy provider, is to freeze gas and electricity prices for its 5 million customers until 2016, putting pressure on rivals to follow.
  • Financial Times: Hopes that insurers will be able to compensate for an expected collapse in lucrative annuity sales received a boost on Wednesday when two of the biggest companies in the sector secured the largest ever transfer of pension risks - £3.6 billion worth of defined-benefit pension liabilities of ICI.
  • Daily Mail: One of the UK's biggest pension companies, Legal and General, has said it expects the UK market for individual annuities to shrink by around three-quarters after 2015.

Business and economics

  • Financial Times: Amazon’s cloud computing business has received high-level security clearance from the Pentagon, paving the way for it to provide more services to the US government.
  • Financial Times: Mexico expects to put some deep water oilfields out to tender starting next year as it throws open its oil and gas exploration and production sector to private investment.
  • Financial Times: Bank of America agreed on Wednesday to a $9.5 billion settlement with a US housing regulator, as its former chief executive agreed in a separate case to a three-year ban from serving as an officer or director of a public company.
  • Financial Times: Lachlan Murdoch is back in the race to succeed his father, nine years after leaving Rupert Murdoch’s media empire, with a new role as non-executive co-chairman of News Corp and 21st Century Fox.
  • Financial Times: Pay settlements in manufacturing rose to 2.6% in the first quarter, compared with last year’s 2.4% average, in the latest sign that the squeeze on living standards is easing.
  • Financial Times: Divisions within Scotland’s financial community have burst into the open with a former Royal Bank of Scotland chief claiming independence would benefit the sector and accusing its trade body of lacking objectivity ahead of September’s referendum.
  • Financial Times: The World Trade Organisation has ruled against China and its export restrictions on rare minerals vital to the production of smartphones, cameras, steel and hybrid cars in a significant victory for the US, EU, and Japan.
  • Financial Times: Rio Tinto’s expansion of the vast Oyu Tolgoi copper mine could be further delayed because a deadline to secure project finance may be missed, according to the company that owns the Mongolian project.
  • Financial Times: The government was forced to accept a greater discount on its Lloyds shares than when it first sold a stake last September due to recent volatility in equity markets – amid concerns over the crisis in Ukraine, the Chinese economy and US interest rates.
  • Financial Times: Finma has appointed the former UBS banker Mark Branson as its new chief executive, making him the first non-Swiss head of Switzerland’s financial watchdog.
  • Financial Times: Trumpf, one of Germany’s best known Mittelstand companies, said it had set up its own bank that will provide a broad range of financial services, including sales financing, lending and finance for start-ups.
  • Financial Times: Tui Travel reported flat summer bookings but said it was pleased with trading, pointing to strong demand from UK and German holidaymakers and an uptick in average prices.
  • Financial Times: Canadian smartphone maker BlackBerry successfully sued one of its leading executives this month, stopping him moving to rival Apple until his six months’ notice period expires in June.
  • Financial Times: Chinese investment conglomerate Citic Group, whose businesses span property, mining, energy, banking and a soccer team, plans a massive restructuring that will allow it to tap more overseas capital for its sprawling empire.
  • Financial Times: Hyundai Motor has announced plans to build a new factory in China, signalling a return to capacity expansion after a two-year pause while it addressed quality worries, and sending its shares up 4.5%.
  • Financial Times: The diverging fortunes of Asia-Pacific’s dairy groups came into the spotlight on Wednesday when New Zealand’s Fonterra reported a halving in first-half profits, while China Mengniu Dairy said 2013 profit jumped by a quarter year-on-year.
  • Financial Times: Louis Dreyfus Commodities, one of the world’s largest food trading houses, has reported a sharp drop in annual profits, weighed down by weakness in several of its key markets including sugar.
  • Financial Times: EnQuest, the UK-focused oil group behind one of the largest pending projects in the North Sea, is to raise an additional $500 million in debt to help finance its aggressive investment plans in UK waters.
  • Financial Times: Shares in Lamprell were down more than 6% on Wednesday in spite of a return to full-year profits as the oil rig maker warned that revenues would fall this year and next.
  • Financial Times: Shares in Cenkos Securities rose 9% after the small-cap broker posted a 50% rise in pre-tax profits, citing a resurgence of investor confidence in equity markets – and small companies in particular.
  • Financial Times: Carpetright has issued its third profit warning in less than six months after the recovery in the UK’s housing market failed to lift sluggish sales at the carpet retailer.
  • Financial Times: The UK has stepped up its efforts to attract Chinese investment by agreeing with Beijing to create a renminbi clearing bank in London.
  • The Daily Telegraph: IMF to unveil $15 billion aid package for Ukraine as US warns sanctions will also have "impact on the global economy”.
  • The Independent: Microsoft is to launch a new video advertising service in Britain as it seeks to grab a share of the market that is dominated by Google’s YouTube.
  • The Independent: The big six energy suppliers face the prospect of being broken up when the regulator announces a shake-up of the industry today.
  • The Guardian: The pace of recovery in Britain slowed to an eight-month low in March, according to business lobby group the CBI, but the outlook was brightened by predictions from other organisations of rising pay across the UK economy.
  • The Guardian: The online lender Wonga is testing out new loans repaid over a six-month period, and has dropped a service that allowed consumers to pay for goods from online retailers using credit.
  • The Guardian: The discovery of two significant offshore deposits, and prospects for fracking in many areas, have triggered a black-gold rush in Spain, with demand for exploration permits up 35% since 2012.
  • Daily Mail: Lloyd's of London has said it expects to escape unscathed from the recent storms and flooding in the UK as it notched up a £3.2 billion profit for last year.
  • Daily Mail: Levi Strauss is slashing 800 jobs in an attempt to trim its costs.
  • The Daily Telegraph: Banking experts at KPMG have warned the Treasury is likely to fall far short of its aim to raise £2.5 billion from the banking industry levy because of shrinking balance sheets.
  • The Daily Telegraph: BG Group wins gas exploration deal in Myanmar.

Share tips, comment and bids

  • Financial Times: Bertelsmann, Europe’s largest media company by revenues, is planning to spend €3 billion on acquisitions as it looks to revive flagging growth.
  • Financial Times: A little-noticed Gazprom deal to take over one of Europe’s largest gas storage facilities is attracting fresh scrutiny in Germany amid a deepening stand-off with Russia over its aggressive moves against Ukraine.
  • Financial Times: Tencent, the Chinese internet company, has stepped up its acquisition spree focused on the transition to the mobile web by taking a 28% stake in South Korean games maker CJ Games.
  • Financial Times: Phoenix Group is poised to make new acquisitions after its £390 million disposal of its asset management arm to Standard Life Investments.
  • Financial Times (Lex): 21st Century Fox: Murdochs tighten their grip on the media company.
  • Financial Times (Lex): Bumi: the infighting has ended, leaving everyone involved to lick their wounds.
  • Financial Times (Lex): Fonterra: looking past poor numbers to longer-term dairy demand.
  • Financial Times (Lex): Tour operators: cash-strapped consumers have tended to prioritise holidays.
  • Financial Times (Lex): Citigroup: Fed vetoes bank’s planned payout for second time in three years.
  • Financial Times (Lex): MBIA: bond insurance is unlikely to regain the dominance it once had.
  • Financial Times (Comments): Candy Crush fall fits the broad pattern of the past month.

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