Yahoo Finance What to watch: TSB's future in question, Daily Mirror-owner pops, and AstraZeneca shares under pressure
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
TSB's future in question
TSB’s Spanish owner has sparked speculation that the challenger bank could be put up for sale after saying it was considering its options.
Sabadell Bank (SAB.MC), which owns TSB, on Friday scrapped merger talks with local rival BBVA (BBVA.MC) after the pair failed to agree on a price. Talks had begun two weeks ago.
In a statement, Sabadell said it would instead focus on “a new strategy that will prioritise its Spanish domestic business”. Part of the plan will involve looking at “strategic alternatives for creating shareholder value with regard to the group's international assets, including TSB.” Sabadell bought TSB for £1.7bn in 2015.
Sabadell said it would publish more details of its plans early next year. However, the new focus on the domestic market and drive to create “shareholder value” from its international assets is sure to lead to speculation that TSB could be sold or spun out.
Shares in Sabadell fell 13% in Madrid on news of the failed merger talks. Shares in BBVA rose 2%.
Daily Mirror-owner pops
Reach (RCH.L), the owner of the Daily Mirror newspaper, received a boost on Friday after it revealed its performance had exceeded expectations.
The group, formerly known as Trinity Mirror, saw digital revenue growth of 16.2% for the five months to 22 November, with circulation sales for its range of national and local titles “resilient” despite lockdown restrictions.
The publisher cited increased customer engagement and cross-promotions as main reasons for growth. Customer registrations exceeded 4.25m and the company said it was on track to deliver the 10m registrations it is targeting by the end of 2022.
The news sent shares as much as 5% higher in early trade.
AstraZeneca shares under pressure
AstraZeneca (AZN.L) shares continued to slide on Friday as its CEO Pascal Soriot announced that the UK-based pharmaceutical giant is likely to launch a new global trial to test its coronavirus vaccine at a lower dosage.
For the fifth consecutive trading session, AstraZeneca shares fell — this time by over 1% in the opening trading hour, as the UK government also confirmed on Friday that a medical watchdog is now weighing up whether to sign off the jab with Oxford University for a rollout.
The potential new trial comes after the surprise discovery that the vaccine was more effective in trial participants who received a dose and a half-dose, when they were supposed to receive two.
Trials in Brazil and the UK showed a 90% effectiveness rate, compared to a 62% rate for those who received two doses. But AstraZeneca did not initially acknowledge the different dosages were an error, sparking greater scrutiny of the results.
FTSE 100 underperforms
The UK’s blue chip stock market opened lower on Friday, with analysts pointing to growing concern in the market about the COVID-19 pandemic and the future path of vaccines.
The FTSE 100 (^FTSE) was down 0.5% shortly after the open, underperforming compared to European peers. The DAX (^GDAXI) was up 0.3% in Frankfurt and the CAC 40 (^FCHI) was up 0.4% in Paris.
In the UK, prime minister Boris Johnson on Thursday England’s current lockdown would end on 2 December but said strict restrictions would replace it across much of the country. The chief executive of pub chain JD Wetherspoon (JDW.L) accused the government of introducing a “stealth” lockdown.
Stock markets in New York were closed on Thursday for Thanksgiving and will operate reduced hours on Friday. S&P 500 (ES=F) and Dow (YM=F) futures were flat ahead of the open. Nasdaq futures (NQ=F) were up 0.4%.
Asian markets rose overnight. The Hong Kong Hang Seng (^HSI) and Japan’s Nikkei (^N225) both gained 0.4%, while the Shanghai Composite (000001.SS) in China rose 1.1% and the Shenzen Component (399001.SZ) gained 0.7%. South Korea’s KOSPI (^KS11) rose 0.3%.
Pound in focus as Brexit talks go down to the wire
Sterling held near a three-month high against the dollar on Friday, as investors remained focused on Brexit trade talks.
Sterling was flat against the euro (GBPEUR=X) at €1.1209 on Friday morning and up just 0.1% against the dollar (GBPUSD=X) to $1.3369. The performance against the dollar was largely down to weakness of the greenback.
Trade talks between the UK and EU continue, with little sign of a breakthrough on key issues and few statements of much note.
The EU’s chief Brexit negotiator Michel Barnier tweeted on Friday morning that he would travel to London later today to resume face-to-face talks. However, he warned that the “same significant divergences persist.”
Barnier will brief EU leaders and the European parliament on the progress of negotiations before he travels to London. Reports suggest he has called an emergency meeting of EU leaders on fisheries, one of the key sticking points in talks.
Oil rally ends
The oil price rally earlier in the week stalled on Friday amid oversupply concerns and doubts over a COVID-19 vaccine.
Crude futures (CL=F) is down nearly 1%, while Brent futures (BZ=F) is down 1.2% at $47.41 (£35.48) per barrel at around 8.30am in London.
Rising Libyan oil production contributed to worries about oversupply in the market, while doubts about AstraZeneca’s vaccine didn’t help.
“With much of oil’s rally in November built on expectation, sentiment and speculative fast money, some sort of correction was long overdue,” said Jeffrey Halley, senior market analyst at OANDA.
“A thin market and the OPEC+ ministers meeting on Monday seem to have been the precursors for traders to lighten bullish positioning.”
Additional reporting by Tom Belger, LaToya Harding and Suban Abdulla.
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