BARC.L - Barclays PLC
| Previous close | 166.44 |
| Open | 165.54 |
| Bid | 171.26 x 0 |
| Ask | 171.32 x 0 |
| Day's range | 164.00 - 172.04 |
| 52-week range | 131.04 - 176.76 |
| Volume | 49,050,485 |
| Avg. volume | 51,036,787 |
| Market cap | 29.645B |
| Beta (3Y monthly) | 0.81 |
| PE ratio (TTM) | 16.99 |
| EPS (TTM) | 10.10 |
| Earnings date | 25 Oct 2019 |
| Forward dividend & yield | 0.07 (4.21%) |
| Ex-dividend date | 2019-08-08 |
| 1y target est | 221.84 |
- Bloomberg
Markets Take the Under on Trump’s Economic Speech
(Bloomberg Opinion) -- The global stock market drifted lower on Monday, posting its biggest decline in more than three weeks. Yes, there’s still plenty of time for equities to recover and gain for a sixth consecutive week, which would match their longest winning streak since they advanced for 10 consecutive weeks over the course of late 2017 and early 2018. But doing so may hinge on a critical event Tuesday. Even with the modest decline, the MSCI All-Country World Index is still up 19% this year. The surge in recent weeks is due largely to optimism that the U.S. and China are close to reaching an agreement on “phase one” of a broad trade deal. It doesn’t matter that the details are likely to be modest; what matters is that it would signal that the trade war isn’t worsening. That’s why President Donald Trump’s address to the Economic Club of New York on Tuesday is so critical. No one is quite sure which Trump will show up. Will it be the one who in recent weeks has trumpeted progress in trade talks, or will it be the one who has said that the U.S. hasn’t agreed to a rollback of tariffs on China, which is what the markets truly want? This is no small matter for investors. Various surveys have shown that trade uncertainty is the primary risk facing markets. In that sense, whatever Trump says on Tuesday has the potential to either ratify the rally or bolster the case that it’s built on little more than hope. And as everyone in markets learns on their first day in the business, hope isn’t a strategy. “Markets have been skittish waiting for any concrete information about the trade talks,” Matt Forester, the chief investment officer at BNY Mellon’s Lockwood Advisors, told Bloomberg News. At 15 times forecast earnings for the following year, the MSCI is trading at its most expensive level since the start of 2018.Trump’s talk is not the only big event for markets this week. Federal Reserve Chairman Jerome Powell will address the Joint Economic Committee of Congress on Wednesday, the same day as the start of public impeachment hearings against Trump. The U.S. Labor Department will also provide an update on inflation for October. The week ends with data on U.S. retail sales for October, which economists hope will be a reversal from September’s big miss to the downside. But as already stated, hope has no place in markets.THE BOND GAME ISN’T OVER YETThe bad news for the bond market is that November isn’t even halfway over and it’s already the worst month for fixed-income investors since April 2018, with the Bloomberg Barclays Global Aggregate Index down 1.40% as of Friday. The good news is that there’s plenty of time for the bond market to rebound. And just as with the stock market, Trump’s appearance at Economic Club of New York — along with Powell’s testimony — may determine whether the recent sell-off in fixed-income assets is overdone. That’s the short-run prognosis. In a nod to John Maynard Keynes, bonds are dead in the long run anyway. Well, at least according to Moody’s Investors Service they are. The credit ratings company put out a research report Monday saying the rising tide of populism spreading round the world has caused it to turn “negative” on global sovereign credit for 2020. Unpredictable domestic and geopolitical risks along with a push for populist policies that weaken institutions, help slow growth and boost the risk of economic and financial shocks means governments will struggle to address credit challenges, Moody’s wrote. That’s scary, but the major ratings companies aren’t known for their astute political science observations. Yields on 10-year Treasury notes are lower now than when S&P Global Ratings stripped the U.S. of its AAA rating in August 2011.GO BIG OR GO HOMEThe thing about bond sell-offs in recent years is that have tended to be short-lived, thanks largely to central banks. The collective balance sheet assets of the Fed, European Central Bank, Bank of Japan and Bank of England rose to 35.7% of their countries’ total gross domestic product in October from about 10% before the financial crisis, according to data compiled by Bloomberg. And judging by some of the latest moves made by the ECB, bond traders can be a little less worried about a lack of buyers. The ECB started its second round of corporate bond purchases by acquiring in a week an amount that analysts expected it to buy in a month, according to Bloomberg News’s Tasos Vossos. The central bank bought almost 2.8 billion euros ($3 billion) of company debt securities in the week to Nov. 8, according to data released Monday. It was the second-largest weekly purchase figure since the ECB first adopted the strategy, known as quantitative easing, in June 2016. The bank suspended the program last December and restarted it at the beginning of this month as growth flagged across the euro area. It’s unknown whether the faster pace of purchases is in response to the big drop in bond prices and corresponding jump in yields, but it should be comforting to know that the ECB is doing its part to stem the weakness.CHILE GIVES INIt’s becoming routine to see the Chilean peso leading the list of biggest losers in the foreign-exchange market on any given day, and Monday was no exception. The peso weakened 1.72% to a record low, bringing its depreciation since Oct. 18 to 6.39%. To put that into context, the next biggest loser among the 31 major currencies tracked by Bloomberg, the Argentine peso, has dropped just 2.48%. It’s well known by now that the populist movement that Moody’s warned about on Monday has erupted in Chile, where a wave of protests has disrupted the economy and government. The latest move lower in the peso came as the administration of President Sebastian Pinera said it would overhaul the constitution drawn up during the dictatorship of Augusto Pinochet to calm three weeks of mass protests. So why did the peso and Chile’s equity market, which fell 1.52%, take it so harshly? Many people regard the constitution, drawn up under the dictatorship of Pinochet, as the foundation of an economic system that privatized pensions and much of health care and education, a chief grievance of protesters, according to Bloomberg News’s Javiera Baeza and Eduardo Thomson. It also enshrined the strict legal safeguards to private property that are behind Chile’s water privatization, a controversial subject in a country struggling with severe droughts.NATURAL GAS STUMBLESThe natural gas market cares little about trade wars or populism. To traders there, it’s all about the weather. Natural gas futures slid the most since January as forecasts showed that a cold snap descending on the U.S. would peter out by the end of the month, curbing demand at the time of year when consumption of the heating gas usually surges, according to Bloomberg News’s Christine Buurma and Naureen S. Malik. Gas was the worst-performing major commodity Monday, tumbling as much as 6.1%. Temperatures will probably be mostly normal in the eastern half of the country Nov. 21 through Nov. 25 as an autumn chill fades, according to Commodity Weather Group LLC. Beyond the weather, the slide in natural gas underscores how record production from shale basins continues to weigh on the market even as exports soar and the power industry becomes more reliant on the fuel. Without a sustained Arctic chill this winter, stockpiles will remain above normal for the time of year, pressuring prices lower, according to Buurma and Malik. As they point out, hedge funds are adding to the bearish momentum, holding the largest short position since 2015 for the time of year.TEA LEAVESWhen the National Federation of Independent Business said a month ago that its small-business sentiment index for September fell to near the lowest level of Trump’s presidency, it noted that the part of the gauge measuring “uncertainty” plunged to its lowest since February 2016. “More owners are unable to make a statement confidently, good or bad, about the future of economic conditions,” the group said, with 30% of respondents reporting “negative effects” from tariffs. Don’t expect much improvement when the group provides an update on Tuesday. The median estimate of economists surveyed by Bloomberg is for a reading of 102 for October, little changed from 101.8 in September. Bloomberg Economics points out that small-business activity has been moderating since the last report. Most notably, the ADP private employment survey indicated recently that net hiring has shrunk to half the pace that prevailed last year, to the slowest since 2011.DON’T MISS Buying Stocks at Records Works Until It Doesn’t: Robert Burgess Investors’ Global Turn Depends on Policy Hopes: Mohamed El-Erian Delaying the IPO Process Weakens Capitalism: Stacey Cunningham U.S. Economy Has Recovered, But Labor Market Hasn’t: Karl Smith The 2020 Economy Should Feel a Lot Better Than 2019: Conor SenTo contact the author of this story: Robert Burgess at bburgess@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Yahoo Finance UK
Challenger bank Starling tops 1m accounts
The app-only challenger bank passed the milestone on Monday.
- Reuters - UK Focus
UPDATE 2-Defensive stocks help European shares end flat, London lags
Demand for defensive stocks helped European shares recover from early losses on Monday as investors grappled with issues ranging from violent Hong Kong protests to an inconclusive Spanish election and weak data from China. After falling nearly 0.5% at one point, the pan-European STOXX 600 index closed flat, helped by a turnaround in bank shares and gains for sectors considered safer bets during times of economic uncertainty, such as food and beverage and real estate. London's FTSE 100 led declines among the major regional indexes with a 0.4% drop, while stocks in Frankfurt fell 0.2% and Paris rose 0.1%.
- Fool.co.uk
Needing early Christmas present ideas? Here is a stock I’d be buying for myself
Treating yourself to a present in the form of Barclays share price is not a bad idea, says Jonathan Smith.
- Bloomberg
Global Bond Sell-Off Persuades Some Investors to Buy the Dip
(Bloomberg) -- Recent losses in Treasuries, which crescendoed Thursday into one of the worst days since Donald Trump was elected president, look like a buying opportunity for many investors who have a grim view of the economy’s prospects.And it appears some are pouncing, with traders cashing out bearish wagers and buy-the-dip buyers rushing in. The rekindled interest in the safety of bonds nudged yields on the 10-year, which had climbed to a three-month high of 1.97% on Thursday, down to as low as 1.89% in early European trading Friday before bouncing back to around 1.94%. European bonds rebounded after French and Belgian yields had climbed above 0% Thursday.Signs of progress in U.S.-China trade talks have thrashed bonds for days, and the two countries agreed Thursday to roll back tariffs on each other’s goods if a deal is reached. The Treasury market has seen a huge turnaround since August, when fears that global growth is slowing prompted the biggest monthly rally since 2008.“Sentiment factors have shifted the needle quite quickly from, ‘Oh, it’s the end of the world,’ to ‘Wow, there are no problems,’ and that’s a massive overreaction,” Aberdeen Asset Management’s James Athey said in an interview this week with Bloomberg Television. The sell-off has “absolutely, without question” created a buying opportunity, particularly if the 10-year yield hits 2%, he said.The U.S. is the most attractive government-bond market to own, given that the dollar remains the world’s reserve currency and the Federal Reserve has the most room to cut rates before it gets to zero, “if you believe like I do that we’re headed to a recession,” Athey said.Athey was joined by Barclays Plc, which recommended investors enter long positions in five-year Treasuries, and JPMorgan, who said traders should bank the profits made by shorting their three-year counterparts.Money manager Raymond Lee at Kapstream Capital also expects the sell-off to be contained, saying there’s value in developed markets with positive bond yields such as the U.S.“I don’t expect to see two or three years of rates backing up in a sustained way,” he said in an interview in Singapore. “Yields may bounce around on headlines a bit, but inflation is still contained and rates are likely to stay low.”Option TradersFor some Treasury options traders, the sell-off was reason to scoop up profits on lucrative one-week bets that called the recent climb in yields. The trades were struck last week when the 10-year yield was around 1.70% and netted a profit of more than $40 million as the level breached 1.90% on Thursday.Diminished appetite for government debt is pushing the 10-year yield toward 2%, a level it hasn’t surpassed since Aug. 1. It’s also sent yields on French and Belgian 10-year securities above zero for the first time in months.Some are suggesting the sell-off hasn’t gone far enough. Bond valuations “still look rich,” particularly in Europe where negative yields are pervasive, said Scott Thiel, chief fixed-income strategist for BlackRock Investment Institute.As Athey sees it, trade policy wasn’t the biggest factor behind broader worldwide weakness in the past 12 to 18 months. Instead, China is undergoing a secular shift in the pace and make up of its growth that leaves the country “less impactful” on the global economy. There’s “really not much left in the engine of global economic growth at this stage,” he said.(Updates yield levels.)\--With assistance from Ruth Carson and John Ainger.To contact the reporters on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net;Edward Bolingbroke in New York at ebolingbrok1@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Nick Baker, Boris KorbyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
UPDATE 2-StanChart bows to investor ire by cutting pension of CEO Winters
Standard Chartered joined some of its British rivals in cutting its chief executive's pension allowance on Friday after protests from shareholders, putting pressure on other banks such as Lloyds to follow suit. Standard Chartered said its CEO Bill Winters and Chief Financial Officer Andy Halford had agreed to have their pension allowances cut to 10% from 20% of their salary from January, putting them in line with the rest of its workforce in Britain. The bank's definition of 'total salary' includes both base salary and a fixed pay allowance paid in shares.
- Bloomberg
U.S. Yields Soar to Three-Month High as Bets on Fed Cuts Slashed
(Bloomberg) -- Treasuries tumbled Thursday as optimism about the prospect of a trade deal dented demand for bonds globally and led investors to trim bets on further Federal Reserve rate cuts.Signs of progress in U.S.-China trade talks helped push the 10-year Treasury yield up as much as 14 basis points, at one stage putting it on track for its biggest daily jump since Nov. 9, 2016. The yield reached 1.97%, a level unseen since early August, before paring its climb to around 1.92%. The 30-year rate topped 2.44%, also a three-month high, as the government auctioned $19 billion of the maturity.At the short-end, traders now doubt that the Fed will ease again at any point in the next two years. Policy makers have been signaling a pause after cutting rates for the third straight meeting in October, but traders had still been factoring some degree of easing as trade friction festered.Now, with apparent relief on that front, “we have a big shift in the 2020 outlook,” said Tom Simons, a money-market economist at Jefferies. “Long-end yields are blowing up, but look at fed funds futures too -- cuts aren’t in the picture any more.”In Europe, rates on benchmark 10-year French and Belgian securities climbed back above 0% for the first time in months, while globally the stock of bonds with sub-zero yields has shrunk to around $12.5 trillion, from about $17 trillion in August.The current mood is a stark contrast to a few months ago, when investors were willing to accept negative yields to insulate their portfolios from the economic harm of the trade war.With yield curves steepening of late, the market is signaling optimism that progress on the trade front and this year’s Fed rate cuts may have helped stave off a U.S. recession.The cheerier economic outlook is a threat to the Treasury market’s top-performing trade. U.S. government debt due in a decade or more has returned about 16% this year through Nov. 6, on pace for its biggest annual gain since 2014, according to a Bloomberg Barclays index. But the performance is now faltering, with the measure extending declines to a third straight month.\--With assistance from Tasos Vossos, James Hirai and Benjamin Purvis.To contact the reporters on this story: John Ainger in London at jainger@bloomberg.net;Katherine Greifeld in New York at kgreifeld@bloomberg.net;Vivien Lou Chen in San Francisco at vchen1@bloomberg.netTo contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, William Shaw, Mark TannenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
UPDATE 1-Banks, funds propose shorter trading day in Europe, bourses split
Banks and fund managers want the European stock trading day shortened by 90 minutes in a radical move they say would improve market efficiency and staff wellbeing - but exchanges are split. The Association for Financial Markets in Europe (AFME), a banking industry body, and UK-based Investment Association (IA), which represents asset managers, said Europe had some of the longest trading hours in the world at 8-1/2 hours.
- Bloomberg
Lebanon Warned on Default and Recession as Its Reserves Decline
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Pocket Cast or iTunes.Lebanon received some of the starkest warnings yet that a default and a deeper recession are increasingly a possibility as protests rock the nation.Moody’s Investors Service on Tuesday downgraded Lebanon deeper into junk for a second time this year, reflecting “the increased likelihood” of what may constitute a default under its definition. The World Bank, which earlier projected a small recession in 2019, now expects it “to be even more significant due to increasing economic and financial pressures.”Lebanon is in dire financial straits just as it succumbs to political paralysis and protests grip the country for a third week. The outcry already prompted the resignation last month of Prime Minister Saad Hariri. But the president has yet to set a date for the start of binding parliamentary consultations to name a new premier, raising concerns the country will be unable to implement measures urgently needed to avert economic meltdown.“The politics has the most attention, but economy has the most risks,” Saroj Kumar Jha, the World Bank’s regional director, said after a meeting with Lebanese President Michel Aoun on Wednesday. “With every passing day, the situation is becoming more acute and this would make recovery extremely challenging.”Lebanon has never defaulted on its obligations despite straining under one of the world’s biggest debt burdens, but the country has seen its credit risk soar as confidence crumbles in the government’s ability to cope with distress.Investors have turned away from Lebanon’s debt despite a package of emergency measures rolled out in October. Its Eurobonds are the world’s worst performers this year after those of Argentina. Their average yield has doubled to 21% since the start of 2019, according to a Bloomberg Barclays index.The nation’s currency peg, in place for more than two decades, is also coming under pressure as local businesses struggle to access dollars from banks at the official rate. After reopening last Friday following two weeks of closures, banks tightened informal restrictions on money transfers that were in place prior to the unrest, in an effort to curtail capital flight.Moody’s lowered Lebanon’s credit rating one level to Caa2 -- the fourth-lowest junk grade -- and said it remains on review for downgrade. Lebanon’s central bank retains a “usable foreign exchange buffer” of only about $5 billion to $10 billion, according to Moody’s. Just over a month ago, the rating company said its usable holdings were no less than $6 billion.Without new net inflows, the stockpile is now likely to be depleted by the government’s looming payments on external debt, estimated at $6.5 billion this year and next, Moody’s said.In an effort to boost liquidity and stave off possible downgrades, Lebanon’s central bank this week instructed local lenders to raise their capital by 20% by next June.Earlier, it also agreed to slash $2.9 billion in interest payments on its holdings of local currency-denominated government debt by waiving coupon payments. The proposal was part of a sweeping package of reforms that aimed to lower the budget deficit to 0.6% of gross domestic productProtesters are meanwhile keeping up the pressure on government officials as students led the demonstrations Wednesday, especially in the capital and outside state entities including the Education Ministry, the Judicial Palace and the electricity company. Thousands have been on the streets, demanding the resignation of a political class that they say has left the country on the verge of bankruptcy.The World Bank warned of the steep cost the crisis could inflict, saying poverty could rise to 50% should there be no immediate solution and if the economic predicament worsens. A third of the Lebanese were estimated to have been in poverty in 2018.“In the absence of rapid and significant policy change, a rapidly deteriorating balance of payments and deposit outflows will bring GDP growth to or below zero, further stoking social discontent, undermining debt sustainability and increasingly threatening the viability of the peg,” Moody’s analyst Elisa Parisi-Capone said.\--With assistance from Paul Wallace and Dana El Baltaji.To contact the reporters on this story: Justin Villamil in Mexico City at jvillamil18@bloomberg.net;Dana Khraiche in Beirut at dkhraiche@bloomberg.netTo contact the editors responsible for this story: Carolina Wilson at cwilson166@bloomberg.net, Paul Abelsky, Amy TeibelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Fool.co.uk
Could the Barclays (BARC) share price and the FTSE 100 help you retire a millionaire?
Investors could make a million with the Barclays share price and the FTSE 100 if they have a long-term investment horizon, believes Rupert Hargreaves.
- Reuters - UK Focus
UPDATE 2-SocGen balance sheet progress lifts shares, outweighs trading weakness
France's Societe Generale raised its capital ratio on Wednesday, giving its shares a lift despite a profit fall and some parts of its trading business lagging rival banks. SocGen shares were up 5% to 28.3 euros at 1102 GMT, making the bank's stock one of the top performers on France's CAC40 index, as investors focused on progress in areas such as the balance sheet. "We have achieved results very much in line with our objectives and priorities," Chief Executive Frederic Oudea said in a statement as SocGen said its common-equity tier-one ratio rose to 12.5% at the end of September.
- Simply Wall St.
Why Barclays PLC's (LON:BARC) High P/E Ratio Isn't Necessarily A Bad Thing
Today, we'll introduce the concept of the P/E ratio for those who are learning about investing. We'll look at Barclays...
- Bloomberg
Barclays Faces SEC Probe Into Sales of Property-Backed Bonds
(Bloomberg) -- U.S. regulators are investigating whether Barclays Plc violated securities laws after a former trader at the firm raised concerns about its marketing practices for certain bonds, according to legal filings.From September 2018 until this June, Barclays provided documents to the Securities and Exchange Commission in response to the agency’s probe, according to legal paperwork seen by Bloomberg News. The examination is preliminary and may not lead to any allegations of wrongdoing, said a person with knowledge of the matter who asked not to be named because the SEC review isn’t public.A Barclays spokesman in New York and an SEC spokeswoman declined to comment.The bank has previously attracted scrutiny from U.S. authorities over the way it sold bonds. Its role in selling securities backed by residential mortgages in the run-up to the financial crisis led to a $2 billion settlement with the Justice Department last year.The latest probe, involving bonds backed by commercial property sold in 2018, started after a complaint from a Barclays trader who was later fired from the bank. In a lawsuit filed in U.S. federal court in April over his termination, Brian La Belle, the former head of commercial real estate trading and distribution, alleged that the lender aggressively marketed a deal for bonds backed by hotels in a way that “could amount to securities fraud.”‘Improperly Altered’At Barclays, La Belle “witnessed a culture in which basic risk management and risk controls were flagrantly disregarded” and “serious compliance issues were ignored,” according to the lawsuit.According to legal filings, La Belle’s colleagues ignored his misgivings and feedback from potential investors that the debt load for an unnamed client was too large. He raised concerns that an independent report on the cost of upgrading hotels tied to the loan in 2018 “may have been improperly altered” following pressure from the bank to make the financing deal appear less risky, according to the lawsuit.La Belle defied the wishes of Barclays bankers and shared his views with investors, one of whom said the deal was “complete garbage,” according to his submissions to the court. The bank ultimately went ahead with the transaction.After raising the issues with Barclays, La Belle made complaints to several authorities including the SEC, legal documents show. La Belle was fired in August 2018 and is seeking $10 million in lost pay, arguing that his termination was a result of his whistle-blowing.Barclays has expanded its asset-backed offering under Chief Executive Officer Jes Staley, who has led the firm since 2015. The bank has recently assembled a team of over 140 to sell more securitized products, according to reports.(Adds date of deal in 5th paragraph and background on Barclays strategy in final paragraph.)To contact the reporters on this story: Stefania Spezzati in London at sspezzati@bloomberg.net;Matt Robinson in New York at mrobinson55@bloomberg.netTo contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Marion Dakers, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Alarms Still Blare on Triple-B Bonds, But No One Cares
(Bloomberg Opinion) -- In the bond market, it can sometimes feel as if the more things change, the more they stay the same.Consider the following two articles about the massive amount of triple-B rated corporate debt:“A $1 Trillion Powder Keg Threatens the Corporate Bond Market” by Bloomberg News. The takeaway: “A lot of these companies might be rated junk already if not for leniency from credit raters. To avoid tipping over the edge now, they will have to deliver on lofty promises to cut costs and pay down borrowings quickly, before the easy money ends.”“Bond Ratings Firms Go Easy on Some Heavily Indebted Companies” by the Wall Street Journal. The takeaway: “Amid an epic corporate borrowing spree, ratings firms have given leeway to other big borrowers. … The buildup has fueled one of the most divisive debates on Wall Street: Will higher debt loads cause big losses when the economy turns?”The first one is from October 2018 and the second from a couple of weeks ago. That alone isn’t what’s most interesting — financial-market themes tend to repeat themselves, after all. Rather, it’s the fact that market appetite for those bonds on the brink of junk couldn’t be any more different between then and now, even though it’s clear that fears about ratings inflation and a huge wave of downgrades haven’t gone away.Around this time last year, Scott Minerd, global chief investment officer at Guggenheim Partners, made headlines by tweeting that “the slide and collapse in investment grade credit has begun,” starting with General Electric Co. No one seemed to want to own bonds rated just a step or two above junk — the Bloomberg Barclays triple-B corporate-bond index trailed the broad market in 2018 for just the second time since the financial crisis. I was willing to be contrarian after his comments, writing that investors shouldn’t fear a doomsday that everyone seems to think is coming.Still, the rapid change in sentiment through the first 10 months of 2019 has been nothing short of astounding. While there were signs of the tide starting to turn earlier this year, triple-B bonds have now returned 14.4% through Oct. 30, better than any other rating category. If the gains hold through the end of the year, it would be the triple-B market’s strongest performance since 2009, when it bounced back from its worst annual loss on record amid the financial crisis. Investors have either made peace with the risk of mass downgrades when the credit cycle turns, or they’ve just decided to ignore it and reach for yield when the Federal Reserve is cutting interest rates. Neither seems to be sustainable.It’s not as if the Wall Street Journal’s recent article is an outlier — CreditSights said in an Oct. 30 report that about $70 billion of triple-B corporate debt is at risk of falling to junk within the next 12 months, including household names like Kraft Heinz Co., Macy’s Inc. and Ford Motor Co. It’s not a question of whether so-called fallen angels become more prevalent, according to the analysts, it’s “when and how fast.”As for the “debt diet” that was supposed to happen this year, which would make triple-B companies less leveraged? In the aggregate, it’s been exactly the opposite. Fitch Ratings, in an Oct. 31 report, noted that triple-B corporate issuance is on pace to reach a record in 2019 after accounting for almost two-thirds of the $515 billion in bonds sold through the first nine months of the year. Triple-B securities make up half of the $5.8 trillion investment-grade corporate bond market, Bloomberg Barclays data show.But perhaps the most telltale sign of just how little investors seem to mind the “ratings cliff” between investment- and speculative-grade is how they’re gobbling up double-B bonds just as voraciously as triple-Bs. In fact, on Oct. 28, the spread between the two dropped to 43 basis points, a new low, according to Bloomberg Barclays data. At the start of 2019, it was as high as 172 basis points. Even though triple-B corporate bonds are having their best year in a decade, double-B debt isn’t far behind. This trend isn’t going to end overnight. Investors poured $2.3 billion into investment-grade bond funds in the week through Oct. 30, and an additional $940 million into high-yield funds, according to Lipper data. The sub-2% yield on 10-year Treasuries is probably still causing sticker shock to some investors, given that until a few months ago it hadn’t breached that level since President Donald Trump’s November 2016 election. For those in Japan and Europe, buying U.S. corporate bonds rather than Treasuries is sometimes the only way to avoid negative currency-hedged yields. Global and structural forces keep investors slamming the buy button in credit markets.Eventually, though, something has to give, as it always does. For now, corporate-debt buyers are content to just avoid triple-C rated securities. That includes Guggenheim investors led by Minerd, who said in a note this week that “now is not the right time” to add the riskiest junk debt, given the downside potential of more than 20%.The reasoning makes sense — triple-C rated companies are the most prone to default in an economic downturn. But in such a slump, triple-B companies would be vulnerable to downgrades. If investors were so sure last year that rating cuts would be too much for the high-yield market to bear, why wouldn’t they also stay away from triple-B bonds at this point?There’s no obvious answer. It’s just a reminder that total returns aren’t everything. Even though triple-B securities are the belle of the ball in credit markets this year, nothing much has truly changed.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
EM Review: Fed’s Rate Cut, Trade Hopes Ignited Relief Rallies
(Bloomberg) -- Emerging-market stocks rose for a fourth straight week last week and posted the best monthly advance since June, as the Federal Reserve confirmed investors’ expectations of a third-straight interest rate cut. While the U.S. central bank signaled a pause in further easing, appetite for higher yielding assets remained in place as signs of progress in the U.S. and China trade talks left investors more comfortable with taking risk. Developing-nation currencies strengthened for a fifth straight week.The following is a roundup of emerging-markets news and highlights for the week ending Nov. 3.Read here our emerging-market weekly preview, and listen to our weekly podcast here.Highlights:Federal Reserve officials reduced interest rates by a quarter-percentage point for the third time this year and signaled a pause in further cuts unless the economic outlook changes materiallyU.S. consumer spending trailed forecasts in September while weekly applications for unemployment benefits rose more than projected, offering a note of caution on the economyMeanwhile, U.S. hiring was unexpectedly resilient in October and prior months saw sharp upward revisions, validating the Fed’s signal of a pause from interest-rate cutsChina and the U.S. had a constructive conversation and achieved “consensus in principle” in a phone call between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven MnuchinEarlier in the week, Chinese officials were casting doubts about reaching a comprehensive long-term trade deal with the U.S. even as the two sides get close to signing a “phase one” agreement, while President Donald Trump had said the U.S. was ahead of schedule to sign a very big portion of the China dealCommerce Secretary Wilbur Ross expressed optimism the U.S. would reach a “Phase One” trade deal with China this month and said licenses would be coming “very shortly” for American companies to sell components to Huawei Technologies Co. Trump on Sunday told reporters at the White House that a trade agreement, if one is completed, would be signed somewhere in the U.S.China secured the World Trade Organization’s go-ahead to impose $3.6 billion in sanctions against the U.S., in a case that predates the tariff war but may add a layer of tension to ongoing talksSenator Marco Rubio plans legislation to block U.S. government pensions from investing in Chinese stocks after the board overseeing the funds put off a decision that would add exposure to ChinaHouse Speaker Nancy Pelosi moved the Democrats’ impeachment inquiry of Trump into a new phase that signals the public soon will get a look at the witnesses and evidence being assembled to build a case against the presidentTrump’s presidency stands on its most treacherous ground after the House voted to approve and proceed with its impeachment inquirySouth Africa is heading for a debt trap as bailouts for the embattled state power utility drain the government’s coffers and anemic economic growth weighs on tax revenueFinance Minister Tito Mboweni presented a rapidly deteriorating outlook in his medium-term budget policy statement, with gross government debt seen surging to 80.9% of gross domestic product in the 2028 fiscal year unless urgent action is takenEskom Holdings SOC Ltd. will receive 138 billion rand ($9.2 billion) in bailouts through March 2022, or 10 billion rand more than previously allocatedSouth Africa dodged its third junk rating Friday -- something markets had been counting on for months -- as Moody’s Investors Service maintained the nation’s lowest investment grade score but revised its outlook to negative from stableFitch Ratings raised its outlook for Turkey’s sovereign assessment to stable from negative, citing an improving current account balance, continued economic growth and falling inflationLebanon’s Prime Minister Saad Hariri stepped down Tuesday after two weeks of anti-government protests descended into violenceCalls are mounting for Lebanon to impose formal restrictions on the movement of money to defend the country’s dollar peg and prevent a run on the banks when they open their doors after nationwide protestsThe yield on the nation’s dollar bond due 2021 climbed above 30%Asia:China’s ruling Communist Party warned that internal and external risks were increasing after wrapping up its most important meeting of the yearA gauge of the outlook for the country’s manufacturing sector dropped to the lowest level since February, underlining the weakness of an economy buffeted by weak domestic demand, shrinking profits, and the trade war with the U.S.South Korea’s semiconductor inventories fell the most in more than two years in September, signaling a potential end to a prolonged slump in tech demand that has weighed on global growthSamsung Electronics Co. reported earnings that beat estimatesFOMC rate cut will help maintain global growth trend and have positive impact on the South Korean economy, central bank Senior Deputy Governor Yoon Myun-shik saidExports plunged the most in almost four years while consumer prices failed to rise for a third straight month in October, highlighting continued pain in this Asian bellwether for global tradeThe U.S. won a case against India at the World Trade Organization alleging improper use of export subsidies valued at more than $7 billionIndia’s farmers’ organizations have planned a nationwide protest on Nov. 4 to demand that the government keep agriculture out of a 16-nation trade agreement currently being negotiated in ThailandFiscal deficit for April-September was 6.52 trillion rupees ($92 billion) versus 7 trillion rupees targeted in the budget for the financial year ending March 31India is committed to further improving its people-friendly tax regime, Prime Minister Narendra Modi said, as Asia’s third-largest economy seeks to attract more overseas investment to spur growthThe global slowdown and trade war have created an environment in which “low interest rates for longer” is the new normal, Bank Indonesia Governor Perry Warjiyo said. Separately, Warjiyo said the central bank’s monetary policy will continue to be data dependentIndonesia suspended exports of nickel ore with immediate effect after a planned ban on shipments from the beginning of next year led to a rush to beat the deadlineThe government warned it will revoke export licenses from mining companies that breach rules on shipping nickel ore as it steps up inspections ahead of an export banThe country’s state budget deficit is at 1.7%-1.8% as of September, while the government sees growth at between 5.08% and 5.1% this yearThailand will request a dialogue with the U.S. at the East Asia Summit due in November to regain scrapped trade benefits, Keerati Rushchano, the acting director general of the Department of Foreign Trade, saidPrime Minister Prayuth Chan-Ocha has asked the Foreign Ministry, Labor Ministry and Commerce Ministry to start talks with the U.S. to explain the country’s stance on labor issues as the nation to set up task force to restore trade preferencesThe value of foreign direct investment applications from China doubled during the first nine months of 2019 compared with a year earlierThe current-account balance narrowed in line with the trade surplus on falling gold exportsThe central bank said third-quarter economic growth may be lower than 2.9%Philippines plans to offer prize bonds in November as government seeks to tap liquidity in financial market after central bank’s reserve ratio cuts, Treasurer Rosalia de Leon saidThe Securities and Exchange Commission has asked Bangko Sentral ng Pilipinas to consider setting ceilings on the interest rates and other fees that lending and financing companies may imposeOctober inflation likely 0.5% to 1.3%, according to the central bankTaiwan’s economy in the third quarter grew at the fastest pace since the second quarter of last year as domestic investment and better-than-expected overseas demand helped avoid the worst of the U.S.-China trade warChina’s ban on individual travel to Taiwan could see visitors to the island fall for the first time since the devastating SARS outbreak of 2003. The number of mainlanders traveling to the island plunged 46% in September, according to data from Taiwan’s Tourism BureauThe Financial Supervisory Commission said it is raising the risk-capital charge for insurance firms buying exchange-traded funds that track foreign bonds but are denominated in local currencyThe U.S. Justice Department has struck a deal with fugitive financier Jho Low to recoup almost a billion dollars looted from Malaysian investment fund 1MDBMalaysia maintains claim of $7.5 billion from Goldman Sachs Group Inc. for the bank’s role in arranging bond sales for 1MDB, Finance Minister Lim Guan Eng saidThe country expects its credit rating to remain stable in the near future due to institutional reform, resilient economic growth as well as clear and consistent messaging to investment community, finance minister saidU.S. is unlikely to label the nation a currency manipulator, Finance Minister Lim saidVietnam slapped five-year tariffs on Chinese and South Korean color-coated steel products after domestic producers said unfair pricing from overseas competitors caused them to shut down production linesEMEA:South Africa’s government is talking with potential investors in the state-owned airline in an attempt to ease the continuing burden the company puts on the national budgetMozambique President Filipe Nyusi won a second term by a landslide in the natural-gas-rich nation’s Oct. 15 elections that the main opposition rejected as a “mega fraud”The Kenya National Assembly’s finance committee agreed to support President Uhuru Kenyatta’s decision to reject a bill that sought to retain caps on what banks can charge on loans, paving the way for the removal of a law that cut credit to businessesRussia’s biggest rate cut in two years was well flagged by Governor Elvira Nabiullina, but when it came, the move gave an extra boost to one of the strongest bond rallies in emerging markets this year, driving generic 10-year yields to their lowest since before the 2008 financial crisisFor all their talk about breaking Washington’s dominance, Russia and Turkey are still pretty hooked on the U.S. currency, according to data published by the Bank of RussiaTurkey’s central bank lowered its inflation estimate for the end of this year to 12% from 13.9%, citing a faster-than-expected slowdown in food prices and a stable liraTurkey offered to buy shares in Borsa Istanbul that the European Bank of Reconstruction and Development plans to sell following concerns over a convicted banker’s appointment to lead the benchmark stock exchangeBulgaria’s ruling party held on to the capital city in local elections, fighting off a challenge by the opposition-backed candidateShares in Saudi state oil giant Aramco will start trading on the Middle Eastern country’s stock exchange on Dec. 11, television news channel Al Arabiya reported, without identifying the source for the informationThe energy giant earned $68 billion in the first nine months of the year, cementing its position as the world’s most profitable company, according to people familiar with the figuresSaudi Arabia finally kicked off what could be the world’s biggest initial public offering, revealing potential tax cuts and dividends to lure investorsEgypt said it picked five banks, including JPMorgan Chase & Co. and Citigroup Inc., to manage a new dollar-denominated bond issuance in the 2019-20 fiscal yearA religious ruling in Kuwait against two initial public offerings launched in October is stirring fears that the Gulf state is clamming up at a time its bigger neighbor Saudi Arabia is doing just the opposite, courting investors in anticipation of Saudi Aramco’s IPOLatin America:Argentina’s President-elect Alberto Fernandez has six weeks to put the pieces of his cabinet puzzle together before starting a government that will have no shortage of economic problemsBonds slid after the vote and investors are now watching for the final composition of congress and how that may impact key legislation, including a debt restructuringAurelius Capital Management LP, one of the lead hedge funds that settled a massive litigation over defaulted bonds with Argentina in 2016, made a new claim in New York for $159 million it says the South American nation owes on securities tied to the performance of its economyArgentina lowered the floor on its key interest rate while defending its latest round of capital controls as a way to ease the transition period until Fernandez takes office Dec. 10Fernandez said he will put policies in place to boost manufacturing, including local textile and shoe producersBrazil’s central bank signaled it will stick with the current pace of monetary easing at its next meeting after lowering the key rate by a half point for the third straight time and forecasting inflation below target through 2021Industrial output rose less than expected in September as capital goods production dropped for the fourth straight month, signaling companies are still reluctant to investUnemployment rate unexpectedly held steady in the three months through September amid an increase in the number of people seeking workA Globo report on President Jair Bolsonaro being potentially linked to the murder of a lawmaker in Rio de Janeiro last year was quickly dismissed after prosecutors said that a key statement that supported the accusation was proved wrong during the investigationLower house Speaker Rodrigo Maia said the allegations do not “harm at all” the lower house agendaBolsonaro said he won’t attend the inauguration ceremony for his Argentine counterpart Fernandez in a fresh sign of souring ties between South America’s largest economiesMexico’s gross domestic product rose 0.1% in the third quarter from three months earlier, according to preliminary data -- that’s less than a 0.2% median analyst forecastU.S. companies and trade groups that want lawmakers to approve a new trade pact with Mexico and Canada are making the unusual bet that the impeachment drama in Washington could actually help get the deal through CongressHouse Speaker Nancy Pelosi said the new Nafta deal is the “easiest trade deal that we’ve ever done”Chile’s President Sebastian Pinera fired eight top officials, including the interior, finance and economy ministers, after 10 days of riots, protests and reprisalsMore violence erupted in Chile and dozens of citizens have been partially blinded by rubber projectiles and gas canisters that police and soldiers fired into crowds of protestersMany Chileans are clamoring for a solution that sends shivers down the spine of part of the country’s elite: a new ConstitutionColombia’s central bank defied the emerging market trend for interest rate cuts and left borrowing costs unchanged at its October meetingUruguay’s presidential candidate from the leftist coalition that’s governed the country for almost 15 years faces an uphill battle to win over at least part of the majority of voters who supported right-wing candidates in Sunday’s election before a November runoffTwo people died in clashes over the results of Bolivia’s Oct. 20 election in the latest episode of political violence that’s flared across South AmericaVenezuela gave El Salvadoran diplomats just 48 hours to leave the country after a similar move by El Salvador’s President Nayib Bukele\--With assistance from Selcuk Gokoluk and Carolina Wilson.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at yteso1@bloomberg.net;Netty Ismail in Dubai at nismail3@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Cormac MullenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters - UK Focus
UK lawmakers want bank payments "speed bump" to stop scammers
A mandatory 24-hour delay on all first-time payments from one bank account to another would cut mounting fraud in finance, UK lawmakers said in a report on Friday. Parliament's Treasury Select Committee said fraudsters stole over 600 million pounds ($777 million) from consumers in the first half of 2019 and regulators must crack down harder on scammers. With money transfers between accounts taking just seconds, customers or their bank have little time to be aware that a fraud has taken place, the report said.
- Fool.co.uk
2 reasons why I would bank on the Barclays share price for my ISA allocation!
Could Barclays be a great longer-term buy for your ISA? Jonathan Smith details why he thinks so.
- Reuters - UK Focus
UPDATE 2-Lloyds profit slumps after PPI hit and bad loan surge
Lloyds Banking Group came close to suffering a shock third-quarter pretax loss on Thursday after an increase in bad loans and a fresh 1.8 billion pounds ($2.3 billion) provision for mis-sold loan insurance payouts. Pretax profit of 50 million pounds fell short of a 163 million pound average analyst forecast as Britain's most costly consumer banking scandal continued to haunt the bank. As Britain's biggest mortgage lender, due in part to its Halifax business, and a key source of finance for small companies, Lloyds is seen as a bellwether for the UK economy, and most exposed to shaky sentiment among business and household borrowers unsettled by Britain's protracted exit from the EU.
- Yahoo Finance UK
Lloyds profit falls 97% as bank takes £1.8bn PPI hit
Lloyds Bank set aside £1.8bn in the third quarter to cover last minute PPI mis-selling claims.
- Bloomberg
Britain’s Billionaire Twins Shake Up an Opaque Empire
(Bloomberg) -- After six decades spent buying up assets spanning retail, media and real estate, one of Britain’s most discreet billionaire clans is weighing a retreat.The investments by the families of David and Frederick Barclay have put them among the top ranks of the country’s rich and powerful. The twins have forged reputations as stealthy buyers who rarely turn to public markets or investment bankers to finance deals for their closely guarded business empire.In a surprise twist, the Barclays are now considering offloading some of their most prominent holdings. Those include the Telegraph newspaper titles and Mayfair’s five-star Ritz hotel, where guests dine below chandeliers and can see the sights of the English capital in a custom Rolls-Royce.The Barclays have hired lawyer Marco Compagnoni of Weil Gotshal & Manges, whom they’ve worked with before, to advise on the review, according to people with knowledge of the decision, who asked not to be identified because the matter is private. Compagnoni declined to comment, as did a representative for the Barclays.The Times of London was first to report the plans, which come as some of their holdings are under pressure.Over the past two years, the brothers have injected more than 300 million pounds ($386 million) into businesses such as online retailer Shop Direct and delivery service Yodel. Last week, Shop Direct said it was exploring financing options after disclosing it’s seeking 150 million pounds in extra funding to cover a spike in claims tied to Britain’s insurance mis-selling scandal. The shortfall creates a “material uncertainty,” the company’s auditor, Deloitte, said Monday.The Telegraph group could attract a number of bidders. Although no formal process has started, Daily Mail & General Trust Plc could be interested, according to a person familiar with its intentions, as declining newspapers merge to maximize their audience while minimizing operational costs. A representative for DMGT declined to comment.The Barclays may struggle to recoup the 665 million pounds they spent to buy the paper in 2004. Circulation and earnings have plummeted, there have been repeated rounds of job cuts and operating profit was just 700,000 pounds for the most recent financial year. Still, the paper remains influential in the U.K. It’s been a leading voice for Brexit and employed Boris Johnson as a columnist until he became Prime Minister in July.With Middle Eastern money backing most of London’s luxury hotels these days, the brothers may look farther afield to sell the Ritz. Four years ago, they sold their stake in three other London hotels -- Claridges, the Berkeley and the Connaught -- to Qatari investors.It’s already been a busy year for the Barclays, who turned 85 on Sunday. David lost a libel case he filed against a little-known French playwright who satirized the lives of him and his brother in July, and his lawyer said at the time that he would probably appeal. This month, it emerged that Frederick is embroiled in a divorce court row with his estranged wife. A judge who oversaw the preliminary hearing placed limits on what can be reported, but the case may eventually shed light on the Barclay family’s finances if it reaches a public decision.“For someone concerned about their privacy and public profile, that is a pretty horrible thing to contemplate,” said James Ferguson, a partner at London law firm Boodle Hatfield who specializes in family matters including divorces. “It’s going to incentivize him to want to settle the case.”David is the older sibling by 10 minutes. Born to Scottish parents, they spent their early days in a west London household so close to a railroad that trains rumbling by would rattle the windows. After leaving school at 16, David and Frederick started their careers in the accounts department of General Electric Co., according to “The Twin Enigma,” a 2010 book by Vivienne Lewin. They teamed up in the 1960s to turn old boarding houses into hotels and moved into breweries and casinos, marking the beginning of their business empire.When a Middle East oil embargo sparked a collapse in U.K. stocks and real estate during the 1970s, the twins defaulted on loans owed to a British government agency that had expanded into corporate lending. The brothers almost lost everything, but were spared from absorbing the full losses.The twins have since bought companies that others often reject or overlook, developing real estate and selling off pieces for quick profits. That strategy has allowed the Barclays to own more than 50 firms in the U.K., Japan and Sweden and gain stakes in at least a dozen more.These include Sears Plc, which once had businesses ranging from women’s wear to mail-order shopping. With financing from Bank of Scotland and Bank of Boston, the Barclays joined with fellow billionaire Philip Green two decades ago to buy the clothing retailer for 548 million pounds. Green and the Barclays recouped the purchase price within 12 months by selling some of Sears’s real estate and its three retailing units.The Barclays also paid 2.3 million pounds in 1993 for the English Channel island of Brecqhou off the U.K.’s southern coast for a family compound. They erected a mock-Gothic castle, complete with almost 100 rooms, gilded turrets and a helipad. A visitor from the neighboring island of Sark said framed pictures of the brothers with Nelson Mandela, Margaret Thatcher and Charles de Gaulle adorned a palatial living room. The twins would finish each other’s sentences, the visitor said.Even as their holdings grew, the business has remained a family affair, with David’s sons Aidan and Howard increasingly running matters.“Our business is large, but is a family business,” Frederick Barclay said in a 2012 witness statement as part of a U.K. court case about their attempts to buy a number of luxury hotels in London. “My brother and I retain a strong interest in the affairs of the business and regularly discuss matters with Aidan and Howard and other advisers.”But even as the family’s holdings evolve and the younger generation exerts more sway, one tenet remains constant: Discretion is paramount.(Updates with Deloitte comment in sixth paragraph.)\--With assistance from Tom Metcalf and Jack Sidders.To contact the reporters on this story: Ben Stupples in London at bstupples@bloomberg.net;David Hellier in London at dhellier@bloomberg.net;Thomas Seal in London at tseal@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill, Rebecca PentyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Yahoo Finance UK
The OUTstanding Top 50 LGBT+ Future Leaders 2019
All of the future models in this list, once they identify as LGBT+, can be in any position in a company and can be any nationality and based in any country.
- Reuters - UK Focus
UK banks urge government to ease tax burden as Brexit beckons
Banking in Britain paid 40 billion pounds ($52 billion) in taxes in the last financial year with half from foreign lenders, underscoring the need for a government rethink on taxes to keep London competitive after Brexit, UK Finance said on Wednesday. Banks and their employees paid a total of 39.7 billion pounds in taxes, or 5.5% of government receipts, unchanged from the prior year, UK Finance said in a review compiled by consultants PwC (see graphic). The tax raised was roughly split between those paid by employees, and the corporate tax, surcharge on profits and balance sheet levies paid by the lenders themselves.
- Business Wire
Barclays creates new Sustainable and Impact Banking Group
Barclays today announces the launch of a new Sustainable and Impact Banking group, led by Brian Reilly, Global Head of Sustainable and Impact Banking. The newly created group will focus on identifying new, high-growth clients that are solving global environmental and social challenges, and advising existing Banking clients on sustainable growth strategy and finance.
- Investing.com
StockBeat: Beyond Meat Hit Hard as IPO Lockup Period Ends
Investing.com – Beyond Meat (NASDAQ:BYND) fell sharply as restrictions preventing investors from selling shares in the plant-based meat maker expired Tuesday.
- Bloomberg
At This Price, The U.K.'s Telegraph Is More Than a Vanity Play
(Bloomberg Opinion) -- If the owners of Britain’s Daily Telegraph are serious about wanting to sell the publication for a price similar to what they paid for it 15 years ago then they’ll need to make a very convincing argument that it’s a perfect megaphone to influence British politics, especially at this crucial time in the country’s history. No serious media investor is going to front that sort of cash.Gambling that a deep-pocketed billionaire somewhere wants to exert outsized influence on the negotiations to exit the European Union looks like the best hope for the Barclay brothers to recoup the purchase price of 665 million pounds ($854 million), as the Financial Times has reported is their goal.The Barclays bought the newspaper when the market was in much better shape. In the middle of the last decade, Britain's 10 daily national newspapers sold a cumulative 11.2 million copies and attracted about a quarter of advertising spending, according to Department for Media, Culture and Sport figures from 2007. By 2017, circulation had fallen to 6.1 million copies, and just 6% of advertising went to the print editions of newspapers, as Google and Facebook Inc. gobbled up ad dollars and readership shifted online.It’s hard to see how a strategic buyer such as Daily Mail and General Trust Plc, which has said it’s on the prowl, could justify paying such an exorbitant fee for a business in structural decline. There are good reasons why bringing the Daily Mail and Telegraph under one roof might make sense – both are right-of-center and some operational costs could be shared. But Paul Zwillenberg, the chief executive officer of the Daily Mail and General Trust, has been adamant that he won’t overpay for media assets.Even with adjustments for one-time items, operating profit at the Telegraph Media Group Ltd., parent of both the daily newspaper and its Sunday stablemate, fell to 7.8 million pounds last year. Back in 2004, the year in which David and Frederick Barclay bought it, the company enjoyed 32 million pounds of operating profit.Daily Mail and General Trust commands an enterprise value that's just over 12 times last year's operating profit. Taking that as the yardstick, the Telegraph would be valued at less than 100 million pounds based on last year's performance. That rather generously ignores the fact that DMGT these days generates less than half of profit from its media business.How might the Telegraph be worth the reported 665 million pounds sought? That would need high confidence that its turnaround, initiated by CEO Nick Hugh, is set to accelerate rapidly — that the low numbers of 2018 reflect increased spending that will boost growth. Or a buyer might eye the scope to cut a lot of duplicate costs. If the Daily Mail and the Telegraph were to join forces, the cost base from their combined media operations would be some 850 million pounds.Cutting that outlay by 7% would add 60 million pounds to operating profit and more easily justify the Barclays' target price, but doing so could prove challenging given the extent to which costs have already been pared at both companies. More realistically, were the Telegraph's profit to return to 2017 levels, a valuation nearing 200 million pounds would seem more appropriate.So the only way for the owners to achieve their asking price would likely be to find a billionaire who’s looking for much more than the typical vanity purchase, and is truly keen to sway how discussions to leave the EU evolve. Even if Britain’s initial deal to leave the trading bloc passes parliament by the end of January, there could be a transition period of negotiations stretching to the end of 2022.Despite their declining readership, the Daily Telegraph and Sunday Telegraph remain hugely influential on the right of British politics. Before becoming prime minister, Boris Johnson himself was a weekly columnist for the daily newspaper.In the U.S., a handful of storied publications have been snapped up by billionaire benefactors: Salesforce.com Inc. founder Marc Benioff and his wife Lynne bought Time magazine for $190 million last year; Amazon.com Inc. billionaire Jeff Bezos snapped up The Washington Post for $250 million in 2013; and Laurene Powell Jobs, the widow of Apple Inc. co-founder Steve, secured control of the Atlantic magazine last year. In each case, however, the valuation was far more realistic given the evolution of the news industry.At any rate, there are probably cheaper ways to influence the debate in the U.K. And it’s hard to see how a buyer pursuing a single-issue agenda would be good for quality journalism.If the Barclay brothers do indeed need to sell the newspaper to fund other businesses, as the Financial Times’s report on Sunday suggested, then they will need to be realistic about the asking price.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
