The Times
Currencies pounded as rate freeze set to last: Sterling and the dollar took a pounding on currency markets as speculation mounted that central banks in Britain and the U.S. would respond to the stock market rout by freezing interest rates until well into next year.
British firms miss out on Iran’s $185 billion oil bonanza: British companies including Royal Dutch Shell, Amec and Weir risk being outmanoeuvred by European rivals in a race for projects worth up to $185 billion in Iran’s shattered oil industry.
Tyrie questions Bank’s code of conduct: The head of the Treasury select committee has urged the Bank of England to review its code of conduct after the financial links of its newest policymaker to a macro hedge fund caused embarrassment.
Government sells Lloyds shares despite market turmoil: Choosing to sell into some of the most volatile trading on the FTSE 100 since it was forced to rescue Lloyds Banking Group in 2008, the Treasury offloaded another 1% in the high street bank on to institutional investors.
Bank accounts with extras replace PPI as major complaint: Complaints about mis-sold payment protection insurance are tailing off, but grievances about packaged bank accounts are taking their place.
RSA may ask for more time to line up £5 billion takeover: A possible merger between RSA and Zurich Insurance is hanging on a knife edge as a takeover deadline looms and global stock markets tumble.
China fears send miner’s shares south: Shares in South32 dived as maiden results from the BHP Billiton spin-off were overshadowed by fears it would be badly hit by the turmoil in China.
Shale gas exporter confirms approach: San Leon Energy confirmed the receipt of a takeover approach but the AIM-listed Irish shale gas explorer said there was no guarantee that a deal would be completed.
Househunters now spoilt for choice: The number of homes on the market has jumped by a quarter within a month, but sellers are still significantly outweighed by the number of buyers chasing properties.
The Independent
Tesco’s South Korean auction hit as China market problems cause currency turmoil: Three private equity firms were expected to submit final bids for Tesco’s South Korean business as the supermarket attempts to offload one of its most successful international assets to prop up its dreadful balance sheet.
Pay gap between men and women means female Bosses work 57 days a year ‘for free’: A female Manager effectively works for nothing for 100 minutes of each day because of the pay gap between men and women, according to the latest authoritative survey.
GVC Holdings outbids rival 888 in £1 billion fight for Bwin.party: Sportingbet Owner GVC Holdings moved closer to a £1 billion takeover of up-for-sale Bwin.party as it seeks to supplant bid rival 888 as the preferred choice of the company’s board.
Financial Times
Funds bet on Shell deal as oil prices plunge: A global stock market sell-off and tumbling oil prices have increased fears that some of this year’s largest takeover deals are at risk of falling apart — including Royal Dutch Shell’s $70 billion bid for U.K. rival BG Group.
Naked Wines launches wine by text service: Naked Wines, the online wine merchant bought by Majestic Wine in April for £70 million, said it has taken 70 orders by text message since launching the service last Thursday.
Anglo American agrees to sell Chilean copper mines: Anglo American on Monday reported some progress in its plans to sell more of its marginal assets, by offloading two Chilean copper mines for an initial $300 million.
Moscow snubs Rosneft funding plans: The Russian government has decided not to fund four out of five Rosneft projects for which the oil company had requested financing from the sovereign wealth fund, the economy Minister said on Monday.
Cobalt International Energy exits Angolan fields for $1.8 billion: Houston-based oil explorer Cobalt International Energy is to cash out for $1.8 billion on Angolan prospects that are at the centre of a U.S. corruption investigation.
Loeb ruling raises hurdles for activists: Activist hedge funds will face extra hurdles in their attempts to unseat Managers and board Directors, following a ruling against Daniel Loeb’s fund management group Third Point.
Monsanto sweetens Syngenta takeover bid: Monsanto has increased its takeover bid for Swiss rival Syngenta to $46 billion in the latest attempt by the U.S. group to convince its agribusiness rival to come to the negotiating table.
Leadership reshuffle at China’s three biggest telecoms groups: All three of China’s largest telecoms operators got new leaders on Monday in a top-level reshuffle that made clear the tight links between the state-run companies.
Lex:
U.S. utility M&A: back in black: For U.S. power utilities a Black Monday can still be a Merger Monday. Amid a nasty session for equities, a large U.S. utility, Southern Company, said it would acquire its smaller rival in Georgia, AGL Resources, for $12 billion in total transaction value (against Southern’s enterprise value of nearly $70 billion). Based on retail customers, Southern Company will become the second-largest U.S. natural gas and electricity transmission company, just behind Exelon. Utilities shares traded mostly lower on Monday but fell far less than those in other sectors. And after falling out of favour for much of the year, a rally — even a relative one — must feel sweet for power distributors. Despite the sector’s return to favour, recent merger and acquisition activity has been mostly defensive. U.S. power consumption growth has not rebounded since the financial crisis and dealmaking has been one way to boost earnings. Separately, utilities have been splitting into those focused on safer, regulated power transmission (such as Southern and AGL) and those who want to be in the riskier business of producing and selling power based on speculation on market prices. The underlying economics of utilities are still not pretty and rising rates — whenever they come — will hurt their shares. But their moment in the sun is not over just yet.
Fuji Heavy: American beauty: Shares in Japan’s Fuji Heavy Industries, maker of the Subaru, fell 8% on Monday even though China accounts for only 6% of its unit sales. Blame the fall on a (China-induced) sell-off in the dollar versus the yen. So as emerging markets have fallen out of fashion, FHI has looked a safe bet. In the year to March 2016, the company expects to sell about 90% of its vehicles in Japan, the U.S., Europe and Australia. Suzuki, another Japanese four-wheel drive specialist, depends on the rest of Asia for nearly half its operating profits. The U.S. dependence is not the only concentrated bet the company has made. FHI benefits from strong brand loyalty and can get by with relatively few models. Meanwhile, its much larger peer Toyota (which owns a stake in FHI) diversifies its profits by selling many different models. If the dollar maintains its steady rise and the U.S. auto market can absorb more Subarus, then FHI’s shares can resume their upward trend of recent years. It is too early to signal for the exit.
Luxury: in the trenches: The Chinese stock market correction has turned its exposure to Asia — 38% of sales — from an asset into a liability. Burberry is not the only one to suffer — it has done no worse than the MSCI Europe luxury index. Since the start of August Hermès and LVMH have been among the worst luxury performers. Hong-Kong listed Prada has been slightly more resilient. But it got its poor performance out of the way early — its shares are down 39% in the past year. Last October, Altagamma (an industry trade group) expected the Asian luxury goods market to grow 6% this year. In May, it revised that down to 2%. Asia is now expected to grow more slowly than anywhere else in the world. Despite acknowledging that “the external environment remains challenging”, the company said that capital expenditure next year would rise 15%, with spending focused on retail and the Asia-Pacific region. There are good reasons to keep focusing on China. A recent report from Euromonitor pointed to smaller cities and demand for lesser known, more discreet brands as two areas for growth. Add in demand from India, and from ageing markets such as Japan, and there is still hope for the luxury sector. But the successful groups will be those that are nimble enough to take advantage of such diverse opportunities. No longer will it be possible to roll out identikit stores across China and rely on them to deliver double-digit growth. The key will be the ability to sell trenchcoats to one group of consumers, and flak jackets to another.
Lombard:
Unbungled: Bunzl was known as “Bungle”, after a nervous TV bear, in the eighties when the erstwhile paper maker had become an untidy conglomerate. Focusing on distribution has allowed the business to go on buying to better effect, as decent half-year numbers showed. The group, led by Chief Executive Michael Roney, has raised adjusted profits before tax 6% to £187 million. At the same time Bunzl announced four small acquisitions: one in Austria, another in the U.S. and two in Australia. Media group WPP and Irish building materials group CRH have followed the same strategy, with similar results. Making many small purchases in fragmented industries can be a reliable way of building scale and profits. Big “transformative” deals typically only benefit investors in target companies. Bunzl may be reassuringly boring, but it is not as insensitive to macro shocks as true defensives such as tobacco and utility stocks. The fully-priced shares slipped more than 6.3% in the FTSE 100’s rout. Further slippage would make Bunzl worth holding again, even if the market’s own scared bears doubt its resilience.
Cricket test: BT Group will broadcast the next Ashes online from Australia, after winning an auction. The timing is suspicious, coming just after an England victory. Football fans, a group that includes BT Boss Gavin Patterson, are prone to cricket fever at such times. The passion often expires in the alien landscape of googlies and silly mid-offs. Lombard can’t help thinking of Andrew Flintoff, an all-rounder as BT aspires to be. Exuberance prompted him to commandeer a pedalo in St Lucia in 2007. According to one account, he planned to sail back to the U.K. BT is no stranger to over-reach itself, agreeing to pay £12.5 billion for mobile phones group EE at what now looks very like the top of the market.
The Daily Telegraph
Black Monday: Stock market meltdown wipes billions off global indices as China fears decimate investors: An unprecedented collapse in Chinese shares sent tremors through financial markets on Monday, triggering the ugliest day of global trading since the depths of the financial crisis eight years ago.
Russian rouble hits new low as oil prices plunge further: The Russian rouble plunged to a new low on Monday as falling oil prices piled further pressure on the struggling currency.
Opec powerless to halt oil price slide, warns former group President: Opec is powerless to arrest the slide in oil prices unless producers outside the group such as Russia match any cuts in output, according to a former President of the group.
Water companies say super-sewer will add £25 a year to Londoners’ bills: London’s residents are facing lower than expected increases to their water bills to fund the city’s £4.2 billion “super-sewer”, the companies behind the project announced on Monday as they confirmed the main builders and investors.
Bank of England under pressure following ex-hedge fund Boss pay row: Mark Carney, the Governor of the Bank of England, has been told to review rules governing conflicts of interest among members of the Bank’s influential policy-setting committee, following a row over a new official with links to a hedge fund.
‘Twin engines’ ready to push recovery as U.K. takes China slowdown in its stride: Robust investment and strong consumer spending will boost growth this year as Britain’s “twin engines” fire up to support the recovery, according to the U.K.’s largest business group.
ITV set to snap up Northern Ireland’s UTV television channel: Northern Ireland broadcaster UTV Media is set to sell its television division to ITV in a multi-million pound deal, according to reports.
China’s market Leninism turns dangerous for the world: The world financial system is at a dangerous juncture. Markets no longer believe that China’s Communist leaders are in full control of the country’s $27 trillion debt bubble, or know how to manage fast-moving events beyond their ken.
Apple shares rebound after Tim Cook releases rare email on China: Apple Chief Executive Tim Cook halted a 13% drop in the tech giant’s stock on Monday after taking the unusual step of emailing a media organisation to reassure investors about the business’s Chinese operation.
The Questor Column:
Hold Amlin while it navigates the low rate environment: Batten down the hatches, say Amlin’s Executives, for we can weather this storm. When all about it insurers are losing their independence, Amlin has said its plans to broaden the company’s range of insurance coverage will be enough to keep it from the wave of takeovers sweeping the sector. Amlin is one of five specialist insurers left with a stock market listing – the others being Beazley, Hiscox, Lancashire and Novae. Meanwhile RSA, which makes some of its money from speciality marine cover, is in talks with Zurich about a possible takeover. Profits fell 3.5% to £143.3 million, although the firm said an accounting change for some reinsurance contracts meant the drop did not reflect underlying growth. The group also generated 2.2% from its investment strategies in the first six months of the year, contributing £95.9 million to its bottom line. On the whole it was a mixed set of figures. Chief Executive Charles Philipps is adamant that the firm is not touting itself for a takeover, despite the headwinds that have sent competitors into the arms of larger rivals and private equity firms. The company is still emerging from a period of bumpy profit growth and volatile cash flows, and must finally comply with the forthcoming Solvency II rules in January that have been distracting management teams throughout the insurance world for several years. Amlin at £4.78 -21.5p. Questor says “Hold.”
Bunzl: Bunzl is buying anything that moves. Its agreement to snap up Meier Verpackungen, which distributes food packaging, heralded its entry into Austria, but the firm also threw in for good measure deals to take over two hospitality businesses in Australia, and Chicago-based workwear supplier Steiner. Chief Executive Michael Roney said the firm still had “a promising pipeline of opportunities and ongoing discussions taking place”, and it’s not surprising given that deal-making helps Bunzl achieve the scale that makes it successful in so many markets from cleaning supplies to plastic cups. Evidence of its success came in the form of a 5% rise in half-year revenues to £3.1 billion. Pretax profits rose 6% to £187 million, not including acquisition costs and the pesky exchange rates that have hammered numerous FTSE 100 firms with overseas operations. Questor has long championed Bunzl’s bulk, which makes the group boring but dependable. Shares were changing hands at 24 times future earnings, a ratio that was pushed up by the broad market rout. The company continues to look solid and pricey over the long-term. Bunzl at £16.71 -114p. Questor says “Hold.”
The Guardian
Osborne plays down fears China stock market slide will derail EU economies: George Osborne has played down fears that European economies will be derailed by the dramatic stock market slide in China that triggered some of biggest swings at bourses around the world since the 2008 financial crisis.
Anti-euro, pro-drachma party told: form a government if you can: An explicitly anti-euro, pro-drachma party has assumed the process of attempting to form a government in Greece, four days after Prime Minister Alexis Tsipras resigned to pave the way for snap elections.
Npower Boss Paul Massara quits after another dismal performance warning: The Chief Executive of npower has quit less than two weeks after the energy supplier was forced to warn of another unexpected drop in performance following persistent problems with its billing systems.
BT Sport secures rights to 2017-18 Ashes series in Australia: Live coverage of the next Ashes will be on BT Sport after the broadcaster unveiled a five-year deal with Cricket Australia to show its international matches exclusively in the U.K. from 2016.
Daily Mail
Ex-U.S. Treasury Secretary warns Federal Reserve to not make ’serious error’ of raising interest rates: The fierce sell-off on global markets could be the start of ‘a very serious situation’ for the world and raising interest rates would be a ‘serious error’, according to a former U.S. Treasury Secretary.
Lloyds and RBS take a beating on day of chaos in financial markets: Almost £3billion was wiped from the value Lloyds and Royal Bank of Scotland as the stock market rout caused carnage at Britain’s biggest banks.
Miners lead charge south as resources stocks plummet to lowest level since 2009: Shares in mining stocks were among the worst affected , plummeting as the wider market meltdown stripped more than £9billion from the FTSE 100’s mining sector.
Daily Express
Gordon Brown’s ex-adviser says panic-buy bottled water and tinned goods over China crisis: A former adviser to ex-Prime Minister Gordon Brown has urged Britons to begin stocking up on a month’s worth of “bottled water and tinned goods” – because China’s financial woe will cause worldwide economic carnage.
Growth on cards for CPP Group: Credit card insurer CPP Group said it turned in an underlying operating profit of £2.2 million in the six months to the end of June, compared with break-even results a year ago, after securing new funding and restructuring.
Spire receives a clean bill of health: Private medical firm Spire Healthcare said its adjusted earnings lifted 8% to £83.4 million in the six months to the end of June compared with a year ago.
The Scottish Herald
Arran Aromatics recruits leading beauty business Executive to lead overseas growth push: Arran Aromatics has appointed a beauty trade heavy hitter to lead the perfume maker’s push for growth in international markets following a challenging few years for the firm.
Edinburgh hotels boosted by start of festival season but Aberdeen occupancy tumbles: Edinburgh hotels enjoyed a surge in room rates in July as the festival season got under way and prestigious golf tournaments also boosted demand.
Xcite Energy says it’s making progress off Shetland as crude price hits fresh low: Xcite Energy Has said it is making progress with plans to develop a heavy oil field East of Shetland amid challenging conditions as the crude price hit fresh lows.
Milnbank Housing Association spending £3 million on maintenance programme: Milnbank Housing Association is planning a £3 million maintenance programme after securing new funding from Clydesdale Bank.
The Store wins Scotmid deal: The Store has won a contract to supply sausages, burgers, hotdogs and ready meals to Scotmid.
The Scotsman
Footsie in China panic for 10th consecutive session: Britain’s biggest businesses dived to their lowest collective value since the financial crisis seven years ago, as further falls on the Chinese stock market sparked continuing worldwide turbulence in equities.
Punch Taverns picks up £53 million for outlet sales: Pubs group Punch Taverns has agreed to sell 158 non-core outlets across England and Wales for £53.5 million to NewRiverRetail, a real estate investment trust focused on the retail sector.
Investors hope Petrofac serves up some good news: Oilfield contractor Petrofac delivers interim results and analysts are hoping for some good news on progress with its Laggan-Tormore project.
City A.M.
TalkSport Owner UTV confirms discussions to sell TV stations: Talksport Owner UTV MEDIA confirmed it is in talks to sell its TV stations, with ITV mooted as the likely buyer.
Lord Stuart Rose backs student property firm: Former Marks & Spencer Chairman Lord Stuart Rose has emerged as a surprise backer of Select Property Group, a developer and Manager of student housing across the U.K.
BlackRock buys PwC offices in Uxbridge from Aviva for £59 million: Fund Manager BlackRock said that it has bought an office building in west London for £55.9 million from Aviva Investors.
Meggitt bags big contract win with Canadian Armed Forces: Engineering company Meggitt announced it had won a $25 million (£16 million) contract to provide operator and maintenance support services to the Canadian military at bases across Canada.
AstraZeneca appoints Bohen to Chief medical officer position: Astrazeneca appointed Sean Bohen as Chief medical officer, giving him responsibility for patient safety at the firm.
Integrated Diagnostic Holdings reports its first half-year results: Integrated Diagnostic Holdings (IDH) released its first half-year results since it floated in May, posting increase revenue and profit.
Accounting changes hit Amlin’s first-half profit: The Boss of insurance firm Amlin said the company is not up for sale, quashing speculation that the group would be the next to be swept up in the wave of consolidation seen in the market over the past 12 months.
