Takeover approaches came in thick and fast as the week began. O2, P&O, Pilkington and Mowlem are well-known businesses and there was plenty of activity moving further down the list in terms of market capitalisation. Even Aston Villa was in play last week.Perhaps the most interesting aspect is the extent to which these bids are originating from overseas. The Spanish announced intentions to take control of O2. Middle Eastern interests are pursuing P&O. The Japanese have Pilkington in their sights. This is arguably a trend that could develop further. Not all the good news was of a speculative nature, however. Economic statistics for the US and China came in ahead of expectations. The growth in Chinese GDP was 11.3 per cent quarter on quarter – a stunning performance. Another good news story was the better than expected profits from UBS. I am not normally given to remarking on individual companies but there are lessons to be gained from these figures. The two drivers of the business are now investment banking and wealth management. In the case of investment banking, it is clear that all this M&A activity is delivering strong profits growth to those who have positioned themselves well. Wealth management, on the other hand, is not an area where banks automatically prosper. The attractions are clear. Earnings tend to be less volatile and the move to fee-based remuneration is making revenue generally less sensitive to market conditions. What is clear from the UBS results is that, if you get the mix right, the benefits of scale will travel through to the bottom line. We were not short of other areas of interest last week. The expected quarter-point rise from the Fed brought the rate up to 4 per cent. With economic performance beginning to pick up in continental Europe, can it be long before interest rates start to rise there also? This was the 12th consecutive quarter-point increase. US consumer spending has been driven by the cheap cost of borrowing. The added cost of money, coupled with dearer fuel, could impact on spending habits. With $11trn of debt in the hands of the US public, any further rises need to be watched carefully. I enjoyed the news that a previously unknown company, King Win Laurel, had notified the US Securities & Exchange Commission that it intended to bid for Exxon, the world’s biggest oil company. At $35 a share, this bid would value Exxon at $450bn. The offer was, it added, subject to financing – and it turns out that the bidding company is based in an apartment on the outskirts of Beijing. An Exxon spokesman dismissed the offer with the comment that: “We do not believe King Win Laurel is financially capable of making such a tender offer.” Still, it helps quicken the pulse a little.
Jupiter Merlin absolute-return portfolio, run by John Chatfeild-Roberts and his team, has been given an AA rating by Standard & Poor’s.
Lighthouse Group has bought IFA and Sipp administrator Carrwood Barker Holdings in a deal worth up to 4.5m. Lighthouse is funding the acquisition of the Manchester firm, which has introducer agreements with 100 firms of chartered accountants and solicitors, with the issue of 3m worth of new shares.
The monthly cosst of servicing mortgages has begun to stabilise in the run up to Christmas according to the Woolwich.The cost has remained at 18.6 per cent of borrowers’ household disposable income in October according to the mortgage affordability research.Annually, the increase is up by 0.3 of a percentage point from 511 to 512 from […]
Cazenove Capital Management is aiming for a comeback in the retail fund of funds market with a 1 per cent annual management charge on its multi-manager fund range.
Capital Market Notes, November 2016 David Lafferty, chief market strategist at Natixis Global Asset Management, looks at the impact on markets and portfolios since the somewhat surprising outcome of the US election. Click here
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