(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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Lloyds Banking Group has picked HSBC Holdings's Wealth & Personal Banking head as its next chief executive. Lloyds Banking said it has chosen Charlie Nunn as chief executive officer. Nunn is currently global chief executive for Wealth & Personal Banking at fellow lender HSBC. He joined HSBC in 2011, having also held roles including global chief operating officer of Retail Banking & Wealth Management and head of Wealth Management & Digital. Incoming Lloyds Chair Robin Budenberg said: "I am excited about Charlie's vision for Lloyds Banking Group, as well as his passion for and commitment to our purpose of helping Britain prosper. Given his career track record, he will bring world class operational, technology and strategic expertise to build on the strengths of the existing management team." Antonio Horta-Orsorio's departure after 10 years at the helm of Lloyds was announced back in June. He is aiming to leave by the end of June 2021. It is a full change at the top of the UK bank. Former UK Financial Investments boss Budenberg will become its next chair, replacing Norman Blackwell in early 2021. HSBC meanwhile said that HSBC Bank Chief Executive Nuno Matos has been appointed chief executive of Wealth & Personal Banking to replace Nunn.
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Frasers Group confirmed that it is interested in any sale process for Phillip Green's Arcadia Group, should the UK retailer fall into administration. The Sports Direct and House of Fraser owner said it has already made an offer and provided draft terms to Arcadia for a loan of up to GBP50 million, and is awaiting a "substantive response". Philip Green's struggling Arcadia Group, which runs the Topshop, Dorothy Perkins and Burton brands, is on the brink of collapse with around 15,000 jobs at risk. On Friday, Sky News reported that Arcadia could fall into administration as soon as Monday. Arcadia has been in emergency talks with lenders in a bid to secure a GBP30 million loan to help shore up its finances. If the insolvency is confirmed, it is expected to trigger a scramble among creditors for control of its assets. "Should the company and the Arcadia Group's efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the company would be interested in participating in any sale process," Frasers said Monday.
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JD Sports Fashion is considering backing away from a possible offer to rescue financially on-the-brink retailer Debenhams, amid the looming collapse of Philip Green's Arcadia Group, the Times reported on Saturday. Arcadia, which runs the Topshop, Dorothy Perkins and Burton fashion store brands, is the biggest holder of concessions within Debenhams department stores, the newspaper noted.
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WPP said it has submitted a proposal to acquire the remaining shares in WPP AUNZ it does not already own. The London-listed advertising firm currently holds a 61.5% stake in WPP AUNZ, which is listed on the Australian Securities Exchange. WPP is proposing to buy the shares at AUD0.55 each in cash, a premium of 34% to Friday's closing price. The total consideration payable by WPP for the remaining stake would be AUD181 million, equivalent to around USD133.6 million. WPP AUNZ shares closed up 35% at AUD0.56 in Sydney on Monday. "The proposed acquisition is in line with WPP's global strategy of simplifying its structure and will move WPP to 100% ownership and control of its Australian and New Zealand operations," WPP said. The proposal, which has not yet been put to WPP AUNZ shareholders, will be subject to customary conditions and regulatory approvals. It is expected to be completed in 2021 if approved.
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Indivior said it had reviewed the claim Reckitt Bencksier Group filed against it and stated that the claim is "without merit". On Friday, US-based drug maker Indivior announced Reckitt Benckiser had submitted a GBP1.07 billion claim against the company. The claim related to an indemnity contained in the demerger agreement entered into between the two companies in November 2014. Indivior spun off from consumer health and hygiene firm Reckitt and listed on the London Stock Exchange in December of that year. Indivior said Monday that: "Based on the information available to it, Indivior strongly believes that the claim is without merit and that it has strong grounds for defending against the claim should it be served." If the claim is served, Indivior said it will "fully and vigorously" defend itself. The company will make further announcements when appropriate, including whether the claim is served.
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MARKETS
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A mixed start in Europe on Monday gave way to an improving picture by mid-morning. The FTSE 100 had been the outperformer in Europe in opening trade, though was outpaced by Frankfurt's DAX 30, which was up 0.4% as midday approached. "The top gainer on the FTSE was JD Sports amid the latest machinations in the retail sector as the company reportedly prepared to step back from its Debenhams deal – a response which reflects market perception of the risks attached to this transaction. Elsewhere its rival, Mike Ashley's Frasers was readying a potential loan for the stricken Arcadia Group," said AJ Bell's Russ Mould. Lloyds Banking was up 0.8%, while HSBC was down 2.4%.
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FTSE 100: up 0.3% at 6,389.39
FTSE 250: up 0.4% at 19,545.21
AIM ALL-SHARE: up 1.1% at 1,049.90
GBP: soft at USD1.3321 (USD1.3331)
EUR: higher at USD1.1981 (USD1.1957)
GOLD: lower at USD1,770.86 per ounce (USD1,786.40)
OIL (Brent): lower at USD47.28 a barrel (USD48.05)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The Bank of England said mortgage approvals last month hit their best levels in over 13 years. Net mortgage borrowing remained "robust" at GBP4.3 billion in October, the BoE said, while mortgage approvals for house purchase hit 97,500, the highest since September 2007. Approvals amounted to 92,100 in September 2020. "The continued strength in borrowing follows high levels of mortgage approvals for house purchase seen over recent months. Mortgage borrowing troughed at GBP0.2 billion in April, but has since recovered and is slightly higher than the average of GBP3.9 billion in the six months to February 2020," the central bank commented. October's mortgage approvals figure, the bank continued, was 33% higher than approvals in February of this year and around 10 times higher than the trough of 9,400 approvals in May. Approvals for remortgage, which only capture remortgaging with a different lender, were broadly unchanged in October, at 32,900.
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Crunch talks aimed at securing a post-Brexit trade deal between the EU and UK will resume on Monday in what could be the final week of discussions. The EU's chief negotiator Michel Barnier and his counterpart David Frost will meet again in London as they seek to hammer out an agreement. With just a month to go until the end of the transition period, talks remain stuck on fishing rights – described by Dominic Raab as an "outstanding major bone of contention". But the UK foreign secretary said there was "a deal to be done" after the EU showed progress on the so-called level playing field aimed at preventing unfair competition.
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America should prepare for a "surge upon a surge" in coronavirus cases as millions of travelers return home after the Thanksgiving holiday, top US scientist Anthony Fauci warned Sunday. The US is the world's worst-affected country, with 266,831 Covid-19 deaths, and President Donald Trump's administration has issued conflicting messages on mask-wearing, travel and the danger posed by the virus. Travel surrounding Thursday's Thanksgiving holiday made this the busiest week in US airports since the pandemic began. Deborah Birx, White House coronavirus response coordinator, told CBS's Face the Nation: "We're entering this post-Thanksgiving surge with three, four and ten times as much disease across the country."
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China's factory activity grew at its fastest pace in over three years in November, official data showed, as the world's second-largest economy continued its recovery from the coronavirus. The Purchasing Managers' Index, a key gauge of manufacturing activity in China, has largely rebounded following strict measures to curb the virus early in the year, coming in at 52.1 this month. This was higher than October's reading of 51.4, and remains above the 50-point mark separating growth from contraction. The latest figures also bring the PMI data back to levels seen in September 2017. The non-manufacturing PMI came in at 56.4 in November, slightly higher than the month before, signalling further recovery in the services sector.
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The OPEC oil producers' club will meet virtually Monday to mull over an extension to production cuts as the coronavirus pandemic continues to weigh on global demand. Ministers from the cartel will start meeting via video conference at 1 pm GMT Monday and will be hoping that they can turn a page on a disastrous year. The 13 members to the Organisation of the Petroleum Exporting Countries want to avoid a repeat of the collapse in prices seen in April at the beginning of the pandemic. On Tuesday they will be joined by their allies, including Russia, who form the OPEC+ grouping.
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