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Newspapers: The Times, Independent, FT, Telegraph, Guardian, Mail, Express, Herald 050815

The Times

Mercury rises with Unilever under fire over its rap sheet: A video by an Indian rapper attacking Unilever for allegedly failing to clean up mercury contamination near one of its former factories has proved an unlikely viral success — with 1.2 million YouTube hits and counting.

Just Eat spits out places that fail to deliver as promised: Just Eat is kicking hundreds of British restaurants off its online takeaway ordering platform because of their poor service.

Ban ‘no threat’ to Promontory’s high ground over RBS inquiry: Promontory Financial Group’s role in producing a long-awaited report into Royal Bank of Scotland’s treatment of small businesses is not under threat, the Financial Conduct Authority has said, despite the consulting firm being banned by an American regulator.

Dividend set to join list of Standard Chartered cuts: The new Chief Executive of Standard Chartered is set to announce a dividend cut, alongside results that suggest the emerging markets bank is continuing to struggle with falling revenues and problem loans.

Bitcoin exchange ‘was insolvent since 2013’: Mt.Gox ran out of cash six months before it was declared bankrupt and used clients’ money to pay back other customers, police investigating the collapse of the bitcoin exchange have claimed.

Fresnillo waits for silver lining: Fresnillo has slashed its investment budget by a fifth as it braces itself for silver and gold prices staying low for a long time.

South Africa accuses Glencore over job cuts: The potential closure of a coalmine has pitched Glencore into a furious row with the South African government.

House prices heating up after summer break: The British housing market may have had a brief summer lull, but prices are on the rise again.

Dubai plans world’s tallest residential tower: Not content with having the world’s tallest skyscraper, biggest shopping centre and largest artificial islands, Dubai announced that it plans to build the highest residential building.

The Independent

Shops in struggling high streets permitted to be open all day Sunday under new rules: Shops in struggling high streets would be allowed to open all day on Sundays while megastores in retail parks would be excluded from the longer hours, under plans to be announced by the Government. The move is aimed at breathing fresh life into town centre stores facing mounting pressure from online competitors as well as from out-of-town supermarkets.

High Court blocks Tory plan to slash levy for affordable housing: An “insane” Government planning policy that could have allowed luxury landlords to escape more than £1 billion a year in affordable-housing payments has been quashed by the High Court.

Airbus has patented a jet that could fly from London to New York in one hour: A new hypersonic aircraft patented by Airbus could cut the journey time between London and New York to just one hour.

 

Financial Times

Direct Line cuts costs to deliver profits rise on flat premiums: Direct Line, the insurer spun off from Royal Bank of Scotland, overcame a fiercely competitive market to deliver a jump in first-half operating profits even as premium income was little changed.

Stop constant changes to pensions, urges new Standard Life Chief: Standard Life’s incoming Chief Executive has urged government Ministers to stop tinkering with pensions rules, warning that continual changes may be putting workers off saving for retirement.

Areva and EDF can end rivalry with rescue deal, says Chairman: A multibillion-euro rescue package that Areva has struck with EDF will transform the two French nuclear companies’ strained relations, according to one of the senior figures involved in the negotiations.

Mediobanca takes control of London-based Cairn Capital: Mediobanca, Italy’s most powerful investment bank, has agreed its first foreign acquisition in its 70-year-history, taking control of a London-based investment Manager in the latest sign of upheaval in Italian capitalism.

Lending Club rapid expansion plans undimmed: Lending Club, the world’s biggest online marketplace connecting borrowers and investors, has posted another quarter of rapid growth, with Chief Executive Renaud Laplanche signalling an imminent expansion into new lines such as car loans and mortgages in his quest to “transform the entire banking industry.”

Debt-laden Neiman Marcus readies for IPO: Neiman Marcus, the venerable U.S. luxury department store, has fired the starting gun on an initial public offering as the group’s private equity backers ready for an exit.

Weak yen helps Toyota to record quarterly profit: Toyota, the Japanese carmaker, has eked out a record quarterly net profit as the weaker yen offset a slowdown in vehicle sales in most regions outside of North America.

Alibaba appoints former Goldman banker Michael Evans as President: Chinese ecommerce group Alibaba has appointed a former Goldman Sachs banker as President, tasking him with overseeing the group’s global expansion.

Travelport attacks Lufthansa in booking fee fight: Lufthansa will rue the cost of picking a fight with the travel booking industry, predicted Travelport, one of the three big travel software companies.

SoftBank’s Masayoshi Son backs Sprint overhaul: Masayoshi Son, the Japanese telecoms billionaire, reaffirmed his commitment to Sprint, his struggling U.S. wireless carrier, by announcing the creation of two new equipment leasing companies that will free up cash for a big overhaul of the network.

Lex:

Continental: smooth ride: Continental’s results tend to come in just ahead of expectations, and Tuesday’s first-half numbers were no exception. They were a contrast to more disappointing fare from rivals such as Michelin and BorgWarner, a U.S. car parts maker. The German tyre and parts maker’s reliability was rewarded by a 5% share price rise. Although raw material prices (oil and rubber) have fallen, that has helped low-cost Asian competitors more, because raw materials account for half of Asian producers’ costs but nearer a third for European makers, says UBS. Continental’s tyre division is the defensive, cash-generative part of the business; 70% of sales are replacements. Car parts matter more, accounting for three-quarters of revenues. Here Continental focuses on non-commoditised parts that help carmakers meet three big industry demands: increased fuel efficiency (to meet emissions targets), better-connected cars and higher safety requirements. And, unlike tyres, components are complex. Carmakers prefer to deal with suppliers they know and trust as the financial and reputational risk of failure is high.

Shire/Baxalta: merry-go-round: The next U.S. drugmaker set to decamp to foreign shores, albeit against its will, could well be Baxalta. Pharma group Shire announced a $34 billion unsolicited bid for the Baxter International spin-off on Tuesday. Shire understands only too well the increasing precariousness of tax-driven deals. Last year, U.S. pharma company AbbVie attempted to acquire Shire in just such an “inversion”; after the deal, AbbVie would have screwed a brass nameplate to a Dublin wall and slashed its effective tax rate. However, in the middle of the process, the U.S. Treasury instituted new rules constraining such inversions, prompting AbbVie to walk away from the deal. Since then Shire, whose market value is £34 billion, has spent $5 billion buying NPS Pharmaceuticals, allowing it to apply its low corporate tax rate (it paid an effective rate of 17% in 2014) to a new stream of earnings derived from the U.S. Because it can create more after-tax income, it has far more relative purchasing power than, say, Pfizer, or another U.S.-based company. Shire’s offer is all in shares and would give Baxalta shareholders, including Baxter, 37% of the new company. Shire has disclosed its bid because so far the target company has been cool to its overture. Shire’s shares dipped 6% as its investors worried about earnings dilution.

Crédit Agricole: ploughing on: It comes from Crédit Agricole’s second-quarter results presentation and says its mutual-owned parent company will proactively “reassert an ambitious, innovative and attractive commercial positioning”. Yet not even that flannel explains the 10% drop in the French lender’s shares on Tuesday, making it the Chief faller in the FTSE Eurofirst 300 index. And while Crédit Agricole’s reported net income of €920 million was an improvement on last year’s €77 million, when it was hit by a hefty write-down on its stake in stricken Portuguese lender Banco Espírito Santo, the French lender’s recovery was held back by a further €350 million provision for U.S. litigation relating to sanctions. That takes the total to €1.6 billion — enough to cover the sort of fine Commerzbank had to pay for the same issues. There is no certainty on the final bill. Even so, the bank’s 10.2% common equity tier one capital ratio was up only 30 basis points from a year ago and only just above the minimum European bank investors expect. Much hinges on the size of its U.S. fine, but the bank will have to maintain a far higher rate of profit growth to put its capital beyond doubt.

Lombard:

Shire cheek: AbbVie of the U.S. subjected the London-listed pharma group to a siege last year, only to walk away from an agreed $54 billion takeover when the U.S. changed tax rules to its disadvantage. Shire is now shoving its own scaling ladders up against the castle walls of Baxalta. It has publicly proposed buying the U.S. orphan drugs group for an enterprise value of $34 billion. Baxalta gave it the bum’s rush in private. Just like AbbVie, Shire hopes pressure from shareholders will force Baxalta to lower its drawbridge. The task of hyper-ambitious Shire Boss Flemming Ornskov would be easier if he could schmooze 19% shareholder Baxter, which demerged Baxalta a month ago. However the U.S. medical group is barred from leading investor opinion by the threat of a penal U.S. tax charge. This is designed to stop companies dodging capital gains tax on disposals. Another result of the anti-avoidance regime is that Shire can only offer cash equivalent to one-third of the purchase price of Baxalta via a two-year buyback programme. Nor do you need a degree in behavioural economics from the University of Chin Stroking to deduce that Shire, having batted away four offers from AbbVie last year, will have to sweeten its own approach for Baxalta.

Addicted to quack: Sir Sandy Crombie left a relay baton on the desk of David Nish in 2009 when he handed over the job of Chief Executive of savings group Standard Life. Mr Nish, an outstanding Boss, has promised to leave the same baton for Keith Skeoch, who succeeds him. The company, which announced half-year statutory operating profits had risen a decent 6%, now waddles and quacks more like a fund Manager, with fee-based revenue rising from 70% to 95%. Its shares trade at a premium to most peers at 18 times future earnings. Regulatory challenges are multiplying. Investors looking for an insurer unembarrassed by that title might consider Direct Line, which sells home and motor cover. In a scenario where Standard Life’s rating was set to converge with those of fund Managers, and Direct Line stock was to catch up with better-rated insurers, it could pay to sell one and buy the other.

 

The Daily Telegraph

Greece needs €100 billion debt relief as permanent depression looms: Greece needs a debt write-down of almost €100 billion (£70 billion) if the country is to stand a chance of clawing its way out of a “prolonged and severe depression”, according to a leading think-tank.

Chancellor sells stake in RBS at a loss of £1.1 billion: The Chancellor has pushed the button on the sale of part of the taxpayer’s stake in the Royal Bank of Scotland, beginning the privatisation of the bank seven years after it was bailed out.

P&O Ferries has busiest month for freight in ‘modern history’ amid Calais crisis: P&O Ferries experienced its busiest month for freight “in modern history” in July after it brought its freight vessel back into service to help deal with the transport chaos caused by the migrant crisis in Calais.

Just Eat delivers surge in revenues and profits: Just Eat has brushed off concern it faces mounting competition from rivals muscling into the online food delivery industry after reporting that first-half orders, revenues and profits all surged by more than 50%.

HSBC promotes rising star Antonio Simoes to Europe Chief: HSBC has promoted its U.K. Chief Executive Antonio Simoes to head its European operations, with the title of Chief Executive of HSBC Bank.

Construction sector suffers first slowdown in three months: Britain’s builders suffered something of a slowdown in July, as the sector eased back from its post-election boom.

Iron Maiden star Bruce Dickinson restarts Djibouti’s national airline: The Horn of Africa nation of Djibouti has relaunched its national airline – a company managed by Iron Maiden lead singer Bruce Dickinson.

The Questor Column:

No silver lining for Fresnillo: It is not only the price of gold that is falling sharply, silver has also entered a downward spiral – and that is causing a slump in profits at U.K.-listed Mexican mining group Fresnillo. The prices of all commodities, from iron ore to gold and silver, are falling as the world’s largest consumer, China, sees its economy slow down. The price of silver slumped to a six-year low this week of $14.60 an ounce, down almost 70% from its peak in 2011. Fresnillo, which operates silver and gold mines in Mexico, revealed that profits in the first half of the year had fallen by 44% to $76.4 million. The market expects pretax profits of about $250 million for the full year to the end of December, a sharp reduction on the $1.5 billion profit made in 2011, when both gold and silver prices peaked. Fresnillo is one of the lowest cost producers of gold and silver, and can cope with lower market prices. The company produces 90% of its silver revenues from mines at Saucito and Fresnillo at an average all-in cost of about $8.50 per ounce. Around 73% of gold revenues come from mines at Herradura and Noche Buena at an average all-in cost of about $900 per ounce. The company has reduced costs and cut capital spending, but unless there is a recovery in gold and silver prices it would be very dangerous for investors to look for a bargain here. Fresnillo at 645p +12p. Questor says “Avoid.”

 

The Guardian

Greece needs wide debt relief to avoid permanent depression, thinktank warns: Greece’s economy will suffer fresh damage from the austerity measures demanded by its creditors and will remain stuck in permanent depression unless it receives substantial debt relief, one of the U.K.’s leading thinktanks has warned.

After the Greek crisis, it’s time for a new deal on debt: The International Monetary Fund’s acknowledgement that Greece’s debt is unsustainable could prove to be a watershed moment for the global financial system. Clearly, heterodox policies to deal with high debt burdens need to be taken more seriously, even in some advanced countries.

Councils allowed to relax Sunday trade laws to promote ‘thriving high streets’: Mayors and local councils are to be given new powers to relax Sunday trading laws for high street stores to allow them to compete with large out-of-town shopping centres and online retailers.

Shire pharmaceutical makes $30 billion move for Baxalta: The London-listed drug company Shire has made a $30 billion (£19 billion) hostile takeover bid for the rare-disease specialist Baxalta.

Former City trader Tom Hayes given 14-year sentence for Libor rigging: Former City trader Tom Hayes has been sentenced to 14 years in jail after becoming the first person to be convicted by a jury of rigging the Libor interest rate.

U.K. tea sales fall by more than 6% over past five years: Trouble is brewing for the traditional British cuppa, a report has warned, with sales falling by more than 6% over the past five years.

 

Daily Mail

Britain’s big four banks rack up £50 billion in fines since the financial crisis with HSBC set to pay £500 million in U.S. for rigging foreign exchange markets: Britain’s biggest four banks have racked up almost £50billion in charges to cover fines and lawsuits since the financial crisis.

Goldman Sachs admits U.S. fines for mis-selling toxic mortgages could escalate to £3.8 billion: Goldman Sachs has admitted its fine for mis-selling toxic bundles of mortgage debt before the financial crisis could be £1.4billion bigger than previously feared.

Skoda is getting serious after all the jokes as it speeds to a million sales: There are few firms that have been the butt of more jokes. So the launch next month of a high-end Skoda, costing almost £40,000, is sure to cause much merriment.

Weak euro suits Hugo Boss as profits rise 13% to £50 million and shoppers splash out on upmarket clothes: Hugo Boss has been boosted by the weak euro, which has encouraged overseas shoppers to splash out on its upmarket clothes.

Smiths Group shares soar after U.S. fund ValueAct takes a stake: Smiths Group shares shot towards the top of the FTSE 100 after reports that U.S. activist hedge fund ValueAct has taken a stake in the industrial stalwart.

Arcadia imposes tougher payment terms on suppliers in move set to hit firms hard: Sir Philip Green, the tycoon behind Topshop and Dorothy Perkins, is forcing his clothing suppliers to accept harsher payment terms.

 

Daily Express

Sight hope for diabetics: British-made eye mask set for NHS approval: A British-made revolutionary eye mask with painless light beams to treat the sight problems experienced by diabetics as they sleep is set for NHS approval.

Millions urged to start saving as inheritance figures plunge: Millions of Britons who are banking on an inheritance windfall to secure their financial future are courting disaster.

Russia’s economy hit hard by falling oil prices and Western sanctions: Russia’s economy is set to shrink by 3.4% this year as Western sanctions and falling oil prices take a heavy toll.

House price growth jumps in July and hits record high after being fuelled by demand: House prices in Britain reached a new record high last month and could break through the £200,000 barrier by the end of the year, according to the latest index from Nationwide.

 

The Scottish Herald

Car dealer shows faith in prospects for market after strong first half: Pendragon has underlined its growth ambitions after posting better than expected first half results helped by surging car sales.

ICS Learn keeping an eye open for deals: Online education specialist ICS Learn is eyeing acquisitions and investing close to £300,000 in software and systems upgrades to prepare it for a period of accelerated growth.

Skyscanner seals Microsoft deal: Skyscanner has agreed a deal for its technology to power flight search for Microsoft Travel.

Tough times for arable farmers: Shrinking profit margins in arable farming have been highlighted to new SNP MP Calum Kerr during a farm visit in his constituency of Berwickshire, Roxburgh and Selkirk.

 

The Scotsman

Post-election house building growth slows: House building grew at one of the weakest rates for more than two years in July as the post-election bounce showed signs of fading, according to figures.

Higher launch costs dent quarter profits at BMW: Upmarket carmaker BMW saw its net profit reverse 1% in the second quarter amid higher launch costs for new vehicles and a tougher market in China, a major driver of earnings.

Direct Line profits up as Churchill ads hit mark: The Owner of the Churchill nodding dog insurance brand has lifted profits by almost half as it improved customer services and revamped its marketing.

Aberdeen Asset acquires hedge fund in U.S. expansion: Aberdeen Asset Management has ramped up its presence across the Atlantic with the ­acquisition of a U.S.-based hedge fund specialist with offices in New York and London.

 

City A.M.

RAF air strikes in Iraq extended by one more year through 2017: British fighter planes will continue to carry out air strikes against Islamic State (Isil) in Iraq until March 2017, the defence secretary has announced.

Mortgage rates start to climb off record lows: Mortgage rates are creeping up, ending years of decline and raising affordability fears for young homeowners.

Just Eat fends off rivals with surge in profits: Just Eat is gobbling up market share, with profits soaring by almost two thirds in the first half as more hungry customers flocked to its website.

Fresnillo slashes capex as metal price volatility dampens profits: Gold miner Fresnillo blamed volatile metals pricing for a 44.3% reduction in profit in the six months to 30 June, despite growing production of the precious metal by 37%.

Pfizer can buy Hospira for $17 billion after European Commission approval: The European Commission has approved the proposed acquisition of Hospira by Pfizer for $17 billion (£10.9 billion) under EU merger regulations.

Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.