The Times
Hidden €1 billion found by God’s accountant: A tough talking Australian cardinal charged with cleaning up the Vatican’s hazardous accounting procedures has found more than €1 billion hidden off the books.
Bailout is unworkable and Greece could leave, says Schäuble: German MPs are expected to give grudging approval to the Greek bailout proposal in an emergency vote despite an outburst from Wolfgang Schäuble, the Finance Minister, that Grexit might be a better option.
Amazon gets fresh with U.K. rivals in grocery deliveries: Amazon is preparing for the imminent launch in Britain of its online grocery delivery service.
Goldman profits halved as cash set aside for lawsuits: Goldman Sachs reported a massive slide in its second-quarter profit after it set aside $1.45 billion for litigation expenses.
Rake’s progress halted at Barclays: The financial regulator has approved John McFarlane as Executive Chairman of Barclays in return for the bank’s commitment to having checks and balances on the board.
Emirates says no to Dragon Oil dividend: Dragon Oil has been told that it does not need to pay a dividend as its largest shareholder continues an attempt to take full control.
Homebuyers return to market after election lull: Mortgage lending to Britain’s homebuyers bounced back in June after the pre-election slowdown to hit its highest level since the credit crunch struck seven years ago.
The Independent
Debenhams partnership in peril as Mike Ashley ‘does a Ratner’: Mike Ashley has launched a bizarre attack on Debenhams, calling the business “crap” even though he presides over a partnership between the department store group and Sports Direct, his retail empire.
Non-food Chief quits unexpectedly at Marks & Spencer: Marks & Spencer is in turmoil as the highly respected Chief of its struggling non-food division unexpectedly quit.
Tata Steel points finger at energy taxes as it cuts 720 jobs: Tata Steel blamed green taxes and cheap imports as it announced 720 job cuts at its speciality steel business in the U.K.
Financial Times
888 close to victory in £900 million Bwin bid battle: 888 Holdings, the online casino and poker operator, is nearing victory over rival GVC in the battle to acquire Bwin.party, the Gibraltar-based internet gaming group, in a takeover that is likely to be worth more than £900 million.
Hanergy Thin Film threatens HK regulator with legal action: Hanergy Thin Film Power, the solar equipment supplier being investigated by Hong Kong’s Securities and Futures Commission, on Thursday threatened to take legal action against the financial regulator.
Enoc fires warning shot at Dragon refuseniks: Dubai’s national oil group has increased the pressure on minority investors in Dragon Oil to accept its offer to buy the U.K.-listed Turkmenistan-focused producer, saying the company no longer needed to pay a dividend.
Tom Hayes says he was not alarmed by warnings over Libor fixings: Tom Hayes, the first person to stand trial for Libor rigging, told a court he did not pay much attention to warnings from an interdealer broker he often worked with that he should not make written requests for Libor fixings.
Deutsche Pfandbriefbank shares rise on market debut: Shares in Deutsche Pfandbriefbank jumped as much as 7% on its market debut, as the German property lender went ahead with its €1 billion listing despite recent market volatility.
Acquisitive Celgene aims to deal itself a blockbuster drug: Drug companies have found few things as hard to overcome as “not invented here syndrome” — the notion that in-house scientists will discover enough new medicines to keep the pipeline humming forever.
Accounting scandal set to shake up Toshiba: Anonymous tips about Toshiba’s accounting to Japanese securities watchdogs have ignited a scandal that stretches back at least five years and is expected to lead to a sweeping management shake-up as soon as next week.
Magna International snaps up Getrag for €1.75 billion: Canadian auto supplier Magna International has acquired its privately held German peer Getrag for €1.75 billion, as car parts makers continue to bulk up to serve global vehicle manufacturers.
Star TV and Eros lead race to head off Netflix threat in India: Rupert Murdoch’s Star TV and Bollywood studio Eros International are leading a race to become the “Netflix of India” by pushing to launch new streaming services, in a bid to head off the expected entry of the U.S. company into the country next year.
New Google CFO promises more discipline: Google’s new Chief Financial Officer on Thursday promised to bring greater discipline to the company’s cost controls, as well as to its ballooning capital spending on its most ambitious “moonshot” projects.
Apple, Samsung in talks with telecom groups to launch e-Sim card: Apple and Samsung are in advanced talks to join the rest of the telecoms industry to launch electronic Sim cards, in a move could fundamentally change how consumers sign up to mobile operators.
Lex:
Google: growing pains: For a decade, Google’s investors contented themselves that Eric Schmidt was providing, in his words, “adult supervision” for the young Founders, Larry Page and Sergey Brin. Mr Page is Chief Executive these days, but investors still need to know there is a grown up in the room. Witness the arrival of Ruth Porat, the former Chief financial officer at Morgan Stanley who took up the unenviable position of Google CFO in May. In Ms Porat’s own words, Google’s priority is revenue growth and this is not inconsistent with expense management — a claim that will be put to the test. Ms Porat is embarking on meetings with Google’s business leaders and examining the company’s early stage products including Google Fibre, Google Life Science and Nest. Cutting down will not be easy: one of the company’s key tenets is that it will invest large amounts in “moonshot” projects that might look odd to outsiders. Pure shareholder return has never been a high priority: Google has never paid a dividend, despite a cash pile of nearly $70 billion. As Ms Porat begins her task, one place she could start is by improving Google’s earnings reports. (She has hinted she is considering this.) Better metrics could better highlight which parts of the company are growing, and which are not. Breaking out YouTube and Google Play revenues would give a clearer picture of Google’s non-search businesses; Credit Suisse estimates YouTube and Google Play will contribute a fifth of net revenue this year.
Goldman Sachs: the centre holds: Bank of America discovered this on Wednesday, as earnings more than doubled; it lapped a $4 billion litigation charge from the year before. Ditto for Citigroup earnings, reported on Thursday. They jumped because the bank put a $3.8 billion charge in the rear-view mirror. Goldman partisans have reason to be more optimistic than fans of its universal banking competitors, though. Whatever renaissance Citigroup and BofA are experiencing is largely driven by cost-cutting and retrenchment. Goldman can point to underlying businesses that are in strong shape. Overall revenue for the first half of 2015 was the highest in five years. Investment banking revenues in the second quarter were up 13% from a year ago, driven by advisory fees on M&A transactions. Asset management fees were also strong. Lower trading revenues, not unexpectedly, countered those gains. And much as Goldman would like to downplay the coming settlement, it is not wholly irrelevant. Anything that shrinks its capital base detracts from its ability to pay dividends and buy back shares (in the past two years, Goldman has reduced its capital payout plans based on regulatory feedback). Morgan Stanley settled for $2.45 billion this year, and that could be the benchmark for Goldman. Even with the reserve it took, book value per share was unchanged.
Swatch: moment of reckoning: Switzerland became even more expensive in January, when the Swiss National Bank gave up trying to contain the appreciation of the franc. Shares in Swatch have clawed back about half of the 20% drop that followed that decision, helped by half-year results on Thursday that beat forecasts. At about 16 times forecast 2016 earnings, the valuation is reasonable compared with past levels and peers such as Richemont, on 19. China is another headwind; it accounts for a third of sales. A clampdown on gifting had already affected the company’s high-end brands. Recent turmoil in China’s financial markets might yet curb consumer appetite for mid-market watches, or the ability of Chinese to exploit regional price differentials for luxury goods by holidaying in Europe. Swatch is responding sensibly. Although committed to increasing market share, it still managed to raise prices in Europe and has held them in China. It is introducing new products, expanding its retail network and sounded notably optimistic about the second half. Despite its expansion plans, inventories rose only modestly in the first half, suggesting the company is not struggling to sell merchandise.
Lombard:
Rake braked: The bank has promised he will stay until it has replaced him as senior independent Director and it has appointed a Chief Executive. But there is still a case for the PRA’s Adrian Bailey to demand that Barclays cancels Sir Mike’s security pass when he is in the building, trapping him inside for the duration. The intervention of the watchdog reflects painfully on Executive Chairman John “Mack the Knife” McFarlane, who was already having a bad week at the office. Lucy Kellaway poked fun at him. Sir Mike quit — or tried to. And now the PRA is antsy at a narrowing in oversight following the ousting of CEO Antony Jenkins. As Promethean funkateer James Brown would have remarked of the Scot’s situation: “Papa’s got a brand new bag”. Chairing Barclays is a totally different proposition to helming the board of Aviva. The insurer is a local hero rather than a national bugbear. Politicians, regulators and the press are on a hair trigger when it comes to Barclays. The troubleshooter needs to adjust to that fast.
Lansdowne let down: Owning stakes in hedge fund Managers was once all the rage among investment banks. The fashion is now as passé as a Juicy Couture tracksuit, thanks to the incoming Volcker rule. But some banks seem unable to let go. Neither party wants to talk — hurt feelings, perhaps. However, it appears that the U.S. investment bank wavered when it realised the price was unlikely to exceed a book value of $182 million. A modest non-cash write-off was hardly going to kill a vendor of Morgan Stanley’s scale, though it has avoided a dent to its pride. The bank, by the same token, is not under short-term pressure to sell. Moreover, Lansdowne would appear to be doing decently, if a notable short of Tesco and a complementary long position in Ocado were anything to go by. So no harm holding on.
The Daily Telegraph
Supermarkets are ‘misleading shoppers’ with confusing promotions: Supermarkets are misleading shoppers by running confusing promotions, Britain’s competition regulator has found.
Barclays promises Sir Mike Rake will stay until a new Chief is found: Sir Mike Rake is to stay at Barclays until a new Chief Executive is found, the bank promised on Thursday, seeking to reassure investors that the Deputy Chairman is not about to add to the turmoil at the top of the lender.
IAG’s Aer Lingus takeover waved through by U.S. regulators: U.S. regulators have waved through International Airlines Group’s €1.4 billion takeover over of Aer Lingus, it was announced on Thursday, as shareholders in the Irish flag carrier approved pledges the British Airways Owner has made to maintain routes to Heathrow.
New living wage will ‘stunt’ hospitality profits, Deutsche Bank warns: The imposition of a higher minimum wage is likely to “stunt” profits at hospitality and leisure companies for years to come, Deutsche Bank has warned.
Greek banks to open for first time in three weeks as Mario Draghi provides lifeline: Greece’s banks may be able to reopen for the first time in three weeks on Monday, after Eurozone policymakers handed them a much-needed lifeline.
Google shares jump after hint it may rein in spending: After years of big spending on risky projects that Chief Executive Larry Page proudly hailed as “moonshots”, there are signs Google may be showing signs of financial discipline.
The Questor Column:
Buy into baker Finsbury Food while the shares are still rising: One of the U.K.’s largest bakery companies, Finsbury makes cakes, speciality breads and morning goods, such as croissants and rolls, for the U.K.’s supermarkets, cafes, wholesalers and restaurants. It has licences with Disney, Nestle, Marvel and Thorntons and has had particular success with its Spiderman and Frozen-themed party cakes. A few years ago, however, Finsbury embarked on a major restructuring programme to bolster its balance sheet and turn around what was then a struggling business creaking under a pile of debt. Admittedly, consumer markets remain challenging and the well-documented problems affecting the supermarket sector – still a major customer for the group – show no signs of abating. Finsbury is also increasing capital spending this year as it integrates Fletchers and Johnstones. However, Finsbury is now a larger, more diversified business and that should help it ride out any short-term hurdles. Finsbury is also set to reap the benefits that come with scale and a bigger distribution network. The group expects to outperform its profit targets, leading analysts to upgrade full-year forecasts. That doesn’t reflect the potential of recent acquisitions, the strong organic growth profile and the opportunity for Finsbury to make further acquisitions in an industry ripe for consolidation. Questor says Buy.
The Guardian
U.K. interest rate rise billed for new year, warns Bank of England: Britain has been put on alert to expect its first interest rate rise since the global financial crash at around the turn of the year as the Governor of the Bank of England, Mark Carney, warned that the long period of 0.5% borrowing costs was coming to an end.
Housing market could face collapse if base rate rise hits buyer confidence: Homebuyers can wave goodbye to mortgages at just 0.99%. Savers can say hello to better rates for the first time in seven years. Investors will wobble as bond funds dive. But it is estate agents who have most to fear.
ECB hands Greece extra €900 million in emergency funds: Greek banks will benefit from an extra €900 million (£630 million) in emergency funding to keep them afloat, the European Central Bank has announced, possibly allowing bank branches to open on Monday.
HS2 Chief hits out at ‘unjust’ division of rail assets between north and south: Britain has lacked, according to mild-mannered Sir David Higgins, a proper sense of outrage. Not the kind of anger that anti-HS2 protesters vent at the £50 billion high-speed rail project Higgins leads, but outrage at the injustice that sees one half of the country routinely look down upon the poorer.
Big Mac index inflames debate over Chinese yuan’s value: China’s currency is significantly undervalued against the dollar, according to the Economist’s latest Big Mac index, which found that the bestselling burger from McDonald’s cost 43% more to buy in the U.S. than in the world’s second largest economy.
Daily Mail
Interest rate rise ‘likely by end 2015’ as U.S. economy recovers, says Fed Chief Janet Yellen: Interest rates in the United States are likely to rise by the end of the year as the world’s biggest economy recovers, according to the head of the Federal Reserve.
Mike Ashley forced to slash profits forecast for Sports Direct after failing to buy up House of Fraser: Failing to buy department store group House of Fraser has forced Mike Ashley’s Sports Direct International to cut its profit forecasts for next year.
Anglo American’s Brazilian iron mine digs a £2.6 billion hole in profits after slowing of China’s economy causes ore price to drop: An iron ore mine in Brazil continued to give Anglo American a financial headache after it admitted it will have to write off up to £2.6billion.
Small Oxford cancer drug developer Immunocore secures record fundraising: A small Oxford-based cancer drug developer has secured the biggest-ever private fundraising by a European biotech, collecting $320 million (£205 million) from investors including Neil Woodford.
Burberry Boss turns on charm to placate shareholder concerns over his £7.9 million pay package: Burberry Boss Christopher Bailey managed to placate shareholders at annual meeting after 2014’s pay revolt.
Telford Homes shares jump 5% on back of £620 million sales: Shares in property developer Telford Homes leapt 5% as it revealed it has already secured £620 million of sales for completion in its financial year to the end of March.
Daily Express
Greece’s troubles could boost package tours: Turmoil in Greece and wider political tensions could drive an upturn in demand for package holidays, according to tour operator and leisure airline Jet2.
Shoppers misled by supermarket price tricks, says regulator: Dubious promotions and price tricks by supermarkets could confuse customers and break consumer law, the competition regulator said as it announced a new set of measures to bring grocers into line.
Wetherspoon’s wage warning: National living wage may kill pubs: The Founder of one of Britain’s biggest pubs groups fears the introduction of the national living wage will signal last orders for many watering holes.
The Scottish Herald
FirtsGroup laments loss of ScotRail but says rail no longer its lifeline: Firstgroup’s Chief Executive has said losing the ScotRail franchise was an undeserved “emotional blow” but the group is no longer dependent on rail for its recovery.
Edinburgh software developer Craneware enjoys record contract wins: Craneware, the Scottish company focused on producing software to help the U.S. healthcare system manage billing and revenues, achieved record contract wins during its last financial year.
Quilter Cheviot appoints new Edinburgh office head: Alan Aitchison, head of office for Quilter Cheviot Investment Management in Edinburgh, is to be succeeded by his deputy Mark Hallam.
Ithaca delivers strong production update: Aberdeen-based Ithaca Energy has reported a strong operational update from its oil producing assets in the second quarter.
The Scotsman
BT defends broadband as watchdog looks into break-up: Former telecoms monopoly BT launched a vigorous defence of its broadband strategy after the industry watchdog floated the idea of a possible break-up of the group.
Merger magic at Dixons as profits charge higher: Dixons Carphone hailed a “terrific year” as it revealed a 21% surge in profits in its first set of annual results since being created following a merger between two of the high street’s biggest names.
Sports Direct moves goalposts for bonus scheme: Thousands of Sports Direct workers will share in a £150 million bonus scheme after the retailer posted a surge in profits, but also cut current year targets after admitting expansion plans had fallen short.
Taxpayers’ Lloyds Banking Group stake below 15%: The taxpayer stake in Lloyds Banking Group has fallen to below 15% after the U.K. government sold another tranche of shares in the lender.
City A.M.
Carney fuels speculation of 2015 interest rate hike: Bank of England Governor Mark Carney dropped another strong hint that markets could be underestimating the likelihood of a 2015 interest rate hike.
Draghi raises lending to Greek banks and calls for debt relief: Greece was given a major boost by the European Central Bank (ECB) as it called for debt relief and lifted the amount that could be lent to its banks.
Worldview lays out reasons for Petroceltic EGM: The battle between Irish oil company Petroceltic and its activist investor Worldview Capital is showing no signs of reaching a conclusion in the near future.
Playtech’s offer for Plus500 gets the green light: Plus500, the online trading company recently part of a money laundering probe, won shareholder approval for a takeover by Playtech.
