Today’s Newspapers: The Times, Independent, FT, Telegraph, Guardian, Mail, Express, Herald 190516

The Times

Steer clear of equities, Goldman Sachs tells clients: Wall Street’s largest investment bank warned investors to avoid shares for the next 12 months as the U.S. Federal Reserve hinted that the next interest rate rise could come as early as next month.

Banker failed to halt rogue account, tribunal told: A former Nomura banker has claimed that the Japanese investment bank failed to check whether the investor at the centre of the largest individual loss in the company’s history was authorised to trade, according to a witness statement at his employment tribunal.

EU urged to do its duty with tariffs on Chinese steel: Ministers are being urged to increase pressure on the European Union to tackle Chinese steel-dumping after it emerged that the United States is to double duties on steel exports by China.

Wake up and smell the coffee on high street: Coffee shops and the fast-food outlets have done more to prop up the traditional high street than any other kind of retailer, according to research charting their explosive growth over the past two decades.

SSP grabs the lion’s share in Leon deal: A British transport catering group has stolen a march on one of its biggest global rivals by a signing a five-year deal with Leon to open franchised branches of the fast-food chain at railway stations up and down Britain.

Construction workers unite in Britain’s biggest super-union: Unite is to take over the Union of Allied Trade and Technicians in the latest move towards super-unions. Britain’s largest trade union will represent Ucatt workers after the leadership of the smaller union recommended a merger at its annual conference in Scarborough.

Wary buyers give office space a wide berth: Investment in commercial real estate in London has slowed markedly this month compared with a year ago, according to the Bank of England, amid uncertainty before the European Union membership referendum.

Chip maker parts with $350 million to get big picture: The pain of its last big deal has finally faded for ARM Holdings, which has flexed its considerable muscle 12 years after it last picked up a heavyweight target.

Scottish oil industry remains on a slippery slope: Confidence among oil workers in the U.K. Continental Shelf remains depressed and companies are considering further redundancies, according to a report.

Ex-Barclays banker denies bribing colleagues: A former Barclays banker accused of rigging the Libor rate dismissed promises to emblazon a colleague’s name in “gold letters” when he wrote a book about his exploits as “just banter,” a court heard.

Hinkley Point faces nuclear rival in Sellafield: A project to build a nuclear power station near Sellafield in Cumbria could begin generating electricity in 2025, a year earlier than the scheme proposed for Hinkley Point by EDF.

The Independent

Wetherspoon to sell takeaway tea and coffee for 99p: Wetherspoon is taking on the likes of high-street coffee chains such as Starbucks and Costa by selling takeaway tea and coffees.

High pay for Bosses hurting economy says senior Bank of England official: Excessive pay for top Bosses is holding back economic growth in Britain, the Chief economist of the Bank of England, Andy Haldane, has warned, in a significant intervention in the debate about Executive remuneration in the U.K.’s biggest companies.

Amazon CEO Jeff Bezos says more bricks and mortar stores are coming: Jeff Bezos, Amazon’s Chief Executive, has confirmed that his company will open more brick and mortar retail stores.

Wendy’s replacing workers with machines because of rising wage cost: One of the biggest burger chains in the world has announced plans to replace workers with machines to combat the rising cost of minimum wages.

Microsoft and Hewlett Packard push for U.K. to stay part of Europe: Microsoft said the U.K. should remain in the European Union, becoming one of the largest companies to come out against a June referendum to exit the bloc.

Mitsubishi Motors President to resign over fuel scandal: Mitsubishi Motors President Tetsuro Aikawa will step down as the Japanese automaker looks to regroup from its widening fuel economy testing scandal with the backing of Nissan Motor.

Financial Times

Diageo names Javier Ferrán as new Chairman: Diageo, the world’s biggest distiller, has ended its search for a new Chairman with the appointment of Javier Ferrán, a private equity specialist with a background in the consumer sector.

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Post Office to shut down U.K. mobile phone service: The Post Office is set to close down a shortlived attempt to build a U.K. mobile phone network service as its offering was unable to compete in the crowded British mobile telecoms market.

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Nike to score big with £600 million Chelsea kit deal: Nike is closing in on a kit deal with Chelsea Football Club worth £60 million a year, making it the second most lucrative in the history of England’s Premier League.

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Marston’s switch to food and premium beer pays off: Marston’s, the U.K. brewer and pub operator, has reported double-digit revenue growth and rising profits, as its attempts to transform itself from beer maker to premium food and drinks retailer start to pay off.

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Arm buys imaging specialist Apical as it eyes ‘internet of things’: U.K. chip designer Arm Holdings has bought imaging specialist Apical as the tech company shifts its focus away from smartphones and steps up its investments in new markets.

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Volkswagen to overhaul pay policy for top Executives: Volkswagen has conceded that its pay policy for top Executives “requires change,” as pressure mounts from shareholders for an overhaul of the German carmaker’s corporate governance following the emissions scandal.

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Microsoft sells Nokia feature phone unit to Foxconn for $350 million: The Windows maker has agreed to sell the unit it acquired from Nokia to Foxconn, the Taiwanese technology group, for $350 million.

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Lex:

U.K. housing: helped to fly: For the British dinner party guest of popular stereotype, it depends on whom you ask. Estate agents’ shares are drooping and the outlook is uncertain. By contrast, housebuilders appear slightly embarrassed by their rampant profitability.

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U.K. pubs: loosening the tie: The traditional British pub — male, beery and smoky — is stranded by time, the fabric of its business model worn thin by changing tastes. Indoor smoking is banned, beer is highly taxed, men drink less. A pubco that even treads water merits applause.

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Innovation: not always for profit: Productivity is not everything, wrote Paul Krugman, but in the long run it is almost everything. Profit is another matter. The golden age for U.S. productivity growth was half a century ago. That era was not so great for corporate profit.

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Lombard:

Burberry: not so hot right now: Parody fashion flick Zoolander 2 wasn’t funny and neither were Burberry’s annual results. Adjusted profits before tax fell £35 million to £421 million as weakening Asian growth choked off demand for swanky bags and coats.

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Arm improves vision: Data are interpreted so many ways, writes Kate Burgess. Viewed through one lens, Arm’s $350 million acquisition of its tech neighbour Apical is a rare instance of a FTSE 100 tech business keeping ahead of the smart revolution.

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The Daily Telegraph

Cash and carry king behind Poundstretcher bids for BHS: The cash and carry tycoon who owns the Poundstretcher chain of discount stores is the latest bidder to enter the contest to rescue BHS, The Telegraph can reveal.

Vauxhall recalls 235,000 for a second time to fix fire fault: Vauxhall is preparing to recall 235,000 Zafira cars for a second time as it can now install a long-term fix to a problem which had been causing as many as several hundred fires.

Paddy Power Betfair, Playtech and Foxtons hit by investor revolts over pay: Paddy Power Betfair, Playtech and Foxtons have become the latest companies to be swept up in this year’s Shareholder Spring after investors rebelled against pay at the two gambling businesses and the high-profile estate agency.

Centrica and Tullow Oil win Arctic drilling licences: Two U.K. oil explorers have got the green light to drill for oil in newly opened fields within the Arctic Circle. Both Centrica and mid-cap explorer Tullow Oil have snapped up stakes in the Barents Sea in the Norwegian government’s latest licensing round, which awarded 10 oil field blocks near the Russian border to 13 exploration companies.

Smith & Nephew to hand cash back to shareholders after selling gynaecology unit: Smith & Nephew is selling its gynaecology unit to medical device maker Medtronic for $350 million (£240 million), and will return the bulk of the cash windfall to shareholders.

Stamp duty hikes won’t kill off buy-to-let boom, says Bank of England: Higher taxes on landlords introduced by the Government are unlikely to cool rampant demand for buy-to-let investments, according to Bank of England research.

John Menzies’ Chairman becomes third senior board member to leave this year: The Chairman of aviation services and print distribution company John Menzies has announced his intention to retire just two days ahead of the company’s annual general meeting, as shareholders were warned to vote against his re-election.

Japan avoids recession as consumers boost economy: Japan avoided falling into recession in the first quarter as a stronger-than expected rise in consumer spending more than offset a drop in business investment. The economy expanded by 0.4% in the first three months of the year, following a contraction of 0.4% in the final quarter of 2015.

The Questor Column:

SSE dividends to rise with inflation for next three years: Electricity utility SSE has been a much needed source of dividend income for investors for more than two decades, and those payments look set to rise in line with inflation in future years. The FTSE 100 company (formerly Scottish and Southern Energy) can afford to increase dividend payments steadily because it owns billions of pounds worth of energy infrastructure which generate predictable revenue from customers on direct debits. However, there are a number of reasons why the dividends are becoming riskier. Firstly, competition in household energy supply is getting tougher. Secondly, the power group was forced to write off £890 million from the value of its assets as commodity prices collapsed. As profits fall the value of the assets also need reducing. SSE was forced to write off £640 million from the value of its gas generation, production and storage assets, along with write-downs of more than £250 million on coal power assets. The write-downs in the portfolio meant reported full-year, pretax profits of £593 million were 20% lower than £735 million a year earlier. SSE prefers the measure of adjusted results which smooth out revaluations and commodity price movements. The adjusted pretax profits of £1.45 billion were 3% lower than £1.52 billion a year earlier. That might not sound like much but it is a saving of about £50 million a year in interest costs. SSE shares, trading on 13 times forecast earnings, remain a solid bet for income hunters, offering an inflation-linked 5.9% prospective yield. That said, investors need to be wary of allocating too much cash here as the risks around the dividend payments are clearly on the rise. Hold. SSE at £15.25-22p. Questor says “Hold”.

John Laing Infrastructure a safe bet for dividend income: John Laing Infrastructure Fund’s (JLIF) expansion into the Barcelona metro has taken the asset value over the billion marker, and the shares remain a steady inflation-protected income option for investors. JLIF buys infrastructure assets such as hospitals and schools when finished and then receives a government-backed fee for running and managing them. More recently, the investment fund paid £85 million for a 40% stake in a project to operate and maintain escalators and electronic doors at stations on the Barcelona metro. The contracts for owning these assets are attractive as the management fee is allowed to rise with inflation. This in turn allows the fund to offer steady returns of cash to holders of the shares, which also rise in line with inflation. JLIF now owns a portfolio of 58 investments, such as hospitals, social housing and schools, from which it earns a steady income by operating and maintaining the buildings. The value of those investments increased by 12% to £974 million during the three months to the end of March. The company, spun out of construction group John Laing in 2010, has a six-year dividend track record and is expected to pay 7p in dividends in the year ahead, offering a prospective yield of 5.8%. It is worth noting that for tax purposes the source for dividends is the Channel Islands, so it is considered an overseas investment and may require a longer-form tax return. Questor thinks that when compared with rock-bottom rates on a savings account, the steadily increasing dividend income from these assets will remain attractive. Hold. John Laing Infrastructure Fund at 123.8p +0.9p. Questor says “Hold”.

HICL infrastructure sets inflation-linked dividends until 2018: Boring and straightforward is exactly what you want from a set of results in an infrastructure fund and that is exactly what HICL served up to deliver another year of dividends that are paid quarterly and rise with inflation. The shares now offer a prospective dividend yield of 4.7%. HICL raises money from investors and then buys up infrastructure assets such as hospitals, schools and police stations around the world. The majority of the portfolio is focused in the U.K. and HICL receives management fees for the maintenance of these buildings, and, in some cases, for providing extra services such as catering and cleaning. The fund successfully raised £178 million during the year to the end of March and spent £231 million on new assets, and increased the value of the portfolio to £2 billion by the end of the financial year. The net asset value per share increased by 4% during the year, to 142.2p at the end of March. So, when the four quarterly dividends totalling 7.45p are included in returns then investors earned a total of about 13p per share, or a return of 9.6% a year. The management team was confident enough to set a dividend target of 7.65p for the year ahead and 7.85p to March 2018. That guarantees inflation-linked dividends on a yield of 4.7% for the next two years. Investors should be aware that the value of infrastructure assets have been rising due to falling costs of debt, and were we to experience a prolonged period of rising interest rates and bond yields then asset values would fall. That said, the shares, trading at a 14% premium to their underlying value, are a good bet for income. Hold. HICL Infrastructure at 165.3p +0.9p. Questor says “Hold”.

The Guardian

Interest rates could rise as soon as June, Federal Reserve suggests: The U.S. Federal Reserve could raise interest rates as early as June, according to minutes from its April meeting, with Fed members arguing the risks of a slowdown in the global economy have receded.

Bank of England’s Chief economist calls for more simple pension system: Over-complex pensions are harming the U.K. economy and reinforcing mistrust of the financial sector, the Bank of England’s Chief economist has warned, as he admitted even he was unable to make the “remotest sense” of them.

Rents and property values would drop after Brexit, say landlords: Rent bills are likely to fall if Britain exits the EU and property will become more affordable to first-time buyers, according to the bodies that represent the U.K.’s estate agents and landlords.

Sports Direct’s Mike Ashley outbid on BHS: Sports Direct tycoon Mike Ashley is understood to have been outbid by rivals including the Owners of Matalan and Edinburgh Woollen Mill as administrators try to secure the future of BHS.

Number of EU migrants working in U.K. rises to record level: The number of European Union migrants working in Britain has risen by 224,000 to a record 2.15 million over the past year, the latest official labour force statistics reveal.

Household finances ‘under most pressure in 22 months’: British households were under the worst financial strain in almost two years in May, according to a new report.

Burberry to cut jobs and product range to save £100 million a year after profit fall: Burberry is to cut jobs and reduce its product range by up to one-fifth in an attempt to save at least £100 million a year, following a 10% fall in profit.

Daily Mail

Britain’s second biggest energy firm SSE posts profits of £1.5 billion despite losing 370,000 customers: Britain’s second biggest energy firm has posted profits of £1.5 billion despite losing 370,000 customers.

U.K. jobs market cools ahead of EU referendum as unemployment falls by just 2,000 over the last quarter: The British labour market is holding steady ahead of the EU referendum next month, but there is evidence that jobs creation could be ‘cooling off’ ahead of the all-important vote.

ARM wants to provide technology that will allow your oven, heating and TV to connect with your phone: ARM Holdings has laid bare plans to become a global leader in security systems and technology that connects all the gadgets in homes via phones, after paying £242 million for a specialist in imaging technology.

Daily Express

Vodafone back in the fast lane with first revenue and earnings growth in eight years: Vodafone dialled up its first underlying revenue and earnings growth for eight years as a multi-billion pound investment in faster networks boosted demand for its services.

Mortgage deals at all-time low but existing customers are still being exploited: Rates on new mortgage deals may have plunged to all-time lows but many existing customers are still paying rip-off rates.

The Scottish Herald

Survey reveals how long small business Owners spend on internal administration: U.K. small business Owners spend an average of four days per month on internal business administration, according to a survey, and 55% believe this burden is holding back growth of their companies.

Johnston Press sees revenues fall but says results will be as expected: Johnston Press reported a 14% fall in revenues for the year to date but said it expected its 2016 results to fall in line with expectations.

Design Council figures reveal Scottish growth: Design economy workers in Scotland produce £43,100 of output, compared to £33,600 for the overall U.K. economy, according to a new analysis. But their productivity is lower than the average for design economy workers across the U.K. as a whole, which is £47,400.

Energy Assets stresses takeover recommendation as court meeting is adjourned: Energy Assets, the Livingston-based smart meter specialist, announced that a court meeting due to approve its £198 million takeover had been adjourned – but would be rescheduled.

Pickering’s launches first oak-aged collection: Craft gin distiller Pickering’s has launched a range of oak aged gins matured in single malt whisky casks. The company, which is based at Summerhall Distillery in Edinburgh, said the casks had been hand-picked from distilleries in five of Scotland’s distinct whisky regions: Islay, Speyside, the Lowlands, Islands and the Highlands.

London Stock Exchange and Deutsche Borse to hold merger vote after EU referendum: THE London Stock Exchange (LSE) and Deutsche Borse have confirmed they will hold a shareholder vote on their planned £21 billion merger after the EU referendum.

The Scotsman

Botched £178 million IT system to deliver farming payments under fire: The “multiple failures” of a botched £178 million Scottish Government IT system to deliver vital farming payments have come under fire in a report by the public spending watchdog.

Radisson Blu Hotel in Edinburgh unveils £12 million refurbishment: The Radisson Blu Hotel in Edinburgh has unveiled its new look following significant renovations. Work to upgrade the 238-room hotel began in early 2015 as part of £12 million investment programme.

PwC rolls out mental health help initiative: Senior staff at PwC, the accountancy giant, have launched a “mental health advocate group” to help support those who may be struggling with their own situation or worried about colleagues or friends.

Google launches Android mobile payment system in U.K.: Google’s Android Pay mobile payment system has launched in the U.K., enabling users to make purchases using a smartphone.

Standard Life in charity windfall of unclaimed shares: Standard Life is to plough £90 million worth of unclaimed shares from its demutualisation a decade ago into ramping up its charitable activities.

City A.M.

Fiat Chrysler recalls 500,000 Jeep Wrangler SUVs due to fears over air bags: Car company Fiat Chrysler has announced it is recalling half a million Jeep Wrangler SUVs, over worries that the cars’ driver-side air bags will not deploy if the vehicle is driven off-road.

Chinese businessman Tony Jiantong Xia buys Aston Villa for £60 million: Aston Villa are set to become the first major English club to fall into Chinese Ownership after the club confirmed a takeover by businessman Tony Jiantong Xia.

Staples dragged down by failed Office Depot merger: Staples, the U.S. office supplies retailer that was forced to cancel its plans for a takeover of Office Depot earlier this month, has posted first quarter results marginally ahead of analyst estimates.

China’s Midea is gunning for German industrial robot maker Kuka with one of the largest ever unsolicited approaches of a foreign company by a Chinese buyer: Chinese home-appliance maker Midea is plotting a takeover attempt of German industrial robot maker Kuka, in a deal that values the German company at $5 billion (£3.4 billion).

China vows to support steel exports as trade war escalates: China has vowed to push ahead with a controversial tax rebate for its steel sector, after the U.S. said it would slap Chinese imports with a five-fold tax hike, in what’s been described as an escalating trade war.

BNP Paribas to cut hundreds of investment banking jobs in London: BNP Paribas is reportedly going to slash more than 200 jobs from its U.K. investment banking arm, as part of its billion-euro cost cutting drive.

Antofagasta warns copper prices will remain low for at least two years: Chilean copper miner Antofagasta has said it expects copper prices to remain low for the next two to three years.

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