Week 43

24 October – 28 October

 

24 October

 

Sterling and euro-denominated debt issued by US phone company AT&T weakened in early trading after the company confirmed plans to buy media conglomerate Time Warner for $85.4bn.

 

Belgium has scuppered a free-trade deal between the EU and Canada after its 3.5m-strong French-speaking region refused to sign off on the deal.

 

The eurozone’s economic recovery strengthened over the course of October, with data released today suggesting that the region is growing at its fastest pace this year. The purchasing managers’ index, compiled by data company IHS Markit and used by the European Central Bank to assess the health of the region’s economy, rose to 53.7 last month — up from 52.6 in September. The figure is well above the crucial 50 level that separates an expansion in activity from a contraction.

 

China’s HNA Group has extended its foray into the global leisure industry, this time with a deal to snap up a 25 per cent stake in Hilton Worldwide for $6.5bn The company said in a statement on Monday that it was buying the stake in the US hotel chain from Blackstone for $26.25 a share — a 14.5 per cent premium to Hilton’s closing price on Friday.

 

25 October

 

Shares in Genworth Financial fell nearly 6 per cent to $4.91 as investors were concerned that regulators could snuff its deal with China Oceanwide Holdings. On Sunday, Genworth, said that Chinese investment firm China Oceanwide had agreed to buy the mortgage guarantor and long-term care coverage provider, for about $2.7bn or $5.43 a share in an all cash transaction — a 4.2 per cent premium to Genworth’s closing price on Friday.

 

In a word, credibility. Mr Macri, a former businessman, appreciates the importance of regaining market confidence. Indeed, reform of the state-run Indec statistics institute is one of the pillars of this trust-building strategy. When the Indec announced last month that poverty levels were at 32.2 per cent of the population, compared to the previous administration’s claims last year of 5 per cent, many observers who value the truth (perhaps perversely) saw this as good news.

 

Vietnam’s new benchmark stock index made its debut on Monday as the Southeast Asian country tries to outshine its emerging market rivals in the hunt for foreign capital. The VNX Allshare index, which comprises of most of the stocks listed in the Ho Chi Minh and Hanoi stock exchanges, was developed to give investors a better overview of the overall economy. It had a bumpy first day, ending at 988.55, or 1.1 per cent lower than its base value of 1,000.

 

UBS turned positive on EasyJet, which climbed 1.4 per cent to 931.5p. A 47 per cent slump in 2016 means the stock is “pricing in material future value destruction” far in excess of that assumed for Ryanair, which has risen to a record premium relative to EasyJet based on 2017 earnings, said UBS.

 

26 October

 

Mozambique’s $726m “tuna bond” slid to a record low after the government admitted it would have to restructure its debts to emerge from “debt distress” and win succour from the International Monetary Fund.

 

Apple is forecasting a return to revenue growth in the run-up to Christmas, after reporting a 9 per cent decline in sales during its fiscal fourth quarter. As expected, Apple posted its first decline in annual revenues in more than a decade as demand for the iPhone 6S failed to match its blockbuster predecessor. Sales for fiscal 2016 were down 8 per cent to $215.6bn.

 

AT&T’s proposed $85.4bn acquisition of Time Warner will create a third force in digital advertising that could take on the “duopoly” of Google and Facebook, the US media group’s chief executive argued on Tuesday.

 

The biggest commodity trading houses have seen profits from handling oil shipments jump more than 50 per cent over the past five years, tightening their grip on global energy markets.

 

27 October

 

Europe’s stalled trade deal with Canada is on the cusp of a last-minute reprieve amid signs of a breakthrough in intensive talks among Belgian leaders who have prevented the country from signing the pact.

 

Palantir, the data analytics start-up last valued at $20bn, is heading for profitability next year and considering an initial public offering, despite being previously reluctant to brave the public markets.

 

Sterling did pick up after the surprisingly bright UK GDP reading that just hit the screens, but blink and you’ll miss it, suggesting that it remains politics rather than data that’s driving the currency for now.

 

European equities are matching a soft Asian session as futures indicate Wall Street may deliver a third day of declines amid nervousness over corporate earnings and higher US borrowing costs.

 

28 October

 

The UK’s first official growth figures since the Brexit vote have confounded the government’s warnings of an immediate recession if Britain voted to leave the EU. The economy was 0.5 per cent larger between July and September than three months earlier, according to the Office for National Statistics. The Treasury had predicted it would shrink 0.1 per cent.

 

ExxonMobil is investigating building a full-scale trading division for the first time in its history, as the world’s largest listed energy company searches for new ways to boost profits during the oil price slump.

 

Japan is in the spotlight as inflation, household spending and jobs data are released today and only days ahead of next week’s policy meeting for the Bank of Japan.

 

US stocks fell on Thursday as investors turned cautious in the face of mixed earnings results, as well as a sell-off in top tier government bonds and a rally in the US dollar.