Tuesday, April 4, 2023

Easter dealmaking

The Readout With Ruth David.

If you're planning a long weekend away for Easter, there's some good news. The pound today climbed to a 10-month high against the dollar. Traders have bet resilience in the economy may give the Bank of England room to continue hiking interest rates. And while investors aren't yet making long bets on the currency, some analysis suggests there may be more advances to come, Libby Cherry reports.

Even within the BOE, though, there isn't unanimous consensus on another rate hike, as Tom Rees and Lucy White report. The central bank's most dovish policy maker Silvana Tenreyro today made a case for rate reductions, saying an "earlier and faster reversal" of recent hikes is likely to keep inflation from falling well below target. Tenreyro was speaking at the Scottish Economic Society annual conference in Glasgow.

Investors should also prepare for a world of higher price rises in the coming years, which could eventually force central banks to lift their inflation targets from 2% to 3%, according to Paul Brain, a portfolio manager at Newton Investment Management. 

In the UK, inflation remains stubbornly above 10%, five times the BOE target. The ensuing cost-of-living crisis couldn't come at a worse time, with businesses across the spectrum continuing to lay off thousands.

That's certainly not just a UK problem. Globally, there have been more than 500,000 job cuts announced since October, as tracked by Bloomberg, with most losses among white-collar workers. While those numbers are alarming, Lionel Laurent has the bad news over at Bloomberg Opinion: This wave of job cuts could be just the start.

Want this in your inbox each weekday? You can sign up here.

What just happened

The stories you need to know about this evening

A wealth of deals

Spring holiday season is usually slow on corporate activity but the UK is having an unusually busy week when it comes to dealmaking. It started when London-listed Glencore saw a $23 billion approach to Canadian miner Teck Resources spurned. And if mining mergers are your cup of tea, here's Bloomberg's follow up scoop on what comes next for Teck. We also have a write-up on how the approach is the first tangible sign that Glencore — the biggest shipper of coal and for years one of its most vocal defenders — is thinking about exiting the space.

Even with Glencore's efforts thwarted, the last 48 hours alone have made this the third-busiest week of the year in the UK, our data show. Wealth manager Rathbones Group agreed to buy Investec's UK wealth management business, creating an operation worth about £100 billion in funds, the companies said today. Rising costs for regulation, technology and operations are pushing firms in the industry to combine forces, my colleagues Loukia Gyftopoulou and Adelaide Changole write.

More broadly, chief executives across a range of sectors seem increasingly open to pursuing deals as they chase growth in an environment where higher supply chain costs and rising inflation are hurting profitability. 

Still, pulling off cross-border deals under increased regulatory scrutiny is no easy task. Take the sale of storied football club Manchester United. My colleagues Alex Wickham and David Hellier had the scoop on UK government officials privately flagging concerns about bidder Sheikh Jassim bin Hamad Al Thani, who heads a consortium that some see as the lead bidder for the club.

Sheikh Jassim Bin Hamad J.J. Al Thani Source: Qatar Islamic Bank

And even as the green shoots of mergers appear, London's market for initial public offerings is still barren ground. Company listings in the city have slumped to a 14-year low this year, outpacing the declines in New York and Paris.

One area where London continues to see increased activity seems to be petty crime. We have taken to lugging our bicycles into the house each day because leaving them outside is very risky. Car theft is on the rise too, if the local WhatsApp groups are any indication. Oh, and if you are planning to get insurance for that new Range Rover, you should expect to pay more for auto insurance in the coming months — as your insurer is likely losing money, Chris Bryant writes for Bloomberg Opinion

"Inflation has dramatically pushed up the cost of accident and theft claims, sticking insurers on both sides of the Atlantic with big underwriting losses," Bryant says. Maybe biking is the way to go. 

Health systems are failing patients

As recently as 2000, France, Italy and Spain were ranked as having the best health care systems in the world. But more than two decades and a global pandemic later, that picture has changed. The coronavirus pandemic exposed weaknesses in the European Union's much-envied health care systems — and time is running out to fix them.

What you need to know tomorrow

Get ahead of the curve

Increasing headcount. Ireland's banking industry is set for further expansion this year despite turmoil in the global financial system.

Not on the High Street. Virgin Money has started an investment platform with asset manager Abrdn in a bid to go beyond retail banking.

Out of orbit. Meanwhile, Virgin Orbit filed for bankruptcy after a failed UK space launch prompted a collapse in its stock price.

A seriesWarner Bros. is close to a deal for a new online TV series based on Harry Potter.

Pontoise to nowhere. Paris's air taxi stations could be ready before the taxis are.

Fighting all the way. Former US President Donald Trump is preparing to surrender to law enforcement officers — and plead not guilty. 

When an oil exec leads a climate summit

One key story, every weekday

Sultan Al Jaber, the CEO of Abu Dhabi National Oil  Photographer: Kamran Jebreili/AP

Sultan Al Jaber was selected to lead COP28 — the world's most important climate summit. He also runs the United Arab Emirates' oil and gas behemoth Adnoc. 

Read The Big Take

Please send thoughts, tips and feedback to readout@bloomberg.net. You can follow Ruth on Twitter.

No comments:

Post a Comment

Preference center link

...