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Business - Need to Know

Morning Edition

Good morning. Hope you had a great weekend. The world’s mobile phone makers have gathered in Barcelona for the Mobile World Congress, the industry’s annual shindig. Samsung kicked off the show yesterday, unveiling a “three-screened smartphone”. Mark Zuckerberg, the Facebook founder, is undoubtedly the star of today’s show. He is taking part in the keynote panel session.

Nic Fildes, our technology and communications editor, is among the 100,000 industry executives and hangers-on at this year’s bunfight. For the latest from Barcelona log on to our Business Now live blog. You can also follow Nic on Twitter - @NicFildes.

Thorntons has described its first half as “disappointing” - after posting an 8.2 per cent fall in sales. We have also got results this morning from Trinity Mirror, the owner of the Daily Mirror, and Intertek, the FTSE 100 testing group.

Game Digital, the specialist video games retailer, has announced the acquisition of Multiplay, which runs live events where thousands of people watch other people playing online games, for £20 million in cash and shares. It is a strange world, I know, but it is a big (and growing) business.

On the economics front data released this morning by Nationwide shows that house prices rose by the smallest annual amount since September 2013 in February. The mortgage lender said that the annual rate of house price increase dropped to 5.7 per cent last month from 6.8 per cent in January, a sharper slowdown than economists had expected.

We get mortgage lending data from the Bank of England later this morning (9.30am). Have recent stamp duty reforms and the fall in mortgage rates boosted lending? And the first of this week’s three Markit/CIPS PMI surveys for February. Economists expect today’s manufacturing survey to show a reading of 53.40, up from 53 in January.

But the main focus for economists will be on eurozone inflation and unemployment data later today ahead of this week’s crucial European Central Bank meeting

Finally, don’t forget you can follow me on Twitter - @fletcherr - for updates throughout the day.

Richard Fletcher
Business Editor
The Times

Hours after China's central bank cut interest rates to battle slowing growth, an official survey showed that activity in China's factory sector contracted for a second straight month in February. The official purchasing managers' index inched up to 49.9 in February from January's 49.8, a whisker below the 50-point level separating growth from contraction on a monthly basis, but nevertheless above more pessimistic analyst forecasts for a 49.7 reading.

“The father and son behind the creation of the tallest tower in London have linked up with a hedge fund to finance a new wave of development. James Sellar, the son of Irvine Sellar, who developed the Shard, has set up Opus Real Estate with Mansard Capital, a hedge fund and 'alternative asset manager' founded by Leon Diamond,” reports Deirdre Hipwell.

“Speculation has long been mounting about whether Warren Buffett’s investment company can survive intact after he departs. He has given the definitive answer: don’t break up my company after I’m gone; it works best this way.” Alexandra Frean on Berkshire Hathaway’s 50th anniversary letter to shareholders.

“Thick smog enshrouds Delhi’s new airport terminal while the elevated highway into Chanakyapuri, the Indian capital’s swish diplomatic district, seems suspended in a grey-brown mist.” India’s worsening air pollution is a growing problem – and not just for the health of its own people, says Robin Pagnamenta.

In Tokyo, the Nikkei 225 has started the week on a positive note closing up 0.15 per cent this morning at 18,826.88. The FTSE 100 is forecast to open 13 points lower when trading begins shortly.

The FTSE 100 rose 0.46 per cent last week, closing on Friday at 6,946.66. Standard Chartered and IAG were the star performers in the final session. The index is up by around 6 per cent since the start of 2015 as low interest rates and central bank stimulus continues to boost the market.

On Wall Street, US stocks ended the week on a sour note as data showed the country's economic growth had slowed more sharply than first thought. Over the course of the week, the Dow Jones Industrial Average was down 0.04 per cent, 18,132.7 while the S&P 500 slipped by 0.3 per cent to 2,104.5. The Nasdaq edged up over the same period by 0.2 per cent, to 4963.5.

The pound edged up over the course of the week to around 1.54 against the dollar as speculation mounted that the Federal Reserve could raise US interest rates as early as this summer. Against the euro, the pound hit a fresh seven year high of 1.375, as concerns over a Greek exit intensified.

There was something of a rally in the oil price over the course of the week following its dramatic collapse in recent months. Brent crude was up by more than 4 per cent on Friday to $62.83 a barrel — a gain of 3.9 per cent on the week — to achieve its best monthly performance in nearly six years.

The Times
More than 250 companies claiming to have been damaged or destroyed by Royal Bank of Scotland’s “turnaround” division have clubbed together to sue the state-owned lender. The companies, mainly small and medium sized, allege that RBS placed them under the control of its Global Restructuring Group not to help them, but to send them to the wall so that RBS could grab their assets on the cheap.
read full update
Financial Times
Russian billionaire Mikhail Fridman has threatened legal action against the British government over its plans to block his bid to buy gasfields in the NorthSea. Mr Fridman’s investment vehicle LetterOne Group is acquiring RWE Dea, the oil and gas arm of Germany’s RWE, in a €5bn deal due to complete today. The businessman is creating a new group called L1 Energy to be chaired by former BP chief Lord Browne, which will build on the Dea assets to create a global oil and gas company.
read full update
Daily Telegraph
The Liberal Democrats plan to hit the UK banking industry with an additional £1bn tax bill, which the party says will help to eliminate the country’s deficit. The charge will be in addition to the existing Bank Levy, which is on track to raise £8bn in this parliament, said Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury. The annual levy on banks, introduced in 2010, brings in around £2.5bn a year.
read full update
City AM
The UK government could face legal action if it attempts to interfere with a Russian billionaire’s bid for several North Sea energy assets. An investment vehicle called Letter One, which is owned by Russian tycoon Mikhail Fridman, is buying German oil company RWE Dea in a €5.1bn (£3.7bn) deal expected to be closed today.
read full update

THE WEEK AHEAD

TODAY

The great and the good of the telecoms industry will descend on Barcelona this week for the annual Mobile World Congress. About 85,000 people will crowd the Fira to road test the latest phones — with the Samsung Galaxy 6 set to debut — and to hear the heads of Vodafone, Facebook and Intel wax lyrical. The conference is a goldmine for pickpockets and protesters, so Barcelona’s police will no doubt be happy once it is all over.

Interims Thorntons; Allergy Therapeutics; Swallowfield

Finals Trinity Mirror; HellermannTyton; Keller; PPHE Hotel Group; FBD; Senior; Intertek; Hiscox; Dialight; Ultra Electronics; Alent; Amlin

Economics 09.30 UK: Mortgage approvals (Jan); 09.30 UK: PMI manufacturing (Feb); 09.30 UK: M4 money supply (Jan); 09.30 UK: Net consumer credit (Jan)

TOMORROW

Barclays is set to unveil better than expected results after a faster than expected rundown of the part of the business earmarked for disposal and a close control of costs. The blot in the figures will be a charge of about £500 million for foreign exchange trading manipulation, taking the bank’s total reserve for the matter to £1 billion. What a difference six months or so makes. In the summer, Glencore raised the prospect of merging with Rio Tinto to create the world’s largest mining group. Last month Rio handed its shareholders a $2 billion fillip and scoffed at the mention of a Glentinto tie-up. Last week Glencore said that it was cutting its Australian coal exports in response to a dire market. Its shares have underperformed those of Rio since it proposed the deal, making a merger paid for in shares less likely — but the City will be reading the runes to see whether Glencore is planning to have another tilt at Rio all the same.

Interims Clinigen; Ashtead; ISG

Finals Rotork; Taylor Wimpey; Moneysupermarket.com; Jardine Lloyd Thompson; Barclays; Laird; Johnson Service; Hydro Int; Devro; Travis Perkins; Tullett Prebon; Glencore; James Fisher and Sons; Vesuvius; Regus; Pace; Direct Line Insurance; Partnership Assurance; Total Produce; Paddy Power

AGM/EGM The Sage Group

Trading statement Stagecoach

Economics 09.30 UK: PMI Construction (Feb)

WEDNESDAY

As the reporting season for insurers moves into full swing, Legal and General updates on its full-year results. Barrie Cornes, of Panmure Gordon, reckons that operating profits will come in 14 per cent higher at £1.3 billion and the full-year dividend will be just over a fifth higher at 11.25p a share.

Finals Advanced Medical Sol; Melrose; Novae; Lookers; Sportech; TCS; Standard Chartered; Greggs; Fresnillo; Dignity; 4imprint; SQS Software Quality Systems; Carillion; Capital and Regional; BBA Aviation; Legal and General; ITV; CLS Holdings

AGM/EGM The Local Shopping Reit

Economics 09.30 UK: PMI services (Feb)

THURSDAY

At midday the Bank of England’s monetary policy committee announces its latest interest rate decision. The MPC decided at its February meeting to maintain the rate at 0.5 per cent, unchanged since March 2009, and the size of its quantitative easing at £375 billion. At that meeting all nine members of the committee voted in favour of keeping rates on hold. At 12.45, the ECB will publish its monetary policy decision after its governing council meeting. The main refinancing operation rate stands at 0.05 per cent, the marginal lending facility rate at 0.30 per cent and that on the deposit facility at -0.20 per cent.

Interims Betfair

Finals Schroders; Spirax-Sarco Engineering; Jardine Strategic Holdings; Dairy Farm Int; Friends Life; Genel Energy; CSR; Cobham; Aggreko; Arrow Global; Aviva; H and T; Headlam; London Stock Exchange; LSL Property Services; Mandarin Oriental International; Admiral; Jardine Matheson; Hong Kong Land; Hunting; Irish Continental; Inmarsat

AGM/EGM Eastbridge Investments Trading statement easyJet Economics 12.00 UK: BoE rate announcement; 12.45 EMU: ECB rate announcement

FRIDAY

At 10am the European Union will announce the second estimate of figures for fourth-quarter GDP, which follow on from last month’s flash estimate figures. Those showed that GDP was up by 0.3 per cent in the eurozone and up by 0.4 per cent in the wider EU in the fourth quarter. DFS Furniture is expected to announce the final pricing of its initial public offering today, with conditional dealings in ordinary shares starting on the London stock exchange. Unconditional dealings are expected to begin on or about March 11. The expected price range for the retailer was set at 245p to 310p a share.

Finals Aga Rangemaster; Marshalls

AGM/EGM Spitfire Oil; Motive Television; Rangers International FC Economics 09.30 UK: BoE/GfK inflation expectations survey (Feb); 10.00 EMU: GDP (Q4, detail); 13.30 US: Non-farm payrolls (Feb)

WHAT THE PAPERS SAID

The Sunday Times

• HSBC: The global bank is to break with tradition and recruit its next chairman from outside as the furore over Swiss tax evasion heaps pressure on Douglas Flint.
• Abu Dhabi: The country’s sovereign wealth fund has made a £1.6 billion offer for Maybourne — the owner of Claridge’s, the Berkeley and the Connaught hotels in London — which is controlled by the Barclay brothers.
• Stephen Schwarzman: The boss of the private equity giant behind Center Parcs took home $690 million last year in one of the biggest paydays in Wall Street history.
• Ambassador Theatre: The group, whose West End hits include The Lion King, is in talks to buy Stage Entertainment, the European operator, for €500 million.
• Letter One Energy: Plans by the oligarch-backed oil group to buy a clutch of North Sea assets have been blocked by the British government on concerns over Russian sanctions.
• Fosun: The Chinese conglomerate has made a bid for Afren, the troubled oil explorer.
• ITV: The broadcaster’s annual profits are expected to leap by a fifth.

The Sunday Telegraph

• Sports Direct’s failure to find a finance director for 14 months has become a bone of contention for the retailer’s leading investors.
• Britain will remain stuck in a low-growth trap unless policymakers tackle the “unsustainable deficit and debt”, Ken Clarke, the former chancellor, has warned.
• Archie Norman, the ITV chairman, has urged business leaders to speak out on political issues before an election that “poses a bigger choice than for decades”.
• Supermarkets’ pressure on their suppliers will be laid bare this week when the chocolate maker Thorntons posts a slump in profits.

The Mail on Sunday

• Stephen Hester, the former boss of Royal Bank of Scotland, is in line for a seven-figure bonus from the bank — nearly two years after he left.
• The British fashion guru George Davies is poised to make a comeback to the UK market, launching an online business under the FG4 brand, with plans for high street stores to follow.
• Betting-shop customers are blowing an estimated £1.7 billion a year playing on fixed-odds betting terminals.
• The number of people renting will grow by 600,000 over the next four years, according to Alison Platt, the boss of Countrywide, the estate agency.

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