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Business - Need to Know

Morning Edition

Good morning. Asian equity markets have ended the week on a positive note on the back of yesterday’s dovish Fed minutes that showed the US central bank held off raising rates “because of the risks that an emerging market slowdown posed to the world’s largest economy”.

The FTSE 100 is forecast to follow and open higher (see markets below). The benchmark index has now risen for seven consecutive days - could we see an eighth? It has certainly been a good week for the FTSE 100 which, having closed last week at 6,129, is on track to end the week above 6,400.

Peter Cruddas, the founder of CMC markets, is among the business supporters backing a new cross-party group campaigning to leave the European Union called Vote Leave that was launched this morning. Francis Elliott, our political editor, has more here.

On the corporate front the government has announced this morning that it has sold another tranche of Lloyds Banking Group shares taking its stake to below 11 per cent and Glencore has said that it is cutting back on zinc production by a third - sending the price of the metal nearly 7 per cent higher.

On the economics front, we get UK trade deficit data for August at 9.30am. According to Reuters, economists expect the deficit to narrow (a bit) to £2.5 billion. The official business of the annual meetings of the International Monetary Fund and the World Bank Group gets underway later today with the plenary session in Lima, Peru. Philip Aldrick, our economics editor, is there. You can follow him on twitter @PhilAldrick for the very latest.

Please do keep sending me any thoughts or observations about The Times business coverage - richard.fletcher@thetimes.co.uk and don’t forget to follow me for on twitter for regular updates throughout the day - @fletcherr.

Have a great weekend. I’ll be back bright and early on Monday morning.

Richard Fletcher
Business editor
The Times
richard.fletcher@thetimes.co.uk

Alcoa, the American aluminium group, reported a smaller-than-expected quarterly profit, hurt by slumping prices for aluminium and other commodities and unfavourable foreign exchange rates. “The biggest challenges were commodities prices being under pressure and the wide currency swings,” Klaus Kleinfeld, Alcoa’s chief executive officer told Reuters. Alcoa's shares fell about 5 per cent in after-hours trading trading. The company said last month it will separate into two parts. One half will provide "value-added" materials such aircraft and car parts to manufacturers. The other, "upstream business" will consist of Alcoa's traditional aluminium smelting operations.

Britain’s green energy industry faced a mounting crisis yesterday as a second solar panel company collapsed into administration in as many days after cuts to government subsidies. Climate Energy, an installer of energy-efficient solar panels, boilers and home insulation products, which employs about 130 people, became the latest victim of the cuts, which come into effect in January.

Government hopes of strong demand for Lloyds Banking Group shares have risen after an intermediary said that it had received more than 120,000 expressions of interest in the three days since the proposed sale was announced. Hargreaves Lansdown, the retail broker, said that the level of interest was “tremendous” and the number of people registering an interest exceeded the 100,000 who bought Royal Mail shares through it in 2013.

“I’ve read a novel’s worth of articles this week about the future of human resources and have barely understood a fraction of almost routine calls for “authenticity”, “organisational agility”, “strategic intra-organisation partnerships”, “organisational capability”, and “inter-departmentalisation.” When HR can’t explain what they do, what hope do the rest of us have? Asks Sathnam Sanghera.

The Nikkei has closed up 1.64 per cent this morning at 18,438.67. IG expects the FTSE 100 to open 62 points higher when trading begins shortly.

The FTSE 100 rallied for a seventh straight day, overturning losses early in the session, after dovish minutes from the Bank of England’s monetary policy committee meeting suggested the prospect of an interest rate rise was some way off. The index rose 38.47 points, or 0.61 per cent, to 6,347.82, ahead of stocks in Paris and Frankfurt and despite a number of companies going ex-dividend. The FTSE 250 fell 27.41 points, or 0.16 per cent to 17,003.81. Read here for Alex Ralph’s full market report.

Wall Street finished higher buoyed by the tone of the minutes from the US Federal Reserve’s September meeting. These showed policymakers wanted to wait for evidence that a global economic slowdown would not knock US growth off course before deciding to raise interest rates. The S&P 500 closed at a seven-week high after rising 0.9 per cent or 17.6 points to 2013.4 while the Dow Jones Industrial Average jumped 138.5 points or 0.8 per cent to 17,050.8. Around 7.3 billion shares changed hands against the recent daily average of 7.5 billion.

Sterling fell against the euro yesterday - down 0.4 per cent to €1.357 - after the Bank of England signalled that there’s scope to keep interest rates at a record low as inflation weakness persists. However, against the US dollar, the pound reversed early losses and was 0.1 per cent higher at $1.532.

Oil traders continued to push prices higher yesterday - as they have done all week - on the view that there will be a rise in demand and a fall in supply. In New York, Brent crude rose by 3.8 per cent to $53.3 a barrel

Mondi is one of the least well known constituents of the FTSE 100 index but one with a strong record for growth and ambitious plans to build new plant. Tempus finds the packaging group putting out an encouraging third quarter statement despite the odd doubter in the market. Tate & Lyle has upset in the past, but the latest update indicates further progress even if its sucralose artificial sweetener is still facing headwinds. DFS Furniture came to the market in March and is making an extra payment to investors, a halfway dividend for the period before it floated. Read on for more about the Tempus tips of the day.

1 Executives at the brokerage Icap paid thousands of pounds for tickets to Ricky Hatton’s 2007 fight against Floyd Mayweather for the convicted UBS trader Tom Hayes, according to emails shown to jurors.

2 Homebuyers are paying thousands of pounds more to live in market towns rather than in neighbouring areas, figures show. The average house price in English market towns is £250,686, which is almost £24,000 more than county averages, according to Lloyds Bank.

3 Britain’s green energy industry is facing a mounting crisis after a second company collapsed into administration following cuts to government subsidies.

4 Asda is in talks to take over a vast Tesco store that was built but never occupied. Dave Lewis, the chief executive drafted in to revive Tesco, decided to close the store soon after joining last October as he sought to rein in aggressive expansion and cut costs.

5 Bill Gross, the bond market billionaire kicked out of Pimco last year, is suing the US investment management group, accusing ex-colleagues of a lust for power and greed.

6 One of the City’s oldest listed private equity funds has launched a fresh campaign to keep a corporate raider off the board, saying his appointment would be “destabilising, divisive and value destructive”.

7 Michael Dell is on the cusp of orchestrating the largest takeover in the history of the technology industry by merging his computing business with EMC, a $50 billion data storage company.

8 German exports suffered their steepest monthly plunge since the height of the global financial crisis as growth forecasts for Europe’s largest economy were cut. There were warnings that the emerging markets slowdown would be worse than feared for the country, particularly when combined with the damage done to the “Made in Germany” brand by VW emissions scandal.

9 The Bank of England kept interest rates at a record low for the 79th month, with only one member voting for an increase, as concern grew about the slowdown in emerging markets. Minutes of the meeting confirmed the Bank’s forecasts that growth will slow from 0.7 per cent in the first three months of the year to 0.6 per cent in the third quarter.

10 BT has taken up arms against the “self-interested” rivals that have called for its break-up, warning the telecoms regulator that doing so would hamper investment in Britain’s broadband network. Ofcom raised the prospect of a total separation of BT’s fixed-line broadband network, Openreach, from its other services as part of a wider review of the telecoms market earlier this year.

The Times
Britain’s green energy industry faced a mounting crisis yesterday as a second solar panel company collapsed into administration in as many days after cuts to government subsidies. Climate Energy, an installer of energy-efficient solar panels and boilers and home insulation products, which employs about 130 people, became the latest victim of the cuts, which come into effect in January.
read full update
Daily Telegraph
Volkswagen’s emissions-rigging scandal is “on the same scale as Enron”, America’s most notorious corporate failure, according to US politicians. The German giant was also compared to disgraced cyclist Lance Armstrong and Ponzi fund conman Bernie Madoff, as Michael Horn, chief executive of its American business, appeared before Congress to be grilled over the company’s fiddling of diesel exhaust pollution tests.
read full update
Financial Times
Tidjane Thiam, Credit Suisse’s new chief executive, is preparing to launch a substantial capital raising when he unveils his strategic plan for the bank in two weeks’ time, according to people briefed on the plan.
read full update
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