Business news and markets: live

Business news and markets: live

3, The Nikkei has jumped by a whop[ping 66% in the last 12 months, even when taking account of a more mixed performance since the index peaked in May.

Abe’s economic policies have, so far, been very good at weakening the yen and boosting Japanese equity prices. So what now?

Abe is unlikely to tick his first arrow off his to-do list quite yet, as his second arrow – fiscal reform – could still impact growth. If the economy is hit by next year’s sales tax rise (and potentially more tax rises down the line) then we would expect further monetary policy stimulus to try and cushion the economic blow.

Thus, if monetary policy largesse is here to stay we could see further Nikkei strength and more yen weakness. However, we think that yen weakness could be more pronounced against currencies where central banks are on hold including GBP and EUR, compared to the USD.

10.10 Shire continues its upward march this morning, after a double dose of price upgrades. Goldman Sachs raised its price target to 3600p from 2850p, while Citigroup bumped its target up to 3200 from 2900p. Last week, the specialty pharmaceutical firm released a blockbuster set of results following a wave of aggressive cost cutting by its new chief executive Flemming Ornskov and said it expected to upgrade its 2013 earnings growth forecast to percentages in the mid-to-high teens. Shares hit an all-time high of 2885p in pre-market trading today and are currently up 2.3pc at 2800p.

10.01 Short sellers have been squeezed by today’s Aggreko results. The stock was the fifth most shorted stock going into the results, according to Markit, with around a quarter of the shares available to be borrowed out on loan. The results meant many were forced to cover their positions.

09.58 Temporary power supply company Aggreko leads the risers on the FTSE 100 this morning with a 3.3pc jump in early trade. Brokers are welcoming an unexpectedly calm trading update- many had been expecting a stormy one. The company said trading had been in line with expectations in the three months to the end of September, and added it expects underlying revenues and margins to be ahead of the prior year.

09.45 Confidence among UK corporations is picking up, according to Bank of England data. Its quarterly report on quantitative easing showed that gross issuance of corporate bonds in 2013 Q3 was “relatively strong”, albeit lower than the same quarter last year.

“Strong bond issuance was concentrated towards the end of the quarter, following a typically quiet summer period,” the report said.

09.16 UK Financial Investments, the part of the Treasury that manages the government’s stakes in Royal Bank of Scotland and Lloyds, has announced a management shake-up following the arrival of James Leigh-Pemberton, who begins his new role as chief executive today.

Former UBS banker Christopher Fox, who is in charge of UK Asset Resolution (UKAR), or the “bad bank” set-up to deal with taxpayers’ exposure to the toxic debts of Northern Rock and Bradford and Bingley, will take on the broader role of Head of Banking. This will include his existing responsibilities for UKAR.

Ruth Curtice, who has worked with the Independent Commission on Banking and at the Treasury, will join UKFI as its new Chief of Staff, responsible for ensuring that the body is “equipped to fulfil its investment mandate in all areas, particularly in relation to the policy concerns of its different stakeholders”.

09.01 Traders are expecting thin volumes today as many stockbrokers struggle to get into their London offices from the suburbs.

Michael van Dulken of Accendo Markets noted that the day has got off to a “muted start”. In Lloyds, for example, around 60m shares are trading compared with a 100m daily average.

Quote I would imagine it will be a fairly quiet day. We’ve seen a fairly muted start, it’s not very exciting on the markets with no real big moves.

08.54 Meanwhile, Louise Armistead brings us the rest of this morning’s news in today’s City Briefing:

Among the company announcements today, the Co-Operative Bank has started on its bid to overhaul its IT systems with the appointed Bill Thomas, a former vice president of HP Enterprise Services, to its board. In a statement today Richard Pym, chairman of the board, has admitted that the bank has a “poor track record of successful IT investment” so Thomas will be an “enormous help.”

Pendragon has warned that full year results will be “materially ahead of expectations” with “profit ahead in each of our key sectors of aftersales, new and used.” In a trading update, Pendragon has said overall gross profits increased by 6.4pc on a like-for-like basis.

Aggreko, the temporary power supplier, has reported a 6pc fall in revenues over the past quarter, although the figure is marginally up discounting the £37m revenues from London Olympics that were included during the same period last year.

Balfour Beatty has been awarded two coastal defence contracts by councils in Blackpool and Wyre worth £73m.

Fastjet has raised £2.4m via a draw down on its equity financing facility with Darwin Strategic. And AkzoNobel has announced the opening of a €20m decorative paints plant in India.

08.48 Taro Aso, Japan’s finance minister, has said he will consider penalising Mizuho for its part in the scandal.

08.40 More bank scandals this morning.

Mizuho, Japan’s second biggest bank by assets, has announced a management reshuffle following a £1.3m loans-to-organised crime scandal that has embroiled the lender for more than three years.

This morning, an external panel said the bank did not intentionally cover up loans to yakuza mobsters, even though Mizuho has admitted senior managers knew three years ago that it had lent 200m yen ($ 2m; £1.28m) to criminal gangs.

Takashi Tsukamoto, the bank’s chairman, announced that he will resign, while president Yasuhiro Sato will take a six month pay suspension.

08.22 It looks like this morning’s windy weather hasn’t quite had the same impact on markets as the Great Storm of 1987. David Jones at IG (with the help of some great artistic skills and a felt-tip pen), tweets:

08.07 The FTSE 100 is up 0.2pc this morning, at 6,737.46. Asian markets also rose strongly overnight. The Nikkei 225 index closed up 2.19pc, at 14,396.04, while the Hang Seng index in Hong Kong climbed 0.6pc to 22,828.32.

Analysts said the rises were mainly due to investors picking up bargains following sharp losses last week. A weaker yen also helped to push Japanese markets higher.

07.53 Security company G4S, which last week replaced its UK chief executive amid allegations of overcharging on Government contracts, has rejected a bid from private equity group Charterhouse Capital Partners for its cash solutions business, which G4S described as “highly opportunistic”.

In a statement, G4S said that on October 22, it received a £1.55bn bid from Charterhouse. It added:

Quote The Board consider the Group’s cash solutions services to be core to G4S’ operations and strategic plans. The Board regards the nature and timing of the approach to be highly opportunistic and, following due consideration, with the assistance of financial advisers, the offer has been firmly rejected considering the strategic importance of the cash solutions businesses to G4S and because the Board believes the conditional offer fundamentally undervalues the business and its prospects. The company does not intend to pursue this non-binding, conditional offer and has notified Charterhouse Capital Partners LLP.

07.51 A stormy day ahead. And for once I’m not talking about the financial markets. St. Jude is here, and hurricane-strength winds have already been battering the West Country. So whether you’ve managed to make it in to work, or are reading this from the comfort of your own home, a safe journey to all this morning.

07.45 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

Finance News – Business news from the UK and world


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