Top 10 Stories of Last Week! 06/03/17

This weeks news includes; 2017 Budget announced, Snap share price falls, Fines to be introduced for ticket touting, Dominos sales fall.

Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Click on the links for full stories.

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Opinion articles of the week:

  • Business Insider looks at the Sainsbury’s CEO: Brexit could give British supermarkets an unexpected boost.
  • City A.M looks at the head of Regulation at uSwitch’s claim that Competition, not price caps, is the solution to lowering Britain’s energy bills.
  • CNN explores Volkswagen CEO’s view that more car companies will merge.

 

 

1. THE UK BUDGET 2017

Philipp Hammond has delivered his first Budget as chancellor. Some the main points of the budget included; £2 billion of funding for social care, main rate of National Insurance tax for self-employed workers is to rise by between 1% and 10% by 2018, new minimum excise duties on cigarettes.

There has been a significant amount of controversy surrounding the rise in National Insurance rate as it directly contravened the Conservative manifesto. For more on the issues click here. (The Guardian)

For all of the key points on the budget click here. (Sky News)

2. HOUSE OF LORDS BLOCK BREXIT BILL AGAIN

The government has suffered a second Brexit defeat in the House of Lords as peers backed, by 366 votes to 268, calls for a “meaningful” parliamentary vote on the final terms of withdrawal.

Ministers said it was disappointing and they would seek to overturn the move when the bill returns to the Commons.

Lord Heseltine, one of 13 Tory peers to rebel, said he had been sacked as a government adviser on regional growth.

The previous defeat was on the issue of guaranteeing the rights of EU citizens.

Lord Heseltine, 83, who served as a minister in the Thatcher government, said he was informed by the Conservative chief whip in the Lords he was to be sacked “from the five jobs with which I have been helping the government”.

“This is entirely the right of the prime minister and I’m sorry that the expertise which I have put at the government’s disposal over the last six years has now come to an end,” he said.

“However, in the last resort, I believe, as I said in the House of Lords, the future of this country is inextricably interwoven with our European friends. (BBC News)

3. TRUMP FACES FRESH LEGAL CHALLENGES AGAINST NEW TRAVEL BAN

Donald Trump’s revised travel ban is causing turmoil in the courts once again, as one US judge granted asylum to a Syrian refugee’s family, while another declined to rule on the latest version.

District Judge James Robart has come under criticism for claiming that a complaint or motion needs to be filed against the new executive order before he can make a decision. After a public outcry against the original ban, the Seattle-based judge ruled in February that Mr Trump’s executive was unconstitutional, stopping it from being implemented across the country.

But Judge Robart said he would not be able to rule on the second ban until lawyers filed the appropriate paperwork. Nevertheless, a judge in Wisconsin has already circumnavigated Mr Trump’s travel ban by allowing the wife and child of a Syrian refugee who had already been granted asylum to enter the country.

The president’s latest executive order, issued on March 6, removed Iraq from the list of countries whose citizens will be subject to a 90-day travel ban, but Syria, Iran, Libya, Somalia, Yemen and Sudan all remain banned.

For more information on the ban, click here. (The Telegraph)

4. AIRBNB RAISES $1 BILLION IN FUNDING

Home rental company AirBnB has raised $1bn (£821m) of investment funding in a deal that values the firm at $31bn. The San Francisco-based firm disclosed the investment in a filing to the US Securities and Exchange Commission.

AirBnB did not comment on how it would use the funding, but is expected to expand its operations globally. It has grown rapidly since its launch in 2008, and currently operates in 65,000 cities worldwide.

The firm, which does not publish its sales figures, makes its money by enabling homeowners to rent out their homes. It takes a 3% cut of each booking and a 6% to 12% service charge from guests. It made its first profit in the second half of 2016, and will continue to be profitable this year on an underlying basis, according to media stories. They also reported that the firm had no plans to list its shares on the stock market in the near future.

AirBnB has been diversifying and recently began offering users new services, such as tailor-made city tours and exclusive experiences with local experts. However, it has also faced criticism over claims it is driving up rents and contributing to housing shortages in some cities.

In December, under pressure from MPs, the firm said it would block hosts in London from renting out homes for more than 90 days a year without official consent. It is also facing tougher regulations in New York, Berlin and Barcelona. (BBC News)

 5. SNAP SHARE PRICES TUMBLES AFTER IPO

Shares in Snap, the social media phenomenon that last week became the darling of the New York Stock Exchange, tumbled further at the open of US markets on Tuesday, falling a further 10 per cent to a fresh low of $21.30.

Stock in the star tech company fell back down to earth yesterday, wiping nearly $4bn off the company’s market cap. A blockbuster float last Thursday saw the firm’s stock jump 40 per cent, with further gains on Friday. Traders returned from the weekend with a more sceptical view, however, sending shares down 12 per cent.

Meanwhile, last night a group representing large institutional investors approached index providers S&P Dow Jones Indices and MSCI, looking to bar Snap and any other company that sells investors non-voting shares from their stock benchmarks. Both index providers have said they are reviewing Snap’s inclusion, Reuters reported.

Were Snap to be added to indexes such as the S&P 500 Index or the MSCI USA Index, managers of stock index portfolios would have to buy its shares, and other investors whose performance is tracked against such indexes would likely follow suit.

Some money managers worry about buying Snap’s Class A shares because they have no voting rights, meaning those shareholders will have no voice on matters like strategy or executive pay. (City A.M)

6. STANDARD LIFE TO ACQUIRE ABERDEEN ASSET MANAGEMENT FOR £3.8bn

Standard Life Plc, Scotland’s largest insurer, agreed to acquire Aberdeen Asset Management Plc for about 3.8 billion pounds ($4.7 billion), a deal that would create the U.K.’s largest active manager. The stocks soared in London trading.

Under the terms, Standard Life shareholders will own 66.7 percent of the combined group, according to a joint statement on Monday. Aberdeen’s investors will receive 0.757 new Standard Life ordinary share for each share they already own. That values Aberdeen in line with its market value before the talks were disclosed March 4.

The deal, which will create a 660 billion-pound asset manager, is the latest move by the active management industry to combat a tide of investors shifting money to low-cost, passive funds. Aberdeen, hurt by weaker sentiment toward emerging markets, has suffered more than three years of redemptions, leading Chief Executive Officer Martin Gilbert to freeze salaries and cut costs. Standard Life’s investment unit also had outflows last year.

Aberdeen shareholders have no choice but to “accept a nil-premium takeover or risk a material dividend cut, possibly as soon as the interim results in May, due to the weak capital situation,” Paul McGinnis, an analyst at Shore Capital Group Ltd., wrote in a note to clients. “The uncertainty created by an offer and subsequent integration period could be unhelpful in attracting new money from clients.”

Standard Life’s shares jumped more than 9.6 percent, the most since September 2014, and were trading at 400.30 pence at 9:23 a.m. in London. Aberdeen rose as much as 8.2 percent, the most since June.

Mitsubishi UFJ Financial Group Inc., Aberdeen’s largest shareholder with a 17 percent stake, and Lloyds Banking Group Plc, the third-biggest shareholder, support the deal, according to the statement. Standard Life Chief Executive Officer Keith Skeoch told journalists on a conference call that the insurer’s shareholders he had spoken to were also supportive. (Bloomberg)

7. AIG LOOKS TO EXPAND IN LUXEMBOURG POST BREXIT

American International Group, the global provider of commercial property insurance, said it plans to open an insurer in Luxembourg to write business in the European Economic Area and Switzerland once the UK exits the EU.

“This is a decisive move that ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes,” Anthony Baldwin, chief executive officer of AIG Europe, said on Wednesday in a statement. “We are ensuring that our clients and partners experience no disruption from the UK’s EU exit.”

Financial firms are shaping their Brexit plans after Prime Minister Theresa May announced in January that the UK would leave the EU’s single market in 2019, likely spelling the end of passporting, where companies seamlessly service the rest of the bloc from their London operations.

AIG currently writes business in Europe from a single insurer based in the UK. The New York-based company has more than 2,000 employees based in London and has already been cutting staff there and in other cities as part of a separate cost-cutting initiative.

The reorganisation is expected to be completed in the first quarter of 2019, and AIG will retain an insurer in the UK for sales in that market, according to the statement. Nicola Ratchford, a spokeswoman for the insurer, said the company has a few employees already in Luxembourg. She said there might be shifts in the leadership ranks in Europe, but that it is too soon to know how many workers will move, or to comment on real estate decisions.

AIG chief executive Peter Hancock said before the Brexit referendum last year that he’d consider an operations hub in continental Europe if UK voters opted to leave the EU. Luxembourg is among European cities seeking to attract banks and insurers that are looking to open EU hubs. (The Independent)

8. FINES FOR TICKET TOUTING TO BE INTRODUCED

Online touts who bulk buy tickets and sell them for inflated prices will face unlimited fines under government plans. An amendment to the Digital Economy Bill means it will be illegal to use “bots” to bypass limits on the maximum number of tickets that can be bought.

Tickets purchased by bots can appear on secondary websites at prices many times greater than their face value. High profile artists such as Adele and Ed Sheeran have previously criticised the touts and asked their fans not to buy tickets from secondary sites.

Last month, resale site Viagogo was accused of “moral repugnance” for selling tickets to an Ed Sheeran Teenage Cancer Trust gig for up to £5,000.

And an £85 ticket to see Adele at the O2 in London last year was reportedly being sold for £24,840.

As part of the touting crackdown, ministers will accept in full the recommendations of a review by Professor Michael Waterson. In the report, he suggested ticket sellers should have tougher anti-bot measures in place with a facility to report bot attacks, stronger enforcement of existing consumer rights laws, and the threat of further action if the industry does not act against rogue ticket traders. (BBC News)

9. DOMINOS SALES SUFFER AS RIVALS GAIN GROUND

Domino’s Pizza suffered a sharp slowdown in sales growth in early 2017 as rival Pizza Hut cut prices and consumers reined in spending. David Wild, the Domino’s chief executive, said Pizza Hut was “very aggressive” in January and that consumers were more cautious about spending.

Over the first nine weeks of the year, sales growth at Domino’s stores open for more than a year dropped to 1.5%, down from 10.5% in the same period a year earlier. Wild added that consumer “have seen things like petrol rise in price, they’re reading in the newspaper that food and energy prices are going up, and they’re factoring that into spending.”

He said that Domino’s could gain from that because it “sits neatly in the middle” and could gain from customers opting for a takeaway rather than eating out. “This is a more value-conscious environment,” he added. Family finances are expected to come under increasing pressure in 2017 from rising inflation and weak wage growth.

Investors lost their appetite for Domino’s Pizza on Thursday, with shares plunging 16%. City analysts at N+1 Singer said a number of factors were behind the slowdown. “We understand this reflects a combination of heightened competition from Pizza Hut, market softness and [Domino’s] ‘winter survival’ promotion campaign being relatively unsuccessful,” they wrote in a research note.

Sales growth also slowed over 2016 as a whole, to 7.5% on a like-for-like basis, from 11.7% in 2015. Total sales were up 14.5% at just over £1bn. Wild said the business would continue to grow through expansion both in the UK and abroad. The company expects to open at least 80 new outlets in the UK in 2017, creating up to 3,000 new jobs.

Domino’s also announced the purchase of Dolly Dimple’s, Norway’s third largest pizza company, for £4m. Dolly Dimple’s 42 stores will be integrated into Domino’s startup venture in Norway, where it has 12 stores. (The Guardian)

10. NIKE LAUNCHES SPORTSWEAR HIJAB

Female Muslim athletes around the world can finally look forward to representation in professional sportswear after Nike announced it will launch the Nike Pro Hijab. The product was first teased in the Swoosh’s viral video campaign, titled “What Will They Say About You?,” and is set to be released in spring 2018.

“The Nike Pro Hijab may have been more than a year in the making, but its impetus can be traced much further back, to an ongoing cultural shift that has seen more women than ever embracing sport,” a statement from Nike read.

The Pro Hijab will be made from a lightweight mesh fabric that features tiny, strategically-placed holes for optimal breathability. Though Nike has long been committed to diversity and inclusively (it launched a plus-size range just last week), this is the first time it has released an item specifically for Muslim female athletes. (Business Insider)

 

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