Officials overseeing the wind up of department store chain BHS may be interested in breaking up the business and selling it off part by part.
It was reported by the BBC they had received “several offers” from potential buyers including Edinburgh Woollen Mill, Sports Direct and Ikea. Interested parties were to put in solid offers before 4pm last Tuesday.
The demise of the retail chain will be the biggest high street collapse since the failure of Woolworths eight years ago, providing the government with another problem as it attempts to save thousands of jobs in the steel sector.
There is a long way to go however, with the company cascading into debts of over a billion pounds according to the administrator Duff & Phelps. They say the chain will continue to do business as the negotiations continue.
Another entity that has shown interest in purchasing parts of the embattled company is Yousuf Bhailok, a British businessman and the former general secretary of the Muslim Council Britain. The Preston based multimillionaire is understood to want to save at least three quarters of BHS’s 160 stores as part of a plan to buy the retail chain as a going concern. Although the company are in administration there is still some chance following Bhailok’s offer that the 10,000 staff can be kept on.
“BHS have basically been running out of cash in the last 2 years and this is the end result” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management on his blog Tuesday. “The first slip up that brought the situation about was down to Retail Acquisitions who famously bought the concern from Sir Philip Green for one pound, and proceeded to botch a hundred million pound funding strategy needed for development,” he added.
Failure to revaluate business rates is thought to have lost BHS over 14 million pounds in 2015.
Another factor facilitating the retail chains demise was a gigantic pension deficit. Sir Philip Green previously held talks with the Pension Regulator regarding a cash boost into the BHS pension plan. He is thought to have offered £80 in total equity in order to secure a loan against BHS’s assets but the deal fell through.
Sunday, June 26, 2016
Tuesday, June 21, 2016
Crypto-Currency Could Change Cash Forever
It is "most probable" that the financial industry will embrace the innovations surrounding Bitcoin,” Head of Corporate trading at Nikko-Desjardins Asset Management, Stuart Poulson said.
"I'm pretty sure that the block-chain will change a lot of money related practice and trade," said Poulson on Tuesday from the Consensus 2016 event in Manhattan.
With respect to the crypto-currency's future, Poulsen said the government "will in any case implement laws," but that the sureness of Bitcoin's downfall is "not the definite position to take."
Block-chain innovation has been the subject of media and speculator interest as a potential fix for everything from hospital records to global ID. However many at the block-chain centred gathering told CNBC that there was an aura of over-confidence.
"We don't think the block-chain can do the greater part of what has been promised," Ripple Chief Chris Larsen said. "Yet, we're entering the web of quality — and that is especially under hyped.”
"While some speculators spent the block-chain centred meeting pitching how a safe, unchangeable worldwide ledger (a block-chain) could supplant the current worldwide money related framework, others believed it could play a more ironic role.
Some observers are of the opinion that the innovation behind Bitcoin could change cash forever, by helping fiat money be more productive. Rather than a trust-less system of financially incentivized database maintainers (called "miners" in Bitcoin circles), a variation of block-chain innovation would be utilized by the national banks that crypto-rebels advocate against.
Bitcoin determines its worth by some extent due to shortage. It's hard-wired into the code that there will only ever be a certain number of the crypto currency. National banks will need to have the capacity to make additional computerized resources as required.
Larsen added that central banks' digi-currencies, which he portrayed as a reasonable solution, are "just going to improve the government’s capacity to see what you're doing."
"I'm pretty sure that the block-chain will change a lot of money related practice and trade," said Poulson on Tuesday from the Consensus 2016 event in Manhattan.
With respect to the crypto-currency's future, Poulsen said the government "will in any case implement laws," but that the sureness of Bitcoin's downfall is "not the definite position to take."
Block-chain innovation has been the subject of media and speculator interest as a potential fix for everything from hospital records to global ID. However many at the block-chain centred gathering told CNBC that there was an aura of over-confidence.
"We don't think the block-chain can do the greater part of what has been promised," Ripple Chief Chris Larsen said. "Yet, we're entering the web of quality — and that is especially under hyped.”
"While some speculators spent the block-chain centred meeting pitching how a safe, unchangeable worldwide ledger (a block-chain) could supplant the current worldwide money related framework, others believed it could play a more ironic role.
Some observers are of the opinion that the innovation behind Bitcoin could change cash forever, by helping fiat money be more productive. Rather than a trust-less system of financially incentivized database maintainers (called "miners" in Bitcoin circles), a variation of block-chain innovation would be utilized by the national banks that crypto-rebels advocate against.
Bitcoin determines its worth by some extent due to shortage. It's hard-wired into the code that there will only ever be a certain number of the crypto currency. National banks will need to have the capacity to make additional computerized resources as required.
Larsen added that central banks' digi-currencies, which he portrayed as a reasonable solution, are "just going to improve the government’s capacity to see what you're doing."
Agrochemical-Pharma tie-up looms large
With a
new bid on the table, and amid a recent move by many in the industry to
consolidate, Germany’s Bayer are attempting a takeover of the American
agrochemical titan Monsanto which could result in the biggest supplier of seeds
and chemicals in the world.
Following
the mergers recently involving competitors including DuPont, Dow Chemical and
Swiss company Syngenta, the German chemical and drug producer is looking to
make significant strides into the GM crop arena, Monsanto being noted
specialists in the field.
The
transaction is far from being closed however, with regulators sure to have
their say first.
Monsanto
revealed in a statement released to the press, “Neither the terms of the deal
nor the assurances of any merger happening has been fully decided as yet.” The statement
added that the board of directors will also need to green light the deal for
talks to progress.
Stuart Poulson, Head of Corporate trading
at Nikko-Desjardins Asset Management commented on the news in his blog, “There
is a strong possibility the deal will go though. Both companies are playing
catch up with other big competitors in the field consolidating their holdings
recently. The only stumbling block could be the regulators.”
After
rumours recently that Monsanto had been courted by both Bayer and another German
chemicals giant BASF, Bayer confirmed they have been involved with talks saying
it had “sat down with members of the Monsanto board informally to discuss a
proposed combination of the companies.”
Following
the announcement, Bayer share prices took a 6 percent hit, which may spark a
backlash from their shareholders.
Bayer is
currently the second biggest supplier of crop chemicals after Syngenta, who
were recently acquired by ChemChina, pending regulatory approval. Monsanto also
attempted to buyout the Swiss firm last year but were rejected.
A ground
breaking merger took place in December 2015 when Dow Chemical, an American
chemical multinational head quartered in Michigan, and DuPont came together
forming a new $140 billion entity.
Tie-up concerns
In an
already embattled agricultural industry where major commodities are
underperforming, farmers have been losing income and big suppliers like Bayer
have also felt the squeeze on their annual profits.
As a
result, multinational agrichemical firms have higher amounts of seeds and
chemicals in stock meaning large scale price cuts and an increased need for
efficiency.
It’s
thought regulators will be looking at the proposed merger very carefully as
concerns have been raised the tie-up could have a dramatic effect on competition
in America. Farmers are also worried that such deals could lead to price
increases, fewer choices and too much power for any new entity that holds all
the cards.
“OK macro report” signals bullish stance on equity
There has been a 180 degree turn on the ‘risk off’ stance investors have held to in the last couple of months as they piled over one and a half billion dollars into the equity markets in the week ending June 1st.
The turnaround marks the first net inflows for several weeks as U.S. stocks attracted renewed interest, making up the bulk of the inflow with around $1.1 billion according to Bank of America Merrill Lynch (BAML).
The current bullish sentiment is being attributed mostly to an “okay macro report” although a recent rally in financials, and crude bouncing back, have also played a part.
The rest of the inflows were made up of emerging market equities with around $400 million.
BAML reported that U.S. stocks were a tiny amount under their record highs, with a 1.6 percent climb in the S&P 500 last month.
U.S. May ISM numbers are running right alongside these levels at about 2,160.
Financials enjoyed their most substantial inflows since 2015, with $500 million being added. Meanwhile, tech stocks saw over a hundred million inflow, a two month high.
Mutual funds showed exactly the opposite performance to ETF’s however, with the former seeing a $5 billion outflow in contrast to a $7 billion inflow for ETF’s.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management commented on the BAML findings in a phone interview this morning.
“With mutual funds what we see is a very delicate investment landscape due to a number of factors. There has been increased involvement from regulators, decreased liquidity, low confidence, overcrowding and some strange outcomes from the negative interest rate policies recently,” Poulson said.
In response to the Greece bailout issue and possibly the upcoming Brexit vote, European equities have been on a four month slide with a further $600 million in outflows occurring last week. Most of the hard work from the first decade of the millennium seems to have been completely undone, especially taking into account nearly $50 million worth of redemptions from Asia ex-Japan equity funds.
Poulson continued, “The potential Fed rate hike is just one of several landmines in the road for investors as shown in the BAML data. Uncertainty in Europe is at an all-time high and caution is advised. It’s an okay macro report in general but we need not get carried away.”
The turnaround marks the first net inflows for several weeks as U.S. stocks attracted renewed interest, making up the bulk of the inflow with around $1.1 billion according to Bank of America Merrill Lynch (BAML).
The current bullish sentiment is being attributed mostly to an “okay macro report” although a recent rally in financials, and crude bouncing back, have also played a part.
The rest of the inflows were made up of emerging market equities with around $400 million.
BAML reported that U.S. stocks were a tiny amount under their record highs, with a 1.6 percent climb in the S&P 500 last month.
U.S. May ISM numbers are running right alongside these levels at about 2,160.
Financials enjoyed their most substantial inflows since 2015, with $500 million being added. Meanwhile, tech stocks saw over a hundred million inflow, a two month high.
Mutual funds showed exactly the opposite performance to ETF’s however, with the former seeing a $5 billion outflow in contrast to a $7 billion inflow for ETF’s.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management commented on the BAML findings in a phone interview this morning.
“With mutual funds what we see is a very delicate investment landscape due to a number of factors. There has been increased involvement from regulators, decreased liquidity, low confidence, overcrowding and some strange outcomes from the negative interest rate policies recently,” Poulson said.
In response to the Greece bailout issue and possibly the upcoming Brexit vote, European equities have been on a four month slide with a further $600 million in outflows occurring last week. Most of the hard work from the first decade of the millennium seems to have been completely undone, especially taking into account nearly $50 million worth of redemptions from Asia ex-Japan equity funds.
Poulson continued, “The potential Fed rate hike is just one of several landmines in the road for investors as shown in the BAML data. Uncertainty in Europe is at an all-time high and caution is advised. It’s an okay macro report in general but we need not get carried away.”
Yen Continues Decline as Minister Confirms Government Could Step In
As Japans currency experienced another fall today, the government reaffirmed earlier statements that they would step in to control the bleeding if the fall continues.
The yen declined for the second consecutive day against main competitors after the Finance Minister of Japan expanded on previous comments on Monday regarding the country’s financial policies. The last time Japan stepped into the markets to control the yen was five years ago following one of the nation’s worst natural disasters in history. The most recent statements by the Minister, Taro Aso, came only 24 hours after he announced that “it would be normal for us to step in should we need to bolster the currency.”
The yen fell 0.5% to 108.92 per dollar this morning and earlier reached 108.96, the worst figures since late last month. That said, the yen has still performed well, rising over 11 percent versus the dollar this year, better than any of its Group-of-10 competitors.
“The recent rhetoric from Japans officials has not gone unnoticed by the financial markets” said Sean Callow, a foreign-currency specialist at Westpac in Adelaide. “If the authorities involved keep failing to act they may start to be perceived by onlookers as “all bark and no bite”.
Federal Reserve Perspective
The DKY spot rate, which analyses the dollar against 10 peers, was relatively unaffected after a steady week long rise. Noises coming from U.S. economic authorities still hint towards interest rate hikes this year, reaffirmed by the New York Fed President.
The yen soared against the dollar last Monday reaching its highest level in one and a half years, bolstering gains after Japans Central Bank decided against injecting stimulus in its meeting late April.
“The Finance Ministers statements caused a re-evaluation of positions that had built up in reaction to trepidation of how far the yen could be raised by market activity ,” said Stuart Poulson, - Head of Corporate trading at Nikko-Desjardins Asset Management. “The benchmark for any meaningful intervention by the Japanese is fairly high. We are probably looking at past 100 per USD at least” he added.
While recent comments by Aso and the Governor of Japans central bank have had caused limited movement regarding the yen, the strength of the currency still threatens to weaken profits of the country’s exporters and could also have a negative effect on general business confidence.
The yen declined for the second consecutive day against main competitors after the Finance Minister of Japan expanded on previous comments on Monday regarding the country’s financial policies. The last time Japan stepped into the markets to control the yen was five years ago following one of the nation’s worst natural disasters in history. The most recent statements by the Minister, Taro Aso, came only 24 hours after he announced that “it would be normal for us to step in should we need to bolster the currency.”
The yen fell 0.5% to 108.92 per dollar this morning and earlier reached 108.96, the worst figures since late last month. That said, the yen has still performed well, rising over 11 percent versus the dollar this year, better than any of its Group-of-10 competitors.
“The recent rhetoric from Japans officials has not gone unnoticed by the financial markets” said Sean Callow, a foreign-currency specialist at Westpac in Adelaide. “If the authorities involved keep failing to act they may start to be perceived by onlookers as “all bark and no bite”.
Federal Reserve Perspective
The DKY spot rate, which analyses the dollar against 10 peers, was relatively unaffected after a steady week long rise. Noises coming from U.S. economic authorities still hint towards interest rate hikes this year, reaffirmed by the New York Fed President.
The yen soared against the dollar last Monday reaching its highest level in one and a half years, bolstering gains after Japans Central Bank decided against injecting stimulus in its meeting late April.
“The Finance Ministers statements caused a re-evaluation of positions that had built up in reaction to trepidation of how far the yen could be raised by market activity ,” said Stuart Poulson, - Head of Corporate trading at Nikko-Desjardins Asset Management. “The benchmark for any meaningful intervention by the Japanese is fairly high. We are probably looking at past 100 per USD at least” he added.
While recent comments by Aso and the Governor of Japans central bank have had caused limited movement regarding the yen, the strength of the currency still threatens to weaken profits of the country’s exporters and could also have a negative effect on general business confidence.
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