Good morning! Here’s what you need to know in markets on Monday.
Private-equity firm KKR & Co may bid for television distributor Entertainment One after the owner of the preschool cartoon character “Peppa Pig” rejected an offer from UK broadcaster ITV, Bloomberg reported on Sunday. KKR has not decided whether to make a bid, Bloomberg reported, citing sources. Entertainment One last week rejected a £1 billion ($1.3 billion) takeover offer from British broadcaster ITV, saying it undervalued the production and distribution company.
British employers have turned more cautious about hiring and are less likely to invest in training for their workers following the decision in June by voters to leave the European Union, a survey showed on Monday. Reuters reports that the proportion of employers expecting to increase staffing over the next three months dropped from 40% before the referendum to 36% after it, according to the CIPD, an organisation representing human resources professionals, and staffing firm Adecco Group UK & Ireland.
House prices in England and Wales fell at the fastest rate since November in August as the summer lull added to the uncertainty surrounding Britain’s decision to leave the European Union. Asking prices fell by a monthly 1.2%, according to a survey by property website Rightmove that covers properties put on sale between July 10 and August 6. The biggest drop was in London and the South East, with asking prices falling by 2.6% and 2.0% respectively.
The UK’s post-Brexit economy risks missing out on merger and acquisition deals, with investors shying away from political risk in the wake of the June 23rd vote. Early-stage M&A activity jumped 19.8% in mainland Europe in the four weeks after Brexit. But deal activity in Britain fell 7.4% during the same period, according to a report by M&A analysts Intralinks.
Japan’s economic growth ground to a halt in April-June after a stellar expansion in the previous quarter on weak exports and capital expenditure. The world’s third-largest economy expanded by an annualized 0.2% in the second quarter, less than a median market forecast for a 0.7% increase and a marked slowdown from a revised 2.0% increase in January-March, Cabinet Office data showed on Monday.
The Nikkei is down as a result, bucking the trend in Asian stock markets. Japan’s Nikkei is down 0.14% at the time of writing (6.30 a.m. BST/1.30 a.m. ET). China’s benchmark Shanghai Composite Index is up 2.65%, while the Hong Kong Hang Seng is up 0.91%.
PwC is being sued for a record $5.5 billion (£4.2 billion) for failing to detect fraud that led to a bank collapse during the global financial crisis, in a case that could bring more auditing firms into the line of fire. The Financial Times reports that the case — the biggest against an auditing firm — has been filed in a Miami state court on behalf of a trustee of Taylor, Bean & Whitaker, a defunct mortgage underwriter, and accuses PwC of failing to catch a multibillion-dollar conspiracy between Lee Farkas, the company’s founder, and executives at Colonial Bank, an Alabama-based lender that supplied TBW with loans.
The UK has run up a national pension deficit of more than £400 billion ($518 billion) over the past decade, becoming the biggest liability to the economy. Even worse, the Bank of England’s decision to cut interest rates to record lows and begin a bond buying programme of quantitative easing means the deficit is only going to get bigger.
Biometrics, cloud computing, cognitive computing, blockchain technology, machine learning, quantum computing, and robotics are set to transform financial services over the next few decades, according to the World Economic Forum (WEF). WEF made the prediction in its “Future of Financial Infrastructure” report looking at blockchain technology, which was published on Friday.
A team from Bangladesh will meet officials of the Federal Reserve Bank of New York, the F.B.I., and the US Department of Justice this week in New York in connection with the cyber theft of $81 million (£62.6 million) from the South Asian country’s central bank in February, sources said. Two people close to the Bangladesh central bank said the goal of the meetings starting on Tuesday would be to discuss what led to the heist, carried out by unidentified hackers, and how such events can be prevented in future.
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