Good morning! Here’s what you need to know in markets on Thursday.
1. JP Morgan Cazenove, the corporate broker to Provident Financial Plc, has told investors that the subprime lender’s troubled home credit business is worthless, the Times reports. In the latest blow to Provident, analysts at JP Morgan Cazenove, which acts as the company’s broker and adviser, said in its sum-of-the-parts valuation of the group that “we give zero value to HC.”
2. The decline in the British car market has been greatly exaggerated by its own chief flag waver, the Society of Motor Manufacturers and Traders, the Times reports. In one of the biggest muddles in industry statistics in recent times, the society was forced to withdraw last week’s announcement that used car sales had plunged in the second quarter of the year by a record-breaking 13.5%: In fact, the drop was only 0.7%.
3. The food and drink industry has issued a warning of significant disruption and economic damage if the government fails to stem the flow of EU nationals leaving the UK, the Guardian reports. Nearly a third of British food and drink businesses have had non-UK EU workers leave their employment since last summer’s Brexit vote, according to a survey of more than 600 businesses representing nearly a quarter of the food chain’s 4 million workforce.
4. The euro has jumped to a two-year high against a basket of currencies and hit a post-crisis extreme against sterling after the European Central Bank shrugged off concerns about the strong exchange rate. Mario Draghi, the ECB’s president, said the eurozone economy is firing on all cylinders as super-easy monetary policy continues to flush the system with liquidity.
5. Ad giant WPP, founded and run by Sir Martin Sorrell, reported billings down 4.7% on a constant currency basis to £26.9 billion. WPP, run by Sir Martin Sorrell, blamed populist politics in the UK and US, fake news on platforms like Facebook and Google, and short-term thinking in business, for a terrible start to the year.
6. Sorrel said Brexit has driven advertising and marketing giant WPP to invest in France, Germany, Italy, and Spain. He told Sky News on Wednesday morning: “The migration issue or the fluidity of people is really important to us. About 17% of the 14,000 or 15,000 people we have in the UK come from the EU. If there are severe restrictions on their movement, inward or outward, in the future, that obviously impacts our business in the UK.
7. The owner of the Slug and Lettuce bar chain will on Thursday take a decisive step towards a £100m takeover of rival operator Revolution Bars, Sky News reports. Sky says privately-owned Stonegate Pub Company has agreed the terms of a 203p-a-share offer for Revolution, which is listed on the London Stock Exchange.
8. The reclusive billionaire brothers who own Chanel paid themselves a $US3.4 billion (£2.66 billion) dividend last year, the Guardian reports.Alain and Gérard Wertheimer, who have run the luxury goods company for more than 30 years, took more than four times the company’s net profit and double the dividend they received in 2015.
9. A Nobel economics laureate, Sir Christopher Pissarides, has hit out at Germany’s refusal to increase its domestic state spending in order to help entrench the eurozone’s recovery, reports the Independent. Speaking at the Lindau meetings in Germany on Wednesday, Sir Christopher said that despite the bounce back in the single currency zone in recent months after years of crisis, the Continent’s largest economy was still exerting a damaging and unnecessary drag.
10. Japan’s Nikkei share average slipped towards a 3-1/2-month low on Thursday, dragged down by Wall Street losses, while steel makers fell after reports that Toyota Motor Corp was looking to cut the price of steel supplied to component makers. Bucking gains elsewhere in Asia, the Nikkei was down 0.2% at 19,364 points by 6.58 a.m. BST (1.58 a.m. ET).