Good morning! Here’s what you need to know in markets on Monday.
1. Japan’s SoftBank Group is close to finalising an investment in US office-sharing startup WeWork in a deal expected to be worth over $US3 billion (£2.4 billion), CNBC reported on Sunday. The investment under discussion is a $US2 billion (£1.6 billion) primary tranche of funding, followed by a secondary round worth more than $US1 billion (£800 million), CNBC reported, citing a source.
2. London Stock Exchange Group said on Sunday it believes the European Commission is unlikely to provide clearance for its merger with Deutsche Boerse AG after LSE’s board concluded it would not be able to meet the regulator’s demands. LSE said in an emailed statement that the Commission had asked it to sell its stake in fixed income trading platform MTS to satisfy antitrust concerns over the merger of Europe’s two largest stock exchange operators.
3. JPMorgan says the government’s floated plan to lower corporation tax to keep Britain competitive after Brexit would be “no silver bullet for a hard Brexit.” Both Prime Minister Theresa May and Chancellor Philip Hammond have suggested that Britain may lower corporate tax rates in a bid to retain business and attract more companies to Britain after it leaves the European Union.
4. Luxury carmaker BMW is considering moving planned production of an electric version of its Mini compact car to Germany from Britain in response to plans by London to leave the EU single market, the Handelsblatt daily newspaper reported. BMW may shift manufacturing to its production sites in Regensburg and Leipzig, the paper said, citing company sources. Production at Netherlands-based contract manufacturer Nedcar could also be an option, it said.
5. The Trump administration is exploring alternatives to taking trade disputes to the World Trade Organisation in what would amount to the first step away from a system that Washington helped to establish more than two decades ago, the Financial Times reports. Incoming officials have asked the US Trade Representative’s office to draft a list of the legal mechanisms that Washington could use to level trade sanctions unilaterally against China and other countries.
6. Asian stock markets are lower. Japan’s Nikkei closed down 0.85%, hit by a strong yen and weak financials. The Hong Kong Hang Seng is down 0.28% at the time of writing (6.25 a.m. GMT/1.35 a.m. ET) and China’s Shanghai Composite it down 0.66% at the same time.
7. Oil prices edged higher on Monday, with Brent oil set to rise for five out of seven sessions as a global supply glut appears to ease, but rising US production limited gains. Crude oil is up 0.59% to $US54.31 at the time of writing (6.35 a.m. GMT/1.35 a.m. ET) and Brent is up 0.66% to $US56.68.
8. Warren Buffett’s Berkshire Hathaway is out with its annual letter to shareholders. The letter covers a bunch of topics, touching on everything from stock buybacks to his favourite book of 2016, and also provides some investment advice.
9. Sir Ian Cheshire, the former chief executive of B&Q’s owner Kingfisher, is poised to become chairman of the UK division of Barclays Bank, the part of the lender being ring-fenced to protect taxpayers from any future banking crisis. The Times reports that the move has been cleared by the Prudential Regulation Authority (PRA), the part of the Bank of England that oversees senior appointments. It could be announced today.
10. The Government will grant more visas to technology workers in a major boost to the industry’s attempts to secure access to overseas talent after the Brexit vote. The Telegraph says that Tech City UK, the government organisation that processes applications for the special visa, has been granted the right to endorse 250 immigration visas this year, 50 more than it had originally been allocated.
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