Good morning! Here’s what you need to know in markets at the start of the week.
Japan’s SoftBank has agreed to buy ARM Holdings for £23.4 billion ($31 billion), the Financial Times reports on Monday, citing two people familiar with the negotiations. FTSE 100-listed ARM, which provides technology for the iPhone, is a major presence in mobile processing, with its processor and graphics technology used by Samsung, Huawei, and Apple in their in-house designed microchips.
Royal Bank of Scotland is in a strong position despite the Brexit vote, according to its CEO. Ross McEwan told the Guardian in an interview: “This is not a banking crisis … We’ve got plenty of liquidity. We’re open for business. We’ve got plenty of money to lend.”
Asian stock markets are pretty steady overnight. China’s benchmark Shanghai Composite index is down 0.11% at the time of writing (6.30 a.m. BST/1.30 a.m. ET), Japan’s Nikkei is up 0.68%, and the Hong Kong Hang Seng is up 0.12%.
Britain’s biggest companies are beset by doubts about the future after last month’s vote to leave the European Union and have slashed their investment plans, according to a survey on Monday that bodes poorly for the economy. Some 82% of CFOs from FTSE 350 and large private companies expect to cut capital spending in the next year, the biggest proportion on record and up from 34% in the first quarter, accountancy firm Deloitte said.
The number of shoppers heading to British high streets and retail centres fell at the fastest pace in more than two years in June, with the weeks around the country’s vote to leave the EU hit particularly hard, a survey found. Retail footfall across Britain was 2.8% lower than a year earlier in the five weeks from May 29 to July 2. This was the sharpest decline since February 2014 and down from a 0.3% increase in May, a survey from the British Retail Consortium (BRC) showed on Monday.
Central London homes are undergoing a wave of discounting as sellers give up on their previous asking prices after the Brexit vote. The Financial Times reports that the number of cuts to asking prices surged by 163% in the 12 days following the referendum compared with the 12 days beforehand, according to figures from LonRes, a research firm.
But recruitment specialist Reed Group says demand for new staff has flourished since the referendum, with 150,000 more jobs added to its website in the past three weeks compared with the same period last year. The Mail on Sunday reports that James Reed, chairman of the £1 billion-plus turnover group, said the 8% increase was a sign that it was “business as usual” despite fears that job vacancies could drop.
Andy Haldane, the chief economist of the Bank of England, gave a speech in Port Talbot, Wales, in which he described how his thinking about economic inequality in the UK has changed since the 2008 crisis. “So far at least, this has been a recovery for the too few rather than the too many, a recovery delivering a little too little rather than far too much,” he said.
ExxonMobil has made a bid worth at least $2.2 billion (£1.6 billion) for Papua New Guinea-focused InterOil, winning the support of InterOil and topping an offer from Oil Search. ExxonMobil’s move pits it against French giant Total SA, which is backing Oil Search’s offer with an agreement to buy part of InterOil’s stake in the potentially lucrative Elk-Antelope gas field.
Dan Cobley, the former Google UK MD who now leads the fintech practice at London-based venture builder Blenheim Chalcot, nails why more and more fintech startups are partnering with big banks rather than competing with them.“I think there’s been a recognition that the cost of acquisition has been way too high for there to be a reasonable payback for most products and services,” he told BI. “You can get to that scale much more quickly by partnering with a big business.”