Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
06:27, 17th May 2019

Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

BT to hand workers shares worth £50m as boss seeks a ‘new inclusive form of capitalism’. BT Group (BT.A) FOLLOW is to spend £50m a year awarding shares to all its staff in what its new chief executive said was the first step towards a “new inclusive form of capitalism” from Britain’s former state telecoms monopoly. Philip Jansen, who took the helm at BT in February, said every one of the company’s 100,000 employees would get shares worth £500 every year to help motivate a turnaround and boost their confidence. “Is this a move to a more inclusive form of capitalism from BT?” he said. “It absolutely is and it is just the first part.”

Banking giants fined €1bn for ‘Banana Split’ and ‘Essex Express’ foreign exchange cartel. Five banking giants including Barclays (BARC) FOLLOW and Royal Bank of Scotland Group (RBS)  FOLLOWhave landed a combined €1.07bn (£940m) fine for taking part in two foreign exchange trading cartels named “Essex Express” and “Three Way Banana Split”. The European Commission has fined the banks, which also include Citigroup, JPMorgan and MUFG, for participating in one or both of the cartels. A sixth bank, UBS, avoided a penalty because it blew the whistle on the cartels. The Commission, which started its investigation in 2013, said that traders working for the banks had exchanged “sensitive information and trading plans” and occasionally co-ordinated their trading strategies in online chatrooms.

The turbulence that has buffeted Thomas Cook Group (TCG) FOLLOW over the past year intensified yesterday as the travel group issued a fresh profit warning and reported a half-year loss of almost £1.5 billion after a goodwill write-off of £1.1 billion. Shares of the 178-year-old tour operator, already down by more than 80% over the past 12 months, fell by a further 14.7%, losing 3½p to 19½p — close to the level they plunged to in 2012 when it came close to collapse. The value of its debt also fell further, with the price of its bond maturing in 2022 falling by 9.2 cents to 58.3 cents on the euro, a distressed level, according to data from Bloomberg. The company sought to allay fears of a fresh cash crunch, announcing a new £300 million bank facility to sit alongside its existing £875 million facility. However, it acknowledged that the terms represented a “material uncertainty” that “could cast significant doubt on the ability of the group to continue as a going concern”.

National Grid (NG.) FOLLOW threatens to sue Labour. Labour will face legal challenges if it seeks to nationalise Britain’s power and gas networks at a knockdown price, National Grid has warned. John Pettigrew, chief executive of the FTSE 100 utility group, said there were “a whole host of legal routes companies including National Grid, or their investors, could pursue against the government if they didn’t pay fair value”. He claimed Labour’s proposals for a replacement system of national, regional and municipal energy agencies would return Britain to Yes, Minister levels of bureaucracy.

Investec (INVP) FOLLOW closes ‘hyped-up’ robo-adviser Click & Invest. The prospects for the entire fintech sector have been exaggerated, a senior London banker suggested yesterday as he pulled the plug on a so-called robo-adviser investment service at a cost of more than £32 million. Investec, the Anglo-South African bank, shut down its Click & Invest service to new customers with immediate effect, putting up to 54 jobs at risk, with customers being advised to sell or transfer their holdings. Investec said the service had attracted fewer customers than expected when it was launched two years ago. Hendrik du Toit, co-chief executive of Investec, said: “The entire fintech sector has been hyped . . . to think you can create a parallel financial sector to the existing one is a fallacy.”

GVC Holdings (GVC) FOLLOW bets on less gloomy impact of fixed-odds cut. The gambling group behind Ladbrokes and Coral has reduced the predicted impact on its betting shops from the imposition of a £2 maximum stake on fixed-odds betting terminals. GVC Holdings said that the cut in the maximum stake from £100 to £2, brought in on April 1 to address gambling addiction, would hit its earnings by about £105 million, down from a previous forecast of £120 million. GVC has previously estimated that the £2 stake would result in 950 to 1,000 shop closures over the next 18 months, costing about 5,000 jobs, although a reduction in losses may mean the final number of closures is lower. Its optimism over the cut in the maximum stake is in contrast to William Hill, which said that the impact was “in line” with its initial guidance, while Flutter Entertainment — formerly Paddy Power Betfair — said that the fall in revenues was “at the upper end” of the predicted drop

BHP Billiton (BLT) FOLLOW faces huge legal claim after Brazilian mining flood left 19 dead. The landmark lawsuit is the largest group claim in British legal history. The £5bn case, which was filed in Liverpool’s High Court by law firm SPG Law last week, is seeking redress for 235,000 individual clients ranging from villagers in Bento Rodrigues to municipal governments and members of indigenous communities. BHP, however, intends to defend the claim. SPG claims the millions of tons of waste products from the iron ore mine seeped into the Rio Doce, killing 11 tons of fish, polluting water supplies and damaging vast areas of protected forest and areas considered sacred by indigenous communities. Much of the money the lawsuit is aiming to recover would go towards remedying the environmental destruction, such as restocking fish and replanting trees.

Mobile game developer Gaming Realms (GMR) FOLLOW has played its cards right sealing a distribution deal with gambling business Scientific Games. The three-year agreement will see Scientific distribute Gaming Realms’ Slingo games to more than 200 operators, across its platform. Slingo combines elements of slots and bingo, and Gaming Realms owns a number of variations based on popular television shows.

Genus (GNS) FOLLOW the FTSE 250 firm is partnering with Beijing Capital Agribusiness to research and genetically engineer pigs which are resistant to the porcine reproductive and respiratory syndrome virus. The disease tears through pig stocks around the globe, especially in China, the world’s largest pork market. Under the collaboration, Genus will be paid up to £15.6million up front, between £94million and £125million in several years’ time when the firm’s new joint venture in China has been approved, and any further royalties from sales of the pigs. There is no cure for the porcine reproductive and respiratory syndrome virus, which causes suffering and reproductive failure. But Genus has already been able to breed pigs which show resistance to the disease.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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