The Business: Friday 24 May 2013
Company news, markets and financial talking points, available from 8am Monday to Friday
Shares in Japan have fallen again, following the global sell-off in shares seen on Thursday, reports The Times. The Nikkei index was down 1.8% by mid afternoon in Tokyo, after its one-day fall of nearly 7.8% yesterday - its worst since the aftermath of the tsunami in March 2011. Also on Thursday, the FTSE suffered its worst day in exactly a year as stock markets across the world slumped on the prospect of diminished central bank support and a slowdown among China’s manufacturers. In the US, the Dow Jones closed flat, while markets in Frankfurt and Paris all closed down by about 2%. "Trading is extremely nervous,” said one investor.
The president of the European Central Bank (ECB) has said he sees "encouraging signs of tangible improvements" in the UK economy, reports the BBC. Speaking at a City of London event, Mario Draghi also said that a British withdrawal from the EU would be bad for both parties. “What I can say is that Europe needs a more European UK as much as the UK needs a more British Europe,” he said. Draghi added: "The answer to the crisis has not been less Europe but more Europe." He also said that Ireland, Spain and Portugal – three of the weaker eurozone economies are making "impressive" improvements in their export performances.
Britain came within six hours of running out of natural gas in March, according to a senior energy official quoted in the Financial Times. “We really only had six hours’ worth of gas left in storage as a buffer,” said Rob Hastings, director of energy and infrastructure at the Crown Estate, the property portfolio managed on behalf of the Queen. “If it had run any lower it would have meant . . . interruptions to supply,” he added. The news highlights the risk of supply shortages amid declining domestic production and a growing reliance on imports. Hastings also backed-up the mid-week claim from energy supplier SSE that fuel prices are set to rise considerably in the months ahead.
The former boss of Tesco's failed American chain Fresh & Easy has received a £1.7m payoff despite the business being shut down after repeated losses, reports The Guardian. Tesco announced last month it would exit the US after racking up total costs of £1.5bn through its Fresh & Easy chain, which opened in 2007 but never made a profit. Tim Mason, who departed in December after 30 years at the group, was awarded "liquidation damages" equivalent to his salary and a sum equal to his average bonus over the past two years. Tesco's checkout staff, meanwhile, have learned that their annual shares bonus pot has been halved after the first fall in annual profits in almost 20 years.
The British economy's return to growth has been confirmed with an unchanged second estimate of GDP showing it grew 0.3% in the first three months of the year, reports the Daily Telegraph. The updated figures from the Office for National Statistics showed that the services sector, which accounts for three quarters of national output, drove the recovery – rising 0.6% over the three months. The sector has started the second quarter strongly, growing by 0.2% in March alone. However, economists are concerned about the lack of underlying growth momentum and are warning that there is no evidence of a sorely-needed “rebalancing” in the data.
The EU is to rush out a tax transparency law which compels large companies to reveal corporate profits and taxes on a country-by-country basis, reports the Financial Times. As controversy rages over allegations of tax avoidance by giants such as Apple and Google, the EU is extending transparency reforms for banks and resources groups to all large public and private companies. EU commissioner Michel Barnier said: “It is necessary that large companies... are obliged to report how much tax they pay to whom and where.” The reform will have far-reaching implications for big multinationals in Europe, forcing them to overhaul their tax disclosure procedures.
FTSE-100: down -2.10 to 6696.79
Dow Jones: down -0.08 to 15294.50
Dax: down -2.10 to 8351.98
Cac-40: down -2.07 to 3967.15
Nikkei: down -013 to 14465.07
Hang Seng: down -0.01 to 22668.6
US dollar: buys €0.77320 and £0.66210
Sterling: buys $1.51030 and €1.16750
Oil: Brent crude futures $102.58 down 0.0 percent