Azure Global : 05/09/13

Thursday 9 May 2013

Cameron: Financial transactions tax 'not a good idea

Prime minister David Cameron has reiterated British opposition to a European financial transactions tax (FTT), saying it is "not a good idea".

He fears it could damage the UK's financial services sector and Europe's global competitiveness.

The FTT aims to discourage speculative trading by taxing transactions of shares, currencies and bonds.

Speaking at a conference in London, he said a FTT would encourage financial firms to relocate outside the EU.

In April, the UK government launched a legal challenge against the plans in the European Court of Justice.

The tax would not work unless it was "applied globally", he said.

Of 27 EU member states only 11 have signed up to the proposals: Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Slovenia, Slovakia and Estonia.

Business lobby groups are concerned that UK firms trading with the UK branches of French or German banks could be hit by the tax.

If the cost of financial transactions rises as a result of the FTT, the City of London, which currently accounts for 40% of the EU's financial services activity, could lose billions of pounds worth of business, they fear.

Mr Cameron also said it was time to stop "bashing banks" because the financial services sector and the City were "core strengths" of the British economy.

He also reasserted his belief that the EU could and should be reformed to allow countries like UK to claw back more of their sovereignty.

'Disingenuous'

"Stratospheric levels of unemployment" in countries like Spain and Portugal showed that EU-imposed fiscal policies were not working, he argued.

However, supporters of the tax accused Mr Cameron of promoting the interests of the City, not the country as a whole.

David Hillman, spokesperson for the Robin Hood Tax campaign, said: "It's disingenuous of Cameron to claim FTTs will cause bankers to flee when this is clearly not the case with the UK's own stamp duty on shares.

"It raises the Exchequer around £3bn a year and it makes no difference whether those trades take place in London, Hong Kong or Tokyo.

"Instead of repeating the lines of bank lobbyists the government should give a proper justification for why they are refusing to tax the banks more and are cutting people's services instead," Mr Hillman said.

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Article source : http://www.bbc.co.uk

UK house prices rise by 1.1%, the Halifax says

UK house prices rose by 1.1% in April compared with the previous month but activity in the market remained subdued, according to the Halifax.

The lender, part of Lloyds Banking Group, said that property values were 2% higher than a year earlier.This meant the average UK home was valued at £166,094.

A dip in the number of mortgage approvals at the start of the year suggested that sales activity would not take off, the lender said.

"Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of 2013," said Halifax's housing economist Martin Ellis.

Prices were 1.3% higher in the three months to the end of April than the previous three months, the survey found.

The annual change of 2% is higher than the figure recorded by the Nationwide Building Society. Its survey reported a 0.9% year-on-year increase and a 0.1% rise from March to April. Both surveys are based on the lenders' own mortgage data.

'Polarised'

However, the year-on-year comparison is calculated slightly differently by the two lenders. The Halifax compares the previous three months with the same three months a year earlier to give a smoother comparison, rather than a direct comparison of the equivalent months as calculated by the Nationwide.

Various surveys have suggested that price rises have been driven by increases in London, with some other areas of the country seeing house price falls.

"Some regions of the UK remain under pressure. The market is still deeply polarised, with the increasing national average masking the huge divergence between London's surging prices and those in the North of England that are stuck in reverse," said Jonathan Hopper, managing director of property search consultants Garrington.

"Despite the improved market, buyers are still looking for value, and committed sellers need to be willing to negotiate on price if they want to secure a quick sale."

Article source : http://www.bbc.co.uk

UK industrial output beats forecasts, official figures show

UK industrial production was stronger than forecast in March, official figures show, boosted by manufacturing and a recovery in oil and gas output.

The Office for National Statistics said industrial output rose 0.7% in March from February, above the 0.2% expected by economic forecasts.

Manufacturing output, a sub-sector of industrial production, rose 1.1%, boosted by electronics, metals and machinery.

But annual output was still 1.4% lower.

The extended period of cold weather help the electricity, gas steam and air conditioning sectors achieve 2.4% growth in March.

Lee Hopley, chief economist at the EEF manufacturers' organisation, said: "Manufacturing looks to have had another good month in March with the data pointing to encouraging gains across the board, with almost all sectors posting some growth and on-going strength in transport and electrical equipment sectors."

But she warned that "a smooth recovery path is not assured" while uncertainties remained over likely levels of demand.

Howard Archer, chief UK economist at IHS Global Insight, said the "much stronger-than-expected" output figures add to "the recent improved news on the UK economy and boosts hopes that activity is gaining a firmer footing.

"The services sector remains key to the economy's performance but any help from the manufacturing sector would go down nicely," he said.

Article source : http://www.bbc.co.uk

Bank of England keeps interest rates and QE unchanged

The Bank of England has kept its stimulus programme of quantitative easing (QE) unchanged and also held interest rates at 0.5%.

The decision had been widely predicted, with most analysts not expecting any change in policy until the new Bank governor, Mark Carney, arrives in July.

The first quarter GDP figures, showing growth of 0.3%, were also felt to have reduced the need for more QE.

In addition, recent data has suggested the UK economy is picking up.

Figures from the Office for National Statistics released earlier on Thursday, said industrial output rose 0.7% in March from February, a bigger increase than forecast. Manufacturing output rose by 1.1%.

In addition, recent sector surveys have indicated that conditions improved last month in the service, manufacturing and construction sectors.

The Bank's Monetary Policy Committee has been split in recent months over whether to increase its QE programme from the current level of £375bn.

Three members - including governor Sir Mervyn King - of the nine member MPC have voted for an extra £25bn of QE at the past few meetings.

Article source : http://www.bbc.co.uk

Tesla Motors sparks up first profit in 10-year history

The electric car maker, Tesla, has made the first profit in its 10-year history.

The company said it made $15m (£9.65m) in the first three months of the year, thanks to sales of its Model S electric sedan. Total revenues hit $562m, a huge rise on the $30m reported a year ago.

Tesla said it was receiving worldwide orders for the Model S in excess of 20,000 vehicles per year.

Shares in the company jumped more than 16% in after-hours trading.

Adjusted earnings per share came in at 12 cents, three times what Wall Street analysts were expecting.

Tesla shares have skidded across the markets in recent times.

Over the past few weeks, Tesla's chief executive, Elon Musk, has made a number of comments about making electric cars more affordable, which has been pushing the shares higher.

They are up 67% so far this year, but many dealers remain unconvinced and have been shorting the stock - betting on the share price dropping - in anticipation of a fall.

The company has 72.6 million shares in its "float" - the number of shares circulating among the general public. Of those more then 42% are being borrowed by traders to sell short.

Mr Musk feels such votes of little or no confidence by the market are misplaced and foolhardy.

On his personal Twitter page, he tweeted last month that there "seems to be some stormy weather over in Shortville these days".

Rocky road

Nonetheless, the spark seems to have gone out of the electric car market in the US recently and it has been a troubling time for some of the green technology start-up companies involved in the sector.

Last week, Coda Holdings filed for Chapter 11 bankruptcy protection after selling just 100 all-electric sedans. The cars had a range of around 88 miles (142km), the best in its class, but considerably lower than the Tesla Roadster and the Tesla Model S.

Fisker Automotive, the makers of a high performance electric hybrid called the Karma, has hired bankruptcy advisers and is seeking a buyer.

Article source : http://www.bbc.co.uk

Sir Alex Ferguson retires: Man Utd shares fall in New York

Manchester United shares fell in New York amid concerns over the impact Sir Alex Ferguson's retirement will have.

The news was announced while US markets were closed. When trading began the club's shares fell as much as 4.5%.

The club said in its prospectus ahead of its stock market flotation last year that its business was dependent on its ability to attract and retain players.

"Any successor to our current manager may not be as successful as our current manager," it warned.

The shares eventually closed down 1.8%.

Speculation is already mounting as to who will succeed Sir Alex, who won 38 trophies during his 26-year reign at Old Trafford, with Everton's David Moyes and Real Madrid's Jose Mourinho both being tipped.

Whoever gets the job will join a club laden with almost £370m of debt, and tightly controlled by the Glazer family.

The Glazers bought the club for £790m in 2005 in a controversial deal that loaded the club with debt.

The flotation in New York saw the Glazers sell 16.7 million shares, equal to a 10% stake in the club.

Since the flotation in August 2012, Manchester United shares have risen 34%.

'Risky' stock

Ken Perkins, an analyst at Morningstar who covered the club's flotation, told the BBC: "When we initially did the analysis of the IPO (initial public offering) one of the concerns about the outlook was Sir Alex leaving."

He said that even if the club was to install a new manager relatively quickly, it would merely instil some confidence in the shares in the short term, whereas many investors are more interested in a company's ability to generate revenues over the long term.

Manchester United gets about a third of its revenues from match day ticket sales, a third from broadcasting deals, and a third from commercial business.

"This stock probably has a lot of speculation built into it," said Mr Perkins.

"It may not trade a lot on fundamentals, but may trade on things like who's the new manager, how the team performs.

"It's hard to say how other investors will feel. That's why in our view stock like Manchester United is risky."

Article source : http://www.bbc.com

Sony reports first annual profit in five years

Sony has reported an annual profit for the first time in five years, boosted by a weakening yen and asset sales.

The electronics giant made a net profit of 43bn yen ($436m; £280m) in the year to 31 March, reversing a loss of 457bn yen in the same period a year earlier.

Sony said the yen's recent fall, which makes Japanese goods cheaper for foreign buyers, had helped boost sales.

A weak currency also boosts profits of Japanese exporters when they repatriate their foreign earnings back home.

The Japanese currency has fallen more than 20% against the US dollar since November last year, after policy makers unveiled a series of aggressive measures aimed at spurring growth in the economy.

The firm said it expected its profits to rise to 50bn yen in the current financial year.

Asset sales

Sony, which was once a market leader in various product categories, has seen its fortunes plummet over the past few years.

Increased competition, falling prices and narrowing profit margins have hurt its business, especially in the TV segment which has been making a loss for the past eight years.

As a result, Sony has been trying to restructure its business model and reduce its costs.

As part of the restructuring process, the firm has sold key assets over the past few months, including its US headquarters in New York and some of its shares in M3, a medical research and marketing firm.

The firm has also offloaded its "Sony City Osaki" building in Tokyo.

Sony said the sale of all these assets had resulted in gains of nearly $2.5bn during the last financial year - and the figure contributed to the rise in its earnings during the period.

Analysts said that given the impact these sales have had on the profit - the numbers were not a true reflection of the firm's success.

Gerhard Fasol of Euro technology Japan said that these gains "really need to be subtracted from the results, to understand the regular operating results".

Mr Fasol pointed out that the firm's results indicated that its electronics division continued to struggle and that the unit had not been turned around yet.

Article source : http://www.bbc.co.uk