Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Property

New markets provide shot in the Arm


Posted on March 31, 2014

Hopes of a turn of fortunes put Arm Holdings among the FTSE 100’s biggest gainers.

Having started 2014 at a record high, the chip designer slipped 10 per cent over the first quarter as slowing smartphone sales put its expected royalty revenue under pressure.

    Downgrades now look to have run their course, according to Barclays, with handset shipment forecasts falling to “very achievable levels” and data from the supply chain improving.

    With momentum on the turn, news on Arm’s entry into the networking and server markets should lift longer term forecasts, the broker said. Arm closed 2.1 per cent higher at 998p.

    “The combination of reasonable growth in mobile and very strong double-digit growth in these new markets supports our view of Arm growing revenue at circa 20 per cent for the next five years,” said Barclays.

    It added that, with Arm’s cash pile set to grow beyond its operational needs, the prospect of improved shareholder returns made a valuation of 30 times 2015 earnings “very attractive”.

    The first quarter ended with a whimper, leaving the FTSE 100 down 0.3 per cent, or 17.21 points, to 6,598.37. For the quarter, the index lost 2.2 per cent.

    Babcock International led Monday’s blue-chip risers, up 4.3 per cent to £13.47, after its consortium was named preferred bidder for a £7bn contract to decommission Magnox nuclear reactors.

    JPMorgan Cazenove saw the deal as worth £196m in annual sales over the next 14 years which, on a profit margin of about 9 per cent, would boost Babcock’s operating earnings by 5 per cent.

    Vodafone ended 0.5 per cent higher at 220.3p, though it was well off its session high, after its long-rumoured predator AT&T pledged cash towards buying back 300m shares.

    The US group also said to expect its net debt to remain below 1.8 times operating earnings.

    Drugmaker Shire lost 2.5 per cent to £29.45 in delayed response to a US Court of Appeals defeat on Friday that ordered a retrial of a ruling that had stopped Actavis from making versions of Shire’s bowel disease pill.

    Citigroup saw a settlement with Activis as likely, at a cost of about 6 per cent of Shire’s 2016 earnings.

    Evraz led the metals companies, up 10.6 per cent to 79.7p.

    Credit Suisse, which put a 100p target on the Russian steelmaker, said the weak rouble and cost-cutting should mean Evraz could cope with its debt burden even though its domestic market would be oversupplied for the next two years.

    Songbird Estates, the owner of London’s Canary Wharf development, climbed 12.9 per cent to 250p after just over 400,000 shares changed hands at 257.5p apiece.

    The thinly traded shares have jumped 30 per cent since Songbird last week reported its highest occupancy rates since the financial crisis.

    Iraq explorer Gulf Keystone Petroleum lost 12.4 per cent to 86.3p after it was targeted by prominent short sellers, who argued that the group would need a cash call if a planned bond issue failed.

    Gadget refurbishment group Regenersis jumped 10.4 per cent to 395p after announcing the €60m acquisition of Blancco, a Finnish data erasure specialist.

    The purchase, which was funded via a £100m share placing at 345p apiece, was ahead of European legislation due to come into force next year that will fine companies breaching data security up to 5 per cent of their global turnover.