(Alliance News) - The following is a summary of top news stories Monday.
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COMPANIES
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UK Business Secretary Andrea Leadsom is calling on the Insolvency Service to "fast-track" its investigation of Thomas Cook Group, with the conduct of the company's bosses also set to come under the microscope. Meanwhile, the prime minister defended the UK government's refusal to give the holiday firm a bailout with taxpayer's money. The Insolvency Service will look at the circumstances surrounding Thomas Cook going into liquidation as the events leading up to the tour operator's demise is now pored over. Thomas Cook directors and their conduct will also be probed as part of the inquiry, according to the Department for Transport. A Government task force is being set up to support employees as well as to monitor and assess the impact on affected local businesses. The Insolvency Service is already taking steps to pay statutory redundancy to Thomas Cook employees. UK Prime Minister Boris Johnson defended his refusal to bail out Thomas Cook, warning that state intervention risked creating a "moral hazard" in future cases of companies on the brink.
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Marks & Spencer said Chief Financial Officer Humphrey Singer has decided to leave the group, however, his departure date has not yet been decided. A succession process is now underway, during which Singer will continue with his responsibilities, and work with Chief Executive Officer Steve Rowe to ensure an orderly transition. Singer has been part of clothes, homewares and food retailer M&S for a year since 2018, joining from electrical goods retailer Dixon Carphone, where he was finance director for four years from 2014 to 2018.
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J Sainsbury is set to exit mortgage lending in order to conserve capital and improve the profitability of its banking unit, the Financial Times reported. The supermarket chain had attempted to reduce its operating costs through a GBP12 billion merger with Walmart-owned rival Asda, however the UK Competition & Markets Authority blocked the scheme in April. According to a person with knowledge of the Sainsbury's Bank's plans, mortgage lending has been considered by the group as "very capital intensive, and its a big amount of capital for a small amount of customers", the newspaper reported.
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MARKETS
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London shares were lower with heavyweight mining stocks weighing on the FTSE 100 amid mixed signals from trade negotiations between the US and China. The euro was down against the dollar following disappointing PMI data from the eurozone and Germany. Wall Street was pointed to a mixed open.
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FTSE 100: down 0.7% at 7,296.01
FTSE 250: down 1.0% at 19,979.52
AIM ALL-SHARE: flat at 886.41
GBP: down at USD1.2436 (USD1.2490)
EUR: down at USD1.0970 (USD1.1007)
GOLD: up at USD1,520.05 per ounce (USD1,503.40)
OIL (Brent): down at USD63.57 a barrel (USD64.72)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Boris Johnson has played down the chances of a "New York breakthrough" on Brexit during discussions with key EU leaders at the United Nations. The UK prime minister is set to meet with Angela Merkel, Emmanuel Macron, Donald Tusk and Leo Varadkar during the annual General Assembly in New York City. Johnson will this week discuss his proposals for a new Brexit deal as the October 31 deadline looms. He celebrated a "great deal of progress" having been made but sought to limit expectations when speaking to reporters on board the RAF Voyager on the way to JFK airport. The UK PM will meet with European Council President Tusk on Monday, before meeting German Chancellor Merkel and French President Macron. Johnson will meet with his Irish counterpart Varadkar the following day.
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Jeremy Corbyn will face a showdown with Labour members over Brexit policy as grassroots activists call for the UK opposition party to back remaining in the EU. The Labour leader has called for a neutral position going into a general election, saying that he would negotiate a new Brexit deal with Brussels which would then be put to a referendum. But activists in Brighton will vote on whether the party should campaign to stay in the EU - even if that means rejecting a deal a Labour government has negotiated with the EU.
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The eurozone was on the brink of stagnation in September, preliminary data from IHS Markit showed. The flash composite purchasing managers' index fell to 50.4 in September from 51.9 in August, marking a six-year low. The services reading fell to 52.0 from 53.5 in August, an eight-month low, while manufacturing slumped to 46.0 from 47.9. Any reading under 50 indicates contraction in the sector, while one above signals expansion. The manufacturing slowdown was driven by new orders for goods and services falling for the first time since January, dropping at the steepest rate since 2013. Moreover, expectations for the year ahead remain stuck at one of the lowest levels seen since 2012, with lingering concerns over Brexit and economic growth.
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Germany's manufacturing downturn continued to worsen, with the manufacturing output PMI slumping to 42.7 in September from 45.8 in August. German services activity dipped to a nine-month low of 52.5 from 54.8 in August. The country's composite reading slipped into contraction territory at 49.1 in September from 51.7 in August.
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The European Automobile Manufacturers Association and key national carmakers associations have warned of the "catastrophic consequences" of a no-deal Brexit. With just over a month to go before the UK is due to leave the EU, ACEA and the European Association of Automotive Suppliers, as well as 21 national associations, joined forces to release a rare joint statement Sunday to stress the impact a no-deal Brexit would have on what it called "one of Europe's most valuable economic assets." Contributors to the statement included the German Association of the Automotive Industry, the Committee of French Automobile Manufacturers and the Society of Motor Manufacturers & Traders in the UK. The European industry chiefs warned that the repercussions of a no-deal to what it called a "vital sector" will be severe.
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The US and China ended preparatory discussions ahead of a fresh round of trade talks on Friday, with Chinese state media calling the meeting "constructive". During the two-day consultations, deputy ministers from the two sides "conducted constructive discussions on economic and trade issues of common concern," the Xinhua news agency reported. The delegations "seriously discussed" arrangements for the upcoming round of trade talks in October, it added. While the language was positive, it did not go beyond that of standard statements issued by China following such talks in the past.
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The US will send additional troops to the Middle East in the wake of drone strikes on oil facilities in Saudi Arabia, US Defence Secretary Mark Esper said in Washington on Friday. US President Donald Trump had approved the deployment of additional troops of a defensive nature, Esper said at the Pentagon. Yemen's Iran-linked Houthi rebels have claimed responsibility for last week's attacks on major Saudi oil facilities in the eastern province of Buqyaq. But Saudi Arabia and the US suspect that Iran is behind the strikes, which at least initially put a halt to about half of Saudi Arabia's oil output.
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