More jitters for European banking: at a cost of more than €5.2bn Italy is bailing out Veneto Banca and Banca Popolare de Vicenza. The more robust assets of both are to be taken on by the Intesa Sanpaolo banking group. It’s thought there were no other offers for the two operations.
But the bigger question is whether the move is big enough to stabilise Italy’s shaky banking system? The initial €5.2bn sum is likely to rise significantly, possibly up to €17bn once all liabilities are absorbed.
The euro was at $1.1193 at 7am, down -0.03% while the pound, up 0.04%, was trading at $1.2746. Some caution from the dollar following comments – St. Louis Fed President James Bullard – that the Fed should go easy on the next rate hike.
Later on this week we have a rash of spending data coming out of the US plus GDP growth. Also inflation and business confidence updates for the euro-area. Look out for Chinese PMI figures also.
- UK FTSE 100 7,424.13 -0.20%
- Dow 21,394.76 -0.01%
- S&P 500 2,438.30 +0.16%
- Nasdaq 6,265.25 +0.46%
- Nikkei 225 20,148.89 +0.08%
- DAX 12,733.41 -0.47%
- CAC 40 5,266.12 -0.30%
- Gold 1,255.40 -0.08%
- Oil WTI 43.48 +1.09%
Holland & Barrett bought for £1.8bn
We start with news that high street health stalwart Holland & Barrett has been sold for £1.8bn to Russian billionaire Mikhail Fridman, boss of L1 Retail, from private equity fund Carlyle.
Globally, Holland & Barrett have 600 stores and employs 4,000 people. L1 Retail has ex Home Retail Group boss John Walden on its board (Argos, Homebase). Billionaire Mr Fridman was responsible for BP’s Russian JV with TNK, later purchased by Rosneft.
Holland & Barrett saw revenues of more than £600m and earnings of £150m last year. The story was first reported by the Financial Times.
Takata files for bankruptcy
We move onto news that Japanese car parts player Takata is filing for bankruptcy. The Tokyo car parts maker has been hit by lawsuits and rising costs over an airbag fault that has been linked to more than 10 deaths globally. Key Safety Systems, a US company, has bought Takata’s assets.
Manufacturers affected by Takata's problems include GM and Toyota; the liabilities could now run beyond $9bn. Trading in Takata’s shares have been suspended as it delists on 27 July. Its shares have proved highly volatile in the last week – up more than 40% at one point – as traders speculated on a possible bankruptcy.
It’s not known whether new owner KSS would be responsible for new liabilities in the future following its takeover deal.
UK business confidence climbs – Lloyds
Finally, Lloyds Bank Business in Britain’s report claims UK business confidence is surging: four out of six business sectors claim higher confidence since January with the biggest rises from sectors primarily driven by UK demand says Lloyds.
“The construction sector now has the highest confidence (rising from 20% to 31%). Transport and communications and business and other services also made strong gains.”
However the number of companies who said they had experienced difficulty recruiting skilled labour in the last six months increased to a ten year high of 52% compared with 31% in January. “This was apparent in all regions and sectors,” said Lloyds.
Breaking news: The Co-op Bank says it's no longer up for sale. More later.