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First Abu Dhabi Bank considered offer for Standard Chartered; crypto bank Silvergate cutting jobs – as it happened | Business


Standard Chartered shares surge on report of takeover interest

Standard Chartered has surged to the top of the FTSE 100 leaderboard, spurred by reports of takeover interest in the bank.

They jumped as much as 20%, following a report that First Abu Dhabi Bank, the United Arab Emirates financial group, is considering an offer for the company.

According to Bloomberg, First Abu Dhabi Bank PJSC has been exploring a takeover bid for Standard Chartered.

Bloomberg says:

First Abu Dhabi Bank PJSC has been exploring a bid for Standard Chartered Plc, according to people familiar with the matter, in what would be a complex deal aimed at building an emerging markets lender with more than $1 trillion of assets.

The Middle East’s largest bank has been considering a full takeover of the London-based lender, the people said, declining to be identified as the deliberations are private. FAB, as the bank is known, has been assessing Standard Chartered for more than six months and is working with advisers, the people said.

Standard Chartered, which is focused on emerging markets, was valued at around £19bn before today’s share price jump. Shares are currently up 15% at 761p, having closed at 660p last night.

Standard Chartered shares jump 21% after Bloomberg reported First Abu Dhabi Bank is exploring a takeover bid @business

— Sujata Rao (@Sujata_markets) January 5, 2023

Key events

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Afternoon summary

Time for a recap.

First Abu Dhabi Bank has said it explored a potential bid for Standard Chartered, following a report that FAB had been considering an offer for the FTSE 100-listed lender.

Shares in Standard Chartered, which has declined to comment on the story, are up 6%, having jumped 20% when FAB’s interest was first reported by Bloomberg.

Under UK takeover rules, FAB’s statement means they are precluded from making an offer for the lender in the next six months, except under certain circumstances such as a third party announcing an offer.

Crypto focused bank Silvergate Capital has reported a sharp drop in deposits in the last quarter of 2022. Investors withdrew more than $8bn, Silvergate reported, as it also outlined plans to cut its workforce by 40%.

In the retail sector, Next, Greggs and B&M all reported a pick-up in sales in the crucial Christmas period, despite the cost of living crisis.

Next has raised its profit forecasts for the year by £20m after better-than-expected sales in the run-up to Christmas, but said it remained “cautious” about the year ahead and warned more price rises were coming.

Greggs has handed a 10% pay increase to workers as it warned of “material cost inflation” that prompted a third rise in the price of its sausage rolls in a year.

The jobs purge sweeping US tech firms has escalated as Amazon expanded staff-cutting plans to affect more than 18,000 workers and the software maker Salesforce said it would axe 8,000 employees.

UK car sales hit their lowest level in 30 years in 2022, but demand for electric vehicles jumped.

Almost no trains have run in most parts of England today, as train drivers at 15 operating companies held a strike.

The British government has been given the go-ahead to keep concealing the names of companies that received in total more than £47bn in state-backed Covid loans, after a tribunal ruled in its favour.

Taxpayers are facing a loss of almost £1bn in fraudulent or erroneous grants paid to supposedly struggling businesses during the Covid-19 pandemic.

Workers at the Co-op’s only UK coffin factory, in Scotland, have gone on strike again in a months-long row over pay….

….while the bosses of Britain’s biggest companies have made more money so far this year than the average UK worker will earn in the whole of 2023.

The London Metal Exchange is seeking a new chair.

The LME has announced that current chair, Gay Huey Evans CBE, will not seek re-election and will step down once a new Chair has been appointed.

She will continue to support the Board and the Executive during the transition, after which she will become a senior advisor to the HKEX commodities business, the LME adds.

The LME has been under pressure since last March, when it was forced to suspend trading in nickel and cancel some trades after the price of the metal doubled in a day to over $100,000 per tonne.

The nickel price jumped on after the Ukraine war, which raised speculation that Russia’s nickel supplies could be sanctioned. That created a ‘short squeeze’, as some traders had bet against nickel expecting its price to fall.

Consultancy Oliver Wyman has conducted an investigation into the circumstances leading up to the LME’s decision to cancel eight hours’ worth of nickel trades is due next month.

On 23rd December, the LME said the Oliver Wyman review has now been fully completed, and the report finalised. But given the holiday season, and the LME’s desire that the report is as widely read as possible once it is published, the LME has decided to publish the report on or about 10 January 2023.

Crypto-focused bank Silvergate cuts headcount by 40% amid turbulence

Cryptocurrency bank Silvergate Capital has revealed it faced mass withdrawal requests totalling over $8bn, in the aftermath of the collapse of FTX.com, and is cutting its workforce by around 40%.

Silvergate reports that its total deposits from digital asset customers declined to $3.8bn on the last day of 2022, down from $11.9bn on September 30, 2022.

Silvergate says the digital asset industry has undergone “a transformational shift, with significant over-leverage in the industry leading to several high-profile bankruptcies”.

This has sparked “a crisis of confidence across the ecosystem”, it points out, prompting many industry participants to shift to a “risk off” position across digital asset trading platforms.

Having hired staff during 2022, Silvergate is now reducing its headcount by approximately 200 employees, or 40%, to “account for the economic realities facing the business and industry today”.

It adds:

Reducing headcount will enable Silvergate to continue to offer a tailored customer experience, while prudently managing expenses in a more challenging macro environment.

Shares in Silvergate have tumbled around 46% in early trading.

The US stock market has opened in the red, after today’s stronger-than-expected jobs data.

The Dow Jones industrial average and the broader S&P 500 index have both lost around 1%, while the Nasdaq Composite has lost 1.1%, on worries that US interest rates will continue to rise.

Apertura Estados Unidos (spot)
🔴 🇺🇸S&P 500 -0,90% 3.818,40
🔴 🇺🇸Nasdaq -1,07% 10.347,25
🔴 🇺🇸Dow Jones -0,86% 32.984,04
🔴 🇺🇸Russell2000 -0,53% 1.760,00
🟢 🇺🇸VIX +3,13% 22,70

— JulianTrader (@CriptoJr2021) January 5, 2023

In another sign of a strong US jobs market, the number of Americans filing new unemployment claims has dropped.

There were 204,000 ‘initial claims’ for jobless support last week, a drop of 19,000 compared to the previous week, and lower than forecast.

Also US jobless claims fall 19k to 204k, lower than expected (225k)

— A.Tomarelli (@adri_relli) January 5, 2023

Elsewhere in the markets, the dollar has jumped after US companies added more jobs than expected in December.

Private sector payrolls increased by 235,000 in December, according to ADP Research Institute. That’s ahead of expectations, and rather stronger than November’s 127,000 gains.

#NEW Private payrolls surge in December

Payroll firm @ADP reports private employers added 235k jobs last month vs 153k expected

Services sector led the gains +213k:

Leisure and hospitality +123,000
Profesional & business services +52k
Education & health services +42k

— Greta Wall (@GretaLWall) January 5, 2023

This jobs growth indicates that demand for labour in the US is still solid, despite the interest rate rises during 2022. That could encourage the Federal Reserve to continue raising borrowing costs again this year.

First Abu Dhabi Bank: no longer considering offer for Standard Chartered

First Abu Dhabi Bank has put out a statement, confirming that it considered a possible takeover offer for Standard Chartered – but is no longer doing so.

The bank says:

First Abu Dhabi Bank confirms that it had previously been at the very early stages of evaluating a possible offer for Standard Chartered, but as of the date of this announcement, is no longer doing so.

This has knocked Standard Chartered’s shares down, they are up just 5% on the day now.

Standard Chartered shares surge on report of takeover interest

Standard Chartered has surged to the top of the FTSE 100 leaderboard, spurred by reports of takeover interest in the bank.

They jumped as much as 20%, following a report that First Abu Dhabi Bank, the United Arab Emirates financial group, is considering an offer for the company.

According to Bloomberg, First Abu Dhabi Bank PJSC has been exploring a takeover bid for Standard Chartered.

Bloomberg says:

First Abu Dhabi Bank PJSC has been exploring a bid for Standard Chartered Plc, according to people familiar with the matter, in what would be a complex deal aimed at building an emerging markets lender with more than $1 trillion of assets.

The Middle East’s largest bank has been considering a full takeover of the London-based lender, the people said, declining to be identified as the deliberations are private. FAB, as the bank is known, has been assessing Standard Chartered for more than six months and is working with advisers, the people said.

Standard Chartered, which is focused on emerging markets, was valued at around £19bn before today’s share price jump. Shares are currently up 15% at 761p, having closed at 660p last night.

Standard Chartered shares jump 21% after Bloomberg reported First Abu Dhabi Bank is exploring a takeover bid @business

— Sujata Rao (@Sujata_markets) January 5, 2023

Boots UK says December retail sales up 15% year-on-year

Health and beauty retailer and pharmacy chain Boots UK says its sales were up around 15% in December, compared with a year earlier.

Boots, part of the Walgreens Boots Alliance, says gifting, beauty and fragrance lines all performed “extremely well”. There was also an uptick in sales of over-the-counter medicines for “colds and immunity”.

Boots UK also reports a “record-breaking Black Friday” with boots.com recording its biggest ever day of sales.

Like-for-like sales in the September-November quarter were up 8.7% year-on-year.

Sebastian James, managing director of Boots UK & ROI, says it was “another positive quarter” for the group.

Our focus on giving customers our best ever value to help with cost of living pressures, as well as continued investment in our digital capability and in updating our store estate has resulted in increased retail sales and market share growth for the seventh consecutive quarter.

Our Black Friday and Christmas performance was particularly pleasing and I would like to thank the teams for their huge efforts in bringing our customers genuinely fantastic offers.”

Another good looking update just out. Boots reports ‘retail sales growth of around 15% versus December 2021’. That follows Q1 (ending Nov 30) like-for-like uplift of 8.7%.

— George MacDonald (@GeorgeMacD) January 5, 2023

The UK’s stock market has outpaced the rest of Europe this morning, as Next’s strong Christmas sales lift the retail sector.

The FTSE 100 index is up 35 points, or 0.5%, so far today at 7621, close to the seven-month high reached on Tuesday. Next are still the top riser, up over 7%.

Other European markets are more becalmed, with Germany’s DAX down 0.1% and France’s CAC slightly lower.

Investors have been digesting the minutes of the US Federal Reserve’s last meeting, released on Wednesday, which showed Fed policymakers want to see “substantially more evidence” that inflation is easing.

Next to raise prices after weak pound drives up costs

Next expects to raise its prices this year, after the fall in the value of sterling drove up its costs.

In today’s trading update, Next predicts selling price inflation of 8% in the spring and summer season, and 6% in autumn and winter.

Next says:

Much of the increase in next year’s prices are the result of the devaluation of the pound against the dollar.

Eighty percent of our contracts are negotiated in dollars so the devaluation of the pound has had a significant impact on our prices.

The pound is currently around $1.20 against the US dollar, down from $1.35 a year ago. It has recovered since late September, when it hit a record low above $1.03.

Next adds that:

Looking further ahead, it appears likely that the recovery of the pound against the dollar (if it persists) and continuing downward pressure on factory gate prices, means that inflation is likely to be lower again in the Spring of 2024.

Here’s the full story:

UK car sales drop: what the experts say

Hugo Griffiths, consumer editor at online marketplace carwow, points out that the UK has reclaimed its position as Europe’s second biggest car market, despite the 2% drop in registrations in 2022.

“Let us be under no illusions that the UK’s new-car market is even close to getting back to pre-covid levels, with the 1.61 million registrations that 2022 saw being 700,000 units down on 2019, and more than a million fewer cars than were sold in 2016.

“Given how difficult a few years it has been both for consumers and the industry, however, the fact that 183 new cars were registered every hour in 2022 – more than three a minute – shows that both buyers’ appetites and factories’ abilities to produce vehicles remain in far ruder health than some might consider.

“The UK’s reclamation of its position as Europe’s second-largest market for new cars also shows how important a player we remain on the continent’s stage, something reinforced by the fact the Nissan Qashqai – a car partly conceived and entirely built here – was the most popular new car of 2022.”

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), says 2022 was an “irregular year for new car registrations” due to several wide-ranging factors:

….from supply constraints, driven by continued lockdowns and the war in Ukraine, to the cost-of-living crisis impacting demand in the UK.

Looking ahead, NFDA and its members remain cautiously optimistic, Robinson adds:

Franchised dealers are well placed to enable the UK’s transition to electric vehicles through schemes such as Electric Vehicle Approved (EVA), which are in place to ensure consumers receive the correct support in their switch to electric.

Mark Oakley, Director of AA Cars, argues that car dealers coped well with supply shortages:

“New car sales ended the year on a high despite the current gloomy economic picture, finishing up with five straight months of rising vehicle registrations.

“Although overall sales for the year still finished down on 2021, dealers will feel that they did well to bounce back from a sluggish start caused largely by supply shortages.

“Electric Vehicles remain a bright spot with sales up 40% over the year, and this trend is likely to only grow further in the coming months.

UK firms hit by industrial action…. 5% plan job cuts

One in six UK companies have been affected by the strikes gripping the country.

The latest survey of British firms from the Office for National Statistics found that 16% of businesses had been affected by industrial action. A quarter of those firms said they were unable to obtain necessary goods for their business.

One in 20 companies with at least 10 employees are planning to make redundancies over the next three months, the ONS found – with two-thirds taking action to cut staff costs.

Yet, almost a third of businesses with 10 or more employees reported they were experiencing a shortage of workers, including half of firms in the human health and social work activities industry.

And looking ahead to this month, more than one in five businesses reported energy prices were their main concern, followed by input price inflation (15%) and falling demand of goods and services (14%).

UK services sector activity dropped marginally in December

Britain’s services sector ended 2022 with a small contraction, as firms were hit by a drop in new orders.

Data firm S&P Global’s latest survey of purchasing managers shows there was a “fractional fall in activity” at the end of 2022.

Its services PMI has come in at 49.9, an improvement on November’s 48.8, but just below the 50-point mark showing stagnation.

Services firms reported new business fell at its weakest rate for three months, while staffing levels were unchanged, ending a long period of jobs growth.

But encouragingly, cost pressures also showed signs of weakening, with inflation rates down for both operating expenses and charges.

Tim Moore, economics director at S&P Global Market Intelligence, says

“UK service providers ended the year with another downturn in new orders as strong inflationary pressures and worries about the economic outlook sapped demand. Overall levels of business activity fell only fractionally, despite an exceptionally challenging business environment and spending cutbacks due to cost of living difficulties.

Stalling recruitment and lower backlogs of work added to signs that service sector companies are now experiencing fewer capacity pressures. Business optimism has recovered from the lows seen in the wake of last September’s ‘miniBudget’, but many firms are braced for a sustained period of subdued demand in 2023.

Around 40% of the survey panel expect a rise in business activity over the next 12 months, while 16% forecast a decline, Moore points out, adding:

Survey respondents commented on squeezed disposable incomes, elevated recession risks and a housing market downturn as key factors likely to constrain demand in the year ahead.

Although service providers widely noted concerns about global economic headwinds and stubbornly high inflation, there were also many reports citing positivity about factors within their control, including forthcoming product launches, expansion into new markets and planned business investment.”

Eurozone construction suffers “sustained contraction”

Over in the eurozone, construction firms have suffered the biggest fall in activity since the first Covid-19 lockdowns.

Data firm S&P Global’s eurozone construction total activity index has fallen to 42.6 December, down from 43.6 in November (any reading below 50 shows a contraction).

This data indicates “a sustained contraction in eurozone construction activity levels” warns S&P Global, led by falling housebuilding activity.

Each of the three largest Eurozone nations monitored by the survey registered lower activity in December, with the most pronounced drop seen in France (41.0), closely followed by Germany (41.7). Activity at Italian construction firms fell (with a PMI of 47.0) following a brief upturn in November.

Environment Agency workers to strike for the first time, says UNISON

Thousands of Environment Agency workers in England will strike for the first time later this month, as a dispute over pay escalates, the UNISON union have announced.

Workers who maintain important safety structures such as the Thames Barrier, coastal sea defences and those protecting communities from floods, water pollution, spills, waste fires and fly-tipping will walk out on Wednesday 18 January from 8am to 5pm, UNISON says.

It warns that the strike comes at a time when extreme weather is more likely to hit the country.

Environment Agency workers began working to rule last month, meaning they only worked their contracted hours, and took all their scheduled breaks and full rest time between shifts. Employees also refused to volunteer to be ‘on call’ and deal with live incidents last month and over sections of the festive period.

More strikes.

Environment Agency staff will strike for the first time. UNISON members plan to strike on 18 January.

As with many other sectors, low pay rises at heart of the dispute.

Last month saw the EA hit by industrial action short of a strike.

— Adam Vaughan (@adamvaughan_uk) January 5, 2023

Unison blames the Agency’s failure to give staff a decent pay rise. Last November, workers received a pay rise of just 2% – a real terms pay cut, given inflation is over 10% – plus a £345 payment, it says.

UNISON head of environment Donna Rowe-Merriman says workers didn’t take the decision to strike lightly, as they are crucial in keeping communities and the environment safe.

Rowe-Merriman says:

“But the cost-of-living crisis has reached a point where the lowest paid are truly struggling to make ends meet. Staff often have no choice but to look for other work outside the Agency. This appalling situation cannot go on.

“Communities rely on these critical workers, particularly during bouts of extreme weather and rising problems of river pollution They should be paid accordingly.

“UNISON is urging ministers and the Agency to negotiate and ensure workers are given an improved pay offer. Otherwise, more staff will join the exodus.”

UK car sales hit 30-year low amid chip shortages

Supply chain disruption has dragged UK car sales to their lowest level in 30 years, new data shows.

The Society of Motor Manufacturers and Traders (SMMT) reports that new car registrations fell by 2% in 2022 to 1.61 million units, the lowest since 1992.

The SMMT blames the ongoing supply chain disruption, which left carmakers strugging to get hold of semiconductors, saying:

Despite underlying demand, pandemic-related global parts shortages saw overall registrations for the year fall -2.0% to 1.61 million, around 700,000 units below pre-Covid levels.

But, sales did rise in the second half of last year. Registrations jumped by 18.3% in December to 128,462, the fifth monthly rise in a row.

And there was stronger demand for electric cars last year. Battery-powered electric cars overtook diesel for the first time in 2022, to become the second most popular powertrain after petrol. Sales of BEV cars jumped by 40% in 2022, compared with 2021.

The SMMT is hopeful that there could be “significant” sales growth in 2023.

SMMT CEO Mike Hawes says the government must invest more in electric charging infrastructure, to encourage motorists to switch:

To secure that growth – which is increasingly zero emission growth – government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure.

Here’s the full story:





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