Below are our top 10 stories that you need to know about. Be sure to check our twitter page for regular posts of important headlines. Click on the links for full stories.
Opinion articles of the week:
- It has been a turbulent start to 2016, could we be on the verge of another global economic crisis? Click here for the debate.
- One of Britain’s most successful investors, Neil Woodward, claims that the UK’s biggest drugs maker GlaxoSmithKline (GSK) needs a radical restructure and should be split up. Click here for more.
- A top Barclays investment banker claims that Britain would thrive outside the EU, click here for more.
1. CHINA STOCK MARKET CRASH
For a short video explaining what happened last week to China’s stock market click here. (BBC News)
What does this mean for the rest of the global economy? Click here the effects of this crash on the rest of the world. (BBC News)
For more on the causes of this stock market meltdown click here. (Al Jazeera)
2. US STOCK MARKET WEAK START
The Standard & Poor’s 500 and Dow Jones Industrial Average fell by 6% and 6.2%, respectively, in the biggest ever fall for the first five days of January and the worst for any week since September 2011. US markets, which have been suffering big falls since Wednesday, continued to decline last Friday despite the release of data showing better than expected US jobs growth in December. (The Guardian)
Unemployment remained at 5% and 200,000 jobs were added to the US economy. (The Guardian)
3. UK TRADE DEFICIT FALLS
The UK’s trade deficit in goods and services narrowed in November after the value of oil imports fell. The deficit – the difference between the amount imported and exported – was £3.2bn in November, down from £3.5bn from October, according to the Office for National Statistics (ONS). The ONS put the narrowing deficit down to a £0.5bn fall in imports of oil during the month, to £2.2bn. (BBC News)
4. SAUDI ARAMCO IPO PLANS
Saudi Aramco – thought to be the world’s most valuable company – announced last week that it is planning to go public. The state owned oil producer, said to be worth many trillions, has been “studying various options to allow broad public participation in its equity”, the firm said. The IPO would take the form of an “appropriate percentage of the company’s shares and/or the listing of a bundle its downstream subsidiaries”. (City A.M)
Click here for all the key facts about Saudi Aramco that you need to know. (The Guardian)
For a more in-depth look at Saudi Aramco have a look at The Economist’s analysis.
5. ORANGE MERGER TALKS
France’s largest mobile operator Orange has confirmed merger talks with rival Bouygues, marking the latest step in European telco firms’ race towards consolidation. A deal between the two, merging France’s largest and third-largest operators, has been estimated to be worth €10bn (£7.3bn). Both firms’ share prices rose 1.3 per cent on confirmation from Orange, but analysts note it is still “far from a done deal”
This is just the latest in a burst of merger or proposed mergers among European telco firms over the past year, including the UK’s BT takeover of EE, Sweden’s Telia Sonera buying Norwegian Tele2 and Italy’s Wind and Three merger.
Critics warn that this will deteriorate competition and choice for consumers, and the EU competition watchdog has already slammed the brakes on planned mergers, including the proposed deal between O2 and Hong Kong investment group CK Hutchison. The European Commission has launched an in-depth investigation into the takeover, which would create the UK’s biggest mobile operator. (City A.M)
6. SAINSBURY’S ACQUISITION BID
Sainsbury’s has made a £1bn move to buy Home Retail Group, the owner of Argos and Homebase, as it seeks to strengthen its business against the rise of the discounters and Amazon. (The Guardian)
As many as 245 Argos shops could close if Sainsbury’s secures a deal to buy Home Retail Group.
Analysis for the Guardian by property agent Harper Dennis Hobbs shows that 245 Argos shops are within half a mile of at least one Sainsbury’s store, meaning their future will be under threat if the supermarket chain agrees a takeover of Argos’s parent company. (The Guardian)
7. NETFLIX 2016 PLANS
Netflix Inc., which delivered the best return of any stock in the S&P 500 last year, has ambitious plans for this year so it can produce something new next year: serious profits.
Netflix is planning to introduce online video service to more than 100 new markets, including China, India and Indonesia. At the same time, Netflix will spend about $5 billion on programming, more than twice as much as HBO’s estimated budget, and double its production of original series. If all goes as planned, Wall Street expects net income could soar to more than $500 million in 2017. (Bloomberg)
8. BARCLAYS ASIA JOB CUTS
Barclays Plc plans to shut most of its cash-equities business in the Asia-Pacific region as Chief Executive Officer Jes Staley pushes to reduce costs. The near-exit from cash equities is part of plans to eliminate about 50 percent of jobs at the wider equities unit in the region. The move comes after a slowing Chinese economy sparked a rout in emerging-market currencies and stocks. People familiar with the matter said in December that Barclays planned to cut 20 percent of staff at its investment bank, with most losses to come in Asia and the global cash equities business. (Bloomberg)
These job cuts are becoming all too common as figures show 500,000 jobs have been cut from the banking industry since the financial crisis in 2008. (Bloomberg)
9. APPLE SHARES FALL
Apple Inc.’s shares ended last week below $100 for the first time Thursday since October 2014 amid concerns that demand is waning for iPhones, the most critical piece of the company’s business. The stock’s steady drop in recent weeks coincides with analyst and media reports indicating that Apple has cut back production of new handsets within its supply chain to accommodate slowing sales.
More than 60 percent of Apple’s revenue comes from the iPhone so any sign of weakness for the product causes concern among investors. The stock fell 4.2 percent to $96.45 in New York. Apple, the world’s most valuable company, has lost about $52 billion in market capitalization this year. (Bloomberg)
10. JP MORGAN SETTLEMENT
JPMorgan Chase & Co. will pay $48 million to settle the last in a series of missteps in its handling of foreclosures after the 2008 credit crisis.
The largest U.S. bank by assets will be fined for failing to meet terms of a 2013 accord over mortgage-servicing flaws, the agency said in a statement Tuesday. The new fine will close out JPMorgan’s OCC obligations from the earlier order, under which it had previously faced $2 billion in penalties and payments to borrowers. The bank was among a group of major U.S. servicers accused of mishandling loan papers or robo-signing — fraudulently endorsing affidavits used in foreclosures. (Bloomberg)