Opec has cut its outlook for the global oil market, warning demand has faltered more than expected.
The cartel said oil demand will drop by 9.46m barrels this year – more than the 9.06m it previously predicted.
With little more than some M&A fever to drive sentiment, European shares are drifting along fairly flat today, although they’re off session lows.
James Slack, Boris Johnson’s spokesperson, has told reports the Government is scrutinising Nvidia’s takeover of Arm “in close detail”, with the PM taking a strong interest.
The $40bn (£31bn) sale of chip designer Arm to Nvidia is an “absolute disaster” for Cambridge, the UK and Europe, according to one of Arm’s co-founders.
My colleague James Cook reports:
Hermann Hauser said that the sale of the Cambridge company to American technology business Nvidia could result in key decisions about its chips being “made in the White House and not in Downing Street”.
“I think this is terrible,” Mr Hauser in an interview with BBC Radio 4’s Today programme. “It’s the last European technology company with global relevance and it’s being sold to the Americans.”
Hauser added that the deal would destroy Arm’s business model as “the Switzerland of the semiconductor industry”.
Switzerland’s Six makes top bid for Borsa Italiana – Reuters
Six, the Swiss stock exchange operator, is currently leading the bidding war for Borsa Italiana, operator of Italy’s stock market, Reuters reports.
Six has made the highest offer for Borsa Italiana and is ahead of France’s Euronext and Germany’s Deutsche Boerse in the takeover battle for the Milan bourse, two sources familiar with the matter said.
The three bids value Borsa Italiana at €3.5bn to €4bn, one of the sources said.
The London Stock Exchange (LSE), which took control of Borsa in 2007 for 1.6 billion euros, is now trying to sell it as part of the regulatory remedies to clear its $27 billion acquisition of data provider Refinitiv.
Aramco re-takes top company spot from Apple
Saudi Aramco is once again the world’s most valuable company after its market value eclipsed Apple amid a slump in US technology shares.
My colleagues report:
The state oil giant’s stock has gained 1.1pc in Riyadh this month despite Brent crude dropping 12pc to below $40 a barrel as concerns about rising coronavirus infections mount.
Meanwhile, Apple has fallen nearly 17pc in September. That decline means it is almost into bear-market territory – a 20pc drop from a recent peak – with its market value falling $400bn to $1.9 trillion (£1.48 trillion).
London City Airport warns 239 jobs could be lost as part of restructuring
London City Airport has warned up to 239 jobs could be lost as it tries to cut costs in the face of the pandemic.
The airport said it is launching “crucial restructuring plans” to safeguard its operations, which include opening a consultation over the possibility of voluntary redundancies.
It resumed flights on June 21st, but said passenger numbers “have remained well below 2019 levels and this is expected to continue during the upcoming winter season”.
LCA said it has already cut “all non-essential spending”, and has already announced a pause to its £500m development programme. Its leadership team took a 25pc pay cut in April.
Chief executive Robert Sinclair said:
It is with huge regret that we are announcing this restructuring programme today and our thoughts are with all of our highly valued staff and their families.
The aviation sector is in the throes of the biggest downturn it has ever experienced as a result of the pandemic. We have held off looking at job losses for as long as possible, but sadly we are not immune from the devasting impact of this virus.
Our focus in the coming weeks is to help all staff through this exceptionally difficult period. We are committed to playing our part in rebuilding a stronger local and national economy once the worst of the downturn passes and believe that the difficult decisions we are taking now will enable the airport to bounce back in a better shape when growth returns.”
GardaWorld makes takeover bid for G4S
Just in: GardaWorld, the world’s biggest private security services company, has announced a bid for a complete takeover of London-listed outsourcer G4S.
Canada-headquartered GardaWorld said it had made three attempts to engage with G4S’s board over the last three months, which it said had been “summarily dismissed or ignored”. It added:
Consequently, GardaWorld now encourages G4S’s shareholders to mandate their board’s engagement in collaborative discussions towards a transaction that would be of clear and immediate benefit to G4S’s shareholders, customers, employees and members of the company’s pension schemes.
The possible offer, which GardaWorld said would form the “world’s leading security service provider”, is a 190p a share, and 86pc premium to G4S’s share prices before the first offer was made, a 30pc premium to Friday’s closing price..
GardaWorld boss Stephan Crétier said:
G4S needs an owner, not a manager. GardaWorld has 25 years of experience in the sector and we know how to improve and repurpose this business. As owner-operators, we believe that the combined business’s operations will offer a better future for all those who depend on G4S. We will turn G4S around, ensuring it delivers for its customers, its people and the public .
The combination of GardaWorld and G4S is an important part of our strategy to create the world’s leading security services business. If successful, our commitment to the UK will be for the long-term.
BC Partners, which holds a 51pc common equity interest in GardaWorld, offered its support for the bid, which it said is “a unique opportunity for G4S’s shareholders”. It would lead a group to equity finance the deal.
GardaWorld said further details of its offer will be released “when appropriate”.
G4S’s share have jumped in reaction to the offer.
Burford gets green light for dual listing
Aim-listed litigation funder Burford Capital has received approval from the New York Stock Exchange (NYSE) for a dual-listing of its shares.
My colleague Michael O’Dwyer reports:
Burford said in July that it was ploughing on with plans to add a US listing, which will give it access to more investors.
The listing is part of Burford’s response to a short-selling attack last year by US hedge fund Muddy Waters which wiped £1.5bn off the company’s valuation.
The move remains subject to approval from the Securities and Exchange Commission, which regulates US stock exchanges, as well as the NYSE’s usual listing conditions.
Analysts at Jefferies said they hoped regulatory approval would be received within weeks.
Burford also told investors it will publish its results for the first six months of 2020 on Oct 1, a day after the usual deadline.
Debts could force luxury holiday park boss into bankruptcy
A businessman who promised caravan enthusiasts a “guaranteed return” on their holiday sites could be forced into bankruptcy after leaving investors millions of pounds out of pocket.
My colleague Oliver Gill reports:
Upmarket holiday park operator Dream Lodge collapsed in January 2019, threatening to wipe out individuals who had handed over up to £200,000 in return for fixed rental income or a guaranteed profit after three years.
About 80 jobs were lost across eight sites after parent company Walsham Chalet Park Limited called in administrators.
Deloitte, the accountancy firm, was appointed Walsham Chalet Park liquidator and is pursuing founder Simon Moir over unpaid debts.
Eurozone industrial production rebounded at slower pace in July
Industrial production across the eurozone continued to rebound in July – rising 4.1pc, a slower pace than during June and May.
Despite the series of rises (which, at any other time, would have been highly impressive gains), production as a whole is still below pre-virus levels.
The climb was roughly in line with economists’ expectations, which predicted a 4.2pc rise.
SThree sees recovery in performance
Specialist recruiter SThree said its performance has been improving since the first half of 2019, despite continued pressure on its net fees.
The small-cap group, which hires people across sectors such as finance, energy and tech, said activity had risen across most of its operating regions.
Across the group, net fees were down 14pc year-on-year between June and August, impacted by the virus – slightly worse than in its second quarter (March to May).
Chief executive Mark Dorman said:
Whilst the YoY decline in net fees was marginally greater in Q3 than Q2, there has been an improving underlying sequential performance in the business since the half year.
We have seen a significant uptick in general sales activity levels across most regions, improving contractor retention levels and thus a stabilisation of the contractor order book.
The group said its latest surveys suggest 78pc of its clients are actively hiring, but warned the outlook remains uncertain in the near term.
SThree announced its intention to stop trading in Australia by the end of November following an internal assessment of which STEM markets offer the best opportunity for the group.
Burberry to livestream fashion show on Twitch
Fashion house Burberry plans to stream is Spring/Summer 2021 fashion show via video game streaming site Twitch, with no guests attending in person.
The event, which will go ahead this Thursday, is the first of its kinda to be conducted entirely remotely.
The FTSE 100 group said:
Burberry’s show will use Twitch’s unique Squad Stream functionality, with Burberry hosts live streaming the show together in one window. This will provide virtual guests with the ability to view multiple perspectives of the show at once and converse through Twitch’s chat function, creating a personal, inclusive experience.
Rod Manley, Burberry’s chief marketing officer, added:
Burberry has embraced the full potential of Twitch in this collaboration to create a truly live, interactive, never to be repeated experience. There is great overlap between the Twitch and Burberry superfans, creating a hugely impactful synergy between the two brands.
Here are some of the day’s top stories from the Telegraph Money team:
Vodafone says talks continuing over Egyptian arm sale
Telecoms group Vodafone says it remains in talks with Saudi Telecom Company over the potential sale of its 55pc stake in Vodafone Egypt.
Announcing that due diligence in regards to the possible divestment has been “substantively completed”, it added:
Vodafone now looks to stc and Telecom Egypt to find a suitable agreement to enable the transaction to close.
Aldi to begin click-and-collect trials
Discount supermarket Aldi has begun trialling its first UK click-and-collect services.
The German discounter is currently running a trial of the service for its colleagues from a store in the Midlands and plans to extend that to customers in the coming weeks.
Customers will be able to choose from a full range of grocery items online, then travel to their local store where they can have their shopping brought to their cars by store colleagues contact-free and in line with social distancing measures.
The trial, which is being launched in partnership with Deliveroo, will be extended across other parts of the country if it proves successful.
European markets have risen solidly at the open.
Wetherspoons: 66 staff have tested positive for virus
Pub chain Wetherspoons says 66 of its 41,564 employees tested positive for coronavirus in the 10 weeks since July 4th.
Out of its 811 pubs, 50 have reported positive cases, with an many as four a ttwo sites.
The FTSE 250 group said:
Most of the reported cases have been mild or asymptomatic and 28 of the 66 employees have already returned to work, after self-isolating in accordance with medical guidelines.
In a lengthy statement, chairman Tim Martin said the situation with pubs has been “widely misunderstood”, adding:
If pubs are closed, or restricted so much that they become unprofitable, a great deal of the strenuous effort of the hospitality industry’s 3.2m employees, currently engaged on upholding hygiene and social distancing standards, will be lost – leaving the public to socialise at home or elsewhere, in unsupervised circumstances.
Oracle snaps up TikTok
And here’s some more on Oracle…
Oracle has triumphed over Microsoft in the fierce contest to run TikTok’s operations in the United States, offering it a last-minute reprieve from the wrath of the US government.
My colleague Lawrence Dodds reports:
Sources told US news outlets that the database giant has been chosen by TikTok’s Chinese parent company, ByteDance, as the new custodian of its 100m American users.
It comes just days before the deadline set by President Donald Trump, who had ordered ByteDance to sell TikTok to a US company or be banned from the country.
Mr Trump had previously expressed support for Oracle’s bid, lauding its biggest shareholder Larry Ellison, as “a great guy”. Mr Ellison is one of Mr Trump’s few vocal supporters in the top ranks of Silicon Valley.
Nvidia buys Arm for $40bn
Let’s look more closely at those two deals, which already look set to be the day’s biggest stories. First up, Arm:
The US technology giant Nvidia has confirmed the $40bn (£31bn) takeover of Arm, one of Britain’s biggest tech companies, and promised to invest in the UK amid questions about Arm’s future.
My colleague James Titcomb reports:
Nvidia and Japan’s SoftBank, which currently owns Arm, announced the deal late on Sunday. It comes four years after Arm, which designs the microchip architecture that features in billions of smartphones and other devices, was bought by Softbank for £24bn.
As part of the deal, Nvidia committed to keeping Arm’s headquarters in Cambridge, and promised to invest further, building an AI research centre and an Arm-based supercomputer in the UK. It said discussions with the Government about gaining approval for the deal had started.
In a note to Arm employees, Nvidia chief executive Jensen Huang said: “Arm’s headquarters will remain in Cambridge and continue to be a cornerstone of the UK technology ecosystem. Nvidia will retain the name and strong brand identity of Arm.”
Agenda: Stocks set to climb
Good morning. European stocks are set to start the week in the green amid a flurry of deal activity and signs of progress towards a coronavirus vaccine.
The resumption of the AstraZeneca vaccine trial and comments from the Pfizer’s chief executive about the likely deployment of a vaccine to Americans by the end of the year boosted sentiment.
Reports that a deal for TikTok in the US is nearing a conclusion was also welcomed by investors, while British chip maker Arm could be sold off to US firm Nvidia as its owner SoftBank seeks to monetise the company it bought in 2016.
5 things to start your day
1) Government ministers are mulling intervening on Arm’s $40bn takeover by US chip maker Nvidia, which could be announced as soon as this morning. Ministers are seeking assurances over Arm’s headquarters and jobs in Cambridge. The UK chip company is for sale by Japanese parent company SoftBank.
2) Oracle beats Microsoft in race for TikTok’s US business. The database giant has won the bidding to rescue TikTok from the wrath of Donald Trump, according to multiple US reports.
3) Renewables are growing faster than any fuel in history, according to BP. The oil titan will has admitted that renewable power is now outgrowing competing energy sources.
4) New Look will plead with landlords today to back a rescue deal at a crunch CVA vote. It comes as rival Boohoo is set to pounce on the high street clothes store.
5) Economists are warning UK job losses could hit 700,000 as fresh data shows the country is heading for the highest level of redundancies since the Nineties, as the furlough scheme ends. Job losses as M&S, John Lewis and Pizza Express could just be the tip of the iceberg.
What happened overnight
Asian stocks rose on Monday and US futures pointed higher amid a flurry of deal activity and signs of progress toward a vaccine. The dollar and Treasuries were little changed ahead of this week’s Federal Reserve meeting.
South Korea led modest regional gains with an advance of about 1pc. S&P 500 futures rose about 1pc. Comments from the Pfizer Inc. CEO about the likely deployment of a virus vaccine to Americans by year-end buoyed sentiment, as did reports that a deal for TikTok in the US is nearing a conclusion.
Japan’s Topix index gained 1pc. Hong Kong’s Hang Seng index advanced 0.6pc. The Shanghai Composite climbed 0.6pc. South Korea’s Kospi index added 1.2pc. Australia’s S&P/ASX 200 Index rose 0.5pc.
Coming up today
Industrial production (eurozone, Japan)