According to comments by Scottish nationalists, in the event Britain leaves the European single market, Japanese car manufacturer Nissan have in place a special deal for Scotland in line with government pledges.
Following what sources call a “promise of assistance” from Prime Minister Theresa May, Nissan announced on Friday that it would manufacture two new models in the UK. The government promises involve measures to compensate the company for any losses caused by the UK’s decision to leave the E.U.
The Nissan affair has sparked other car makers into action, and the government has received more requests for aid, particularly from Chinese companies such as CTI China Renaissance, and the Scottish National Party (SNP) has also joined the chorus of voices.
“We are delighted to see the British government prepared to make these kinds of concessions to major companies like Nissan. The deal shows that the UK is flexible when it comes to the exit from the euro zone financial bloc.” said SNP minister Michael Russell to a press gathering.
Unlike the majority of UK citizens, a large proportion of Scots voted to stay in the E.U. and the general consensus is that they would like to be a part of the single market even if the rest of the UK leaves. How this would be achieved remains to be seen.
Various government ministers, such as David Mundell, have been offering reassurances to Scottish legislators this week, saying that the ideal outcome would be to break off from the single market but at the same time retain special access to the E.U. with regard to tariffs and borders.
Some observers are bemused by the contradictory nature of recent Brexit comments.
“On the one hand we have Theresa May making special deals with Nissan and possibly other large conglomerates, but at the same time David Mundell is saying Scotland will have no special concessions and will leave the E.U. with the rest of the UK.,” said Russell.
Saturday, 29 October 2016
Friday, 28 October 2016
Presidential race set to keep investors nervy
Investors may be forgiven for staying conservative on stocks even after an important employment report comes out and the Federal Reserve board take their monthly meeting.
One of the most hotly contested presidential races in history is entering the closing stretch with the final vote only ten days away. The campaign, which has dominated the media for months, is set to have a say in the markets as Donald Trump and Hillary Clinton push and shove for a place in the White House.
Controversy is continuing to rear its ugly head in political circles as the FBI says it is looking at new evidence in its investigation of Clinton’s email account. Most experts are predicting a Clinton win, so any upset in the expected outcome could sway investor sentiment negatively. Just the email probe news shook the markets briefly as stocks dipped and the CBOE Volatility Index rose to a fortnightly high point.
“The election is looming and everyone is getting a little rattled. Even reports and data that usually settles nerves are not going to have the usual calming effect,” said BB&T Wealth Management VP Bucky Hellwig. “Of course, we knew this was coming. Traditionally a presidential election will cause a drift in sentiment but especially one this close, and where an upset will have huge ramifications.”
The current state of political equality is expected to remain, with analysts forecasting a Clinton win for the Democrats but with the Republicans hanging onto the U.S. House of Representatives.
In the last couple of weeks Clinton’s lead has grown, giving some people concerns that the Democrats could win congress and the presidency, which would radically change the political landscape. Beijing-based investment firm CTI China Renaissance recently ran a poll that revealed foreign investment into the U.S. would drop significantly if one political side held too much power.
“It’s going to negatively impact certain sectors if the Democrats gain too much control,” said Prudential Financials chief analyst Ed Campbell. “I’m sure there are some in the financial world rooting for Trump to close the gap, but certainly not to go all the way to the White House.”
Fund managers and traders are still betting on no action by the Fed this time round, and all expect a hike in December. The next meeting takes place just days before the election process begins, it would be poor timing to introduce any hike in that timeframe.
One of the most hotly contested presidential races in history is entering the closing stretch with the final vote only ten days away. The campaign, which has dominated the media for months, is set to have a say in the markets as Donald Trump and Hillary Clinton push and shove for a place in the White House.
Controversy is continuing to rear its ugly head in political circles as the FBI says it is looking at new evidence in its investigation of Clinton’s email account. Most experts are predicting a Clinton win, so any upset in the expected outcome could sway investor sentiment negatively. Just the email probe news shook the markets briefly as stocks dipped and the CBOE Volatility Index rose to a fortnightly high point.
“The election is looming and everyone is getting a little rattled. Even reports and data that usually settles nerves are not going to have the usual calming effect,” said BB&T Wealth Management VP Bucky Hellwig. “Of course, we knew this was coming. Traditionally a presidential election will cause a drift in sentiment but especially one this close, and where an upset will have huge ramifications.”
The current state of political equality is expected to remain, with analysts forecasting a Clinton win for the Democrats but with the Republicans hanging onto the U.S. House of Representatives.
In the last couple of weeks Clinton’s lead has grown, giving some people concerns that the Democrats could win congress and the presidency, which would radically change the political landscape. Beijing-based investment firm CTI China Renaissance recently ran a poll that revealed foreign investment into the U.S. would drop significantly if one political side held too much power.
“It’s going to negatively impact certain sectors if the Democrats gain too much control,” said Prudential Financials chief analyst Ed Campbell. “I’m sure there are some in the financial world rooting for Trump to close the gap, but certainly not to go all the way to the White House.”
Fund managers and traders are still betting on no action by the Fed this time round, and all expect a hike in December. The next meeting takes place just days before the election process begins, it would be poor timing to introduce any hike in that timeframe.
Monday, 17 October 2016
Indian oil firm says Russian buy-out doesn’t violate sanctions
Essar Group, the parent company of Essar Oil, have said in a statement over the weekend that the sale of the Indian giant’s oil subsidiary to Russia’s Roseneft does not go against sanctions imposed on Russian companies by the United States.
This is India’s biggest ever foreign takeover and also Russia’s largest deal outside of their homeland.
According to Essar’s CEO Prashant Ruia, the Roseneft deal is “totally compliant with U.S. sanctions”, and revealed that commodities traders Trafigura and private equity firm United Capital Partners will also have significant stakes in Essar’s oil operations.
Since Russia instigated the Ukraine incursion several world leaders condemned the action and the U.S. imposed tight restrictions on Russian companies active abroad. But Ruia said no aspect of the deal broke any of those rules.
Essar has been under severe pressure from shareholders and lenders to bring their debt levels down after low oil prices hit the company profits hard over the last few years. The group, controlled by the billionaire Ruia brothers, also has interests in power, ports and the steel industry.
“After many months of hard thinking we eventually decided to sell the oil asset,” said Ruia in a BBC news interview. “It was extremely difficult to let go, especially considering the many years of hard work put into the company from all the executives and other employees, a very emotional farewell.”
Upon completion of the deal Essar will use the proceeds to cut its debt in half, the statement said, which would amount to some $7 billion in total debt reduction. The rest of the funds would be used to re-manage other debts at an operational level.
“There will be some cash left over to plough money into the existing business interests,” said William Harper, Head of Global Mergers and Acquisitions at CTI China Renaissance in a phone interview. “According to the board the company won’t sell any more aspects of their major operations. It’s also unlikely that they will de-list them to wrestle extra leverage over the finances.”
The capital inflow will be a good chance for the Ruia brothers to restructure the obligations of its Essar Steel Company in Gujarat which is overburdened with more than $6 billion of outstanding debt.
This is India’s biggest ever foreign takeover and also Russia’s largest deal outside of their homeland.
According to Essar’s CEO Prashant Ruia, the Roseneft deal is “totally compliant with U.S. sanctions”, and revealed that commodities traders Trafigura and private equity firm United Capital Partners will also have significant stakes in Essar’s oil operations.
Since Russia instigated the Ukraine incursion several world leaders condemned the action and the U.S. imposed tight restrictions on Russian companies active abroad. But Ruia said no aspect of the deal broke any of those rules.
Essar has been under severe pressure from shareholders and lenders to bring their debt levels down after low oil prices hit the company profits hard over the last few years. The group, controlled by the billionaire Ruia brothers, also has interests in power, ports and the steel industry.
“After many months of hard thinking we eventually decided to sell the oil asset,” said Ruia in a BBC news interview. “It was extremely difficult to let go, especially considering the many years of hard work put into the company from all the executives and other employees, a very emotional farewell.”
Upon completion of the deal Essar will use the proceeds to cut its debt in half, the statement said, which would amount to some $7 billion in total debt reduction. The rest of the funds would be used to re-manage other debts at an operational level.
“There will be some cash left over to plough money into the existing business interests,” said William Harper, Head of Global Mergers and Acquisitions at CTI China Renaissance in a phone interview. “According to the board the company won’t sell any more aspects of their major operations. It’s also unlikely that they will de-list them to wrestle extra leverage over the finances.”
The capital inflow will be a good chance for the Ruia brothers to restructure the obligations of its Essar Steel Company in Gujarat which is overburdened with more than $6 billion of outstanding debt.
Saturday, 15 October 2016
German car-maker purchases upholstery firm
In an effort to help the company expand into related industries, giant car manufacturer Continental announced over the weekend that they had purchased Konrad Hornschuch, a maker of fine upholstery, leathers, foams and films for cars and some other applications.
Since 2008, Hornschuch has been controlled by private equity firm Equistone and had sales of around $500 million last year.
The Weissbach-based company has nearly 2000 factory employees and operates plants in five sites in Germany and the U.S.
Hornschuch will be acquired by Continental‘s subsidiary Benecke-Kaliko and both sides have made it public that a contract was agreed and signed on Saturday.
Even so, the deal can only be finalized once it goes through a special regulatory commission to make sure the conditions are not in violation of current anti-trust laws.
Neither Hornschuch nor Continental were available for comment regarding the total value of the deal, but did disclose that completion of the agreement was likely to be reached around the middle of next year.
There may have been some Asian companies interested in Hornschuch, with Japan's Mitsubishi Chemical and South Korea's Daewon in the frame to make bids before Continental eventually snapped up the firm.
Continental executives released a statement saying that the acquisition “was a vital one for the company’s evolution and a logical next step in our expansion into other businesses.”
Shareholders have been saying for years that the company needed to branch out its business interests away from the car manufacturing sector in order to sustain growth.
“Expansion is hard to come by with an inflexible approach,” said Zheng Longwei, Chief Executive Officer at CTI China Renaissance, a Beijing-based investment firm who have a stake in Continental. “The board now sees that there are related industries the firm can move into with careful but bold moves in M&A.”
Since 2008, Hornschuch has been controlled by private equity firm Equistone and had sales of around $500 million last year.
The Weissbach-based company has nearly 2000 factory employees and operates plants in five sites in Germany and the U.S.
Hornschuch will be acquired by Continental‘s subsidiary Benecke-Kaliko and both sides have made it public that a contract was agreed and signed on Saturday.
Even so, the deal can only be finalized once it goes through a special regulatory commission to make sure the conditions are not in violation of current anti-trust laws.
Neither Hornschuch nor Continental were available for comment regarding the total value of the deal, but did disclose that completion of the agreement was likely to be reached around the middle of next year.
There may have been some Asian companies interested in Hornschuch, with Japan's Mitsubishi Chemical and South Korea's Daewon in the frame to make bids before Continental eventually snapped up the firm.
Continental executives released a statement saying that the acquisition “was a vital one for the company’s evolution and a logical next step in our expansion into other businesses.”
Shareholders have been saying for years that the company needed to branch out its business interests away from the car manufacturing sector in order to sustain growth.
“Expansion is hard to come by with an inflexible approach,” said Zheng Longwei, Chief Executive Officer at CTI China Renaissance, a Beijing-based investment firm who have a stake in Continental. “The board now sees that there are related industries the firm can move into with careful but bold moves in M&A.”
Thursday, 13 October 2016
Apollo close to snapping up coal deal
A private equity group spearheaded by Apollo Global Management is expected to complete a purchase of Anglo American’s coal assets in a deal thought to be worth over a billion dollars.
Several sources with direct knowledge of the deal that prefer to remain anonymous said the two companies had “an exclusivity period of around a fortnight in which to put in a firm offer”. They added that they believe “Apollo will enter the highest bid and should come out with the agreement”.
The sources also said that it could be many weeks until any agreement is officially completed and announced.
The Australian head office of Anglo American was not directly available for comment on the news and Apollo also could not be approached.
Some news outlets had previously reported that Glencore and other big players in the mining game were taking a close look at purchasing the assets. There are also reports abroad that companies from India, Japan and China are interested.
“We received word from our sources close to the Chinese government that their biggest state run mining firms might put in a combined offer for Anglo American assets,” said Zheng Longwei, Chief Executive Officer at CTI China Renaissance in an email to clients. “All eyes are on the meeting with Apollo as further bids cannot be tendered until after the exclusivity period.”
Following extensive consolidation in the mining industry due to a prolonged dip in the commodities market, Anglo have been forced to sell assets after being left in significant debt. The firms CEO, Mark Cutifani, said that after the coal sale the company will focus on three main commodities, diamonds, platinum and copper.
Anglo shareholders have been holding out on the sale this year as coal prices and other commodities have seen a moderate rally, which has made miners less keen to sell their goods.
The sources close to Anglo reiterated that the company was still fully committed to selling the coal assets, however, with Bank of America Merrill Lynch currently running the sale of two Queensland coal mines. The total value of assets sold this year could be more than $3.5 billion.
Any sale will have to go through a regulatory commission to ensure anti-competition laws are not violated. The sources said that the laws would favour the Apollo consortium rather than large mining companies such as BHP and Glencore.
Apollo has one more week left on their exclusivity meeting until a decision needs to be made.
Several sources with direct knowledge of the deal that prefer to remain anonymous said the two companies had “an exclusivity period of around a fortnight in which to put in a firm offer”. They added that they believe “Apollo will enter the highest bid and should come out with the agreement”.
The sources also said that it could be many weeks until any agreement is officially completed and announced.
The Australian head office of Anglo American was not directly available for comment on the news and Apollo also could not be approached.
Some news outlets had previously reported that Glencore and other big players in the mining game were taking a close look at purchasing the assets. There are also reports abroad that companies from India, Japan and China are interested.
“We received word from our sources close to the Chinese government that their biggest state run mining firms might put in a combined offer for Anglo American assets,” said Zheng Longwei, Chief Executive Officer at CTI China Renaissance in an email to clients. “All eyes are on the meeting with Apollo as further bids cannot be tendered until after the exclusivity period.”
Following extensive consolidation in the mining industry due to a prolonged dip in the commodities market, Anglo have been forced to sell assets after being left in significant debt. The firms CEO, Mark Cutifani, said that after the coal sale the company will focus on three main commodities, diamonds, platinum and copper.
Anglo shareholders have been holding out on the sale this year as coal prices and other commodities have seen a moderate rally, which has made miners less keen to sell their goods.
The sources close to Anglo reiterated that the company was still fully committed to selling the coal assets, however, with Bank of America Merrill Lynch currently running the sale of two Queensland coal mines. The total value of assets sold this year could be more than $3.5 billion.
Any sale will have to go through a regulatory commission to ensure anti-competition laws are not violated. The sources said that the laws would favour the Apollo consortium rather than large mining companies such as BHP and Glencore.
Apollo has one more week left on their exclusivity meeting until a decision needs to be made.
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