Sunday newspaper round-up: Insurance, Sports Direct, Tesco
The Financial Conduct Authority ignored Bank of England warnings that it had created a false market in insurance shares for more than five hours, the Sunday Times writes. A newspaper report that the FCA planned a clampdown on insurance policies going back up to 30 years caused shares of Legal & General, Resolution and others to plunge on March 28th. The office of Andrew Bailey, the BoE’s chief prudential regulator, called the FCA repeatedly after 09:00 but the FCA did not clarify its plans until 14:30.
Sports Direct’s founder Mike Ashley bought an 11% stake in House of Fraser and tried to “derail” the purchase of the department store chain by Chinese retailer Sanpower, the Sunday Telegraph and Sunday Times reported. Ashley bought the stake from Tom Hunter a week ago and considered bidding for the whole of House of Fraser, which he has long coveted as an outlet for Sports Direct’s goods. But other House of Fraser shareholders, including Chairman Don McCarthy, refused to sell. Ashley is thought to have bought the stake through Sports Direct though he may have done so through his holding company, the Telegraph said.
City fund managers want Tesco to hire a top-notch finance director who could take over from Chief Executive Philip Clarke, according to the Sunday Times. Some directors have got behind Clarke, arguing that the resignation of Laurie McIlwee as Finance director was a necessary part of clearing out the old guard at Tesco. But a top-10 shareholder said investors would be furious if the next finance director was an internal candidate and that the company needed someone who could stand up to Clarke and become Chief Executive if necessary.
Marks & Spencer is set to miss sales targets, increasing pressure on Chief Executive Marc Bolland, the Sunday Telegraph and Sunday Times said. The retailer is expected to say on April 10th that clothing sales fell for an 11th straight quarter with total sales for the year to March of £10.3bn – below the £10.8bn to £11.5bn targeted by Bolland two years ago. M&S has offered deep discounts in recent weeks that could worsen the impact of weak sales. Final-quarter results will be affected adversely by Easter falling in late April but Bolland will have to answer questions about his progress in turning around M&S's general merchandise business, which is mainly clothing.
UK Banks are planning to reduce mortgage lending amid fears Britain is in danger of experiencing a housing bubble, the Sunday Times said. The Bank of England’s credit conditions survey shows mortgage lenders planning the biggest reduction in mortgage approvals since the peak of the Eurozone crisis. James Carrick, an economist at Legal & General Investment Management, thinks the UK’s combination of low interest rates and strong inflation could be a “fairytale” and that the BoE may not be able to rein in another housing bubble.
Barclays faces a major shareholder revolt over employee pay at its investment bank, the Sunday Times said. Up to a quarter of shareholders are likely to protest at the bank’s annual meeting this month. A top-10 Barclays investor said change on pay was on the way but it was too late at the investment bank. The revolt is unlikely to match that of 2012 when a third of shareholders failed to back previous Chief Executive Bob Diamond’s pay deal. But it will embarrass Diamond’s replacement, Antony Jenkins, who has pledged to overhaul pay and governance.
The International Monetary Fund (IMF) is expected to upgrade its forecasts for UK growth at its spring meeting, the Sunday Telegraph reported. Chancellor George Osborne is likely to claim vindication for his policies on April 8th, when the UK Government expects the IMF to revise up its growth forecasts for the UK “reasonably significantly” a British Government source told the paper.
Tony Hayward, the ex-boss of BP, is the front runner to become the next Chairman of Glencore, the Sunday Times explains. Hayward has been on the board of the commodities trader since its flotation in 2011 and became interim chairman a year ago. Hayward is competing with two other candidates: former BG Chief Executive Frank Chapman and Roger Agnelli, who ran the Brazilian miner Vale.
The boss of engineering company Amec has advised Scotland not to vote for independence from the UK in September’s referendum, the Sunday Telegraph said. Samir Brikho said a yes vote could disrupt billions of pounds of investment in North Sea oil and gas production. Amec employs 4,500 workers in the North Sea. “For me there is no question – I believe in the UK,” Brickho told the paper.
National Accident Helpline is preparing to float on the stock market in a transaction that would value it at £100m, according to the Sunday Times. The company, which says it is Britain’s biggest accident claims firm, is owned by Inflexion Private Equity.