singapore hotel: Business news and markets: as it happened

£100m Byron sold to Hutton Collins

16.45 Byron, the upmarket hamburger restaurant, has been bought

by private equity firm Hutton Collins, which has also invested in Pizza

Express and Wagamama. The sale of the six-year-old business has been in the

works for over a year.

Here’s Hutton Collins managing partner Graham Hutton on the deal:

We are delighted to be investing in such a pioneering brand. Byron has a clear

road map for growth and a talented team in place to deliver it. We are

excited to be working with Tom Byng and the entire Byron team, and are

looking forward to bringing the Byron burger experience to many more diners

across the UK.

This transaction complements Hutton Collins’ long experience of generating

attractive investment returns in the casual dining and leisure sectors.

Byron gained additional fame earlier this year when Chancellor George Osborne

tweeted a picture of himself chowing down as he prepared the budget speech.

FTSE finishes at month high

16.41 Buoyed by the positive data from China, the FTSE 100 has

finished the day up 46.42 points, or 0.7pc, at 6,622.58, its highest level

in a month.

NYSE to test trading ahead of Twitter IPO

16.30 A lot was made of Twitter’s decision to list on the New

York Stock Exchange, rather than the tech-heavy Nasdaq index, which was

beset by glitches during Facebook’s IPO last May.

Now, the NYSE will launch a dress rehearsal of the hotly-anticipated flotation

in an effort to prevent those glitches, the

Wall Street Journal is reporting. It will allow traders to test their

systems to ensure smooth trading when the stock does debut.

European leaders hit out at Russian influence

16.20 Russia must stop pressurising eastern European countries

to avoid making ties with the EU, leaders have said. Countries including

Ukraine and Lithuania are due to sign up to trade agreements at the end of

November, but Russia has been exerting pressure on the countries recently.

AP reports Lithuanian foreign minister Linas Linkevicius as saying:

Pressure exerted by Russia against eastern partnership partners is

unacceptable.

Royal Mail shares hit 505p

15.59 Speaking of well-performing stock, Royal Mail shares have now

passed the 505p mark.

Spain’s IBEX passes 10,000 for first time in more than two years

15.44 Spain’s main benchmark index has climbed back to levels not seen

since July 2011. In today’s trade it touched 10,000 before retreating

slightly. It’s currently hovering around the 9979 point-mark.

HSBC hit with $2.5bn US court judgement

15.38 Banking editor Harry Wilson has more

details:

HSBC has been ordered to pay $2.5bn (£1.5bn) by a US court in a case linked to

alleged fraud at its Household International subsidiary.

A court in Chicago said the bank must pay the record sum after losing a

class action securities fraud lawsuit brought by the US lender’s former

shareholder.

The case predated HSBC’s acquisition of Household in 2002 and concerned

claims that the bank’s chief executive, chief financial officer and head of

consumer lending had given false and misleading statements to investors that

increased its share price.

HSBC said it would challenge the court ruling and would appeal the

judgement.

Read Harry’s full story here.

Google soars as high as $1,007.40 in opening minutes of trade

15.27 US business editor Katherine Rushton has more on Google’s

inexorable rise to the $1,000-a-share club.

Google has joined the exclusive $1,000-a-share club, after a better than

expected set of results sent its stock up more than 13pc in morning trading

in New York.

Its share price soared as high as $1,007.40 shortly after the Nasdaq stock

exchange opened on Friday morning, pushing Google’s value to $336bn and

putting the 15-year old web search giant alongside a handful of companies

whose stock runs to four figures.

The web search business joins Priceline, an American technology company

whose shares passed the $1,000 threshold last month, as well as the bank

Farmers Merchants of Long Beach and shipping group Seaboard

Corporation. Their share prices stand at around $5,075 and $2,797

respectively.

However, Google remains a long distance behind Berkshire Hathaway, the

conglomerate led by legendary billionaire investor Warren Buffett, whose

stock is the most expensive in America. One of its top-tier “A” class shares

is valued at $175,920.

^{Source: Reuters}

Google makes its $1,000 club debut

15.12 The share price for the web giant rose above $1,000 for the first

time this morning. This makes it part of an ultra-exclusive club with only a

handful of members. Take a look at market reporter Ben Martin’s story

to find out more about its new peers.

However, as Seth Fingerman on Mashable

points out, Google’s membership of the club is likely to be short-lived

since the company is about to undergo a stock split which will create a new

class of non-voting shares to ensure the founders maintain control voer the

company’s direction.

Dow Jones left out in the cold amid Google rally

14.56 Google’s 10.5pc jump in after-market trading last night has

powered the SP 500 to new highs this morning. The Nasdaq

Composite – which also includes Google – jumped 25.92 (0.67 percent) to

3,889.07, its highest level since September 2000.

However, the Dow Jones, which does not count Google as a constituent,

slipped 0.09pc in opening trade.

In the first minutes of trade, Google’s strong earnings released after markets

closed Thursday gave the Web giant a strong bump to $982.30 a share and the SP

500 surged beyond its record close of Thursday, adding 4.80 points (0.28pc)

at 1,737.95.

US debt ceiling impasse will be remembered as ‘sad and difficult episode’

14.38 Larry Summers, former US Treasury Secretary and erstwhile

frontrunner for Fed chair (until he withdrew his candidacy some weeks ago),

has branded the US debt ceiling stand-off a “a sad and difficult

episode in our democracy” which “nobody should be proud of”.

Deutsche Bank finds risk appetite remained healthy even amid US government

shutdown

14.25 This chart shows how various asset classes have fared since the

US government went into partial shutdown on October 1. Japanese and European

stocks did rather well, while gold, normally a safe haven asset, fell the

most. Here’s David Folkerts-Landau, group chief economist;

We expect the economic impact of the shutdown and political impasse to be

relatively muted. Somewhat perversely, the deadlock in Washington helped

underpin risk appetite, as the elevated state of uncertainty raised

expectations that Fed tapering will be delayed, thus containing the recent

rise in borrowing costs

^{Source:Deutsche Bank}

EU and Canada sign off on trade deal

13.59 It involved a long tussle over quotas for Canadian beef and EU

cheese, but the pair finally struck a free trade deal in the small hours

of last night.

The deal is the EU’s first with a member of the G8 club of the world’s

biggest economies, marking a breakthrough for Brussels’ free-trade

agenda that so far has only achieved smaller deals with South Korea and

Singapore. It will also pave the way for an even bigger deal with the US.

Canada’s president Stephen Harper said the £25.7bn was the “biggest

ever made” by the North American nation, saying it was bigger than

the North Atlantic Free Trade Agreement between Canada, the US and Mexico.

Cyprus government orders landlords to slash rents to help recession-hit

citizens

13.43 Last night the Cypriot parliament adopted a law imposing

discounts of 15pc or 20pc, depending on the tenant’s monthly rental rate, in

a bid to ease pressure on its cash-strapped population. Residential rents of

up to €300 will be cut by 15pc. On rents above that, the reduction will be

20pc, but with a ceiling of €120.

More on Cable letter to MPs

13.14 Financial Editor James Quinn has more

details on business secretary Vince Cable’s letter to MPs defending

the Royal Mail float.

Vince Cable has defended the pricing of the Royal Mail float, arguing that

there was not enough demand from long-term investors to price it above the

330p issue price, in part because of the ongoing threat of industrial

action.

On the day that the Royal Mail’s shares touched 500p for the first time –

some 51pc above the float price – Mr Cable argued that were the initial

public offering (IPO) to have been priced above that level, demand for the

shares would have tapered off strongly from key long-term investors.

The Business Secretary explained that as a result of the continued threat

of strike action leading up to the IPO – the Communication Workers Union

this week disclosed that members have voted to strike – some investors chose

not to back the float, while it tempered the views of others on the

long-term earnings potential of the Royal Mail.

Read his full story here.

Cable defends Royal Mail float to MPs

13.10 Vince Cable, the Business Secretary, has argued in a letter to

MPs that the Royal Mail IPO was hampered by the threat of industrial action.

Read it for yourself here:

Vince Cable to Adrian Bailey BIS Select Committee Inquiry Into Royal Mail Privitisation (PDF)

Vince Cable to Adrian Bailey BIS Select Committee Inquiry Into Royal Mail Privitisation (Text)

Royal Mail share price hits 500p

12.57 Back to Royal Mail, which is understandably a closely

followed shareat the moment, its worth noting that the

postal service hit 500p during trading earlier this morning, a move

that took it 51.5pc above the 330p float price that was set last week.

Taper expectations pushed back in aftermath of US debt ceiling drama

12.44 As the US government kicks the debt-ceiling-can down the road, so

too will the Federal Reserve put off tapering for longer. That’s the view of

a growing number of analysts who foresee the Fed needed to keep its stimulus

at full-pelt for the next few months to offset the economic impact of the

16-day government shutdown and the political deadlock over raising the

country’s debt ceiling.

Jane Foley at Rabobank International in London said:

People are putting in place calls that the Fed may not taper until March,

which is a significant change.

If China is growing nicely and the Fed is doing more stimulus, then it

helps lift appetite for higher-yielding assets. The dollar should weaken

versus the euro.

And here’s Besa Deda, chief economist at St. George Bank in

Sydney:

The very earliest you’d be looking at Fed tapering is March.

There’s been a recovery in risk appetite and that’s seen flows into riskier

assets and away from the U.S. dollar.

Spencer out

12.23 The Twitter QA has come to a close. Looks likely to be

remembered as a success – despite criticism of the Bank’s failure to hit its

inflation target for nearly four years and some suggestion that quantitative

easing could be the devil’s handiwork. Certainly not a re-run of the British

Gas twitter fiasco of yesterday.

Will Bank of England revise its predictions for timing of rate rise?

12.11 When Mark Carney’s ‘forward guidance’ policy was first announced,

the Bank said it expected unemployment to fall below 7pc by the end of 2016.

But Dale hints that this might be coming forward:

Dale bats off criticisms on Bank of England’s inflation targeting

11.46 Quite a few questions on whether the Bank’s credibility has been

dented after missing its inflation target for 47 consecutive months. But

Dale seems unflapped, at least over the space of 140 characters.

Bank ‘vigilant to risks’ of re-emergence of US debt ceiling stand-off

11.43 Dale says the Bank is watching closely for any economic impacts

from the US debt ceiling debate.

High school students pile into Dale Twitter QA

11.41 Pupils from Sandbach High School in Cheshire have taken to

Twitter with gusto to quiz the Bank of England’s chief economist:

William Hill takes dip after JP Morgan cuts recommendation

11.29 Back with the movers and shakers in the London stock market,

bookmaker William Hill, off 3.9pc, has suffered the heaviest fall in

the FTSE 100 after analysts at JPMorgan Cazenove cut their

recommendation on the group to “underweight”, the equivalent of a “sell”.

Insurer Prudential, which is heavily exposed to Asia, has been lifted

by an encouraging update from Hong Kong-based peer AIA. The Pru, the biggest

riser in the Footsie with a gain of 3pc, made a bid for AIA in 2010.

You wouldn’t invite Keynes and Hayek to the same dinner party, says Dale

11.31 Dale tips his hat to his economics teacher but gives little away

about his economic orthodoxy.

British Gas price rise could ‘squeeze incomes further’ says Dale

11.27 As if this issue did not get a good enough airing yesterday,

the impact of British Gas price rises on inflation has come up.

Funding for Lending is boosting growth says Dale

11.21 Funding for Lending was bound to come up. Dale says the scheme is

boosting growth.

Dale quizzed on BoE’s 7pc unemployment threshold

11.14 Dale defends BoE’s use of unemployment as an indicator of

economic strength. Mark Carney announced over the summer that the Bank would

not raise interest rates atl east until unemployment fell below 7pc.

The Bank of England’s gold bar ‘stays shiny without being polished’

11.13 Showing a bit of game, Spencer Dale answers a question about the

Bank’s 1kg gold brick:

Total write-off of world sovereign debt?

11.11 Dale does not see a situation where this would be possible.

Dale defends QE

11.04 Lots of people have raised concerns about QE – but Dale reassures

them that it will come good in the end.

And they’re off…

11.03 The interview has begun. In reply to a question about how long

interest rates will stay at their record-low 0.5pc:

Twittersphere warms up for Spencer Dale’s live QA debut

10.56 Plenty of questions flooding in for the Bank of England’s chief

economist’s Twitter debut.

Millemoodie

asks: How far off 7% unemployment do you think the equilibrium natural rate

is?

Matpointon Given new FPC

powers on reining in housing market yet to be tested – should they be used

sooner rather than later?

Some were not so serious

A few not-so-heavy-hitters, including this tweet

from World First asking:

What’s Mark Carney’s skin regimen? #AskBoE

And this from Tony Yates: what would montague-Norman make of all this

twittering by Bank officials?!

Who is in the exclusive $1000-a-share club?

10.40 Our market reporter Ben Martin found out who Google’s new

peers will be if the tech company’s share price climbs above $1,000 — a

prospect which is now in view after shares in the California-based

technology surged as high as $960.21 in after hours trading yesterday.

It is perhaps no surprise that Berkshire Hathaway, the conglomerate

led by Warren Buffett, is the single most expensive US stock, with it’s ‘A’

shares valued at $175,286.

Known as the Sage of Omaha, Mr Buffett is renowned for his investment

prowess and Berkshire controls a range of companies across the consumer

goods, insurance and utilities sectors.

But some of the other $1,000-a-share companies are perhaps less well known

in the UK. Farmers Merchants Bank of Long Beach is one, with

its stock valued at $5,075. There is also Kansas-based pork products and

shipping group Seaboard Corporation, which trades at around $2,797.

Priceline.com, which topped $1,000 a share for the first time last

month and is now valued at around $1,032, is currently the only tech company

that trades above the key level. Like Google, Priceline is an internet

business and it offers discounts on flights and hotels. The group is known

in the US for its advertisements featuring former Star Trek actor William

Shatner.

Surrey-based investment pair banned and fined for misleading clients

10.24 The Financial Conduct Authority has banned two Surrey-based

investment advisors, Mark Bentley-Leek and Mustafa Dervish,

from holding any position at a financial firm after finding the duo “lacked

integrity” and misled clients about the strength of their investments.

The pair were also fined a combined £885,00. Over a period of six years the

pair advised more than 300 customers to invest more than £35m in a series of

property developments in the UK and abroad. They a 6pc to 18pc, and in some

cases at 50pc return, despite the high level of risk attached to the

investments.

Here’s Tracey McDermott, director of enforcement at the FCA:

Many consumers committed their life savings or their pensions to these

property investments as they trusted Mr Bentley-Leek and Mr Dervish’s

advice. The least consumers should expect from those they turn to for

investment advice is honesty and integrity. Bentley-Leek and Dervish fell

far short of our expectations, they failed their customers and further

tarnished the name of the financial services industry.

We are determined to stamp out such behaviour and these sanctions should

send a clear message to others who might be tempted to put their own

interests ahead of those of their clients.

Chinese tech company Lenovo eyes Blackberry

10.03 It would be one of the biggest purchases of a Western company

by a Chinese firm if it happens. Chinese phone and computer maker Lenovo

is considering a takeover bid for Canada’s BlackBerry to rival an existing

bid from 10pc stakeholder Fairfax Financial.

#AskBoE

09.51 The Bank of England’s Spencer Dale will be hoping for a better

reception than British Gas when he takes to the Twittersphere at

11am this morning. We’ll follow the action here on the liveblog.

BoA is ‘cautiously optimistic on euro-area growth’

09.30 Bank of America Merrill Lynch says the eurozone looks like its

heading for growth but that it could be institutional indecision rather than

economic fundamentals that hold it back.

We remain cautiously optimistic on euro-area growth but fear institutional

issues could fail to provide a decisive impetus. First, the Eurogroup did

not give a clear answer on a fiscal backstop for the ECB balance sheet

assessment, which could undermine its efficacy and credibility, in our view.

Second, the recovery in hard data continues to be weaker than suggested by

soft leading indicators, and for the first time since June, confidence in

Germany shows signs of weakness.

Finally, but less worryingly, coalition talks in Germany continue, with no

clear deal for the moment, amid the third round of exploratory talks between

the CDU/CSU and the SPD. As we have already argued before, we see a grand

coalition as the most likely outcome.

Dollar near eight-and-a-half month low as traders digest two-week shutdown

09.00 The US dollar has dropped to an eight-and-a-half month low

against a basket of major world currencies as traders expect the US Federal

Reserve will be forced to maintain its stimulus to offset the economic toll

of the 16-day partial government shutdown.

Here’s Paul Robson, currency strategist at RBS:

With the impasse in the U.S. having passed people will go back to the Fed

taper discussion.

The market will come round to the idea that tapering is off the agenda

until the back end of Q1 or even Q2, and that is a powerful dollar negative,”

he said, adding there was a risk of the euro rising towards $1.40.

^{Dollar against basket of world currencies since February 2013. Source:

Bloomberg}

BoJ ready to unleash further stimulus if external risks threaten 2pc

inflation target

08.47 Kikuo Iwata, deputy governor of the Bank of Japan, has said

further policy steps may be taken if the wider global economy could threaten

its target to hit 2pc inflation within two years. The Bank of Japan is in

the throes of a major stimulus plan aimed at doubling the money supply in

the space of two years.

We are ready to consider new measures if we think it will be impossible to

achieve 2 percent inflation.

Commodity prices to benefit from China upturn

08.29 Here’s Rebecca O’Keeffe, head of investment at broker

Interactive Investor, on the China data that is giving stock markets

some support this morning:

Promises made by Premier Li Keqiang that Chinese growth would rebound have

indeed been met, with growth being seen in industry, investment and retail

sales and annual growth likely to reach their 7.5pc target. China

remains the dominant factor for commodities and economic recovery should

underpin prices in a number of these markets over the next few months.

Commodity heavy indices, including the FTSE 100 and BRIC nations are likely

to be the primary beneficiaries.

FTSE 100 climbs on open

08.24 London’s blue-chip index has nudged up 0.24pc to 6,592 points in

the opening minutes of trade, buoyed by the data out of China this morning

showing the world’s number two economy reversed its first half slowdown.

Here’s Jonathan Sudaria, a trader at Capital Spreads:

China’s GDP figures reported a steady growth rate coming out in line with

expectations.

Bulls will be content with the fact that the recent downward trend of the

last two quarters has been broken.

Royal Mail share price watch

08.13 Shares in the 500-year-old postal service have edged up around

0.8pc this morning, to 484p, a 47pc premium on the 330p opening price.

BoJ governor says effects of policy starting to emerge in economy

08.05 Haruhiko Kuroda has hailed the Bank of Japan’s ultra-loose

monetary policy, saying its impact was spreading in the economy and prices.

He said the economy was likely to continue its moderate recovery.

The BOJ will continue with quantitative and qualitative easing, aiming to

achieve the price stability target of 2 percent, as long as it is necessary

for maintaining this in a stable manner.

FTSE poised to open up after China growth picks up again

07.58 Here’s Accendo Market’s Michael van Dulken on the expected open:

FTSE 100 called to open +40pts at 6615, with sentiment getting a boost

overnight from a re-acceleration in Chinese growth in Q3 as well as a

turnaround in US bourses after the debt ceiling deal and a results beat by

Google. Note SP back at all-time highs and Nasdaq near 13yr highs.

US shutdown means inflation data will be unreliable for months

07.56 Research by the Cleveland

branch of the US Federal Reserve (via the Wall Street Journal)

suggests that inflation data from the US will be prone to error for months

since the federal employees who normally spend the month collecting pricing

information from shops were out of the office for the last two weeks due to

the government’s partial shutdown. Still, it says, year-on-year inflation

data will remain more or less reliable.

Here are the Cleveland Fed’s Randal Verbrugge and Sara Millington:

Since the CPI price collection relies upon field staff visiting shops, some

of the October data will never be collected. As a result, the November CPI

release, which is based upon October data, will have a much bigger standard

error due to the smaller sample. We can estimate how much bigger by weighing

the potential size of the October sample against typical sample sizes,

historical standard errors, and the likely inflation rate.

The October sample will be half its usual size. Price collection happens

during the working days of the month. The government was shut down for 11

working days, so the missing data represent about 50 percent of the price

quotes (since there are 21 working days a month on average).

This level of error gives rise to considerable uncertainty about the true

monthly inflation rate. For example, suppose that the October CPI ends up

being estimated at its median, 0.14 percent, and we wish to have a

wide-enough confidence interval so that we are wrong only 5 percent of the

time. In this case, the range of uncertainty about this 0.14 percent

estimate would be that true monthly inflation in September was somewhere

between 0.05 percent and 0.22 percent.

Serious Fraud Office gags Wall Street Journal over Libor names

07.30 David Enrich, the Wall Street Journal’s European banking editor,

has been ordered by the UK’s Serious Fraud Office to restrain from

publishing the names of individuals the government plans to implicate in a

Libor fixing criminal fraud case. Mr Enrich may not publish “any

names in the indictments other than those of Tom Hayes, Terry Farr and James

Gilmour” anywhere readers in England and Wales could see them.

In a move described by the Journal as “a serious affront to press freedom”,

the SFO has threatened Mr Enrich with fines, imprisonment or the freezing of

his assets should the names appear in any newspaper, television broadcast or

other report viewable in England and Wales. The report in question will

appear in the Wall Street Journal’s US and Asia print editions.

Chinese slowdown reverses in third quarter, but

outlook unclear

07.10 Economic growth the Middle Kingdom has picked up to its

fastest pace all year, hitting an annualised 7.8pc in the July to

September quarter. GDP grew 7.7pc in the first quarter and 7.5pc in the

second, both marking a slowdown from the last three months of 2012, when the

economy expanded 7.9pc.

The latest GDP reading keeps China on track to achieve the government’s

2013 growth target of 7.5pc, stronger than other major economies but

still the worst performance for the country in 23 years. Still, the current

administration seems to be comfortable with slowing growth, after three

decades of break-neck expansion.

Economists put the pick-up in third quarter expansion down to increased

activity in the property market – but noted that since the government is

bringing tougher measure to curb prising home prices, that this acceleration

is ilkely to be temporary. The government also unleashed a “mini-stiimulus”

over the summer which boosted investment in infrastructure like railways.

Falling exports are also expected to limit the strength of any surge in

economic growth.

Here’s Shen Jianguang, chief China economist at Mizhuo Securities in Hong

Kong:

The Q3 GDP figure is in line with market expectations but the uncertainty is

whether the current recovery is sustainable. We think the recovery in the

third quarter was mainly driven by the strong momentum of the property

market.

We think the government concerns about an over-heated property market are

increasing, and tougher measures to curb rising prices may be forthcoming.

We expect GDP growth will slow to 7.6 percent in the fourth quarter.

Best of the rest

07.00 The Times reports that Kuwait

has made a £1.5bn bid to buy the More London complex next to Tower Bridge,

the building which houses the City Hall headquarters of Boris Johnson.

Paul Tucker, departing deputy governor of the Bank of England, has told the

Financial Times that hedge

funds and shadow banking pose a major risk to financial stability

and that regulators must “up their game” in overseeing these sorts

of institutions.

The owner of the Grangemouth

oil refinery has told its 1,300 workers they face “D-Day”

as it demanded they accept cuts to jobs and pensions plus other changes to

their working conditions to keep the plant open, reports the Guardian.

^{The More London complex near Tower Bridge}

Good morning

06.45 Good morning and welcome to our daily business and markets live

blog, your one stop shop for all the breaking business stories of the day.

Business news and markets: as it happened - Friday October 18, 2013

Thứ Sáu, 18 tháng 10, 2013