Brussels explosions prompt FTSE 100 stock market slide
European stocks have fallen and so-called safe haven assets like gold and government bonds have risen in price following the explosions in Brussels yesterday (22 March 2016).
Holiday companies and airlines led the fallers on the FTSE 100 index of the biggest companies in the UK.
IAG, which owns British Airways, fell more than 4%, EasyJet fell more than 3.5% and TUI, parent company of Thomson holidays, fell 3%. Shares in Intercontinental Hotel lost 2.5%.
Shares in Thomas Cook were down almost 5% after the company released a trading update stating that summer bookings are down 5%.
The fall in travel sector stocks dragged the FTSE 100 down at opening, reported the Independent.
Two blasts were heard at Brussels airport on Tuesday morning (22 March 2016), closely followed by a third at a city Metro station near EU buildings. Both the Metro system and the airport were closed as rescuers sought to evacuate anyone inside.
BHS faces crucial vote on its future
British Home Stores (BHS) creditors will vote on a deal it desperately needs to cut the rent bill for its 164 UK stores.
The loss-making retailer currently has debts of over £1.3bn, including a pensions deficit of £571m, reported the BBC.
BHS was bought by billionaire Sir Philip Green for £200m in 2000, but he sold it last year for just £1.
The troubled department store is now owned by Retail Acquisitions, a consortium of financiers, lawyers and accountants.
BHS - which has been loss-making for seven years - wants its creditors to agree to a Company Voluntary Arrangement (CVA). In effect, this is a compromise financial deal which depends on them accepting reduced rents.
Otherwise one of the UK’s best-known high street stores is likely to end up in administration, placing the jobs of its 10,000 workers at risk.
I'm at BHS creditor meeting. Very likely BHS survives but for how long?— Simon Jack (@BBCSimonJack) March 23, 2016
SNP will not adopt chancellor's 40p tax threshold change
The SNP said it would not adopt UK government plans to raise the starting point at which workers in Scotland pay the 40p tax rate.
Leader Nicola Sturgeon, who is also the country's first minister, believed the move was wrong, reported the BBC.
However, she said that if her party won the 5 May election then "no taxpayer" would see their income tax bill rise.
In April 2017, Holyrood will receive new powers to set bands and rates which apply to Scotland alone.
That will allow the Scottish government not to follow George Osborne's plans, announced in his Budget last week, to increase the threshold for 40p tax payers to £45,000 next year.
SNP stance on 50p tax rate a sensible one & very welcome. But a pity that more Scots will pay 40p rate than down South.— Murdo Fraser (@murdo_fraser) March 22, 2016
Sports Direct investors are on the run
Sports Direct investors deserted Britain’s largest sporting goods retailer in droves yesterday after its founder admitted it was “in trouble”.
The controversial billionaire Mike Ashley said the company’s profits were falling and laid the blame at the feet of MPs, with whom he is in a very public battle over his refusal to appear before them in Westminster to answer questions about Sport Direct’s workplace practices.
“We are in trouble – we are not trading very well. We can’t make the same profit we made last year,” Ashley said in a media interview. “We are supposed to be taking the profits up – they are not supposed to be coming down. And the more the media frenzy feeds on it, the more it affects us.”
Sports Direct shares plunged 11% or 44.6p to 379.2p, wiping £267m from the company’s market value, reported the Independent.
The stock is now down more than 30% so far this year – a slide that has led to it being demoted from the blue-chip FTSE 100.
Sports Direct boss and Newcastle owner Mike Ashley wants to box Ed Miliband's ears. His interview is some reading https://t.co/HFhY1KXhW9— Paul O'Donoghue (@paulodonoghue93) March 23, 2016
Credit Suisse to cut another 2,000 jobs
Credit Suisse is accelerating its restructuring and cost-saving programme, with the confirmation that 2,000 jobs are being cut in its global markets division.
The bank said the job cuts - which come on top of the 4,000 previously announced - would reduce costs in the troubled division from £4.6bn ($6.6bn) to £3.8bn ($5.4bn) by the end of 2018. So far 2,800 roles have been made redundant.
Credit Suisse's share price was up 2.1% in early trading on the news, reported City A.M.
The division will be forced to make further write-downs in the first quarter of this year - £244m ($346m) as of 11 March, resulting in a loss for the period, although this will be lower than last quarter, when it was forced to write down £446m ($633m).
The bank is "exiting activities that are not consistent with our new strategy", which focuses on equities, credit and solution, which will be made up of derivatives and emerging markets. Distressed credit, European securitised product trading and long-term illiquid funding are being exited.