Amec Foster Wheeler’s chief executive is stepping down amid the oil rout, Wolseley’s CEO is retiring, Home Retail Group has knocked up a deal to sell DIY business Homebase for £340m. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Long-serving chief executive Samir Brikho is stepping down at oilfield services group Amec Foster Wheeler. He will be replaced immediately by finance director Ian McHoul, who will hold the job on an interim basis until a permanent successor is found.
Oilfield services groups have been particularly badly hit by the oil rout. The shares have fallen by around two-thirds from their 2014 peak, but remain a little above the level when the wisecracking Mr Brikho took over ten years ago, according to S&P CIQ data. Cheaper oil might be deemed a boon to businesses grateful for lower energy input costs, were it not that its connection to weakening global growth has shaken equity markets.
Steel is also in a glut. Tata is expected to announce over 1,000 UK job cuts, according to Sky News. The axe would fall most heavily on the historic Port Talbot plant in South Wales. Credit Suisse is forecast to cut over 1,000 jobs of its own in the UK this week. But the mainstream media tends to be more phlegmatic about finance redundancies, which lack the gritty narrative possibilities of the manufacturing kind.
Plumbing supplies business Wolseley is managing a more orderly succession than Amec. Chief executive Ian Meakins is retiring after turning round the FTSE 100 group. Chief financial officer John Martin will replace him, with Simon Nicholls, jumping ship from Cobham to fill the vacancy this creates.
Wolseley has produced a cracking shareholder return of 225 per cent over six years thanks to Mr Meakins.
Home Retail Group has confirmed the £340m sale of Homebase, a retailer that sells home décor of an underwhelming kind alongside DIY gear often available more cheaply elsewhere. Wesfarmers of Australia is the brave purchaser. HRG will return around £200m to shareholders after sticking £50m in its pension scheme and covering a steep £75m in transaction and restructuring costs. The group can now focus on selling its remaining Argos business to Sainsbury for the highest price.
National Australia Bank is pressing ahead with its flotation of Clydesdale, but has set a reduced pricing range to give the business an expected market worth of £1.5-£2bn. A capitalisation of £2bn-£2.5bn had been mooted. Three quarters of the challenger bank’s shares will be dished out to NAB investors with the remainder sold to City institutions.
Peacenik Jeremy Corbyn plans to retain nuclear submarines if Labour wins power, but without the nuclear missiles. Presumably, in time of war the subs would rise to the surface and hoist flags bearing the word “Bang!”
Beyond the Square Mile
Oil prices sank further this morning, on fears that the lifting of Iranian sanctions will push more supply onto a global market already grappling with overcapacity. Brent crude, the international oil benchmark, shed as much as 4.3 per cent in Asian trading to $27.70 a barrel, the lowest since November 2003.
Gold output has peaked in this commodities cycle, according to mining industry leaders and analysts who say few big projects will reach the point of production amid falling prices.
Credit Suisse cuts London workers at Credit Suisse are set to become the latest casualties of the rout that has left analysts poised for another round of poor results from top investment banks in the US and Europe. The Swiss bank will this week tell up to 1,800 London staff their jobs are at risk, following through on a cost-cutting commitment made in October, bank insiders said.
There are no significant economic data releases today in Europe and all markets are closed in the US for the Martin Luther King holiday.
It gets busy from tomorrow, with Chinese December industrial production, retail sales, and fixed asset investment as well as GDP growth for the final quarter of last year out on Tuesday. UK December inflation is also on Tuesday followed by unemployment figures on Wednesday. The European Central Bank will announce its January decision on interest rates on Thursday. US inflation figures are out on Wednesday.
Business leaders, central bankers, heads of state and celebrities will gather in Davos, Switzerland on Wednesday for the annual World Economic Forum. This year, the overarching theme is ‘The Fourth Industrial Revolution‘ — the rapid changes taking place in technology that are disrupting every industry in every country.
For a fuller diary of the week’s events, check out ft.com/weekahead .
Nikkei 225 down -191.54 (-1.12%) at 16,956
Topix down -14.52 (-1.04%) at 1,388
Hang Seng down -275.32 (-1.41%) at 19,245
S&P 500 down -41.51 (-2.16%) at 1,880
DJIA down -390.97 (-2.39%) at 15,988
Nasdaq down -126.59 (-2.74%) at 4,488
Eurofirst 300 down -37.26 (-2.79%) at 1,297
FTSE100 down -114.13 (-1.93%) at 5,804
CAC 40 up +3.80 (+0.09%) at 4,214
Dax unchanged 0.00 (0.00%) at 9,545
€/$ 1.09 (1.09)
$/¥ 117.09 (117.04)
£/$ 1.43 (1.43)
€/£ 0.7633 (0.7649)
Brent Crude (ICE) down -0.75 at 28.19
Light Crude (Nymex) down -0.59 at 28.83
100 Oz Gold (Comex) unchanged 0.00 at 1,092
Copper (Comex) up +0.02 at 1.96
10-year government bond yields (%)
CDS (closing levels)
Markit iTraxx SovX Western Europe +0.4bps at 19.72bp
Markit iTraxx Europe +5.42bps at 95.93bp
Markit iTraxx Xover +20.16bps at 384.54bp
Markit CDX IG +6.05bps at 109.69bp
Sources: FT, Bloomberg, Markit