UK unemployment has increased slightly for the first time in two years.
The rate of unemployment rose from 4.3% to 4.4% for the three months to the end of December, the Office for National Statistics said.
Despite the slight increase in the unemployment rate, the total number of those in work increased by 88,000.
Wages grew by an average of 2.5%, up from 2.4% the previous month, although the increase remained below inflation.
The number of unemployed people rose by 46,000 to 1.47 million for the final quarter of the year, compared to the previous three months.
KARACHI: The KSE-100 Index started the week in the red, ending 294 points lower amid lack of positive triggers and profit-booking on Monday.
Trading began on a positive note with the KSE-100 rising to an intra-day high of 43,900, but lack of interest on the part of institutional investors and profit-booking in index-heavy cement and banking sectors dragged stocks into the red. The index dropped 439 points in intra-day trading before retail investors helped arrest the slide.
At close, the benchmark KSE 100-share Index recorded a drop of 293.72 points or 0.67% to finish at 43,515.08 points.
According to Elixir Securities’ analyst Jawwad Abubakr, equities closed negative in lacklustre trading with the benchmark KSE-100 Index seeing an exchange of only 66 million shares.
Weekly review: KSE-100 feels impact as global equity markets tumble
“Market opened sideways and traded in positive territory for a brief period, however, lack of immediate triggers prompted most institutional investors to stay on the sidelines,” remarked Abubakr.
Mainboards stocks in particular witnessed dreary activity and skidded lower on dull volumes with index heavy financials taking the lead in declines. Oil & Gas Development Company (OGDC PA -0.5%) was an exception as it fetched good institutional interest leading to over 3.6 million shares exchanging hands.
Moreover, volumes chart remained dominated by small cap retail plays to the likes of ANL (-5.3%), TRG (PA +2.1%), (KEL -0.5%) and DFML (PA +5%).
Market watch: KSE-100 overcomes early jitters to end 128 points higher
“MSCI was due to announce quarterly-annual review, which, in Elixir’s view, will likely be a non-event for market on Tuesday as we do not expect any additions or deletions from Pakistan constituents due to 50% buffer rule applied on quarterly rebalancing. As such, flows will remain crucial and continue to guide broader market direction,” the analyst added.
Overall, trading volumes fell to 215 million shares compared with Friday’s tally of 225 million.
Shares of 352 companies were traded. At the end of the day, 124 stocks closed higher, 212 declined while 16 remained unchanged. The value of shares traded during the day was Rs7.9 billion.
Azgard Nine was the volume leader with 34.3 million shares, losing Rs1.00 to close at Rs17.88. It was followed by TRG Pakistan with 12.2 million shares, gaining Rs0.82 to close at Rs39.13 and Aisha Steel Mills with 9.7 million shares, losing Rs0.27 to close at Rs21.48.
The fraud trial of three former Tesco bosses has been abandoned after one of the defendants suffered a major heart attack.
The trial at Southwark Crown Court, which began in September last year, collapsed after Carl Rogberg, 51, was taken to hospital.
Judge Deborah Taylor was due to begin her summing up after significant delays in the case, but instead discharged the jury on Monday.
The collapse of the case can be reported for the first time after reporting restrictions were lifted on Tuesday.
Rogberg, Chris Bush, 51, and John Scouler, 49, are accused of failing to correct inaccurately recorded income figures which were published to auditors, other employees and the wider market.
The Serious Fraud Office is considering if the case should go to retrial.
Judge Deborah Taylor told the 11 remaining members of the Tesco jury on Monday: “Thank you once again for your patience.
“The position is this: very unfortunately and sadly Mr Rogberg has suffered from a heart attack and is currently in hospital awaiting surgery.
“In the circumstances it would not be right or proper to continue with this trial and therefore I am discharging you from further dealing with this case.
“It has been a long period and I know it must be quite frustrating for you not to come to a conclusion at the end of all your hard work during the course of this trial.”
Nicholas Purnell QC, representing Rogberg, told the court on Monday that he was rushed to hospital on Thursday last week after suffering a major heart attack.
He is due to have surgery later this week after three blockages were found in his heart, Mr Purnell said.
“He has found the delay increasingly stressful,” he added.
The City fought off panic on Tuesday as a global share sell-off slashed £37 billion off the value of London’s blue-chip giants.
A turbulent day saw the FTSE 100 sink 143.34 points to 7189.64 although leading shares bounced back from the nine-month low of 7079.41 in early trading.
The biggest Wall Street sell-off in six years spread to Asia overnight, sending Japan’s Nikkei and Hong’s Hang Seng down by 5%. The chaos continued in Europe today, with Germany’s Dax sliding 1.8% and France’s CAC40 off 1.4%.
It has been triggered by worries over US inflation forcing the Federal Reserve into more interest rates rises than the market expects this year, as well as concern that US equities are overvalued.
James Bateman, chief investment officer at funds giant Fidelity International, urged calm. He said: “At this stage, the money is made by keeping your head when others are losing theirs. The tech-fuelled rally in the US had long lost any sense of reality in its valuations, the prospect of inflation remaining low forever could not last, and we have a new and untested Fed chair [Jerome Powell, pictured]. It would be more worrying if markets didn’t react.”
The Dow Jones Industrial Average is still up more than 8% this year and 21% in the past 12 months despite Monday’s rout, which knocked 4.6% off.
But Mark Haefele, global chief investment officer, at UBS Wealth Management said: “We remain confident that the bull market remains intact.”
And Gerard Lane, at Artorius Wealth, said: “In my view there is an opportunity to go and buy the market in a properly diversified portfolio… I don’t think there is cause for panic or distress.”
But others flagged up overpriced US shares compared to European counterparts, with dividend yields of less than 2% in the US compared to 4.3% for the FTSE 100.
CMC Markets’ Michael Hewson said: “This is long overdue and investors have been very complacent. We could see further falls and you would have to be very brave to get back in at these levels. We may have already seen our highs for the year.”
He highlighted record borrowing to buy stocks, which hit $627.4 billion in November as markets roared to new highs.
Commodities were also hit as oil prices slid more than 1% to $66.82 a barrel. Copper fell as much as 2% to $7025 a tonne.
Bitcoin plunged 20 per cent to a three-month low on Tuesday, its latest sharp loss following a series of setbacks for the cryptocurrency that, with a collapse across global mainstream markets adding to the selling.
The virtual currency fell to $6,190 for the first time since mid-November, according to Bloomberg News, and represents the latest hammering for a unit that saw a stratospheric 26-fold rise last year.
Tuesday’s collapse comes just six weeks after bitcoin hit a record high of $19,511, fuelled by a flood of speculators looking to make a quick buck, with warnings it could fall another 50 per cent.
Since those heady days the cryptomarket — which includes dozens of other units — has been pounded by news of crackdowns by governments including in China, Russia and South Korea, one of the biggest markets for the sector.
On Thursday, India said it would “take all measures to eliminate” cryptocurrencies’ use as part of a payment system and in funding illegitimate activities, while Japanese authorities raided a virtual currency exchange after it lost $530 million to hackers.
Central bank in Europe, Japan and the United States have also flagged concerns about the unit and this week saw several commercial lenders say they would stop allowing their customers to buy bitcoin through their credit cards owing to debt concerns.
Stephen Innes, head of trading for Asia Pacific at Oanda, said “the dynamics behind the moves are regulatory clampdowns and investors losing confidence in crypto”.
The sell-off on Tuesday was exacerbated by crushing losses on world stock markets, with the Dow on Wall Street suffering its biggest one-day points loss and wiping out all its 2018 gains.
The global rout comes as panicked investors fret over rising US borrowing costs, leading them to cash in profits after a stellar couple of months that have seen many indexes hit record or all-time highs.
Equities have enjoyed months of surges fuelled by optimism over the US economy, corporate earnings and the global outlook.
But while traders have been piling into equities, pushing many global indexes to record or multi-year highs, there has been growing concern on trading floors about elevated US Treasury bond yields — at four-year highs — and the likelihood of fresh Federal Reserve interest rate hikes.
“The risk-off tone is hitting Bitcoin almost as hard as a global regulator and bank scrutiny,” said Greg McKenna, chief market strategist at AxiTrader.
“The latest dent to the Cryptospace has been banks saying they are shutting down the ability of clients to buy bitcoin with their cards.”
“This could end up a full round trip back into the $1,850/$2,966 region.”
Chinese Ambassador Yao Jing on Saturday said that Baloch militant organisations the China-Pakistan Economic Corridor (CPEC), while sitting down for an interview with BBC Urdu.
He added that members of such militant groups were “not true Pakistanis”.
Jing assured that the Gwadar port would be transformed into one of the world’s trading hubs owing to the improving security situation in the country in the last few years.
“If they [Baloch militants] are true Pakistanis, they should work in the interest of Pakistan,” he said.
He discounted their capacity to become a threat to the CPEC project.
The envoy also expressed his satisfaction with the security dispensed to 10,000 Chinese nationals working on various projects in the country.
Govt struggles to defend tax waiver to Chinese firm
Back on December 9 of last year 70 Baloch separatist militants, including commanders, renounced violence and laid down their arms on Saturday at a ceremony Chief Minister Sanaullah Zehri and Commander Southern Command Lt Gen Asim Saleem Bajwa were among the participants.
The Ferraris belonging to Baloch separatist groups announced submitting to the writ of the state and becoming part of the national mainstream.
At least 70 Baloch separatist militants, including commanders, renounced violence and laid down their arms on Saturday at a ceremony with then Chief Minister Sanaullah Zehri and Commander Southern Command Lt Gen Asim Saleem Bajwa were among the participants.
The Ferraris belonging to Baloch separatist groups announced submitting to the writ of the state and becoming part of the national mainstream.
Samsung heir Lee Jae-yong has been freed from jail after a South Korean court suspended his five year jail term for bribing the country’s ex-president.
Seoul High Court upheld parts of the conviction, but used its discretion to release the executive.
Prosecutors may challenge the decision in the country’s supreme court.
The case gripped the public amid growing anger against the country’s biggest companies, known as chaebols, and their influence on wider society.
In Monday’s hearing, the court halved Lee’s original sentence to two and a half years – and suspended the sentence for charges including bribery and embezzlement, meaning he does not have to serve any more prison time.
Despite his release, Lee plans to appeal against the remaining guilty verdicts, his lawyer said.
Last year a lower court jailed Lee for corruption in a political scandal that ultimately brought down former President Park Geun-hye.
The Samsung Electronics vice chairman, who is also known as Jay Y Lee, had been convicted of a range of offences including bribery and embezzlement.
The scandal exposed the ties between family-run conglomerates and political powers.
Samsung Electronics is regarded as the jewel in the crown of the Samsung Group conglomerate, which is made up of 60 interlinked companies.
Lee, has effectively directed operations at the mobile phone and chip maker since his father, Lee Kun-hee, was incapacitated by a heart attack in 2014.
‘A dramatic turnaround’
By Karishma Vaswani, Asia Business Correspondent
A dramatic turnaround in fortunes for Samsung scion Lee Jae-yong.
There were many outcomes that could have taken place today. But it would be fair to say that Lee walking out of jail was the one that was least likely.
Lee’s release will be a major relief to the world’s biggest smartphone maker and arguably the most important company in Corporate Korea.
Sources inside Samsung tell me that while the company hasn’t seen its share price or profits affected in the short term from Lee’s absence, long term it was going to struggle, especially with strategy and future direction.
And you can see the immediate impact of that from the pop in Samsung’s share price this Monday – a sign that investors are looking forward to Lee back in the driving seat.
But there are also political consequences to this latest move.
South Korea’s President Moon Jae-in won office by campaigning to clean up the powerful chaebol sector in Korea. But many will see the court ruling as effectively a get-out-of-jail card for Lee that goes against everything the president stood for.
What was he accused of?
The 49-year-old was accused of giving donations worth 41bn won ($37.7m; £26.7m) to non-profit foundations operated by Choi Soon-sil, a friend of South Korea’s former President Park Geun-hye, in return for political favours.
Prosecutors said the donations were made to Ms Park’s confidante to win government support for a big restructuring of Samsung that would strengthen Lee’s control over Samsung Electronics.
But Lee’s defence team said that the payments were signed off without his knowledge.
Lee admitted that the firm also gave a horse and money to help the equestrian career of Choi’s daughter, Chung Yoo-ra, but denied seeking favours.
Capita shares have plunged over 40% after the outsourcing firm warned on profits and announced a major shake-up.
New chief executive Jonathan Lewis said the company had become “too complex” and “driven by a short-term focus” and needed to change its approach.
Capita, which issued a series of profit warnings last year, has again cut its profit forecast and revealed plans to raise £700m by issuing new shares.
The move comes after outsourcing rival Carillion collapsed earlier this month.
Capita operates the London congestion charge, runs the government’s Jobseekers Allowance helpline and administers the teachers’ pension scheme. It also collects the TV licence fee on behalf of the BBC.
A Cabinet Office spokeswoman said as a “strategic supplier” Capita was always monitored by the government.
Mr Lewis, who took over two months ago, said a review had found the company worked across too many markets and services, meaning it was difficult to “maintain a competitive advantage” in every business.
Capita had relied too much on acquisitions to drive growth and had also seen weakness in new contracts, he added.
Analysis by Today business presenter Dominic O’Connell
A calamitous fall in the share price – off by over one-third, reducing the company’s stock market value by £800m – looks the worst possible news for Capita.
But if Carillion had made an announcement like this a few years ago – raising money to pay off debt, admitting a slow-down in the market, owning up to both underinvestment and an over-reliance on buying other companies to find growth – then it might still be with us now, rather than languishing in the arms of a liquidator.
Instead, Capita’s new boss, Jonathan Lewis, has decided to take evasive action early.
Chief executives are normally afforded only one chance to hit the reset button in their time at the top, and the smart ones take it early, and hit the button hard.
That is what Mr Lewis has done.
His diagnosis of Capita’s woes could have been taken from one of the many Carillion post-mortems; and by taking harsh financial medicine now he has probably ensured that the company does not suffer Carillion’s fate.
The market seems to think so; while the share price fall is sharp, it is roughly in line with the dilution of existing shareholders implied by the £700m rights issue.
In other words, investors are giving Mr Lewis the benefit of the doubt.
Mr Lewis plans a wide-ranging overhaul including cost cutting and selling unprofitable businesses. The firm will not pay a dividend to shareholders this year.
Annual profits are now expected to be between £270m and £300m – well below analyst expectations of £400m.
In a conference call after the announcement, Mr Lewis said overhauling Capita would take at least two years, but he refused to say how long it would take for the group to recover.
There was “much to be done”, but Wednesday’s announcements were the “first steps on the road to recovery,” he said.
Neil Wilson, senior analyst at ETX, said signs of problems had been building at the firm, including the loss of “a lucrative and profitable contract with the Prudential” in January.
Frances O’Grady, the general secretary of the TUC, said the profit warning from Capita was “really worrying” and urged the government to act.
“We can’t afford another Carillion. The TUC is calling for an urgent risk assessment of all large outsourcing firms. It’s essential the government completes this quickly and is prepared to bring services and contracts in-house if they are at risk.”
What does Capita actually do?
Capita offers customer management services, including the operation of call centres, for public and private sector organisations.
Its customers include O2, M&S, John Lewis, local councils, the Army and the Department of Work and Pensions.
The firm’s biggest contract is its management of O2’s call centres. The 10-year deal which was signed in 2013 is worth £1.2bn.
It is also the UK’s leading provider of software to emergency service control rooms and also runs the Ministry of Justice’s electronic monitoring services for criminal offenders.
- U.S. economic growth slows in Q4 on surging imports
- Yen up on BOJ’s Kuroda comments on economy, inflation
The dollar remained weak against a basket of currencies on Friday, bruised by comments by senior U.S. officials this week backing a weak dollar and after data showed U.S. economic growth unexpectedly slowed in the fourth quarter.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.38 percent at 89.05 and on track for a weekly fall of 1.7 percent, its worst performance since May.
President Donald Trump’s comments on Thursday that he wanted a “strong dollar,” a day after Treasury Secretary Steven Mnuchin said a weaker greenback would help U.S. trade balances in the short term, failed to put a lid on volatility and keep dollar bears in check.
The euro was up 0.24 percent against the greenback at $1.2425 after hitting a more than three-year high of $1.2536 on Thursday.
“$1.25 in euro-dollar is a critical level and its got a lot of sticker shock associated with it,” said Greg Anderson, global head of FX strategy at BMO Capital Markets.
“There were probably a lot of options barriers and lots of stops up there that people would love to take out. You would expect to see an acceleration in volatility,” he said.
“We did have those comments, and it added to the drama,” Anderson said.
The market was likely to take a breather now but the underlying trend for a gradually weakening dollar remained intact, Anderson said.
Here’s what Trump said that had Wall Street in a frenzy from CNBC.
UBS Wealth Management upgraded its six-month forecasts for the euro on Friday to $1.28, from $1.22.
The dollar found little support after data showed U.S. fourth-quarter gross domestic product increased at a 2.6 percent annual rate, held back by a modest pace of inventory accumulation. Economists polled by Reuters had forecast a 3 percent increase.
“Today’s U.S. growth print may prompt some modest soul-searching amongst interest rate bulls but does little to change the fact that the economy has considerable momentum behind it,” Karl Schamotta, director of global product and market strategy at Cambridge Global Payments, said in a note.
The dollar slipped to a session low against the Japanese yen after Bank of Japan Governor Haruhiko Kuroda said the central bank expects the economy to continue growing at a moderate pace and inflationary expectations are picking up slightly.
The pound rose after Britain’s economy unexpectedly picked up speed in the last three months of 2017, adding to the view that the hit from the Brexit vote was not as bad as expected.
- Asian markets finished mixed on Friday, with the Hang Seng Index outperforming regional indexes ahead of the market close in Hong Kong
- The dollar wobbled after gaining overnight following comments from President Donald Trump about dollar strength
- Japan consumer prices in December were stable
Asian markets closed mixed on Friday as the dollar wobbled after gaining overnight following comments from President Donald Trump.
Tokyo’s benchmark Nikkei 225 index gave back morning gains to close lower by 0.16 percent, or 37.61 points, at 23,631.88. Major exporters finished the session mixed while financial names largely declined. Fanuc Manufacturing closed higher by 0.3 percent.
Automakers were a mixed picture. Toyota rose 0.18 percent and Honda closed lower by 0.23 percent. Suzuki Motor fell 3.51 percent after Maruti Suzuki India announced quarterly profit that was below expectations, according to Reuters.