UK spending power to surge to 13-yr high with prices frozen

OCT 10, 201512:22 AM

[LONDON] As household-spending power surges toward a 13-year high, economists predict the boom for consumers may be short lived.

The UK Office for National Statistics will say Wednesday that average weekly earnings excluding bonuses climbed an annual 3 per cent the three months through August, according to a Bloomberg survey of economists. Annual consumer price inflation was zero in August and a separate report on Tuesday will probably show the rate remained frozen in September. The gap of 3 percentage points would be the largest since July 2002.

"Pay growth is probably one of the brighter sort of stars in the economic sky," said David Tinsley, an economist at UBS in London. "You've got this very sweet spot now, where you've got regular pay growth growing in excess of 3 per cent, and inflation at zero - so I'd imagine real-wage growth, in other words, will come down over the next 6 months."

According research from Bloomberg Intelligence, consumer price growth is set to pick up rapidly at the turn of the year and, unless pay growth keeps pace, will erode real wages.

"Inflation is going to start shooting up in February," said Dan Hanson, a UK economist at Bloomberg Intelligence. "So for the recent growth in purchasing power to be maintained wages have to keep gathering pace." The labor market is a key metric for policy makers as they inch closer to lifting rates from a record low. The strength of wage gains has been a factor prompting Ian McCafferty to call for an increase in the benchmark. Any signs of a slowdown in real pay would underscore the case for keeping the rate at 0.5 per cent.

Analysis by Hanson and Jamie Murray shows that as base effects of lower oil prices start to fall out, inflation will accelerate to 1 per cent in January and 1.1 per cent in February.

So as BOE Governor Mark Carney remarked earlier this year, Brits should enjoy the fillip from low inflation while it lasts.

BLOOMBERG

    
 

SingPost to buy majority stake in US e-commerce logistics firm

By

Andrea Sohsandrea@sph.com.sg@AndreaSohBT

Singapore Post has agreed to acquire a 71.1 per cent stake in US e-commerce logistics enabler Jagged Peak for US$15.8 million (S$22.5 million), as it builds an end-to-end e-commerce logistics network and technology platform. 

PHOTO: SPH

OCT 9, 20159:41 PM

Singapore Post has agreed to acquire a 71.1 per cent stake in US e-commerce logistics enabler Jagged Peak for US$15.8 million (S$22.5 million), as it builds an end-to-end e-commerce logistics network and technology platform.

With this acquisition, made through its indirect wholly-owned subsidiary, SP Jagged Peak LLC, SingPost's e-commerce footprint will be global, the firm said on Friday.

Said SingPost chairman Lim Ho Kee: "As SingPost pioneers and leads e-commerce logistics in Asia-Pacific, we are casting our eyes beyond the region....This transaction is also part of our strategy to focus our resources on strengthening our geographical reach and the technology we employ as an e-commerce logistics company."

Jagged Peak recorded revenues of about US$61.7 million for the year ended Dec 2014. The firm's proprietary and accredited e-commerce logistics platform is used by more than 20 warehousing facilities across the US, Canada and Europe.

SingPost said it intends to invest in Jagged Peak's e-commerce logistics infrastructure, processes and technology to help customers maximise their business potential globally.

"This acquisition will 'connect the dots' and make our e-commerce logistics network global. The acquisition of Jagged Peak allows us to use their state-of-the-art e-commerce omni-channel technology to enable brands and retailers not only to leverage their warehouse facilities in over 20 locations in the US but expand these services into our Asia Pacific warehouse network," said SingPost group CEO Wolfgang Brier.

With this investment, SingPost has planted the seeds of a future global multi-channel "B2B4C" e-commerce logistics platform, he added.

      

Owners of payments firm Worldpay narrow IPO price range-sources   

OCT 9, 201510:03 PM

[LONDON] The private-equity owners of British payments processor Worldpay Group Ltd, Advent International and Bain Capital, have cut the top end of the price range set for the company's London listing, two sources familiar with the matter said.

The top end of the range was cut to 250 pence per share from 260, while the bottom was raised to 235 from 225.

Worldpay is seeking a market valuation of about £4.9 billion (US$7.5 billion) from its initial public offering, one source said.

That would make the IPO the biggest on London's main market this year, but would be far less than the offer of up to £6.6 billion that a source had said Worldpay rejected earlier this year from French rival Ingenico Group SA.

A bookrunner for the deal said earlier this month that Worldpay was seeking a valuation of between £4.5 billion and £5.2 billion.

Advent and Bain bought Worldpay, which provides platforms that allow merchants to accept payments by cards and other methods, from Royal Bank of Scotland Group Plc in 2010 for about £2 billion. They declined to comment on Friday.

The change in pricing was first reported by the Financial Times. London has seen fewer firms go public this year, with 93 listings raising about £5.3 billion by Sept 30, roughly half the £11 billion raised from 136 listing in the same period last year, according to stock exchange data.

Choppy market conditions have made it harder for companies to come to market in recent weeks.

Hastings Insurance, which is also seeking a London listing, is expected to price its IPO at 170 pence per share, below its indicated range of 180-185 pence, a banking source told Reuters earlier on Friday.

REUTERS

      

Tunisian mediator group wins Nobel Peace Prize

Tunisia's National Dialogue Quartet won the Nobel Peace Prize on Friday for helping build democracy in the birthplace of the Arab Spring, an example of peaceful transition in a region otherwise struggling with violence and upheaval. 

PHOTO: REUTERS

OCT 9, 20157:36 PM

[OSLO] Tunisia's National Dialogue Quartet won the Nobel Peace Prize on Friday for helping build democracy in the birthplace of the Arab Spring, an example of peaceful transition in a region otherwise struggling with violence and upheaval.

The quartet of the Tunisian General Labour Union (UGTT), the Tunisian Confederation of Industry, Trade and Handicrafts (UTICA), the Tunisian Human Rights League (LTDH), and the Tunisian Order of Lawyers was formed in the summer of 2013.

It helped support the democratisation process when it was in danger of collapsing, the Norwegian Nobel committee said in its citation. "This is a great joy and pride for Tunisia, but also a hope for the Arab World," UGTT chief Hussein Abassi told Reuters. "It's a message that dialogue can lead us on the right path. This prize is a message for our region to put down arms and sit and talk at the negotiation table."

With a new constitution, free elections and a compromise politics between Islamist and secular leaders, Tunisia has been held up as a model of how to make the transition to a democracy from dictatorship. "This a brilliant example, I think Tunisia is one of the Arab countries that has done best since the so-called Arab Spring and the upheavals in that part of the world," said Ahmad Fawzi, chief UN spokesman in Geneva.

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The Nobel Peace Prize, worth 8 million Swedish crowns (US$972,000), will be presented in Oslo on Dec 10.

The Norwegian Nobel Committee praised the quartet for providing an alternative, peaceful political process at a time when the country was on the brink of civil war. "More than anything, the prize is intended as an encouragement to the Tunisian people, who despite major challenges have laid the groundwork for a national fraternity which the Committee hopes will serve as an example to be followed by other countries," it said.

Committee head Kaci Kullman Five told Reuters: "I think it's timely to put the limelight on the positive results that have been obtained in Tunisia to try to safeguard them, to try to inspire the Tunisian people to build further on this basis."

After an uprising that led to the ousting of autocrat Zine El-Abidine Ben Ali in 2011 and inspired the "Arab Spring" protests, Tunisia now has a new constitution, free elections and a coalition government with secular and Islamist parties.

In 2013, Tunisia appeared to be sliding into a political crisis that would end its transition, with secular opponents demanding that an Islamist-led government step down.

Angered by the assassinations of two of its leaders and emboldened by Egypt's army-backed ousting of an Islamist president, Tunisia's opposition held protests against the ruling Islamist Ennahda party. The government had agreed it would step down but wanted more guarantees of a fair handover.

The UGTT with other civil society partners negotiated between the two sides, helping form a caretaker government to hold power until new elections were held.

The crisis ended, and last year Tunisia held successful legislative and presidential elections to complete its transition.

Problems remain, however. In March, Islamist gunmen killed 21 tourists in an attack at the Bardo Museum in Tunis, and 38 foreigners were killed in an assault on a Sousse beach hotel in June.

More than 3,000 Tunisians have also left to fight for Islamist militant groups in Syria, Iraq and neighbouring Libya. Some of those jihadists have threatened to return home and carry out attacks on Tunisian soil.

The Nobel Committee's choice came as a surprise. The quartet had not been mentioned in any of the speculation in the run-up to the announcement, which instead focused on Pope Francis, German Chancellor Angela Merkel and anti-nuclear weapon campaigners. "This is extraordinary, incredible, unexpected... It brings support from the world to Tunisia for its democratic process,"LTDH member Chocri Dhouibi told Norwegian broadcaster NRK.

REUTERS

  
 

US wholesale inventories rise slightly in August

The Commerce Department said on Friday that wholesale inventories increased 0.1 per cent, outpacing the median forecast of a flat reading in a Reuters poll. 

PHOTO: BLOOMBERG

OCT 9, 201510:14 PM

[WASHINGTON] US wholesale inventories rose in August, boosted by larger stocks of computers and professional equipment used by businesses.

The Commerce Department said on Friday that wholesale inventories increased 0.1 per cent, outpacing the median forecast of a flat reading in a Reuters poll.

Inventories are a key component of gross domestic product changes. The component of wholesale inventories that goes into the calculation of GDP - wholesale stocks excluding autos - rose 0.1 per cent.

Inventories for durable goods climbed 0.3 per cent, with computers up 1.9 per cent. At August's sales pace it would take 1.31 months to clear shelves, up slightly from 1.30 months in July.

An inventory-to-sales ratio that high usually means an unwanted inventory build-up, which would require businesses to liquidate stocks. That in turn could weigh on manufacturing and economic growth.

REUTERS

Tax evasion, smuggling costs Greece up to US$23b a year

OCT 9, 201511:36 PM

[ATHENS] Cash-strapped Greece loses up to 20 billion euros a year to tax evasion and smuggling, and more than a million people and businesses are under investigation, a finance official said on Friday.

"Tax evasion and smuggling are worth between 15-20 billion euros (US$17-23 billion) a year," junior finance minister Tryfon Alexiadis told reporters.

The Greek economic crimes agency (Sdoe) is currently investigating 38,000 cases involving 1.3 million people and businesses, he said.

And five years after receiving insider data on the Swiss bank holdings of over 2,000 Greeks - the so-called Lagarde list - only 136 cases have been conclusively checked, he added.

The left-wing government of Prime Minister Alexis Tsipras has accused its conservative and socialist predecessors of protecting business friends from tax checks.

The list had been sent in 2010 to then socialist finance minister George Papaconstantinou by Christine Lagarde, International Monetary Fund chief and at the time French finance minister. Ms Lagarde had got it from an HSBC whistleblower.

A few years later, it emerged that three members of Papaconstantinou's family had been on the list, but their names were excised and they escaped scrutiny.

Mr Papaconstantinou denied any wrongdoing but a court in March found him guilty of tampering with the data.

Mr Alexiadis on Friday said that the statute of limitations on the Lagarde list investigation was due to expire on Dec 31, but the government would take steps to extend the prosecution period by another year.

He added that the government was also poring through bank transfers and data on Greeks with property in London and yachts registered in the Netherlands in search of undeclared income.

"We are not going to cover up anything," Mr Alexiadis said.

AFP