Friday Takeaway – 29 January 2016

“Global markets have seen more bearish maulings since the New Year than Leonardo DiCaprio’s latest blockbuster.”

In the news

Good Week: Apple
It was apparently a great week for Apple as the tech giant reported record quarterly profits of $18bn for the three months to December. Chief executive Tim Cook is now looking to manage shareholder expectations, forecasting a drop in sales for the quarter to April 2016 compared to last year. Rumours are circulating that Apple is giving careful thought to the next incarnation of its core product, the iPhone, as Chinese rival Huawei increases its international appeal. Still, with the firm sitting on cash reserves of $260bn, there’s plenty for investors to cheer.

Good Week: The Treasury
The Government has been at pains to position the securing of £130m in back taxes from Google as a victory this week. With the search firm’s annual profits in the UK estimated at £1bn, Jeremy Corbyn was swift to accuse the Prime Minister of applying a meagre tax rate to Google at Wednesday’s PMQs. Cameron responded by highlighting that the figure is an improvement on the 0% leveraged under Labour – the £130m figure applies to the period between 2005 and 2015, five years of which saw a Labour administration. The deal secured by HMRC is now under scrutiny from the EU.

Bad Week: Retail Investors
Global markets have seen more bearish maulings since the New Year than Leonardo DiCaprio’s latest blockbuster. It’s for this reason that George Osborne has shelved his £2bn Lloyds share sale for the time being. The bank’s stock value fell more than 10% below the price paid by the Government in the wake of the financial downturn this week. Last year, the Chancellor faced accusations of offloading the public’s stake in Royal Mail at a discounted rate exclusively to institutional investors. This time retail investors stand to gain, but the 63,000 bargain hunters signed-up for the Lloyds sale will have to bear a longer-than-anticipated wait.

Bad Week: Stuart Rose
The rarely flummoxed Lord Stuart Rose made a fundamental PR error this week: getting the name of his organisation wrong. In an interview with Sky News, the head of the official campaign to stay in the EU introduced himself as “chairman of Ocado… sorry…chairman of Stay in Britain – Better in Britain campaign.” The group’s actual title is Britain Stronger in Europe. The business leader will no doubt be better, or greater, prepared next time.

Client News

Chris Cummings, Chief Executive of TheCityUK, was quoted in City A.M. welcoming the appointment of Andrew Bailey as the new head of the Financial Conduct Authority.

Research from Willis Owen on UK consumer sentiment featured in Mindful Money, Money Observer and Every Investor. The research finds that 27% of people feel more confident about their personal finances than they did a year ago.

Linstock News

Linstock participated in the PRCA’s ‘2016 the year of…” forum yesterday. Ad blockers, cyber security and embracing video are among the Association’s 16 elements to look out for in 2016.

Coming up

We’ll be attending a Finance Foundation event on negotiating global economic shocks with Martin Wolf, chief economics commentator at the Financial Times.

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