UK to cut business energy prices by more than half
Government seeks to stop wave of corporate collapses this winter
The UK will cut the wholesale price of energy for businesses and public organisations by more than half this winter, the government said on Wednesday, as it announced new subsidies to try and ward off a wave of corporate collapses.
The business department said wholesale prices for businesses were now “expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter — which is a discounted price per unit of gas and electricity”.
Chancellor Kwasi Kwarteng said the government had “stepped in to stop businesses collapsing, protect jobs, and limit inflation”.
The government added that the level of “price reduction for each business will vary depending on their contract type and circumstances”. It said the scheme would initially run for six months from October to the end of March, but Liz Truss, the new prime minister, has indicated the subsidies could be extended for the most vulnerable businesses.
Ms Truss introduced a domestic price cap of around £2,500 per annum for typical household use earlier this month. But she delayed the details of the business-focused scheme because of the greater complexity of corporate contracts and administration for the support package. The total cost of the domestic and business support scheme is estimated at around £150bn.
The government said businesses and public bodies on existing fixed-price contracts will be eligible for the new scheme for any contract agreed on or after 1 April 2022.
Those on default or variable tariffs will receive a per-unit discount on energy costs up to a maximum of “around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments”.
Asian stocks fell after US shares declined and Treasury yields held near multiyear highs as investors position for a hefty interest rate hike from a hawkish Federal Reserve. Equities declined in Japan, Hong Kong and Australia after the S&P 500 Index dropped more than 10% below the August high marking the peak of its rally from this year’s low. US contracts fluctuated and European stock futures fell. The Bank of Japan announced an unscheduled bond-purchase operation as it seeks to cap upward pressure on yields before a policy decision later this week. A dollar gauge traded near a record high amid the market jitters while bitcoin hovered around the $19,000 level. The offshore yuan fell to the lowest against the greenback since mid 2020, even after the People’s Bank of China set the daily reference rate for the currency stronger-than-expected for a 20th day. Fed officials are about to put numbers on the “pain” they’ve been warning of when the central bank publishes new economic projections Wednesday. They’re expected to hike by 75 basis points again, according to the vast majority of analysts surveyed by Bloomberg. Only two project a 100 basis points move. Nouriel Roubini, who correctly predicted the 2008 financial crisis, sees a “long and ugly” recession occurring at the end of 2022 that could last all of 2023 and a sharp correction in the S&P 500. “Even in a plain vanilla recession, the S&P 500 can fall by 30%,” said the chairman of Roubini Macro Associates. In “a real hard landing,” which he expects, it could fall 40%. As the S&P 500 plunged last week, hedge funds snapped up single stocks while betting against the broad market with products like exchange-traded funds, data from Goldman Sachs Group Inc.’s prime brokerage show. oil fluctuated around $84 a barrel as it headed for its first quarterly loss in more than two years amid concerns over a energy demand. Gold was steady near a two-year low.
Nikkei -1.21% Hang Seng -1.51% CSI -0.80% Shanghai -0.40% Shenzen -0.80%
Eur$ 0.9965 CNH 7.0481 CNY 7.0434 JPY 143.97 GBP 1.1378 CHF 0.9652 RUB 61.6564 TRY 18.3086 WTI$ 84.18 +0.30% Gold 1,665 -0.01% BTC 19,115 +0.75% ETH 1,344 -
S&P -0.10%% Nasdaq -0.15%% EuroStoxx -0.52% FTSE +0.04% Dax -0.49% SMI -0.39%
Macro :
- Short Sellers Back Off Bearish Bets After $59 Billion Loss
- Soros’s Short Trade Rhymes for Pound as Parity Looms: Macro View
- Bitcoin Hovers in Sight of Lowest Level Since 2020 as Fed Looms
- Nomura Quant Says Speculators Raising US Stock Shorts Before Fed
Keep an eye on :
- ARGX BB : Argenx Submits BLA to FDA for SC Efgartigimod
- AVV LN : Schneider Is Said to Near £9.4 Billion Aveva Buyout Deal
- AZE BB : Azelis Offering by Holders Prices at EU20.91/Share: Terms
- AM FP : American Air CEO Wants Rockets, Private Jets to Help Pay for FAA
- BAVA DC : Bavarian Expects to Sell 15-20 Million Doses in 2023: Borsen
- DRX LN : Drax Signs Agreement for 2 Million Tons of US Carbon Removal
- ELK NO : Vianode Invests NOK2b in Battery Materials Plant in Norway
- ENGI FP : Engie CEO Says Gas Margin Calls Can Reach Several Billion Euros
- FFARM NA : ForFarmers CEO Deen To Be Temporarily Absent for Health Reasons
- FORTUM FH : Fortum: Fortum to fully divest Uniper to the German State @ E1.70/Share
- HTZ US : Hertz to Buy 175,000 GM Electric Vehicles Over Five Years
- ICPT US : Intercept Study Shows OCA Treatment Had 70% Lower Risk of Death
- IVG IM : Iveco, Petit Forestier Sign MoU for the Supply of 2,000 eDAILY
- BAER SW : Julius Baer Takes Stake in Chinese Asset Manager Grow Investment
- NOVN SW : Novartis to Petition US Supreme Court Over Gilenya Patent
- OLG FP : Ares Said to Discuss Joining Bid for French Football Team Lyon
- ONCO SS : Oncopeptides Sinks 46%; Cowen Expects Negative Vote at US Panel
- OVS IM : OVS 2Q Adjusted Net Sales EU405.9M Vs. EU369.7M Y/y
- PCF LN : PCF Group Extends Deadline for Castle Trust Offer to Sept. 27
- REP SM : Strong Refining, Gas Can Drive More Repsol EPS Beats: BI Focus
- SBRY LN : J Sainsbury in Talks to Offload £500M Portfolio to LXI REIT: Sky
- SU FP : Schneider Is Said to Near £9.4 Billion Aveva Buyout Deal
- UN01 GY : German Economy Minister Habeck to Make Statement on Uniper
- VK FP : Vallourec Signs 10-Year Supply Pact With Saudi Aramco
- VOD LN : Vodafone Invests $15 Million in Emergency Taxi Program in Africa
>>> Up
* Devolver Digital Raised to Buy at Goodbody; PT 100 pence
* Enagas Raised to Outperform at Oddo BHF; PT 20.10 euros
* Estee Lauder Raised to Buy at Goldman; PT $303
* Reckitt Raised to Add at AlphaValue/Baader
* Telenor Raised to Buy at SpareBank; PT 130 kroner
>>> Down
* Adevinta Cut to Sell at Citi
* Crest Nicholson Cut to Underweight at JPMorgan; PT 240 pence
* Deutsche Post Cut to Neutral at Goldman; PT 38 euros
* Flutter Cut to Neutral at Citi; PT 11,500 pence
* Idorsia Cut to Underweight at Morgan Stanley; PT 10 Swiss francs
* MFE Cut to Neutral at JPMorgan; PT 54 euro cents
* Redrow Cut to Neutral at JPMorgan; PT 550 pence
* Vistry Group Cut to Underweight at JPMorgan; PT 800 pence
>>> Initiation
* REN Rated New Neutral at Oddo BHF; PT 3 euros
* Rightmove Rated New Reduce at HSBC; PT 520 pence
>>> Call
* Adevinta, Flutter Downgraded at Citi; Evolution Among Top Picks
* Idorsia Downgraded as Morgan Stanley Flags Slow Quviviq Uptake
* Rightmove New Reduce at HSBC on Risk of Housing Market Slowdown
Eataly Near Deal to Sell Majority Stake
Private-equity firm Investindustrial aims to help Italian-marketplace chain expand globally
A European private-equity firm is close to a deal to buy a controlling stake in Eataly SpA, with the aim of helping the Italian-marketplace chain continue to expand globally, according to people familiar with the matter.
Investindustrial is in talks to take a 52% stake in Eataly in a deal that involves an investment of around €200 million, equivalent to $199 million, as well as the purchase of additional shares, the people said. A deal could come together Wednesday, assuming talks don’t fall apart.
Eataly plans to use the investment to retire debt and open more flagship stores as well as develop new formats, the people said.
Eataly was founded in 2003 by Oscar Farinetti. Its marketplaces feature a mix of restaurants and retail, all with a focus on Italian food and drink. It currently has roughly 40 locations in countries including the U.S., the United Arab Emirates, Japan and Brazil, with more planned.
The Farinetti family, the Baffigo/Miroglio family—another family long involved with Eataly—and Italy-based Tamburi Investment Partners will own the remaining 48% of the company, the people said.
While not a household name in the U.S., Investindustrial has a decadeslong track record of helping brands with European, and especially Italian, roots expand. It was founded by Andrea Bonomi. The firm, which has roughly €11 billion under management, took fashion label Ermenegildo Zegna Group public through a special-purpose acquisition company in 2021 and invested in spa-maker Jacuzzi Brands in 2019.
Last month, Investindustrial unveiled two U.S. food-related deals: It agreed to buy part of TreeHouse Foods Inc.’s meal-preparation business as well as ingredient company Parker Food Group.
Italy at risk of turning back on Brussels in favour of east Europe, tycoon warns
Business leaders are wrong to want an election victory for rightwing coalition, says Carlo De Benedetti
Italy risks shifting its alliances to eastern European countries with rightwing governments if the hard-right emerges as the winning coalition in this week’s general election, industrialist tycoon Carlo De Benedetti has warned.
The country’s three rightwing parties — Giorgia Meloni’s Brothers of Italy, Matteo Salvini’s League and Silvio Berlusconi’s Forza Italia — are widely expected to win the election. Both Meloni and Salvini have previously criticised the EU with a particular focus on the imposition of rules that they say are against the national interest.
Meloni — who aims to become Italy’s first female prime minister as leader of the coalition’s biggest party, the Brothers of Italy — has vowed not to backtrack on the foreign and fiscal policy stances adopted by Mario Draghi, the outgoing prime minister whose resignation in July triggered the election. He had agreed reforms with the EU to receive €200bn from the bloc’s coronavirus recovery funds.
De Benedetti, who has long been associated with the centre-left and is the publisher of pro-EU daily newspaper Domani, in an interview said: “Meloni is too close to Hungary and Poland and we will end up badly [as a country] if Berlusconi does not ditch the coalition.”
“A Meloni-led government . . . will shift our alliances toward the Visegrad bloc . . . This is what most Italian entrepreneurs fail to understand,” said the 87-year-old billionaire, referring to a group of eastern European countries comprising of Poland, Slovakia, Hungary and the Czech Republic.
Earlier this month, chief executives attending the Ambrosetti Forum, an economic conference in Cernobbio, asked politicians to ensure Italy’s commitment to EU-funded €200bn recovery plan. However, beyond that specific concern, many business leaders across the country have signalled that a centre-right coalition, which has pledged to slash taxes and the cost of labour for businesses, is their preferred election outcome.
“This is a leap in the dark because this would not be a liberal centre-right government, this is a fully-fledged rightwing coalition where the dominant element is Meloni,” said De Benedetti, who was also the vice-president of powerful industrial trade body Confindustria for eight years until 1992. “The business community is wrong in taking the approach that they deserve to be tested.”
The tycoon has vowed to ensure his Domani publication “continues to stand out as a pro-EU progressive voice even after the election and the ascent of the right”.
Italy’s centre-left has warned that with a Brothers of Italy-led government the country could plunge back into the fascist era. Meloni, who refers to herself as a centre-right conservative, has refused to disown the fascist origins of her party, they say.
“I don’t see the re-emergence of fascism because the country has matured, we are part of the European Union,” said De Benedetti, whose Jewish family was forced to flee Piedmont to Switzerland in 1943 after Benito Mussolini’s government implemented racial laws.
Meloni’s rivals and sections of the Italian media claim a government led by her party would amend the constitution and roll back civil liberties. But De Benedetti said he disagrees with that prediction.
“The conditions for a return to a fascist dictatorship do not exist and [Democratic Party leader] Enrico Letta made a mistake to focus on the threat to our democracy, as opposed to discussing his policy proposals,” he said.
De Benedetti said he sees the greatest risk in the potential deterioration of Italy’s relationship with Brussels. Evoking Italy’s role in the western alliance against Russia’s invasion of Ukraine, he said: “The country we need is the one we saw represented in that photo of Draghi on a train with the leaders of France and Germany on their way to Kyiv.”