TheChek News Flow

Airline criticised for failing to remove man hurling insults before take-off

Ryanair has come under fire for failing to remove a passenger who racially abused an elderly woman aboard a flight on Friday afternoon.

The Irish carrier was criticised by passengers for its handling of the situation on board a Ryanair flight from Barcelona to Stansted airport and for not removing the man from the aircraft. A crew member did attempt to intervene in the dispute but did not resolve the situation, or remove the passenger.

The incident, which came ahead of the company releasing its half-year results on Monday, will be a blow to the budget airline’s efforts to improve its reputation through its “Always Getting Better” campaign.

“The cabin crew were young. The man just overpowered them,” David Lawrence, who recorded part of the incident on video, told the Financial Times. “I’m sure there was some sort of training in place by Ryanair. I was expecting them to put that into place and follow proper procedures — ie: call the police. But they didn’t.”

The incident took place as passengers boarded a flight on Friday afternoon. The man attempted to pass the woman who was seated in an aisle seat. An argument broke out between the man and the woman and her daughter when the woman supposedly took too long to move.

“He was speaking about her race, saying . . . all these derogatory things. I couldn’t believe it,” Mr Lawrence said.

Shadow transport minister Karl Turner said he would be writing to Ryanair and the aviation minister Liz Sugg “to ask what they’ve done about this”.

“Clearly committed criminal offences,” he said on Twitter. “Needs to be charged and fast.”

The male passenger has not been identified and has not responded to the incident.

Ryanair said it had reported the incident to the police in Essex. “As this is now a police matter, we cannot comment further,” it added. It had previously stated that it would not tolerate “unruly behaviour” on its aircraft.

The carrier’s low-cost strategy has previously led it put low prices ahead of customer service — “we’re low-cost, mean bastards” the airline’s chief marketing officer Kenny Jacobs said earlier this year.

But it has tried to move away from this uncaring image in recent years. It launched its “Always Getting Better” initiative in 2014 following two profit warnings in 2013. It hoped the shift would improve its brand image, presenting a friendlier face and being “nicer” to customers.

The airline has suffered a series PR problems over the past year.

A mix up in its pilot rostering last year led to more than 20,000 flights being cancelled. The airline was then pressured into recognising trade unions — despite previous assertions by chief executive Michael O’Leary that hell would “freeze over” and he would cut his arms off before this happened.

But the airline has struggled to reach agreements with most unions and has suffered a series of strikes in recent months.

Earlier this month it issued another profit warning on the back of weakened “customer confidence” which it said had been “affected by fear of further strikes”.

Ryanair ranked 64th in the Skytrax 2018 World Airline Awards and 67th in the AirHelp Worldwide 2018 rankings. It was placed bottom of the latest Which? customer satisfaction survey in December 2017.

Western leaders demand Riyadh say more on fate of Saudi journalist

Turkish president Recep Tayyip Erdogan intensified the pressure on Saudi Arabia over the death of Jamal Khashoggi, casting doubts on Riyadh’s claims that the journalist died in a fist-fight and saying he would reveal what happened in “full detail”.

Saudi Arabia finally admitted at the weekend that Khashoggi was killed in the kingdom’s consulate in Istanbul this month after two weeks of denials. It said it had detained 18 unidentified Saudis over the incident. But Riyadh has changed its story several times and its claims that the 60-year-old columnist was killed in a fight have been widely condemned as lacking credibility.

Turkish officials have previously said they believe Khashoggi was killed by a 15-man Saudi hit team that flew into Istanbul and later dismembered his body. Mr Erdogan, who has been restrained in his comments over the past two weeks, referred to that version of events in a speech on Sunday.

“Why did 15 people come here; why were 18 people detained?” All of this must be explained in full detail,” he said. “On Tuesday, these things will be explained in a very different way at the group meeting [of Turkey’s ruling party]. There I will go into these details.”

A Turkish official told the Financial Times that Ankara had successfully “shamed” Riyadh into an admission of guilt. “Now we have to get the full story. We will refute the claim that a fist-fight caused this mess.”

If Mr Erdogan reveals the details of Khashoggi’s death on Tuesday, it would coincide with the opening of Saudi Arabia’s flagship investor conference in Riyadh. A growing list of western government ministers and executives have withdrawn from the gathering because of the crisis.

Western leaders have also demanded that Riyadh provide more details on the death of Khashoggi, one of the Middle East’s most prominent journalists who was living in self-exile in the US.

Riyadh, grappling with its biggest diplomatic crisis since the September 11 attacks on the US in 2001, has provided no evidence to back its claims and it is still not clear where Khashoggi’s body is.

In a joint statement on Sunday, the foreign ministers of the UK, France and Germany “stressed that more efforts are needed and expected towards establishing the truth in a comprehensive, transparent and credible manner”.

The statement added that “nothing can justify this killing and we condemn it in the strongest possible terms”.

“We will ultimately make our judgment based on the credibility of the further explanation we receive about what happened and our confidence that such a shameful event cannot and will not ever be repeated,” the statement said.

After initially hinting that he would accept Saudi Arabia’s claim, US President Donald Trump on Saturday said he was “not satisfied” with its explanation for the death of the journalist, who wrote a column for the Washington Post

“I am not satisfied until we find the answer,” Mr Trump told reporters, adding he was considering imposing sanctions on Riyadh, the main Arab ally of the US.

Analysts and activists believe any operation mounted against Khashoggi could not have been authorised without the knowledge of Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler who has forged close ties with the Trump administration.

In a sign that Prince Mohammed will not bear any responsibility for the crisis, his father, King Salman, named the 33-year-old crown prince to head a committee to restructure the intelligence services within 30 days.

Turkey and Saudi Arabia already have strained relations and vie for influence in the Middle East. Riyadh was annoyed by Ankara’s support for Qatar after Saudi Arabia and its allies imposed a regional embargo on the Gulf state. It also considers Turkey as sympathetic to the Muslim Brotherhood, the Islamist movement that the kingdom describes as a terrorist group.

Stocks had a mixed outing this week after suffering heavy losses in the week prior. The benchmark S&P 500 finished flat, leaving its October loss at 5.0%, and the blue-chip Dow ticked up 0.4%. Conversely, the tech-heavy Nasdaq fell 0.6%, and the small-cap Russell 2000 lost 0.3%.

The third quarter earnings season ramped up this week after kicking off last Friday. Financial companies Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC), U.S. Bancorp(USB), Charles Schwab (SCHW), and BlackRock (BLK) reported mostly better-than-expected profits, helping to boost the S&P financial sector 0.8% higher.

The minutes from the September FOMC meeting were released on Wednesday, showing that officials generally agreed on the need for more gradual rate hikes. In addition, the minutes revealed that a number of officials saw the need to hike rates above levels expected to prevail over the long run. The probability of a December rate hike remains high, ticking up to 83.7% from 79.8% last week, according to the CME FedWatch Tool.

As for the 11 S&P 500 sectors, they finished the week pretty evenly mixed between green and red. Defensive groups like consumer staples (+4.3%), utilities (+3.1%), and real estate (+3.2%) were the top performers, while growth-sensitive groups like consumer discretionary (-2.0%), energy (-1.9%) and materials (-1.4%) finished at the bottom of the sector standings.

Elsewhere overseas, China's Shanghai Composite touched a new four-year low this week due to investor concerns over slowing economic growth. On Friday, China reported 6.5% year-over-year GDP growth, less than the prior quarter's growth of 6.7% and less than the expected growth of 6.6%. Meanwhile, the Euro Stoxx 50 advanced 0.5% this week despite continued angst that the Italian budget situation could get nasty.

Macro :

- Italian Populists Struggle to Stay United as Pressures Mount

- Goldman Says Stocks Likely Turning Into Drag on U.S. Growth

Keep an eye on :

- AF FP : French Fin Min: Smith Doing ’Super Job’ at Helm of Air France

- MT NA : Essar Steel Lenders Declare ArcelorMittal Highest Bidder: CNBC

- AZN LN : AstraZeneca gets cancer trial boost for Lynparza drug - FT

- GBF GY : Bilfinger Sees U.S. Bribery Case Closing by End of Year: FAS

- BP/ LN : Aker BP Leads Rebound as Revenue Beats Estimates: EU Energy Wrap

- DAI GY : Daimler's List of Excuses Gets Longer and Longer: Chris Bryant

- ERG IM : ERG Gives Workers EU1.1M in Shares to Celebrate 80th Anniversary

- ERG IM : *ERG TO INVEST IN WIND POWER, GROW ABROAD INCL. IN U.K.: STAMPA

- EKT SM : Euskaltel says Zegona bid confirms strength of corporate project, Zegona wants to raise its stake to just below 30%

- GALP PL : Dos Santos May Be Willing to Sell Indirect Galp Stake: Expresso

- HAW GY : Hawesko Adjusts View on Subsidiary Fraud Case, ’Long Hot Summer’

- JPR LN : Johnston Press Activist Buys Shares to Block Some Resolutions

- MRK GY : Pfizer, Merck KGaA’s Bavencio Hits First Target in Kidney Cancer

- MOR GY : Morphosys Sees MOR208 Gaining FDA Approval by Mid 2020: Welt

- NANO FP : Nanobiotix’s NBTXR3 Phase 2/3 Meets Primary, Secondary Endpoints

- NOVN SW : Novartis’s Alpelisib Improved PFS in Phase 3 Study

- PIRC IM : Camfin Board Resolves to Increase Pirelli Stake by up to 2%

- RDSA LN : Egypt Says Output Starts From First Well in Shell’s 9B Gas Field

- ROG SW : Roche’s Tecentriq Improves OS in Some Breast Cancer Patients

- SAN FP : Regeneron, Sanofi: FDA Approves Asthma Indication for Dupixent

- STAN LN : Standard Chartered Plans New Round of Job Cuts: FT

- SREN SW : Swiss Re possibly interested in Anbang Insurance stake, acquisition of Vivat - Telegraaf

- UCG IM : B&C Rejects ‘Hostile Takeover’ Attempt After UniCredit Report

Barrons weekend update: cover positive on Emerging Markets; positive feature on CFG; cautious on Chinese internet names

* Cover story: Emerging markets have had a bad year, but recent problems obscure their long-term attraction; 83% of the world’s population, of which half are members of the middle class, reside in them; With emerging market stocks trading at steep discounts to U.S. equities, now is the time for investors to start bargain hunting.

* Features:

1) Cautious on BABA, Tencent Holdings, BIDU: Members of Barron’s Asia Roundtable discuss the Chinese Internet giants, which face problems but still offer benefits for investors;

2) Barron’s Big Money Poll found that American money managers seem confident the bull market will continue into next year, with 56% bullish on U.S. equities through next June, little changed from the spring survey’s 55%;

3) Positive on BAC, JPM, USB, WFC, JPC, FFC, PFF: Investors seeking yield should be looking at preferred stocks, where yields on many issues have risen a half-percentage point or more in the past month as investors sell off Treasuries;

4) Dallas-based Centurion American Development Group came up with an innovation in municipal finance through the sale of tax increment financing revenues, but the move has raised a number of questions;

5) Positive on CFG: The Providence, Rhode Island-based regional bank has one of the hottest lending niches in the world: It is the exclusive financing partner for iPhones bought directly from AAPL;

6) Story looks at four issues that must be addressed if the U.K. and EU are to avoid a calamity from a so-called hard Brexit: contracts, clearing houses, data, and immigration.

* Tech Trader: Barron’s created a FAANG risk score card, ranking FB, AMZN, AAPL, NFLX, and GOOGL on nine issues of importance to analysts, the press, or politicians during the past year; Facebook and Alphabet have the highest scores, followed by Amazon, Apple, and Netflix.

* Trader: Positive on UAA: Investors should take a look at the sports apparel company as a contrarian bet before its margins improve and Wall Street becomes confident about its turnaround plans; Positive on VTR: The real estate investment trust owns more than 1,200 properties, many of which focus on seniors, positioning it to benefit as baby boomers finally start to retire.

* Interview: Former Federal Reserve chairman Alan Greenspan says the economy doesn’t look so great, and could get worse because of the ballooning deficit and the rising cost of entitlement programs.

* Follow-Up: Positive on STZ: Under new chief Bill Newlands, the company will remain committed to the alcohol business, but also focus on the global cannabis market—and he sees continued growth in premium beers and alcohol-free beverages spiked with marijuana.

* International Trader: It’s a good time to bet on British stocks—the “economy is strong, stocks are inexpensive relative to those in the U.S., and when the Brexit drama passes, the pound sterling should rise.”

* Emerging Markets: Donald Trump is wreaking short-term havoc on China’s stock markets, though he probably won’t succeed in stemming the country’s long-term economic rise.

* Commodities: With a number of recent global events clouding the outlook for gasoline prices, there’s a possibility that American consumers won’t see the usual post-summer decline in prices at the pump.

* Streetwise: “The Khashoggi case is a reminder to Saudi Arabia’s business partners that they are in bed with an absolute monarchy that has a medieval view of human rights. The question now is whether these partners need to do more than just dodge the spotlight of a single conference.”

- The shift toward an expansionary fiscal policy suggests that, rather than falling over the coming years as was projected under the previous government's fiscal stance, Italy's public debt will instead remain around the current 130% of GDP, a level that makes Italy vulnerable to future domestic or externally-sourced shocks, in particular to weaker economic growth.

- Govt has not plans to impose a wealth tax

Progression-free rates in trial point to potential as a breakthrough medicine

A treatment developed by AstraZeneca has shown strong benefits for women newly diagnosed with ovarian cancer in the latest boost for the Anglo-Swedish drugmaker’s research and development-led growth strategy.

Lynparza’s potential as a breakthrough medicine for this group emerged as the findings of a trial known as SOLO-1 were unveiled at the European Society for Medical Oncology meeting in Munich on Sunday.

It showed that 60 per cent of newly diagnosed women whose disease had a particular mutation, BRCA, were progression-free at three years compared with about 27 per cent who had not received the drug.

Dave Fredrickson, head of the oncology business unit at AstraZeneca, said the results gave “hope that this will translate into long-term durable survival benefits in ovarian cancer and other areas of very high unmet need”.

Lynparza was initially approved in 2014 by the US Food and Drug Administration in late-stage BRCA-mutated ovarian cancer. Another study, SOLO-2, then examined its impact as a “second-line” treatment for ovarian cancer, given when an initial treatment has not worked, or stopped working.

Mr Fredrickson said that, with the SOLO-1 study, it was moving the treatment into “an early setting where there is curative intent from the perspective of both physician and patient, and that’s why these results are so important”.

The SOLO-1 results are the latest to point to the potential of Lynparza; last year AstraZeneca and US drugmaker Merck agreed to collaborate in developing and commercialising the medicine. Last week both companies announced that the FDA had granted “orphan drug designation” — a status given to medicines to treat rare diseases — for Lynparza in pancreatic cancer.

Analysts, however, have suggested the efficacy demonstrated in the SOLO-1 study may yield limited commercial returns because the pool of patients with the relevant genetic mutation is a relatively small percentage of overall sufferers.

Andrew Baum, from Citi, said he anticipated “only [about] $500m near-term sales n this indication [or particular treatment]”.

In general, however, he suggested that the market was “underestimating” Lynparza potential for treatment in other areas, “notably in metastatic ovarian and prostate cancer”.

He highlighted Citi’s forecast of $4bn in revenue from the drug by 2023 “versus consensus of $1.8bn”.

21 OCT 2018

The Takeda Pharmaceutical [TYO:4502] dissident shareholders group TTBF is trying to secure support in London and New York for their attempt to block the Japanese company’s GBP 46bn (EUR 52.16bn) takeover of Irish counterpart Shire [LON:SHP], The Sunday Times reported. The newspaper did not cite a source for the information.

TTBF, representing members of Takeda’s founding family, have criticised the Shire takeover, saying it will put the company’s dividend at risk and dilute the Japanese group’s corporate culture.

However, some estimates indicate that TTBF represents just 1% of Takeda shareholders, the report said. Takeda’s large shareholders are believed to be in favour of the Shire deal, the item added.

Shire’s market capitalisation stood at GBP 41.23bn at the close of trading in London on Friday, 19 October.

Background:

A report from this news service on 5 October quoted a leading member of a group of Takeda shareholders trying to derail the Shire deal, who said they were considering writing to individual shareholders to urge them to vote against the deal at its upcoming EGM.

The 130-member group holds 1% of Takeda’s shares, the report said.

The shareholder said the group would try to obtain the shareholder list from Takeda after the name of shareholders on record was confirmed on 19 October. The shareholder did not entirely discount the prospect of a proxy battle.

Euskaltel [BME:EKT], the Spanish cable company, said the Zegona Communications [LON:ZEG] bid to increase its stake confirms the strength of its corporate project.

Zegona wants to raise its stake to just below 30%.