TheChek News Flow

- Says: "First, as of today, there's no sign the grocery market is going to return to volume growth and that would be a tipping point... Second, there's no sign that there will be food inflation coming through in the next period, so the market dynamics are going to be extremely squeezed."

Boost to eurozone consumer confidence expected in week’s data

Tuesday will be the only important day in terms of data releases in most markets thanks to a shortened week for the public holidays surrounding Christmas, although some interesting Japanese data will be published on Christmas Day itself.

Monday’s highlight will be the release of consumer confidence figures for the eurozone in December. The previous month saw confidence fall from -11.1 to -11.6 on the index but the expectation is that falling oil prices and increasing real incomes should boost consumer confidence. The consensus prediction is that the index will show -11.0 in December.

The third release of estimates of US gross domestic product for the third quarter will be released on Tuesday. Analysts suggest that consumer spending was much stronger in the third quarter than previously though and so the consensus is that the annualised rate of growth will be revised upwards from 3.9 per cent in the second estimate to 4.3 per cent.

US durable goods orders and personal income and spending data will be published on Tuesday as well. Both are expected to show an acceleration in November, for durable goods this is thought to be mainly due to an increase in aircraft sales. The year’s last University of Michigan confidence index is expected to show a final reading of 93.3, revised downward slightly from 93.8 in the initial release.

Tuesday will also see the release of the final estimate of UK GDP in the third quarter, but this is expected to remain unchanged at 0.7 per cent quarter-on-quarter growth.

Thursday, a public holiday in the US and UK for Christmas, will see the release of Japanese inflation and labour market data for November as well as retail sales and industrial production figures.

On Friday, Haruhiko Kuroda, the governor of the Bank of Japan, said that the country was on track to defeat inflation after the bank expanded its quantitative easing scheme in October with an aim to expand the monetary base by an annual Y80tn.

Thursday’s estimates of inflation are, however, expected to show falling inflation again. Stripping out the effects of the April VAT rise, inflation was 0.9 per cent in October and this is expected to fall to 0.7 per cent in November on the back of falling energy prices.

Industrial production figures ought to be more encouraging: Growth is expected to accelerate to 0.9 per cent in November up from 0.4 per cent in October.

Drugmaker Hikma on lookout for acquisitions

Hikma is on the lookout for more acquisitions as the UK-listed drugmaker pushes for membership of the FTSE 100 index.

Said Darwazah, chief executive, said Hikma had the financial firepower for more dealmaking if good targets could be found at a reasonable price.

“Money is readily available and interest rates are very low. It is a good time to do an acquisition,” Mr Darwazah told the Financial Times.

Hikma has built itself into one of world’s biggest makers of generic injectable medicines with the help of deals such as last July’s $300m acquisition of US-based Bedford Laboratories from Boehringer Ingelheim of Germany.

Analysts have estimated that Hikma has a war-chest of up to $1bn available for deals and Mr Darwazah confirmed that Hikma was open to buying companies or individual products to boost growth.

His comments suggest that the mergers and acquisitions spree that convulsed the pharmaceuticals sector this year could spill into 2015 as drugmakers tap plentiful cash and cheap credit to strike deals.

But Mr Darwazah added: “Hikma has always been very disciplined and we will not make acquisitions for the sake of it.”

Hikma’s share price has risen by two-thirds in the past year, taking its market capitalisation above £4bn to the cusp of the FTSE 100 index of Britain’s biggest companies.

The company has increased revenues by a compound annual rate of 19 per cent over the past five years to $1.37bn and Mr Darwazah said he was looking for ways to sustain the momentum through deals and organic growth.

Hikma’s London listing makes it the fourth-biggest UK-listed drugmaker after GlaxoSmithKline, AstraZeneca and Shire, but most of its business is concentrated in the US, the Middle East and North Africa.

The company was founded by Mr Darwazah’s father, Samih, in their native Jordan in 1978. The former took over as chief executive in 2007.

It has not all been smooth sailing. Hikma has received warning letters from the Food and Drug Administration, the US regulator, over quality problems at plants in the US and Portugal over the past two years. The US facility has since been given the all-clear and Mr Darwazah says the Portuguese issues are being addressed.

The Middle East and North Africa, which still account for 40 per cent of sales, have also been a drag on growth recently, in part because of political disruption in Libya and Iraq. “This year has seen more volatility than usual but volatility is part of doing business in this region and we have got used to it,” said Mr Darwazah.

James Vane-Tempest, analyst at Jefferies, said strong US growth was “offsetting a disappointing performance in the Middle East and North Africa”.

The company chose London over New York for its stock market listing in 2005. This has allowed it to benefit from the more favourable UK corporate tax regime compared with the US. Several US drugmakers have used foreign acquisitions to move their tax domicile offshore through so-called inversion deals in the past two years.

Ramaswamy Narayanan, analyst at Citigroup, said Hikma had strong momentum with M&A activity holding the potential for further upside.

Rolls-Royce pledges greater openness with investors

John Rishton, chief executive of Rolls-Royce, pledged greater openness with investors in a bid to restore relations with a financial community smarting after a series of profit warnings.

The group would have “more meetings, listen more, reflect more and provide more formal access”, said Mr Rishton in an interview with the Financial Times. “What we are trying to do is change our approach.”

Britain’s most admired engineering group fell from grace this year after a series of botched communications and missteps. As well as the profit warnings, it was reprimanded by the UK’s Financial Reporting Council for using aggressive accounting practices and is under investigation by the Serious Fraud Office for alleged corruption relating to deals in China and Indonesia. Its shares have fallen a third during 2014.

Mr Rishton said the group was working on ways to give better guidance to investors and would implement them once he was sure Rolls-Royce would “get it right”.

Investors have high hopes that David Smith, the group’s new finance director, will help a traditionally closed group to deliver guidance in a more consistent manner. They were particularly angered by the company’s failure to alert the market to a downturn in defence, which Mr Rishton said had been identified in 2013, but not communicated until February 2014 because of the group’s habit of giving guidance only in the current year.

Mr Rishton said some of the errors were due to the fact that Rolls-Royce had been trying to respond to investor demands for greater transparency. The company had held two investor days this year, which was unprecedented, he said.

His comments come as Rolls-Royce prepares to ramp up production of its new XWB engine, which will power the new Airbus A350 aircraft. The engine has taken 10 years and cost more than £1bn to develop, and will be a test of Rolls-Royce’s ability to deliver at volume and on time.

More from Rishton

To do so, Mr Rishton said the company would have to reduce costs and improve processes, as well as make better use of state of the art facilities such as the recently opened factory in Singapore. He reiterated the group’s target to cut its global manufacturing footprint by 20 per cent. “I have too much capacity,” he said. “I have to get out of old stuff.”

He said that Mr Smith had been given two tasks: the first to make sure management had “robust information” and the second to “make sure our cost-performance delivery is where it needs to be”.

Mr Smith replaced Mark Morris, a 27-year veteran of Rolls-Royce, who left the group in November when it announced 2,600 jobs would go as part of £120m cost reduction plan.

Rich Russians are gaining entry to the UK in record numbers amid a worsening economic outlook in their home country.

The number of Russians who were granted investor visas this year has soared by 69 per cent, according to Home Office statistics. The visas gave foreigners from outside the EU a fast track to residence and citizenship in return for buying gilts worth £1m to £10m.

In the first nine months of the year, 162 investor visas were granted to Russians, compared with 96 in the same period of 2013, the figures show. The whole of 2013 saw only 118 investor visas granted to Russians, according to the data, which were first reported by The Sunday Times.

Falling oil prices, western sanctions against Moscow over its actions in eastern Ukraine, and a plummeting rouble have all taken a heavy toll on the Russian economy — sending capital flight to new heights and draining state coffers.

The rouble was down by up to 36 per cent last week, although a big interest-rate rise by the central bank saw it strengthen to end the week only 2 per cent weaker.

The most powerful and rich among Russian society have had a nervous time of late: the September arrest of Vladimir Yevtushenkov, one of Russia’s richest men — and a subsequent court ruling forcing his Sistema Group to hand its Bashneft oil company back to the state — triggered warnings both from tycoons and reform-minded government officials that the country’s investment climate was being undermined.

Mr Yevtushenkov was released from house arrest last week and attended a banquet hosted by President Vladimir Putin a day later with other oligarchs. His invitation sent shares in Sistema soaring by more than 300 per cent in intraday trading.

Investor visas have proved particularly popular with Russians and Chinese, but the British government is — for the first time in two decades — making them harder to obtain. New rules that came into force last month raised the minimum amount needed to £2m from £1m, and brought in restrictions on the nature of the investment.

Until the recent change, visa applicants had been permitted to spend a quarter of their total UK investment on property, but this is no longer allowed. Although the Home Office did not given a reason for its decision, it was widely considered to be a response to public anxiety about foreigners investing in London properties that remain vacant.

The Home Office’s independent immigration advisers calculated in February that the scheme resulted in about £500m of gilts investment a year, and said this would “barely fund two days’ worth of the national deficit”.

- lead of 3.4pts is down from 5.3pts in the November polls.

- Says: "We want to provide the health-care unit with more flexibility, potentially also by acquisitions... I know some analysts think we're too slow...Siemens isn't being prepared for the next quarters or year, however, but rather for the next generation."

- Would help spur economic activity and fight off deflationary pressures.

- Says: "Since the beginning of 2014, we have systematically underestimated deflationary effects...if we were to find ourselves at the beginning of next year with negative inflation and fall into a deflationary spiral, the effects on the behaviour of households and businesses could be very negative."