Sunday newspaper round-up: Portugal, Dog-funds, Invensys

21st Jul 2013 13:14

The Eurozone debt crisis threatened to erupt again this weekend, with the Portuguese government close to collapse and new tensions in Cyprus. Talks between Portugal's three main political parties on a "national salvation pact" failed late on Friday ? raising the threat of a snap election. Portuguese bonds, which soared last week in expectation of a deal, are expected to collapse tomorrow unless an agreement can be reached today on how to push through budget cuts demanded by Brussels, The Sunday Times says.The number of profit-warnings from UK stock-market quoted companies has fallen to its lowest since 2011 - at 54 - giving a new shot in the arm to Britain´s tentative economic recovery, according to figures compiled by Ernst&Young (EY). Thus, Keith McGregor, EY's head of restructuring for EMEA, explains that the recovery appears better placed to ride out the aftershocks that have triggered sobering second-half dips in economic activity in recent years. The highest number of warnings came from software and computer services, travel and leisure, and media, each with five profit warnings, The Financial Mail on Sunday writes. Rising markets have swollen the amount of cash investors have in so-called dog funds to £13.3bn from £12.1bn at the start of the year, according to the latest Spot the Dog report from Bestinvest. To be classified as such funds must have underperformed in each of the past three years and by 10% or more over the three-year period reviewed. Nevertheless, the number of such funds has decreased to 59 from 64 in January. The fund management groups with the highest amount of investors' cash in the poor-performing funds are Schroders (£4.1bn), Neptune (£1.4bn), Fidelity (£1.2bn), F&C (£734m) and UBS (£662m), The Independent on Sunday explains.Housing prices are not the only thing to have turned corner, so has people´s optimism about economic prospects. A full 24% of those surveyed by Which? now expect to see an improvement in the economy over the next year, versus 16% a year ago. However, inflation running at a 14-month high means about 1.5m more persons - for an estimated total of 6.1m - are now feeling financially squeezed than a year back despite the above. They have thus been dipping into their savings each month on average over the last year to compensate for rises to costs such as food prices and energy bills, according to The Financial Mail on Sunday.Japan´s ruling LDP party is expected to come away with a majority in the elections to the upper house of parliament now being held. The preliminary results, scheduled for release on Sunday evening, are expected to show that it, and its minority ally Komeito, have won 80 more seats. That may bolster his ability to move forward with promised economic reforms, says The Financial Times. J.P. Morgan Cazenove has been hired to provide the UK government with strategic advice on the privatisation of Lloyds and Royal Bank of Scotland. It is also among 37 banks, brokers and other advisers shortlisted for a number of advisory roles announced by the body which holds the taxpayers' stakes in the bailed out banks, The Scotsman on Sunday says. Tesco was last night accused of 'shameless profiteering' after increasing the price of its bottled water by 40% just as Britain is in the grip of its worst heatwave in seven years. The country´s largest supermarket chain has decided to up the cost of a two-litre bottle of its own-brand still water from 17p (the price charged by rivals Sainsbury and Asda) to 24p. The company denied those accusations and insisted the move reflected the cost of production, The Financial Mail on Sunday writes.The exit of ASOS´s human resources director - Michelle Emmerson - from the online retailer may fuel concerns of management churn. Her departure follows close on the heels of those of the company´s international director, in April, and those of its product and buying directors, quit in October. Kate Bostock, the former Marks & Spencer executive hired amid fanfare seven months ago, resigned just a few days before, The Sunday Times points out. Figures from the Office for National Statistics (ONS) show how membership of private pensions (as opposed to the national insurance-funded State pension) has hit a new low, with just 35% of men - and even less women - contributing to a scheme during 2011-12. To address this problem, the Government has launched an auto-enrolment programme aimed at getting people saving for their retirement. Under this scheme employers have to sign workers up to a pension scheme, unless the employees opt out, writes The Sunday Express.French industrial giant Schneider Electric is expected to table a takeover offer this week for Invensys, The Sunday Times reports. That comes after U.S. rival General Electric´s Chief Executive effectively ruled out a counter bid on Friday after a fortnight poring over the British firm´s books. Invensys makes software and control systems for industrial plants and machinery and has nearly 20,000 employees worldwide.As air-traffic into and out of the United Kingdom is set to more than double in the long-term The Economist has waded into the debate regarding the future of Heathrow, throwing its weight behind proposals to add a third - and possibly even a fourth runway there. That would cost up to £18bn by 2025-29 and an additional up to £14bn for a fourth strip of asphalt. The new airport hubs proposed by some, on the other hand, carry a price tag of between £70bn ($106bn) and £80bn, with £30bn or more coming from the state - a sum to make ministers blanch.AB