25 March 2018


25 March 2018

Good morning,

And a warm welcome back on this bright new dawn of GDPR compliance.
Given you are reading this because you decided to opt back in to receive our morning briefings (and may have had to endure a barrage of similar emails), I would like to extend thanks on behalf of Charlotte Street Partners. 
Judging from the papers and my curiously lighter inbox this morning, it might be fair to say that the new European-wide data protection regulation that comes into force today has not met with the silky smooth landing its creators were hoping for.
“Don’t panic!” was the message from the consumer rights group, Which?, as reported front-and-centre on the BBC this morning. Social media has responded in predictable fashion, poking fun at the best attempts by companies to maintain their customers’ interest - a handy list of which I include here to pore over with your morning coffee.
The masterminds behind GDPR seemed more up-beat. Andrea Jelinek, who is to chair of the new European Data Protection Board which will police GDPR, dismissed fears that the authorities lack the resources to fight a barrage of predicted legal battles with big technology groups who break the rules. Ireland’s data protection office is likely to face the toughest workload among the EU28 as it will be responsible for any data protection cases launched again Facebook or Twitter, both of which have their European headquarters in the country.
The same case for optimism cannot be said for US-North Korean relations, however, as President Trump stunned commentators yesterday by announcing that a planned summit between the two countries in Singapore next month is to be scrapped.
The White House has placed blame for the deterioration in relations squarely on China. I’d wager that ongoing trade disputes between Beijing and Washington might have something to do with it, but in the meantime President Trump has cited a “change in attitude” by Kim Jon-un following talks the North Korean leader held with China three weeks ago.
No doubt the predictable rounds of ‘he said; she said’ will occupy the news cycle for a couple days yet. Happily for those of us on this side of the pond, I imagine that’s probably just enough time to finish getting through the expected list of resubscription emails we forgot to answer yesterday.


The SNP is to launch the report of the Sustainable Growth Commission, which explores the economics of an independent Scotland. The 354-page analysis document, promises a “new case for optimism” and will be published online later this morning. The First Minister of Scotland, Nicola Sturgeon, has said she hopes the document will “restart the debate” and now plans to discuss its findings in special assembles of SNP members around Scotland in the run-up to the party’s autumn conference.
President Putin has warned that the scrapping of the Iran nuclear deal would have “lamentable consequences” and welcomed European efforts to save the agreement. Hosting French president Macron in St Petersburg during his first state visit to Russia yesterday, the Russian leader also expressed his “regret” over the cancellation of the proposed US-North Korea summit. Despite a worsening in tensions between the West and Russia in recent months, Macron’s visit forms part of an unusually high level of meetings, The Times reports. (£)

The US Department of Justice has started investigating Bitcoin traders in Britain as part of an international inquiry into criminal price manipulation of digital currency markets. According to sources reported in The Times, Britain forms the focus of the inquiry with traders located in the UK thought to be involved in the dramatic rise and fall in global Bitcoin prices over the past year. (£)


Business & Economy

Mark Carney has hinted that the Bank of England may be forced to reduce interest rates if the government fail to contain the dangers of a “disruptive Brexit”. Speaking at a meeting of economists in London yesterday, the Bank’s Governor said that UK-EU negotiations were now entering “the most critical phase”, and speculated the Bank would act accordingly should economic instability return as it did in the immediate aftermath of the Leave vote. (£)
Samsung has been forced to pay Apple nearly $540 million in damages after it lost a patent legal dispute with the world’s largest tech firm yesterday. The case began in 2011 when Apple claimed that some Samsung smartphones infringed on trademarks used in the iPhone. Apple was an initial award of over $1 billion, but the amount was later reduced because of errors in the original jury’s calculations. (£)
Westfarmers has sold Homebase to debt investor firm Hilco Capital, taking on losses of at least $1 billion. Under the agreement, Hilco will buy all Homebase assets from the Australian conglomerate for a nominal sum, with Westfarmers expected to book a further £200m-£230m loss on the sale. The sale marked Westfarmers first retreat from a major overseas expansion, which it attributed to Brexit-related uncertainty.


What happened yesterday?
London stocks finished on another low yesterday – marking fully eight days of losses – as Donald Trump stunned investors by announcing that the US had called off planned peace talks with North Korea in Singapore next month. By close of trading, the FTSE 100 was down by 71.7 points to 7,716.74, or a fall of 0.9%.
Data from the Office for National Statistics showing that retail sales rose much more than forecast in April struck a rare optimistic note among the day’s activity. Retail sales climbed 1.6% month-on-month and 1.4% on the year, comfortably exceeding the consensus forecast of 0.9% for monthly growth 0.2% for the year.
This was not mirrored by corporates, however, as oil giants BP (down 1.82%) and Royal Dutch Schell (down 1.89%) weighed on the index as crude prices dipped. Shares in water company United Utilities (down 1.10%) also suffered after the firm posted a drop in full-year pre-tax profit, although revenue gained. In the year end to March, pre-tax profit fell by £10 million to £432.1m, a drop the company attributed to the disposal of its non-household business a year earlier.
On the other end of the scale was B&Q and Screwfix owner Kingfisher (up 0.51%), whose shares edged higher despite reporting a four per cent fall in like-for-like sales during February and March due to bad weather. Intertek (up 3.40%) was the day’s standout gainer, however, after the testing company posted 4.4% growth in revenue for the first quarter and said it was on track to deliver its 2018 targets.
Overall losses on the FTSE were balanced by gains on the currency markets, as sterling was buoyed by the positive economic data. Despite giving up much of the day’s gains against the dollar, the pound stood 0.3% higher at $1.39 and was flat versus the euro at €1.14.

Pennon Group
Westminster Group

Air China Ltd.
Etalon Group GDR (Reg S)
Contour Global
Hochschild Mining
Hydrogen Group
Keywords Studios
TCS Group Holding GDR


Trading Announcements

Old Mutual
UK Economic Announcements
(09.30) BBA Mortgage Lending Figures
(09.30) GDP (Preliminary)
(09.30) Index of Services
Int. Economic Announcements
(09.00) IFO Business Climate (GER)
(09.00) IFO Current Assessment (GER)
(09.00) IFO Expectations (GER)
(13.30) Durable Goods Orders (US)
(15.00) U. of Michigan Confidence (US)

Columns of Note

Philip Collins writes in The Times that President Macron, ironically, may be the “populist antidote to populism.” Collins predicts a brewing storm in relations with the incoming government of Italy, and suggests that Macron might be able to garner public sympathy in his favour over the future of the EU and eurozone. (£)
Robert Shrimsley uses his column in the FT to publish the shortened version of a blog written by former campaign director for Vote Leave, Dominic Cummings. In the post, Cummings writes of what he sees as the failures of the current government in negotiating Brexit, offering his apologies that they seem to be “betraying my Brexit.” (£)


Did you know?

At the height of his popularity, Charlie Chaplin entered a Charlie Chaplin look-a-like competition in San Francisco. He came in 20th place.