4 April

@Stu7Tay

Good morning,

Russia begins three days of mourning today after yesterday’s bomb blast on a St Petersburg metro train which killed 11 people and injured dozens more.

The attack on a train travelling between Sennaya Ploshchad and Tekhnologichesky Institut stations has left Russian security services on high alert. Prime Minister Dmitry Medvedev declared that the attack may have been one of a terrorist nature. However, no terror group has so far claimed responsibility for the explosion, with conflicting reports attributing blame to an IS-inspired group enraged by recent Russian airstrikes in Syria, and Chechen militants who have a history of targeting Russia’s transport network.

The BBC reports a story running in Russian media which claims the assumed attacker is in his early 20s and a native of Kyrgyzstan who obtained Russian citizenship, though it was unclear if he was a suicide bomber.

President Vladimir Putin was in the city at the time of the attack and paid his respects above the station where the train ended its journey, laying flowers at a makeshift shrine to the victims. He later spoke with President Donald Trump, who offered his “full support” in bringing those responsible to justice. Foreign Secretary Boris Johnson tweeted his condolences for the victims and their families. 

Many of the stations on the city’s metro system – which at two million passengers a day makes it one of the busiest in the world – had already reopened last night, demonstrating a resolve from the people of Russia and their government not to allow this barbaric attack to affect their daily lives.

NEWS
Theresa May has defended her trip to Saudi Arabia, saying close ties are needed with the Kingdom for both security and trade reasons. The Prime Minister is travelling to the country from Jordan later today, and said humanitarian aid was one of the issues she would be discussing during her two-day visit.

The parliamentary committee on exiting the EU has cast doubt on Theresa May’s claim that “no deal is better than a bad deal” when it comes to Brexit, describing that statement as “unsubstantiated”. However, the pro-Brexit MPs on the committee have refused to endorse the findings, with one describing it as “unduly negative”.

MPs will today publish a report which concludes that unethical behaviour is “absolutely embedded” in the culture of foreign aid contractors employed by the UK Government. The report by the international development committee will claim that profiteering, overcharging and duplicity has been uncovered at businesses that receive millions of pounds in taxpayers’ money to implement aid projects overseas. (£)

BUSINESS & ECONOMY 

Tesla’s valuation overtook Ford’s for the first time, as investors put their faith in founder Elon Musk to deliver on his promise to bring electric cars to the masses. The US car manufacturer’s shares rose 5.5 per cent to make the company worth $47.7 billion, $2.7 billion more than its older rival.

Pressure on China’s large state-owned banks has seen the country’s so-called bad banks evolve into some of the country’s largest financial conglomerates. China’s four centrally controlled asset management companies were established in 1999 and have seen their assets expand rapidly over the past five years. (£)

Amazon is launching a new service that aims to target the multi-billion pound UK business-to-business market, in the latest example of the retail giant’s expansion beyond retail. Amazon Business will sell office supplies, industrial tools and laboratory kits to companies.

MARKETS

What happened yesterday

The FTSE 100 index yesterday fell 40 points to 7,283, a fall of 0.4%. The most notable faller was Imagination Technologies, which saw its shares plummet by 62% after Apple announced that it would end a deal to use its microchips in products including the iPhone and iPad.

Imagination said its biggest customer would stop using its products over the next 15 months to two years, deciding instead to develop its own technology. While Imagination said this would be difficult for Apple to do without breaching Imagination’s patents, the announcement was enough to see the company’s shares fall 165p to 102p, meaning the company’s value dropped from £765m to around £250m.

On the currency markets, the pound was 0.6% lower against the dollar at $1.247, and 0.6% lower against the euro at 1.171 euros.

 

Finals: Flowtech Fluidpower, Hydrogen Group, Midatech Pharma, Next Fifteen Communications, Panmure Gordon & Co, Sprue Aegis, Shield Therapeutics, TP Group

Interims: Nanoco Group

UK Economic Announcements: (08:30) PMI Construction

International Economic Announcements:(10:00) Retail Sales (EU), (12:30) Balance of Trade (US), (14:00) Factory Orders (US)

Source: FTSE100, The Financial Times

COLUMNS OF NOTE

In his latest column in the Financial Times, Janan Ganesh argues that the electoral upsets which resulted in Brexit and the election of Donald Trump were not a revolt against elites but actually the exposure of a “large, unmet demand for paternalist government.” He says voters were angry and wanted to see a return of the governments of the past, which harboured memories of secure governance delivering safe neighbourhoods and assured employment. (£)



In The Times, Edward Lucas looks at Germany’s relationship with Britain, and argues that the Germans are grieving over Brexit. He warns that Downing Street must tone down the rhetoric and realise that Germany can become a closer ally than ever before. (£)

Cartoon Source: The Times

Did you know?

On this day in 1949, the North Atlantic Treaty Organization (NATO) was established by 12 Western nations: the United States, Great Britain, France, Belgium, the Netherlands, Denmark, Italy, Luxembourg, Norway, Iceland, Canada, and Portugal.