Reuters Insider - UK Day Ahead: Yuan Weighs on Markets
12/08/2015 16:07
Click the following link to watch video:
https://insider.thomsonreuters.com/link.html?cn=share&cid=1466142&shareToken=MzpkNzM4ODhmMi01NWU3LTRhOTctODk1Yi0xMzI5OWExYjBkZmM%3D&playerName=ReutersNews
Source: Thomson Reuters
Description: Global losses as the Yuan falls for a second day.
Elsewhere Cineworld prepares to report earnings.
(To access all exclusive Reuters Insider programming visit: http://insider.thomsonreuters.com)
Short Link: http://reut.rs/1Mk59vg
Transcript (May be auto-generated)
Good Afternoon. I'm Kelly Lemon. China's currency is the story dominating global
markets today. We've seen losses in Asia, here in Europe, and now in the US.
That's as China allows the yuan to fall in value for a second day. By allowing
the currency to fall analysts say the devaluation has the potential to turn into
a trend and that could impact on global growth. Policy makers in the US
criticizing the move with investors concerned this could spark a global currency
war. Although not everyone agrees. The PBOC might argue that we have been in one
for quite a while with the Fed having pushed the dollar down over the past 5
years thanks to rounds of QE. And now the ECB doing the same thing. So China,
yes it's getting the blame for this perhaps most blatant move but it is maybe a
currency war that has been underway for quite some time.
Shares in major exporters to the Asian economy are plummeting as their goods
become even more expensive for Chinese consumers. And of course on fears of less
demand in the future. Auto maker Daimler down 3% earlier. Luxury giant LVMH also
falling in afternoon trade. London nickel, copper and aluminum dropped to six
year lows. Glencore fell more than 5% earlier, while BHP and Rio Tinto fell
around 3%. Let's have a quick look at the markets. The FTSEurofirst 300 falling
today on the back of China's devaluation.
Same story here in the UK with miners leading the losses. In terms of companies.
Watch out for Cineworld tomorrow when the company reports. Investors keen to see
how a summer of blockbusters has impacted the cinema's bottom line. Greece is
also a story to watch tomorrow. Initial bailout funds for Greek banks will be
placed in a special account not on their balance sheets. Instead lenders will
receive fresh equity only after a stress test is finished by the end of October.
Keep an eye on banking stocks as lenders will have to submit viable business
plans to European authorities before fresh equity is disbursed. Banks will only
receive cash from the ESM once authorities sign off on the plans. Weekly
publication The Economist has a new majority owner. Italy's billionaire Agnelli
family has become its largest investor, now owning 43.4% of the group through
its holding company Exor. That's after Britain's Pearson agreed to sell its 50%
stake for GBP469 million. Existing shareholders such as The Economist itself,
and the Rothschild family also increased their stakes. It follows Pearson's sale
of The Financial Times last month to Japanese media group Nikkei for $1.3
billion. Analysts now expect Pearson to focus on its education businesses. It
does seem to be really a fairly good deal in terms of valuations. I think The
Economist is one of those global publications that carries such brand
recognition that actually you might argue they could have got a shade more for
it. And finally, A Dutch engineer has taken a step closer to a flying car. He's
invented a manned quadcopter that flies itself. It uses twenty engines that are
powered by lithium battery and the structure is made from an aluminum alloy. So
far the Quadro has accomplished 10 seconds in the air while carrying a
passenger. What I envision is that governments could use this transportation
system, and a person could use a smart phone, call the drone, it will land in
front of him, you can get in there and go to his desired location. That's it for
now. I'm Kelly Lemon and this is Reuters