5) A Hong Kong raider targeting the London Stock Exchange may be forced to rack up massive debts as it scrambles to sweeten its £32bn bid in the face of sceptical investors. Hong Kong Exchanges and Clearing has only won the backing of one shareholder among the top 10 since making its audacious offer for the London market (LSE) last month, sources said.
What happened overnight
Hong Kong’s bourse on Tuesday dropped its unsolicited $39 billion bid for London Stock Exchange Group (LSE), conceding it hadn’t won over LSE management for a move that could have transformed both global financial services businesses.
The surprise approach, made last month, had threatened to upend the LSE’s own $27 billion plan to buy data and analytics company Refinitiv. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv purchase for its offer to go ahead.
In a statement on Tuesday, Hong Kong Exchanges and Clearing Ltd (HKEX), said it still believed the combination of the two exchanges would be “strategically compelling”.
In the markets, meanwhile, Asian shares inched up, with Chinese shares making modest gains after a week-long holiday, though investors remained cautious over US-China trade talks after President Donald Trump said a quick trade deal was unlikely.
Japan’s Nikkei climbed 1pc while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7pc, led by gains in tech shares in South Korea and Taiwan.
South Korea’s Samsung Electronics rose 1.2pc after its profit guidance. The semiconductor firm said its third-quarter operating profit likely fell 56pc on a downturn in global memory chip prices, but that was better than what analysts had anticipated.
Taiwan’s stock index gained 0.7pc to hit five-month highs while Hong Kong shares extended gains after the territory’s leader said she had no plans to use the emergency regulation ordinance to introduce other laws.
Shanghai shares rose 0.3pc after the week-long break though gains were led mainly by defensive shares ahead of the crucial trade talks.
Coming up today
Turbulence puns are well-worn when it comes to the performance of Britain’s airlines, but easyJet truly has been flying through a storm in recent months: a sharp oil price spike following the attack on Saudi oil facilities, offset by a wider fall; the collapse of rival Thomas Cook; major rivals hit by strike action; and difficulties faced by several of its sector rivals.
After a record loss in the first half of the year, it could be on course for a record profit in the second, says Hargreaves Lansdown’s Nicholas Hyett. “Take fuel out of the equation, and other operating costs are one of the important areas in which airlines can influence their own destiny,” says Hyett.
“The focus on reducing non-fuel costs looks set to deliver better results in the second half, having fallen 4pc in the third quarter. That’s despite an improved pay deal for staff, and sustainable progress here would set easyJet up well for next year.”
Preliminary results: YouGov
Trading update: EasyJet, Electrocomponents, Ferrexpo
Economics: PPI (US)