Wed, Sep 05, 2018 - Page 10 News List

World Business Quick Take

Agencies

UNITED KINGDOM

Building slowdown deepens

Construction growth last month slowed more than forecast, providing further evidence that the nation’s economy is losing momentum. IHS Markit’s purchasing managers’ index for the industry fell to 52.9 from a 14-month high of 55.8 in July, the firm said yesterday. The reading was the lowest since May and below the 54.9 forecast by economists. A reading above 50 indicates expansion. Markit’s survey showed a “sharp slowdown” in house building, while work on civil engineering projects decreased for the first time in five months. New business growth also ebbed, with some respondents saying that Brexit-related uncertainty was holding back investment. The report is the latest to suggest the economy is cooling. A gauge for manufacturing showed growth last month unexpectedly slowed to the weakest in two years, just as the Bank of England opted to hike interest rates to the highest level since 2009.

ADVERTISING

WPP to spend for growth

WPP PLC’s new CEO Mark Read signaled he would spend more to revive growth at the world’s biggest advertising group. WPP forecast a profit margin squeeze in the full year, in line with a 0.4 percentage point like-for-like decline in the first half to 13.3 percent. It suggests that Read is willing to forgo some earnings for now to defend business with big clients, especially in the US, where consumer goods giants are cutting their ad spending and as power in online advertising shifts to Alphabet Inc’s Google and Facebook Inc. Read also boosted the company’s revenue outlook slightly for the year. Like-for-like revenue less pass-through costs, a key measure of WPP’s operating performance, is expected to grow in line with the first half of the year, when it rose 0.3 percent. It had previously forecast no change.

VENEZUELA

Fuel prices to increase

The price of heavily subsidized gasoline is to rise by next month, President Nicolas Maduro said on Monday, as the crisis-stricken government seeks to shore up its coffers amid hyperinflation that is accelerating a broad economic collapse. Despite the crisis, fuel prices are set so low that the equivalent of US$1 buys nearly 1.51 million liters of fuel. That cripples the state’s hard currency earnings and drives a lucrative smuggling trade. The government yesterday launched a new payment system that would increase prices to international levels once it is in place. Any increase would mark the first time in 20 years that the nation has significantly raised fuel prices, which have been a sensitive issue ever since riots broke out in 1989 in response to austerity measures. Government regulations have kept prices steady at the pump despite inflation that is expected to hit 1 million percent this year, the IMF said.

SOUTH AFRICA

Discovery to start bank

Discovery Ltd is on track to start a bank by the end of this year after agreeing to buy FirstRand Ltd’s stake in a credit-card venture, which had delayed the lender’s launch. Johannesburg-based Discovery is joining a rush into retail banking by a range of new entrants. The insurer is to pay 1.8 billion rand (US$118.45 million) for FirstRand’s 25 percent stake in Discovery Card, which it started with the nation’s second-largest banking group in 2004, Discovery said in a statement yesterday. The deal would be implemented “as soon as practically possible” to meet one of the conditions imposed by the central bank when the regulator granted Discovery its banking license, the company said.

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