The week in IR: M&S removed from FTSE, global stocks rise and WeWork in massive valuation cut

Sep 06, 2019
This week’s IR-related stories from around the web

Governance issues continue to rise in importance for how companies operate. Big US firms are coming under increased pressure to dump combined chief executive and chairman roles as the number of shareholder proposals pushing for independent board leadership increased in 2019, according to the Financial Times.

Early in the week, London-listed stocks exposed to the UK economy fell, as investors expressed deep concern the country was heading for a no-deal exit from the EU – or even an early national election – while worries about global growth continued to have an impact, reported Reuters.

The FT reported that UK retailer Marks and Spencer was in the inauspicious position this week to be relegated from the FTSE 100, which it has been a member of since 1984.

Boston Fed president Eric Rosengren said the US economy is in a ‘relatively strong’ place with low unemployment, rising wages and solid growth – driven by consumer spending – and he does not see a need for lower interest rates until there are signs of distress from the trade war on consumers, according to the Washington Post.

Nashville-based SmileDirectClub, which says it can straighten customers’ teeth more cheaply than traditional braces, is seeking to raise up to $1.3 bn in an IPO, noted the FT.

The US-China trade stand-off and the prospect of a no-deal Brexit are weighing  heavily on Germany, with plummeting orders for German products leading to restrained business expectations, reported the Express.

After the recent ups and downs of global stocks, it was refreshing to see them advance on Thursday, with Wall Street seeing one-month highs amid optimism over geopolitical tensions after the US and China announced they would resume trade talks next month, reported the FT. Biotech stocks took a turn for the worse, however, with the Wall Street Journal revealing some to be down 20 percent over the past year.

In the debate on recession, the FT’s capital markets correspondent Richard Henderson says it is already here – but it is a recession in US corporate profits. Henderson cites FactSet data that shows profits at US blue chips have fallen 0.3 per cent on a per-share basis in the second quarter.

US workspace company WeWork is preparing a massive cut – possibly by more than half – to its $47 bn valuation to subdue investor concerns about the scale of its losses and the ‘vulnerability of its business model’, reported The Times.

Following months of protests, ratings agency Fitch has lowered its rating for Hong Kong, citing political and business instability and international concern about rule in the country, reported the FT.

US equity futures rose on Friday ahead of an American employment report and before a speech by Federal Reserve chairman Jerome Powell in Zurich, according to Bloomberg.

 

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