Wednesday Briefing: George Osborne Sees the Necessary of Tax Rises and Spending Cuts

June 29, 2016

The U.K. has no shortage of bad news these days thanks to Brexit. The U.K. Chancellor confirmed the necessary of tax rises and spending cuts in the stabilizing effort for the financial markets and the U.K. economy post-Brexit. While George Osborne is getting the crowd attention for all the wrong reasons, which has catapulted him to the top of Sentifi Top Attentions, Lyft is getting the attention for all the right reasons. The financially able company is speculated to have an IPO soon, beating rival Uber to the punch. There are stories to pay attention to on this Wednesday, so read on.


1/ George Osborne: Tax rises and spending cuts are necessary [1,378 messages in the last 24h]

The Chancellor made a comment about the future of the U.K. market that nobody wanted to hear. Tax rises and spending cuts are necessary tools to deal with the aftershock of Brexit. He further said it wasn’t the government’s responsibility to have a plan on how to deal with Brexit, since the government advocated for Bremain. Instead, he said, the responsibility was of those who voted for Brexit. To add onto Osborne’s point, Business Secretary Sajid Javid said he will meet with leaders of Britain’s biggest business organizations, CEOs and other senior industry representatives to discuss their views about Brexit. And any future relationship with the EU will be done in the interest of the U.K. companies, investors, potential investors and workers.

2/ Lyft: Rumored to have an IPO [515 messages in the last 24h]

IPO will soon be reality for Lyft?

With a record growth in May, the crowd is speculating Lyft would have an IPO before its prime competitor Uber. Currently valued at $5.5 billion, Lyft is said to be on track to meet annual goals. The company also has many financial advantages to prep for an IPO. It has 2.8 million unique passengers in May, which is 300,000 more than April. It will likely not lose more than $600 million per year. It is in a good stage to provide value to its shareholders, which is crucial to start an IPO.

3/ Dow Chemical Co: Will cut 8% of its Michigan workforce [388 messages in the last 24h]

Dow Chemical started the day with terrible news for its workers, as it is planning to cut 2,500 jobs worldwide, with 700 of them being in its home turf Michigan. The goal of the massive layoff is to save hundreds of millions of dollars. The company’s shares dropped 2.04% following the announcement.

4/ Lloyds Banking: CEO buys shares to show confidence [329 messages in the last 24h]

CEO Antonio Horta-Osorio has bought 100,000 shares in the bank to show his confidence that the share price tumble is just a short-term hit. A few directors from financial services such as Virgin Money and Shawbrook Bank also bought shares in the bank with a belief they will rebound in price sooner than later.

5/ Xencor Inc: Shares skyrocket on collaboration agreement with Novartis [263 messages in the last 24h]

Xencor enjoyed a huge jump in its shares, 35% to be precise, thanks to a collaboration agreement with Novartis. The Swiss company will pay $150 million to Xencor for two of its pipeline candidates, but the license only applies to markets outside of the U.S. Thus, Xencor can still commercialize these drugs in the States, or even partner with another company to do so.

6/ Lending Club: Appoints new CEO [186 messages in the last 24h]

With a new CEO, Lending Club aims to continue the disruption momentum.

The company was sans CEO in May when Renaud Laplanche resigned amid accusations of loan documentation errors. That has changed as it’s appointed Scott Sanborn as the new CEO. Sanborn was previously the chief marketing officer of the company. Its shares went up 6% after the appointment.

7/ Ocado: Good earnings increase stock price value [177 messages in the last 24h]

The online grocer’s shares made an 15% jump in value thanks to an 18% increase in pretax profits to £8.5 million and a 15% jump in retail revenues to £584.2 million in the six months to May 15. The company has its partnership with Morrisons to thank. Speaking of partnerships, the investors were slightly disappointed because of the lack of news on more partnerships, as international licensing deals are deemed crucial to the company’s future growth.

8/ Tata Communications: Sells asset, launches Wi-Fi+ [144 messages in the last 24h]

The company has sold its South-African fixed-line unit Neotel to Liquid Telecom Group for $428.6 million to help pare its debt, which is $2.1 billion. Its stock gained as much as 7.99% after the announcement. Aside from that, the company has also launched Wi-Fi+ to improve the mobile experience and generate additional revenues from Wi-Fi services.

9/ World Bank: Co-organizes the first outreach session in Singapore [126 messages in the last 24h]

The World Bank has its first workshop in Singapore to provide the local companies with project opportunities.

In a collaboration with the travel agency International Enterprise Singapore, the World Bank hosts the first ever workshop in Singapore for the country’s companies. It will serve as an introduction and an overview of the process of how to get projects funded by the bank. It will also give Singapore companies opportunities to win projects from the World Bank.

10/ FastJet Plc: Fights off shareholder to keep chairman [92 messages in the last 24h]

The largest shareholder of the company, Stelios Haji-Ioannou, was unhappy with the company’s performance and called for the resignation of Chairman Colin Child. In a brave move, the company fought off the aggression and kept the chairman instead, but it still warns the company will keep facing a challenging trading environment. The company is currently facing a few problems. Passenger numbers are still lower than expected. Markets have yet to develop as quickly as the management had anticipated for expansion. Plus, the management is burning through cash too quickly. It will need a much better plan to turn a profit.

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