Thursday 09/07/26

US carries out second day of strikes against Iran (Financial Times, Steff Chávez and Bita Ghaffari) highlights continued strikes on Iran “to further degrade Iran’s ability to attack commercial shipping and innocent civilian mariners in the Strait of Hormuz”. Iranian forces attacked infrastructure at US military bases in Kuwait and Bahrain. Oil prices rise sharply after Iran launches attacks on tankers near strait of Hormuz (The Guardian, Jillian Ambrose) highlights market reaction to a resumption of attacks (Brent breached the $80 mark). Here we go again!

Elsewhere, Ukraine intensifies attacks on Russian ships in Azov Sea (Financial Times, Alice Hancock) highlights an escalation in Ukraine’s campaign against Russian merchant shipping as it continues to disrupt fuel supplies to occupied Crimea and Russia bans diesel exports after Ukraine refinery strikes (Daily Telegraph, Emma Taggart) shows that Russia has had to take action following a series of Ukrainian strikes on oil refineries. The success of Ukrainian drone attacks on oil infrastructure has really strangled diesel supplies in some regions. Diesel intended for export will now be diverted to the domestic market to help shorten the queues at petrol stations. And on a related note, Donald Trump’s surprise Ukraine shift steadies nervous Nato allies (Financial Times, Henry Foy and Steff Chávez) shows that Trump’s more benevolent stance towards Ukraine has proven to be a nice surprise for Europe’s NATO leaders amidst all the mud he’s slinging at everyone else. The fact that he’s gone from chief Zelenskyy-slagger-offer to letting Ukraine manufacture US weapons has led allies to be cautiously positive about his stance towards Kyiv.

In Asia, China’s factory gate prices jump as Iran ceasefire hangs in balance (Financial Times, Joe Leahy, Thomas Hale and Haohsiang Ko) cites the latest Producer Price Index (PPI) data from the National Bureau of Statistics which shows that factory gate prices rose at their steepest rate since July 2022 in their fourth consecutive month of expansion. Then in South Korea falls into bear market as traders fret over AI chipmakers’ prospects (Financial Times, William Sandlund and Daniel Tudor) we see that stocks on the KOSPI have entered bear market territory (i.e. fallen 20% from their recent high) as investors are apparently concerned about the long term prospects of chipmakers. I have to say that I think this is temporary and is just an example of investors taking money off the table. The underlying demand for chips is still strong. South Korea’s AI chip boom separates the haves from the have-mores (Financial Times, Daniel Tudor) shows that the “sudden” success of those working in the chip industry is starting to rankle with those who don’t

as Samsung and SK Hynix workers brace for massive bonuses (about $400,000 on average, per worker – which is particularly impressive when you consider that the average worker earns about $33,500 per year). Chip workers now are riding high – and their stellar pay is causing many people in traditionally prestigious occupations to question their life choices…

Back home, Britain handed biggest growth upgrade in G7 (Daily Telegraph, Eir Nolsøe) cites the latest forecasts of the IMF, which saw the UK economy getting the only upgrade in the G7 while others either remained the same or got downgraded. The catalysts for this were surprisingly strong growth at the beginning of the year and a less-than-expected hit from the Iran war. * SO WHAT? * This is great in theory, but let’s be honest – no-one really takes such things too seriously. We’ve still got to see what Burnham’s got in store for us…

Talking of which, Burnham’s economic blueprint focuses on small business and cost of living (Financial Times, George Parker) highlights a glimpse into what could possibly form the backbone of his economic agenda as a paper was drawn up by one of his advisers, Miatta Fahnbulleh, an ex-minister and economist. It focused on addressing the cost of living, assisting small businesses and the high streets, boosting housebuilding and more state control over key public services. * SO WHAT? * I guess this will be thrown into the pot (along with a load of other things) and debated over in preparation for Burnham to become PM.

Nigel Farage’s unusual by-election opponent: Count Binface (Financial Times, Elizabeth Bratton) takes a look at the opponent that Farage is going to be facing in the Clackton by-election – a comedian in a bin costume whose policies include “building at least one affordable house” and “nationalising Adele”. * SO WHAT? * If Farage loses to a bloke dressed as a bin then Reform will have a lot of thinking to do…

Then in energy news, Sizewell B nuclear power plant granted a 20-year life extension (The Guardian, Jillian Ambrose) shows that Britain’s most recently completed nuclear power plant has got the go-ahead to generate electricity until 2055, having been granted a 20-year extension! * SO WHAT? * The original plan was to shut it down within the next decade. It first began generating power in 1995  and produces 3% of Britain’s electricity. I think that it is fair to say that we need all the electricity we can get – so  this is not a surprise!

UniCredit secures 48% stake in Commerzbank (Financial Times, Simon Foy and Florian Müller) shows that the Italian bank has managed to build up a sizeable holding in Commerzbank, Germany’s second biggest lender. UniCredit launched an all-share offer to buy Commerzbank back in March and it has been building up its stake ever since.

Tesco explores sale of European business (Financial Times, Ashley Armstrong and Ivan Levingston) shows that the UK supermarket is thought to be considering the sale of its central and eastern European operations. If it manages to do so, it will signal the end of an attempt by Tesco to build a global empire and keep it to a UK and Ireland operation. Tesco has been disposing of its various international businesses since 2014. * SO WHAT? * Although Tesco

neither confirmed nor denied the rumour, if a sale goes ahead it is likely to plough the proceeds into cost cuts and new stores. I personally hate it when UK supermarkets talk about international expansion. Each market is different and I feel like supermarkets do the international thing to distract from a dreary performance in the domestic market. I really believe that supermarkets in particular need to concentrate on their own knitting and deepen their expertise in their home markets. As far as I can see, the only supermarkets that have ever really had sustained success outside their home markets are Aldi and Lidl – and Aldi recently announced that it was going in strong in the US.

World Cup and heatwave are stopping people from buying a home (The Times, Tom Howard) cites the latest RICS survey which concludes that the two things are holding back a housing recovery following a post-Iran slump. * SO WHAT? * This perhaps contrasts with news I highlighted yesterday that the latest Lloyds house price index reflected the first house price rise in three months. I suspect that these two factors plus UK political uncertainty, the ongoing situation in the Middle East and its ramifications will give people plenty of excuses to do nothing for the next few months in a period that is usually pretty quiet anyway.

In Housebuilder Vistry warns of losses amid heavy discounting on unsold homes (The Guardian, Julia Kollewe) we see that the troubled housebuilder’s nightmares are continuing as the company announced yesterday that it would make a loss in the first half of the year thanks to having to offer big discounts to get buyers for unsold homes. The company also announced that its FD was leaving. * SO WHAT? * The company, which used to be called Bovis, has managed to make a significant dent in its portfolio of unsold properties but the slowdown in Q2 has proved to be painful. It will continue to cut costs and there are worries surrounding what will happen with state funding under the government’s social and affordable housing programme.

In a quick scoot around some of today’s other interesting stories, Lawyers risk being struck off for not using AI (Daily Telegraph, Louis Goss) highlights a new directive from the UK Jurisdiction Taskforce (UKJT) which says that failing to use AI could be interpreted as a breach of lawyers’ professional duties if using it would improve their work. The statement said that “It is important to be aware of the possibility that a professional could also be liable for failing to use AI for a task when a professional exercising reasonable care and skill would have done so”. * SO WHAT? * Failing to follow this guidance could carry punishments such as being banned from practicing as a solicitor or barrister! Wow!

In FCA charges lawyer with insider trading over Seraphine sale (Financial Times, Martin Arnold and Suzi Ring) we see that a former London-based M&A solicitor at Goodwin Proctor, the

US law firm, was charged with insider trading for allegedly using information obtained while he was working on a sale of Seraphine Group. He dealt in Seraphine Group shares on five occasions between March 2022 and January 2023 prior to it being bought by private equity group Mayfair. * SO WHAT? * This is the second allegation of insider trading affecting Goodwin this year. The other one involved an ex-lawyer using confidential information about takeover deals to do some trading. The solicitor in question in this case is an M&A specialist. Goodwin itself isn’t on trial here, but it’s not great PR.

I thought I’d bring you some wholesome moments today 🥰🥰🥰!