03/09/2024

BIZ & FINANCE TUESDAY | SEP 3, 2024

17

Murdoch’s REA considers buying Rightmove

Central Europe’s manufacturing decline shows signs of easing WARSAW: Poland’s manufacturing sector declined slightly less in August than the previous month, while the rate of contraction for Czech factories was the slowest in two years as a downturn in central Europe showed signs of abating. Manufacturing activity has been a drag on central Europe’s recovery, but policymakers are expecting a rebound in consumer activity to make up for that now the inflation rise of the last few years has weakened, giving households new confidence. Companies, however, face a struggle for new orders because of weakness in major trading partners, notably European Union powerhouse Germany. Purchasing managers’ indices in Poland and the Czech Republic, which have indicated a downturn for more than two years, showed a further decline last month. Hungary’s PMI, published under different methodology, was also in contraction territory for a third straight month. In Poland, S&P Global’s Polish PMI rose for a second month to 47.8, from 47.3 in July, but remained below the 50 mark dividing contraction from growth for a 28th month in a row. New orders decreased and output shrank, the survey said. “The shape of the domestic industry still leaves much to be desired,” Bank Pekao analysts said. Weak demand was evident in the S&P Global’s Czech PMI, which remained below the breakeven 50 mark although it increased to 46.7, its highest level since August 2022. The Czech survey showed new orders declined in August, with soft demand at home and in export markets, but the pace of contraction was the slowest in more than two years. Polish exports fell more than new orders, and both components declined for a record 30th successive month. Hungary’s PMI, published separately by the country’s Association of Logistics, Purchasing and Inventory Management, fell to 47.6 in August from 48.8 in July. – Reuters Australian casino firm Star suspended from stock exchange SYDNEY: Troubled resort and casino operator Star Entertainment was temporarily delisted from the Australian Securities Exchange yesterday after failing to post its annual financial results. The measure – which is usually temporary – comes as the firm tries to recover from a series of scandals over lax safeguards against money laundering. The Sydney-based stock market said Star was “suspended from quotation” for “not lodging the relevant periodic report by the due date”. The firm failed to present financial year annual results on Aug 30. Trading in Star shares was halted on Friday after a regulator said it was still “unsuitable” to hold a casino licence. The New South Wales Independent Casino Commission earlier published a scathing report about the firm’s casino operations, saying it had not done enough to rectify a culture that allowed serious criminal infiltration. “The Star entities are presently falling short of what is required for suitability,” it said. The firm has previously been accused of not adequately policing criminal infiltration and doing little to vet the sources of money coming into the business. Watchdogs found that one patron, Xiangmo Huang – a Chinese real estate billionaire barred by the Australian government for being an agent of Chinese influence – had ploughed more than a billion dollars into Star over several years. Another high-rolling patron was allegedly involved in human trafficking. – AFP

REA said it was considering a possible cash and share offer for London-listed Rightmove. It, however, said it had neither approached nor held talks with Rightmove. REA now has to update the market if it has a firm intention to make a bid by Sept 30 under the UK’s takeover code. “Despite the potential long-term benefits of a strategic acquisition, the takeover move suggests capital vulnerability and risks,” Junvum Kim, Saxo Asia Pacific senior sales trader at Saxo Markets, said in regard to the potential deal for REA. A deal would boost growth for REA, the largest player in Australia’s online property space which has already developed a foothold in Asian countries including India. Rightmove, on the other hand, has continuously reported a pickup in revenue in the recent past amid expectation of an improvement in the UK housing market on falling interest rates. – Reuters

Rightmove had a market value of £4.36 billion pounds (RM25 billion) as of Friday’s close. It makes money from listing real estate agents on its website. Analysts at Investec in a note agreed with REA’s stand that the offer and the enlarged group presents a highly attractive investment opportunity given an easing interest rate environment in the UK and recent new investment starting to pay off. Shares of REA, in which the Murdoch family-controlled media firm News Corp owns a more than 61% interest, fell as much as 8% to A$201.50 and were set for their worst day since December 2022. The stock closed 5.3% lower at A$207.40, one of the day’s biggest losers on the benchmark. If the deal goes through, it will be the largest so far this year in which an Australian firm buys an overseas company, data from LSEG showed.

LONDON: REA Group, the property listings company majority-owned by Rupert Murdoch’s News Corp, is considering buying Rightmove to create a global real estate company, the Australian firm said yesterday, sending the British housing portal’s shares soaring. Shares in Rightmove jumped 24% to £6.89, their highest level since March 2022, in early deals on the London Stock Exchange, and the stock was the top percentage gainer on the FTSE 100 index. The company declined to comment. Britain’s largest property portal, o Deal will create global real estate firm, analyst warns of capital risk

Vessels that are used for towing oil rigs in the North Sea are moored up at William Wright docks in Hull, Britain. – REUTERSPIC

‘North Sea tax changes mean £12b revenue drop’ LONDON: British government plans to increase a windfall tax on North Sea oil and gas producers would lead to a nearly £12 billion (RM70 billion) drop in revenue to the state and accelerate a decline in output, an industry group said yesterday. The Labour government, elected in July, has said the changes will help to achieve a ramp-up in renewable power and shift from oil and gas to reduce carbon emissions and help curb global warming. The proposed tax changes “will trigger an accelerated decline of domestic (oil and gas) production, and a corresponding reduction in taxes paid, jobs supported, and wider economic value generated,” OEUK CEO David Whitehouse said in a statement. North Sea focused NEO Energy said the fiscal and regulatory uncertainty would slow investment across its portfolio. regulator has forecast that production will decline to less than 200,000 boed by 2050. Shortly after its election, the Labour government said it would increase the Energy Profits Levy (EPL) to 38% from 35% starting Nov 1, bringing the headline rate of tax on oil and gas activities to 78%, among the highest in the world. Its duration was also extended by a year to March 2030.

NEO owns half of the Buchan Horst development project in the UK North Sea with Serica Energy and Jersey Oil & Gas owning 30% and 20%, respectively. Production in the mature North Sea basin has declined from a peak of 4.4 million barrels of oil equivalent per day (boed) at the start of the millennium to around 1.3 million boed today. The North Sea Transition Authority

The changes will also include scrapping the levy’s 29% investment allowance, which lets companies offset tax from capital that is re-invested. “We are committed to maintaining a constructive dialogue with the oil and gas sector to finalise changes to strengthen the windfall tax, ensuring a phased and responsible transition for the North Sea,” a Treasury spokesman said. – Reuters

Industry group Offshore Energies UK (OEUK) forecast the changes would reduce tax revenue by £12 billion between 2025 and 2029 compared to the current tax regime. Capital investment in the sector over the period is expected to fall to £2.3 billion from around £14 billion, OEUK said.