Nationwide have reported a 23% rise in FY pre-tax profits to £1.3bn. Their new CEO Joe Garner said the results showed strong mortgage lending and strong saving inflows. Nationwide is the country’s second largest mortgage lender accounting for 36% of net UK mortgage lending.
The FTSE edged higher after an opening dip, helped by financials amongst others. Coca-Cola shares struggled for the second consecutive day, after their operations in Venezuela have been affected by a sugar shortage, causing suppliers to temporarily cease operations (Diet Coke still available). The lack of raw materials comes from spiralling food and energy problems. Venezuela’s economy is expected to shrink by 8% in 2016 following a 5.8% contraction last year.
Indian Prime Minister Narendra Modi has announced a $500m fund set aside for the development of a strategic southern Iranian port. This will enable a sea-land access route to central Asia whilst avoiding Pakistan, with whom the country has historically tense relations. This agreement follows Modi’s visit to Iran, and the announcement was followed by a trilateral agreement with Afghanistan and Iran to develop a transport and transit corridor allowing unhindered flows of commerce, capital and technology.
Adidas have decided to run back to Europe for mass shoe production thanks to robots. During the mid 90s Adidas moved from Europe to cheaper areas of production in Asia, such as China and Vietnam. Now with robotic advancements, the German apparel brand can afford to return back to their native country, with plans to open a similar factory in the US the following year. This will enable quicker production, combat against rising wages in Asia and will overcome the problem of lengthy shipping times.
Google today had their Paris offices searched as part of a tax fraud investigation. It’s not the first time a multinational has been scrutinised for their tax structures in varying countries, Google itself has just recently settled a case in the UK after it has been ‘avoiding’ tax in the Republic of Ireland, despite UK sales.
At the close the FTSE finished 1.35% higher (@6219.26) as investors overlooked various negative articles. Despite borrowing figures in the UK being worse than first feared and UK property debt rising for the first time since 2008, the bounce back from yesterday and eased Brexit worries helped the main index. Kingfisher and Severn Trent also issued strong results on the day where Tesco topped the index, finishing 6.81% higher. French and German markets closed even stronger, both over 2% higher respectively and American markets have begun their session in similar fashion.