- More than half (54 per cent) of exporters expect their ability to compete in international markets to improve over the next year
- Almost as many (47 per cent) expect their overseas sales to increase over the next six months
- Nearly a quarter (23 per cent) expect trading with the USA to bring the biggest opportunities for their businesses in the next six months
- More than a fifth (22 per cent) of respondents have not reviewed their trading plans two years after the Brexit referendum.
A growing number of UK exporters expect their ability to compete in international markets to improve over the next year, according to the latest Business in Britain report from Lloyds Bank.
More than half (54 per cent) expect their ability to compete in international markets to improve in the next 12 months, four points higher than six months ago.
Almost half of exporters (47 per cent) said they had seen their overseas sales grow over the last six months, compared with just 21 per cent who said they had fallen, with sales to the EU, the USA and China rising by 35 per cent, 32 per cent and 35 per cent respectively during that time.
And despite facing continued uncertainty, almost half (47 per cent) said they expected their overseas sales to increase over the next six months, compared with just 20 per cent who expected international sales to fall.
The good news comes as the latest data from ONS revealed the value of British exports hit a record £621 billion in the 12 months to June 2018, with service exports rising 2.2 per cent to an all-time high of £278 billion and exports of goods climbing 6.3 per cent to £343 billion.
However, more than 22 per cent of respondents have stated that they have not reviewed their trading plans two years after the Brexit referendum. If this is the case across all UK exports this means that potentially as many as 50,000 exporters may not have considered nor factored any changes they may need to make to their trading strategies post March 2019.
Clive Higglesden, head of trade and supply chain product, at Lloyds Bank, said: “We have to recognise that the Brexit negotiations can affect how businesses are feeling and this can change but it’s heartening to see UK exporters demonstrate confidence towards their trade prospects, especially in light of continued domestic and international uncertainty.
“However, while the ongoing negotiations around the UK’s departure from the EU and its potential impact are an important point on most businesses’ agendas, it’s maybe a cause for concern that up to 50,000 exporters may not have reviewed their own strategy since the referendum two years ago.
“It may be difficult to plan whilst there is uncertainty over the nature of the UK’s departure, but there is little doubt that businesses will face some degree of change in the months and years ahead. All exporters should be taking proactive measures in the interim to prepare for that.”
The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium-sized businesses, on a range of issues facing them.
Top UK export markets
Although nearly one in four (23 per cent) British exporters expect the biggest opportunities for international trade to be with the USA, this figure has fallen from 30 per cent at the end of 2017.
Similarly, 13 per cent expect the biggest opportunities to come from China, down two points from 15 per cent six months ago, while eight per cent cited Germany, down from nine per cent.
The fall in firms identifying these markets was caused by a significant increase in respondents to Lloyds Bank’s survey saying they ‘did not know,’ suggesting that firms are struggling to plan ahead amid such uncertainty.
Some 18 per cent of exporters said they ‘did not know’ where they saw their biggest overseas opportunities now, compared with six per cent six months ago.
Firms state the biggest barrier to exporting is exchange rate uncertainty, which was cited by 42 per cent, the same proportion as six months ago.
Tariffs and quotas were cited by 35 per cent, compared with 29 per cent six months ago, while difficulty finding potential customers was mentioned by 32 per cent, up from 26 per cent.
Although the majority of exporters hold a positive outlook, 26 per cent expect their ability to compete in international markets to deteriorate over the next year.
One in five (21 per cent) said their overseas sales had dropped in the last six months, while almost as many (20 per cent) said they expected their exports to drop over the next half year.
With negotiations ongoing between UK and EU diplomats over the future relationship between Britain and Europe, exporters most want to see the UK prioritise free trade agreements with USA (24 per cent), China (12 per cent) and the EU (11 per cent) followed by Germany (seven per cent) during discussions.
Clive added: “Exporting for the first time can feel daunting, particularity when the global political and economic landscape is going through a significant period of flux.
“But with the falling value of the pound continuing to make our goods more attractive overseas, I’m certain there are lucrative opportunities out there for firms ambitious enough to pursue them.
“Our International Trade Portal* can also help both current and prospective exporters understand the best market for their products or services, the trading requirements and conditions they face and the buyers they may wish to work with.”
Robinhood plans confidential IPO filing as soon as March – Bloomberg News
(Reuters) – Online brokerage Robinhood, at the centre of this year’s retail trading frenzy, is planning to file confidentially for an initial public offering as soon as March, Bloomberg News reported late on Friday, citing sources.
The California-based brokerage has held talks in the past week with underwriters about moving forward with a filing within weeks, Bloomberg said.
Robinhood did not immediately respond to a request for comment.
Reuters reported last year that Robinhood has picked Goldman Sachs Group Inc to lead preparations for an initial public offering which could value it at more than $20 billion.
Robinhood was at the heart of a mania that gripped retail investors in late January following calls on Reddit thread WallStreetBets to trade certain stocks that were being heavily shorted by hedge funds.
The online brokerage tapped around $3.4 billion in funding after its finances were strained due to the massive trading in shares of companies such as GameStop Corp.
(Reporting by Ann Maria Shibu in Bengaluru; editing by Richard Pullin)
Analysis: How idled car factories super-charged a push for U.S. chip subsidies
By Stephen Nellis
(Reuters) – When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.
For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.
As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.
Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.
“It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted,” said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.
Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.
Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.
Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.
“Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, ‘Sorry, can’t help,'” Lewis said. “It was one of those moments where everything aligned.”
The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.
The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world’s two largest chip manufacturers.
In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.
Intel Corp, Micron Technology Inc and GlobalFoundries – which already have U.S. factory networks – will also likely benefit.
Smaller, specialty chip factories also could benefit.
“The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.,” said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. “We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer.”
Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.
Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers’ needs as best it can.
“We are expecting this level of demand to continue at least for the next 12 months, maybe even longer,” he said.
(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)
(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)
Atlantia disappointed with CDP bid for unit, continues talks
By Francesca Landini and Stephen Jewkes
MILAN (Reuters) – Italy’s Atlantia said on Friday an offer by a consortium of investors led by state lender CDP for its 88% stake in Autostrade per l’Italia fell short of the mark and asked its top managers to see if the bid could be sweetened.
“The offer falls below expectations,” the Italian infrastructure group said in a statement, adding it had mandated the chief executive and the chairman to assess “the potential for the necessary substantial improvements” to the bid.
Italian state lender CDP, together with co-investors Macquarie and Blackstone, has presented a proposal valuing all of Autostrade per l’Italia at 9.1 billion euros ($11 billion).
The consortium also requested Atlantia guarantee up to 700 million euros in potential damage claims and another roughly 800 million euros for a pending legal case, making the bid less attractive than previously expected.
One source said the consortium estimated overall pending legal claims against Autostrade at 3 billion to 4 billion euros, adding the 700 million euro cap did not mean the amount would be detracted from the offer price from the start.
Earlier on Friday Atlantia’s minority investors TCI and Spinecap had called on Atlantia’s board to reject the offer, saying it undervalued the asset.
“No deal is better than a bad deal, especially a bad deal and a wrong price,” TCI Advisory Services partner Jonathan Amouyal said in a emailed comment to Reuters.
TCI, which holds an indirect stake of around 10% in Atlantia, repeated that the value for 100% of Autostrade should be no less than 12.5 billion euros.
The board will hold a further meeting in order to take a final decision on the offer in due time, Atlantia said.
The negotiations between Atlantia and the CDP-led consortium are part of an effort to end a political dispute over Autostrade’s motorway concession triggered by the collapse of a motorway bridge run by the unit.
(GRAPHIC – Atlantia share performance: https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqggjdpx/image-1614331237501.png)
The bid expires on March 16, but the deadline could be extended in case Atlantia calls an extraordinary shareholders meeting (EGM) on the issue, according to one source with knowledge of the matter.
Shares in the group ended down 0,7%, after recovering some losses, as investors waited for the decision of the board.
Atlantia, which is controlled by the Benetton family, owns 88% of Autostrade, with Germany’s Allianz and funds DIF, EDF Invest and China’s Silk Road Fund holding the rest.
The group also kept open an alternative plan to demerge and sell its stake in Autostrade per l’Italia unit and called an EGM on March 29 to extend to end-July a deadline for offers for the demerged stake.
(Additional reporting by Stefano Bernabei, editing by Louise Heavens and Steve Orlofsky)
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