Sunday newspaper round-up: Aldi, house prices, BG-Shell, retailers

If competition in the UK supermarket sector was not hot enough, the Big Four grocers will be sweating even more heavily at plans of German retail invader Aldi to open a record 80 new stores in 2016, 23 per cent more than last year. With fellow discounter Lidl planning 50 openings this year, the Mail on Sunday reported, Aldi's plans will take the chain to more than 700 stores and refute hopes from established players that its pace of growth may slow.

Risks of repeated future flooding are resulting in house prices dropping dramatically in many parts of England. Some homes in Carlisle, for example, have appeared on the market for only 60% of their November values, the Observer reported.

Government cuts to flood defence budgets could leave almost twice as many households at “significant risk” within 20 years, according to a document leaked to the Observer. "Annual flood and storm damage costs are approximately £1.1bn, according to the Association of British Insurers, and those households at significant risk [of flood damage] through a reduction in our capacity to manage water levels could increase from 330,000 today to 570,000 in 2035,” the report from the Association of Drainage Authorities said.

A major institutional investor in BG Group has more than halved its stake in the company in the midst of continuing doubts about the oil explorer’s looming takeover by Royal Dutch Shell. Capital Group, which also holds a sizeable stake in Shell, clipped its holding in BG from 2.2% to 0.9%, the Sunday Telegraph noted.

The vote on the deal by BG and Shell shareholders in January is a "major opportunity" for the largest and arguably most influential fund managers to "send a powerful message to companies and particularly their advisers” that they are good stewards of investors’ money, Jupiter's Ian McVeigh wrote in the Sunday Telegraph. Writing in a personal capacity and not on behalf of Jupiter, McVeigh said “it seems very hard to imagine that index funds will vote for this deal as so much of the premium that is being paid is going to the company where their holdings are far smaller”.

Oil giants are expected to further increase debt to preserve dividends as the price of a barrel of crude oil scrapes along below $40. Worldwide oil and gas investments are forecast to slide to a six-year low in 2016 of $522bn, following their 22% fall to $595bn last year, Oslo-based consultancy Rystad Energy said. "This will be the first time since the 1986 oil price downturn that we see two consecutive years of a decline in investments," Bjoernar Tonhaugen, vice president of oil and gas markets at Rystad Energy, told Reuters.

The fallout from a punishing winter for Britain’s high street will be laid bare this week, said the Sunday Telegraph, with trading updates from retailers predicted to reveal the results of what has been a cut-throat festive trading period. With UK shoppers leaving their Christmas shopping until the latest point since records began in 1998, according to Ipsos Retail, with footfall only peaking in the three days leading up to Christmas, high street visitors were 1.8% lower than the same week last year. Next is one of the few that is expected to have enjoyed robust trading.

The Sunday Times also splashed with a story on Amazon's success over Christmas, having boasted of a “record-breaking holiday season”, at the expense of rivals whose origins are in bricks-and-mortar retailing. Big losers include Marks and Spencer, which sneaked out a sizeable cut to forecasts through stockbroker Nomura in the week before Xmas, following more over profit warnings from other listed groups like Home Retail and Game Digital. 2016 is not forecast to get much better, with the introduction of the living wage in April and plans to devolve business rates, as described by Tesco’s Dave Lewis as a “potentially lethal cocktail” that could trigger job losses and higher prices, plus the uncertainty of the UK's EU referendum.

Another Sunday Times splash is on the four horsemen of the banking world, riding into 2016 with sabres slashing at costs: John Cryan at Deutsche Bank, Jes Staley at Barclays, Tidjane Thiam at Credit Suisse and Bill Winters at Standard Chartered. Deutsche sources say say Cryan's five-year strategy will begin with the disposal of most of the bank’s Russian business, floating its German retail arm and upgrading IT, with plans to cut 15,000 jobs over three years, 1,000 of which in London in 2016. At Standard Chartered, Winters will ring in the new year with a round of job cuts as part of his plans to cull 15,000 jobs from its 86,000 workforce along with a £13.5bn cut to the loan book.

At Barclays, Staley's March turnaround plan is expected to possibly include a potential sale of the bank’s African business, major redundancies in Asia, with rumours that he wants to “tighten” the American and British businesses, the Times added, implying more job cuts.

Retail chain Debenhams is in talks to appoint former Kingfisher boss Sir Ian Cheshire as its new chairman. The embattled department store group could use its annual meeting on 14 January to unveil the departure of current incumbent Nigel Northridge, the Sunday Times reported.

Health food shop chain Holland & Barrett is likely to be sold by private equity owner Carlyle, according to sources cited by the Sunday Telegraph. Banks will soon be asked to pitch for the £1bn auction, unless Carlyle opts to keep the group on its books to keep enjoying growth such as the 12% surge in profits last year.

City financier Edmund Trull and Charles Hendry, the former Conservative energy minister, the men whose Atlantic Superconnection firm is proposing to build a £5bn underwater cable to transport excess geothermal power from Iceland, have launched a new venture to build several more links to electricity sources across Europe. A proposed cable from Southampton to the Channel Islands and France could link to the delayed nuclear reactor planned by EDF in Flamanville, just 30 miles off the coast of Guernsey.

Companies are not waiting for a formal end to Iran's trade embargo and are already moving into the region with ideas for how to expand into an economy the size of Turkey's that is hungry for investment in infrastructure and oilfields and brimming with 90m consumers thirsting for western brands after years of economic isolation, the Sunday Times reported. Peugeot-Citroën and Accor Hotels are two of the companies making early investments, while lawyers and other support services firms are opening offices in Tehran to grease the wheels of this looming land-grab.

Attention will be on Sports Direct in the new year after founder Mike Ashley's pledge to turn the sportswear retailer into another John Lewis. The important things to watch in 2016, the Observer said, will be how the group changes its employment practices and its share price, with the more the shares fall, the more Ashley will be pressured into sweeping changes.

Analyst Navid Malik has quietly parted company with broker Cenkos just days after he was re-elected to the board of under-fire drug developer Northwest Biotherapeutics, the Sunday Times revealed. Neil Woodford, the fund manager who owns 28% of the much-critiqued Northwest’s stock, abstained from the December 18 ballot on the reappointment of Malik and of Linda Powers, Northwest’s chief executive, both for three years.

Former Jimmy Choo director Tamara Mellon is working on plans to extricate her eponymous company from Chapter 11 bankruptcy in the US thanks to new funds from private equity firm NEA and the founder herself, though original backers are likely to lose their stakes. Mellon has applied for an imminent exit from its Manhattan headquarters with a deadline for objections next week.