Sunday newspaper round-up: BIS warning, ECB stimulus, LSE bids, Old Mutual

The global economy's is over-indebted and displaying dangerous signs of reaching a tipping point, the Bank of International Settlements has warned, with credit issuance and cross-border flows in emerging economies slowing for the first time since the aftermath of the global credit crunch. The Sunday Telegraph reported that Claudio Borio, chief economist of the 'central bank of central banks', has noted that some of his starkest warnings from last year were now coming into fruition

The European Central Bank (ECB) is expected to cut interest rates deeper into negative territory and ramp up bond buying as president Mario Draghi bids to spark the continent's stagnating economy. Analysts predict the ECB could attempt to cushion the worst effects of sub-zero rates by introducing a tiered system, the Sunday Telegraph said, which would see larger banks charged more than their smaller counterparts to hold excess deposits, and encourage them to increase lending more.

Draghi is forecast to cut the ECB’s key overnight deposit rate from -0.3 to -0.4% and announce a €10bn (£7.7bn) monthly boost to the existing €60bn-a-month quantitative easing (QE) programme, the Sunday Times added. Pressure on the central bank may increase this week as eurozone consumer spending data is expected to show a slowdown, while on Saturday China cut its growth forecast for this year to 6.5%-7%, from the previous forecast of 7%.

China gave itself wiggle room in lowering its economic growth target this year, though it still set the pace at a relatively high 6.5% to 7%. In opening the National People’s Congress on Saturday, Premier Li Keqiang set out policies that aimed to stimulate growth and encourage industrial restructuring, the Wall Street Journal reported, though he left unclear how Beijing would balance its growth objectives and its reform goals.

As part of his Budget, the Chancellor of the Exchequer will reveal plans to create a £100bn UK sovereign wealth fund, as well as a scheme to part-privatise the country's rail network. The sovereign fund will merge local authority firepower and is being masterminded by City financier Edmund Truell, former chairman of the London Pensions Fund Authority, the Sunday Times said.

The London Stock Exchange's proposed merger with Deutsche Boerse could be gazumped by a rival offer from NYSE owner Intercontinental Exchange (ICE) at more than a 10% premium to the current share price. Following confirmation of rumours last week, a major LSE shareholder told the Sunday Telegraph that an ICE bid could come in at a price of around 3170p, with two-thirds in shares and the rest in cash.

ICE's entry to the LSE merger party could also be gatecrashed by CME Group, the owner of the Chicago Mercantile Exchange, which has run the rule over both UK company and its suitor in recent months and is said to prefer the German. CME, which is world’s largest financial exchange and valued at £22.5bn, made a bid for Deutsche Boerse three years ago and could move again, the Sunday Times wrote.

Barclays chief executive Jes Staley is willing to accept a trade off of bigger fines in order to seal quicker deals with authorities to get the stack of regulators investigations off his desk. As a result, the Sunday Telegraph said, the bank may pay hundreds of millions of pounds more in fines to regulators to accelerate the repair of its battered reputation and share price.

British American Tobacco has received a £340m tax rebate from Revenue & Customs as part of a group of companies claiming historic tax payments. Leading a group containing BP and De La Rue, the cigarette maker received the payment in November, following a £620m payout last July, the Mail on Sunday wrote, and also claiming a further £261m the HMRC is holding back as a result of a new 45% corporation tax levy on the interest due.

Independent North Sea oil producer EnQuest has brought in debt specialists at Rothschilds to help it slash debts that are now ten times its £119m market value thanks to the weakening crude prices last year. The Sunday Times reported that another year of negative cash slow may force management to take options such as a potential sale and leaseback of a £180m production ship or auctioning a stake in the Kraken oil field.

Corporation tax may be completely shelved for the smallest businesses under plans unveiled by the Office of Tax Simplification. A report into small company taxation suggested that instead of companies with fewer than 10 employees paying corporation tax, its shareholders could pay income tax on the profits of the business, the Mail on Sunday reported.

Hedge fund Cheyne Capital has agreed to invest £850m in social housing as part of a deal with Luton council that will see 400 low-rent homes built in three years. This would be one of the first direct private investments in social housing from a large City institution, the Sunday Times said.

With shares in Lloyds Banking Group back above 73.6p, investment bankers at Morgan Stanley have been selling the government's shares into the market, cutting its current 9% stake to the final 4% which will be offered to private investors. That means the final privatisation of Lloyds could happen later this year, the Sunday Telegraph said, in a £2bn sale of shares to retail investors eight years after the financial crisis.

Old Mutual, the FTSE 100 wealth manager, is planning to split itself up in a £9bn deal that could lead to a takeover battle for some of its biggest operations. The Anglo-South African group is organising the break-up into standalone companies, various Sunday newspapers reported, though the news was first broken by Sky News.

Following weak results and restructuring announced Rupert Murdoch’s parent company News Corp last week, London-based unit News UK is expected to cut more than 100 jobs. Along with the cutting of several roles in the newsroom, newly returned chief executive Rebekah Brooks' axe will mainly fall among commercial staff, the Sunday Telegraph reported, with separate commercial divisions combined into a single customer unit to save costs.

Ahead of its imminent London flotation, Oxford Nanopore will issue its defence in a lawsuit filed by larger US rival Illumina. Oxford Nanopore has developed and is comercialising a gene sequencing device called the MinION, but Illumina's California lawsuit claims the UK company has used its ideas, the Sunday Times said.

Irish minerals explorer IMC is poised to make the jump up to a full London listing before the end of March, raising £1m to help its plans to reap the benefits of Ireland’s ‘gold coast’. A report from the Geological Survey of Ireland (GSI) last week showed the ISDX-listed company's prospecting licenses in Counties Wicklow and Wexford hold more gold and platinum than previously thought, the Irish Independent reported.

Commerzbank has named retail banking head Martin Zielke as its new group chief executive. The German bank's supervisory board said Zielke would take the role from 1 May, succeeding Martin Blessing, according to the Financial Times.

The John Lewis Partnership may issue more retail bonds after subscribers to a previous issue received a £3,250 windfall cash and vouchers over the past five years. Following the 2011 scheme, where private investors and shop customers could invest as much as £10,000 each in return for a 4.5% annual dividend and a further 2% in vouchers, the company said a repeat remained 'an option in the future', the Mail on Sunday revealed.

A new company Research Tree has been set up that will offer private investors access to stockbroker research normally reserved for City players. So far, 17 brokers have signed up, including Liberum Capital, FinnCap and Panmure Gordon, the Sunday Times reported, with investors charged £40 a month for access to a live database of notes and stock recommendations ahead of new regulations that are set to slash the fees that investment firms pay brokers for research on individual stocks.