Thursday newspaper round-up: Pension deficits, sovereign bond yields, Rolls-Royce, Poundland

The scrapping of a dividend by specialist plastics group Carclo due to its spiralling pension deficit triggered rules that prohibited a payout could be a watershed moment for British business as it highlighted the crisis in corporate pensions. The combined deficit of all the UK’s 6,000 pension funds has risen by £100 billion to £710 billion in the past month, according to PricewaterhouseCoopers’s Skyval Index. - The Times

The collapse in sovereign bond yields has saved taxpayers more than $500bn in annual interest expenses, allowing countries to rein in budget deficits and continue government-backed programmes that would have otherwise been shelved, according to a new report. With stimulus from the European Central Bank and Bank of Japan unleashing a rally across fixed income markets, and now Japan, France, Germany and Switzerland all now paid to issue short-dated sovereign bonds, the “benefits have effectively been transferred from global investors to sovereign issuers, as sovereign borrowing costs have dropped,” said Robert Grossman, an analyst with rating agency Fitch, adding that if rates remain low for an extended period, "it would likely erode earnings power for many large investment institutions and pension funds”. - Financial Times

Rolls-Royce has hit back at government attempts to crack down on the profits defence companies make on military contracts. Warren East, chief executive of the blue-chip engineer, warned that unless industry can make a decent return on contracts, it will abandon them – with serious implications for the country’s military industry. - Telegraph

The battle for control of Poundland took a new turn last night after Elliott Capital said that it had raised its stake in the retailer to 22.7 per cent. The disclosure comes three weeks after the American activist hedge fund, which has been increasing its holding in the high street discounter for months, managed to squeeze a few extra pence out of Steinhoff International, the South African furniture and clothing retailer, which is pursuing its own bid for Poundland. - The Times

Federal regulators in the United States have now extracted a $5.5 million payment from AstraZeneca to settle a bribery investigation into improper payments made by its staff to state-employed healthcare officials in China and Russia between 2005 and 2010 to promote the sale of its drugs. The settlement with the Securities and Exchange Commission is deeply embarrassing for AstraZeneca. Three years ago it created a special task force to “double and triple” check all business relationships in China to ensure that it avoided corruption allegations similar to those that rocked GlaxoSmithKline in 2013 and 2014. - The Times

The Home Office is trialling a new online application system to speed permanent residence applications from thousands of EU citizens seeking to secure their UK immigration status in the run-up to Brexit. The pilot programme, which will run for the next two weeks, is being tested secretly by a group of about 20 corporate clients ahead of a public launch expected later this year, according to people involved in the trial. - Financial Times

The first powerful treatment for Alzheimer’s is on the horizon after a new drug was found to combat the changes to the brain that cause the disease. Scientists hailed the breakthrough as the best news in dementia research for a quarter of a century and others said that it could be a “game changer”. Scientists at Biogen, a biotechnology company in Boston, Massachusetts, and Neurimmune, its Swiss partner, discovered the molecule when they were testing different chemicals from human immune “memory” cells against the protein that is widely thought to be the biggest cause of Alzheimer’s, known as amyloid beta. - The Times

Excessive executive pay should be curbed by new committees of shareholders that would take over responsibility for approving remuneration packages from company boards, according to a new report for the High Pay Centre by a Conservative MP. Chris Philp, a backbencher and member of the Treasury Select Committee, said Britain should follow Sweden’s lead on corporate governance and impose shareholder committees on public companies.

Plans by mobile phone operators to block adverts for customers across their networks are in doubt after the EU said they breached net neutrality legislation. Updated guidelines issued by the Body of European Regulators for Electronic Communications (Berec) this week state that advertising should not be blocked by networks, something that mobile operator Three has already trialled in the UK. - Guardian

Marks & Spencer is to be lobbied by MPs and fair pay campaigners after a petition against planned pay cuts gathered almost 90,000 signatures. Siobhain McDonagh MP, who raised the issue in parliament in June, will lead a delegation to present the Change.org petition at the retailer’s Marble Arch store in London on Thursday. Friends and family of M&S employees who are facing pay cuts will be supported by her fellow Labour MPs John Spellar, Carolyn Harris, Karen Buck and Nia Griffith as well as Change.org campaigners and student activists. - Guardian

Netflix is to produce its first British children’s programmes, as entertaining kids becomes a key battlefield in the intensifying pay-TV war with Amazon and Sky. The streaming service signed an agreement with the BBC and the German public service broadcaster ZDF to fund a new adaptation of The Worst Witch series of books for pre-teens by Jill Murphy. - Telegraph

Saudi Arabia’s first international debt sale has generated so much interest from Asian investors that the kingdom is weighing a full pipeline of bonds to follow a $15bn initial auction as early as October, according to bankers briefed on the sale. The clamour for Saudi sovereign debt, which could be the largest emerging market issuance in history, comes as record-low interest rates in mature economies has prompted investors to pour money into developing markets at a record pace, overlooking the risks in some of the world’s least stable economies. - Financial Times

Britain’s accountancy watchdog has hit PricewaterhouseCoopers with the second largest fine on record over failings in its audit of the stricken UK sub-prime lender Cattles nine years ago. The Financial Reporting Council handed PwC a £2.3 million fine, the second largest after Deloitte’s £3 million penalty over the collapse of MG Rover, and a severe reprimand for conduct that “fell significantly short of standards reasonably to be expected”. - The Times