Sunday newspaper round-up: OBR, Saudi Aramco, Tesco, BAT, bonds vigilantes

The Saudi Arabian embassy in London has been abuzz with senior bankers renewing their visas in recent weeks, the Sunday Telegraph reported, as the City prepares for Saudi Aramco to float in a deal the size of which the world has never seen before. Banks have been rushing out to Riyadh to pitch for a prestigious role advising King Salman and Prince Muhammad bin Salman on the $2trn initial public offer that is already generating the kind of excitement last seen in the Square Mile with the near-£40bn flotation of Glencore five years ago.

The ferocious bond market sell-off in the wake of Donald Trump's election victory has not only revived yields and talks of an end to the three-decade bull run, but also, said the Sunday Telegraph, it has spurred speculation about the return of “bond vigilante” investors who make their displeasure about fiscal and monetary policies known by pushing up bond yields, just as they did when they essentially blocked Bill Clinton's plans to boost spending in the early 1990s. While borrowing costs remain very low, if the sell-off continues unabated, higher yields could act as a restraint on Trump’s spending plans.

Tesco is in talks with property developer Apex Airspace over plans to build hundreds of flats on top of its largest urban supermarkets as a means of raising cash to fund its turnaround and capitalise on burgeoning UK housing demand. The Tesco mini-villages plan could raise £1.5bn, with just the sale of the 'air rights' above its stores generating close to £400m, with an other £1bn from offloading land and excess space in its stores, the Sunday Telegraph said.

The Government is planning radical changes to the business rates regime which could cost firms billions of pounds by blocking them from appealing against their rates bills even when they are known to be wrong, the Mail on Sunday reported. The overhaul of the system has been condemned by a consortium of business groups representing hundreds of thousands of firms which predicts it will result in companies being forced to close.

FTSE 100 tobacco giant British American Tobacco’s potential £40bn takeover bid for US rival Reynolds could be flicked into the ashtray as a result of Donald Trump's election victory, according to City sources cited in the Sunday Telegraph. Many analysts have assumed BAT will seal the merger by making an improved offer, but the paper's sources said the drop in consumer staples stocks since the US election has cast serious doubts on the deal.

Theresa May is understood to have watered down her plan to place workers on company boards, in return for a renewed push on additional curbs on executive pay. After strong objections from some of the UK's largest companies over adding employee representation at the highest level, the Sunday Times reported that the Prime Minister has chosen instead to redirect the focus of the plans with the introduction of legally binding annual shareholder votes on director remuneration.

The government want to introduce competition to weaken Network Rail’s grip on the railways and force it to up its performance. The transport secretary, Chris Grayling, will launch a new wave of railway reform in a speech before Christmas, Sunday Times sources said.

Workers in the 'gig economy' face poverty in retirement unless the government acts to change its flagship pension policy and makes it easier for them to save, pensions experts have warned. The Observer said that while pensions minister Richard Harrington has indicated he is mulling ways of including self-employed workers into the flagship auto-enrolment scheme, he has not confirmed whether this will be part of a review planned for next year.

The Serious Fraud Office plans to request on Monday that an employment tribunal for the allegedly unfair dismissal of a former senior banker at Barclays should be held in private. Several newspapers, including the Guardian and Times, are challenging the reporting restrictions as the SFO continues its investigation into Barclays’ emergency cash call during the 2008 banking crisis that prevented it from a state bailout.

Rio Tinto’s former chief executives may also get drawn in to the scandal the erupted over its Guinea dealings in recent weeks, the Sunday Times said. Both Tom Albanese, who ran Rio from 2007 to 2013, and successor Sam Walsh appeared to sign off on the payments that have led to the dismissal of the miner's head of energy and minerals last week.

If Royal Dutch Shell loses its four-day High Court battle over alleged environmental damage from its oil pipelines in Nigeria, it could open the floodgates to more multinationals being sued in London courts. The FTSE 100 oil behemoth is being sued by two Nigerian communities seeking close to £100m in compensation after suffering repeated oil spills they claim came from SPDC pipelines in the Niger Delta, the Sunday Telegraph noted.

The Premier League’s biggest clubs are highly vulnerable to any potential drop-off in the value of television rights deals, as the “illusion” of wealth fostered on the back of the deals is a false economic reality, according to a report on the football industry. Based on the economic losses from subtracting capital charges from net operating profit after tax, seven of England’s biggest clubs were calculated to have destroyed a total of £1.1bn in the last seven years, said the Sunday Telegraph, citing consultancy Vysyble.

Supermarket group Morrisons will cut the price of petrol by 10p to below £1 a litre on Monday as the industry's seasonal price war begins early. From Monday, Morrisons customers spending more than £50 in-store will be given a voucher to let them fill their cars with unleaded petrol for 99.9p a litre.

Drug device designer Vectura may be receive a sales boost from changes in treatment guidelines for chronic obstructive pulmonary disease (COPD). The new guidelines favour types of inhaler like the Ultibro that Vectura has developed in partnership with Swiss drugs giant Novartis, reported the Sunday Telegraph.

The Trans-Pacific Partnership has been felt to be on the rocks, though renaming it the “Trump Pacific Partnership” to satisfy the US president-elect could help revive the threatened pact, according to New Zealand prime minister John Key. The Observer reported that the Kiwi leader suggested “cosmetic changes” could be made to TTP to keep the US on board under Donald Trump, who has attacked free trade deals.

Paula Vennells, the no-nonsense boss of the Post Office, refuses to be cowed by the threat of strikes and promises the centuries old British institution is set to report its first profit in decades, the Mail on Sunday reported. On top of the current 11,600 network, Vennells envisages 2,000 more openings, as a result of the growth connect to a ‘universal access’ deal due to be struck early next year that will see the Post Office take on more basic banking services on behalf of the high street lenders who are eager to scale back on costly branches themselves.

A trio of US and Canadian private equity giants are locked in a £1.4bn battle for Parkdean Resorts, one of Britain’s biggest holiday park operators, the Sunday Times reported. Onex, Advent International and Centerbridge are in detailed talks with Parkdean as they hope to cash in on a boom in “staycations”.

The former boss of Rolls-Royce’s aero-engine arm is being lined up as the new chief executive of Meggitt amid speculation over a takeover of the aircraft parts maker. Tony Wood was last week named chief operating officer of the FTSE 250 company, whose parts range from brakes for jumbo jets to cooling gear for F-16 fighter planes, and he is in pole position to replace current chief executive, Stephen Young, within a year or two, the Sunday Times said.

Solicitors who failed to warn homeowners of soaring ground rents on leasehold properties face a spree of legal claims for professional negligence, according to the Guardian. Many homebuyers have been unaware that the ground rent on new-build leasehold properties they have bought can escalate dramatically in future years, following the introduction of new clauses in which it doubles every decade.

TSB has tabled a bid for a £16bn loan portfolio that was previously part of failed mortgage lender Bradford & Bingley. The challenger bank has staged a last-ditch attempt to see off rival offers from American private equity firms Cerberus and Blackstone, the Sunday Times said.

President-elect Donald Trump is nothing if not a tough-talking New Yorker, but his blunt speaking could lead to chaos on the foreign exchange markets, the Mail on Sunday reported. To gain an edge, forex traders use algorithms to instruct computers to buy or sell automatically depending on the language politicians use in news reports. But these machines could over-react to Trump’s distinctive way with a Tweet, experts have said.