Scotland votes ‘NO’ – a popular decision for the markets
The news that Scotland has voted against independence from the rest of the United Kingdom has been met with positive responses from businesses and the world markets. With the result being announced in the early hours of the morning European markets reacted with sharp gains as relief kicked in and banks and other financial institutions were among the biggest gains on the UK markets. The 55 per cent majority vote means the UK will stay together although politicians in London will now have to honor promises made during campaigning which will hand more devolved power to the Scottish parliament. These powers are likely to include the ability to set tax rates, although the details are yet to be formalised. A discussion has now begun about further devolved powers for the administrations in Wales and Northern Ireland and the possibility of a state government for England to sit below the UK wide parliament. The pound has risen against the dollar and the Euro this morning and gold, which some Scots had been buying to mitigate a yes vote, has edged lower. US stock futures are higher.
Alibaba IPO breaks records
Yesterday’s announcement that the Alibaba IPO will start at $68 means that its debut on the New York Stock Exchange this morning will be the largest US listed IPO ever. The price means a valuation of $168 billion, more than eBay or Amazon. Investors are tipped to see shares rise to above $80 this morning. Analysts say that after the initial excitement, Alibaba will need to prove what it can really do, not just in China but in the US too, or investors will quickly become disillusioned. Asian markets have been trading higher today on anticipation of the IPO and were also buoyed by the Scottish vote decision.
Ford cuts production in Europe
After GM’s announcement that it is scaling back production of its Opel range in Russia, Ford has this morning said that its German factory will be cutting production due to weaker demand in some key markets. Although the passenger car market rose 1.8 per cent in August, it fell in three of Ford’s major markets forcing the company to stop production of some models for 11 days over the next two months.
China fines drug company and sentences executives to jail
In the latest example of China getting tough on western firms that break the rules, British drug company GlaxoSmithkline has been fined $490 million for ‘bribing non-government personnel’, mostly doctors and health institutions. The closed hearing also sentenced the company’s chief of operations in China and other executives to between two and four years in jail, although the sentences were suspended and the executives will be deported. Read the full story.