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RSA up on week as Zurich deadline looms; BoE to cut rates?

RSA shares
RSA – click to enlarge (source: LSE)

Shares in RSA are up by about 9% on the week ahead of Tuesday’s deadline for Zurich to decide whether to launch a £5.5 billion bid for the company.

The Swiss company was reported earlier this month to have arranged facilities to finance a deal with Morgan Stanley, Citigroup, HSBC Holdings, Deutsche Bank, UBS and Lloyds Banking Group.

RSA, whose chief executive if former RBS boss Stephen Hester, subsequently sold operations in Latin America to Suramericana for £403m in a move that was said to have the full support of Zurich. It would help it further in putting a deal together at about 550p a share which RSA’s board has said it could support.

The Bank of England chief economist Andy Haldane said in a speech that interest rates may need to be cut rather than increased in order to stimulate growth.

Mr Haldane’s suggestion that monetary policy should be loosened rather than tightened sets him on a different track to his fellow monetary policy committee members, including his boss Mark Carney who has indicated that rates are due to rise at some stage.

Last week the MPC voted 8-1 to hold rates at their record low level of 0.5%.

Worldpay, the payment processing company, has confirmed it plans to float on the London market and will aim to raise £890m.

The private-equity owned Worldpay will come to market after rejecting a £6.6 billion offer from France’s Ingenico, backed by BNP Paribas, JPMorgan and Societe Generale.

It is likely to set a benchmark for valuing the company on the market. There was no price set in this morning’s announcement.

David Potts,  chief executive of supermarket chain Morrisons, has spent half a million pounds buying shares in the group in a sign of confidence in his ability to turn it around.

Yesterday he bought 314,881 shares at 158.8p. This is in addition to the £1 million he spent buying 508,000 shares during his first week in the job in March.

Finance director Trevor Strain also took advantage of weakness in the share price after the interim results to buy 58,453 shares at 169.8p.

A new ratings company Crowdrating has given a less than glowing report on BrewDog, praising its good management and decent products, but arguing that its potentially record-breaking crowdfunding scheme is for customers, not investors.

The financial details available as part of the controversial Scottish brewer’s £25m campaign is “disappointingly light”, says Crowdrating.

For this reason Crowdrating, which launched this week, said it was not able to evaluate BrewDog’s investment proposition.

“It is clear that the ‘Equity for Punks IV’ offer is aimed at their customers rather than new investors,” Crowdrating said.

A “fat finger” trade was said to have contributed to a sharp fall in London shares. The FTSE100 closed down 83 points at 6,104. Traders also sold following the Fed’s decision to hold US interest rates because of a gloomier world economic outlook.

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