Companies and markets
Royal Mail faces disruption; Asia rises as China cuts tariffs
Postal deliveries may be hit
Royal Mail is facing further disruption after the CWU union said it will ballot members for strike action.
In November the company won its legal battle to prevent a postal strike over Christmas.
Royal Mail said today: “We are disappointed that the CWU has issued a timeline for a ballot of its members for industrial action.
“We stand ready to invest £1.8bn to modernise and grow in the UK. We want to reach agreement with CWU; but we cannot afford to delay this essential transformation any longer.”
It said trading for the nine months ended 29 December parcels volume was up 3.7% and letters revenue was down 1.5%.
John Moore, senior investment manager at Brewin Dolphin, said: “An increase to group revenue, including a rise in revenues at its UK parcels and letters business, is good news for Royal Mail.
“However, it is undoubtedly tempered by the highly cautious tone management has struck in its statement. Industrial relations and political issues aside, the UK business appears to be taking better shape as the results of its transformation come through and GLS remains a bright spot.
“That said, an indication of what Royal Mail’s future dividend policy will be – along with capital expenditure and expansion plans – is missing and investors will be watching for this in forthcoming updates.”
China to cut tariffs
Stock markets is Asia rose after China said it would cut tariffs on more than 1,700 goods imported from the US.
It will halve additional tariffs levied against 1,717 products.
Beijing’s move follows last month’s signing of a Phase 1 trade deal that brought a truce to the bruising trade war.
It was also seen by some analysts as an attempt to boost confidence amid the devastating coronavirus outbreak.
Japan’s benchmark Nikkei 225 was up 2.9%, the Hang Seng in Hong Kong rose by 2.7%, and China’s Shanghai Composite gained 1.3%.
China’s finance ministry said in a statement that tariff reductions for the relevant goods, which were initially announced on 1 September, will take effect from 14 February.