Business news in brief
Belgium stymies EU-Canada trade pact at 11th hour
The European Union failed to finalise a massive free trade deal with Canada by a self-imposed deadline yesterday, with the tiny Belgian region that's holding up the pact saying its objections had not been sufficiently addressed. Paul Magnette, the president of Wallonia, spent hours talking with EU officials and Canadian international trade minister Chrystia Freeland to find a compromise by the end of a two-day summit in Brussels. Talks will continue as the deal needs unanimity within the EU, and Belgium in turn needs unanimity among its regions. The disagreement has pitted Wallonia, a region of 3.5m people, against the entire EU and Canada, with populations of more than 500m and 35m.
“Difficulties remain,” Mr Magnette said, adding that a key stumbling point was the politically sensitive issue of how multinational corporations could challenge states under the deal. Mr Magnette said the talks would continue, but suggested any deal might not be ready in time for Canadian Prime Minister Justin
Trudeau's visit to Brussels next Thursday. “I plead that, in an amicable way, we jointly postpone the EU-Canada summit and that we give ourselves time,” he said.
AP
Nintendo shares slide as new console underwhelms
Nintendo offered a sneak preview of a new gaming system that can be used both as a traditional console as well as a handheld device, but a lack of revolutionary features helped send its shares sliding 6 per cent. In a three-minute video teaser, the Kyoto-based games company unveiled Nintendo Switch, its first new gaming device in four years, which will launch in March 2017. It remained, however, silent on the key issue of pricing. Its success will be crucial as Nintendo still considers console gaming to be the centre of its business, even as casual gaming has moved to smartphones and tablets and as it last console, the Wii U, flopped badly. If sales disappoint, the company will come under even more pressure to embrace smartphone gaming, something it has only just begun to do.
“The trailer does not show the device being played in interesting new ways, gameplay looks to be surprisingly similar to gaming with any number of other consoles,” Takeshi Koyama, a senior analyst at Mizuho Securities, wrote in a report to clients. He added that many aspects of the new device remained unclear, such as whether the screen on the main unit is a touch screen or whether it can be synced up with other smart devices. The Legend of Zelda, Super Mario, and Splatoon are among the games lined up for the console, the trailer showed, while dozens of publishers such as Activision, Electronic Arts and Take-Two Interactive Software are developing games for the device.
Reuters
Burberry gains after talk of merger with Coach
Burberry’s shares rose the most in almost eight months after the Betaville financial blog said Coach is considering merging with the British trench coat maker. The US maker of purses and accessories has been working with financial advisers at Evercore for several weeks on a possible deal, the website said, citing two people familiar with the situation it didn’t name. Burberry shares traded 3 per cent higher at 1,494 pence in London after rising as much as 8.1 per cent. Representatives for Burberry and Coach declined to comment. “A merger of Coach and Burberry would primarily be a merger of problems,” Exane BNP Paribas analyst Luca Solca said in a note. “M&A history in luxury has shown that mergers don’t obviously help in regaining brand traction and desirability.”
Bloomberg
Booking slowdown hits IHG shares
Shares in Intercontinental Hotels Group (IHG) slumped yesterday, as a slowdown in European and American bookings knocked revenue growth. The company said revenue per available room, which is the sector's preferred measure, grew 1.3 per cent in the third quarter, compared to 2.5 per cent over the previous quarter. The news sent IHG shares near the bottom of the FTSE 100. IHG was trading lower by more than 1.5 per cent or 50p to 3175p.A number of IHG's American hotels are concentrated in oilproducing markets, which have been impacted by the slide in oil prices. Revenue per available room fell 7.3 per cent in those markets, compared to 2.5 per cent growth in the rest of the region.
PA
All day breakfasts help McDonalds beat sales estimates
McDonald's says sales rose 3.5 per cent in the third quarter, sending its shares 4 per cent higher yesterday. The world's biggest hamburger chain also reported better-than-expected earnings and revenue for the last
quarter. McDonald's launched all-day breakfasts a year ago to try and reverse falling sales and win back customers. Sales at US stores have increased in the last five quarters since then, but the growth is slowing. A 1.3 per cent sales increase in the US is slightly below the 1.8 per cent increase it reported in the previous quarter. The company is adding more items to its all-day breakfast menu and is testing a Happy Meal for kids with an egg and cheese McMuffin and other breakfast items.
AP
Sluggish economy puts brakes on GE
General Electric cut its 2016 forecast for organic sales growth as the industrial giant grapples with a sluggish global economy that’s crimping demand. Revenue on that basis will be flat to up 2 per cent this year, down from an earlier projection of 2 per cent to 4 per cent growth, GE said yesterday in a statement. The Boston-based company also narrowed its earnings outlook to $1.48 to $1.52 a share. It previously forecast $1.45 to $1.55. A “slow-growth, volatile environment” is generating headwinds, chief executive Jeffrey Immelt said in the statement. GE said foreign exchange effects will hurt earnings by as much as 6 cents a share this year. The revised forecast, following similar reductions by some peers, threatens to take the punch out of the industrial giant’s transformation. GE has shed finance and consumer-focused operations while investing in equipment manufacturing and building a complementary software business.
Bloomberg