Recently in Emerging Markets Category

I used to be so uncertain but now I am not quite so sure.
Forgive me for using this now well worn cliché again but it is one that on this occasion I consider near perfect to reason why sterling is being trashed. And trashed it is now drifting into territory that most self respecting currencies would seemingly fear to tread and that would provide big warning signs to their respective governments!

After intensive negotiations, JLR management and trade unions have failed to agree on a package of measures to cut costs.

Negotiations have been conducted, it appears, with considerable goodwill on both sides, and given the lack of public comment there seems to be genuine sadness that an agreement could not be reached. Indeed, neither side has spoken in public, and there seems no desire (so far) for industrial action from the unions.

Management had proposed back in September reductions in wages for new staff and an end to the defined pension scheme for new entrants, along with a lump sum payment to staff to postpone November 2010 pay talks to April 2011.

In return, workers were being offered an employment and volume guarantee, with the firm committing to grow UK production to 300,000 units a year by 2015, and to maintain 8,000 JLR hourly-paid, permanent employees until 2015.

Companies often write in to newspapers to put their point of view across on an issue that directly concerns them.

But it's very odd that the boss of Nestle UK, Peter Grimwood, felt it necessary to write into the Financial Times this week to stress Nestle's credentials in producing in the UK, in implied contrast to Kraft.

He wrote to stress that Nestle had retained the factory it bought in York in 1988 through its takeover of Rowntree, which produces Kit Kats (although please note that Smarties production was moved abroad). Kraft Foods, on the other hand, had shut down its Terry plant in York.

So what's this all about? The subtext - according to some commentators - is that Nestle is staking its claim to be a responsible corporate U.K. citizen that has preserved UK jobs and has invested in chocolate production in the UK. The implication is that Cadbury would be safe with them.

"Oh, divine chocolate!
They grind thee kneeling,
Beat thee with hands praying,
And drink thee with eyes to heaven"
Marco Antonio Orellana (18th century)

Cadbury this morning issued its call to arms to its shareholders, increasing its growth and profitability targets while promising enhanced shareholder returns in an attempt to fend off Kraft's £10 billion hostile takeover bid.

Roger Carr, chairman of Cadbury, said in the defence document that "Kraft is trying to buy Cadbury on the cheap to provide much needed growth to their unattractive low-growth conglomerate business model. Don't let Kraft steal your company with its derisory offer."

As predicted in yesterday's blog, Cadbury is promising organic revenue growth of between 5 and % and profit margins of 16 to 18 % by 2013. It also stated that it was aiming at double-digit growth in dividends from next year onwards. The message to shareholders was clear - stick with us.

British chocolate icon Cadbury will tomorrow launch a robust defence of it independence in its appeal to shareholders to stay loyal and reject a hostile £10 billion takeover bid by US food conglomerate Kraft.

Cadbury has steadfastly rejected Kraft's hostile cash and shares offer, which values Cadbury shares at around 720p, claiming that the offer does not properly value Cadbury's strong growth potential. And it is thought that unless Kraft increases its offer to more than 800p a share, Cadbury won't enter takeover talks.

In so doing, Cadbury can point to rapid earnings growth ahead of stock market expectations, a strong presence in emerging markets such as India, great brand value and its ethical and environmental credentials.

Analysts believe that Cadbury will tomorrow release a trading update and will also increase its target profit margin in percentage terms from the mid-teens by 2011 to the high-teens by 2014-15.

Cadbury - the iconic British chocolate firm which began life here in Birmingham - is now the target of a hostile takeover attempt by the US food giant Kraft. The latter posted its official offer document to Cadbury shareholders last Friday, thereby triggering a 60 day £9.8 billion hostile takeover battle.

The US chocolate-to-cheese-slices conglomerate has offered 300p in cash and 0.2589 new Kraft shares for every share in Cadbury. This values Cadbury at 715p a share, compared with Cadbury's closing share price on Friday on the London Stock Exchange of 795p.

When Kraft first went public with its proposal back in September, its offer valued Cadbury at 745p per share. But Kraft's share price has dropped by around 5.4% over the last three months on the back of disappointing figures, trading at $26.57 in New York on Friday (Kraft's shares are down by 3.91% over the last year, down by 22.45% over the last 5 years and down by 13.17% over the last 10 years). The firm is - as Cadbury's management has rightly argued, a "slow growth conglomerate".

After being clobbered by the double whammy of recession and credit crunch, it's wonderful to see JLR back in the black (in operating terms at least) with some excellent results.

Indeed, so much so that it will be fun to watch some of the teenage scribblers in the London business press digest this after roundly slagging off the firm earlier this year (they should get out more and understand manufacturing better).

The Tata-owned but Midlands based firm has made an operating profit after aggressive cost cutting and a rise in sales. The latter has been boosted by improvements in markets like China and the UK, and also through sheer hard work by the firm.

Its 2010 range of revamped Land Rover, Range Rover Sport and Discovery 4 is doing well. Meanwhile the stunning Jaguar XF takes on all-comers and the real benefits of the XJ are yet to come.

After six month of haggling, the board of GM gets its fourth chance today to decide on the fate of GM Europe (including Opel and Vauxhall).

The board itself was created after the firm left Chapter 11 bankruptcy back in July, and will be asked by GM's management team to OK a letter drafted to address concerns raised by the European Commission over the sale of a 55% stake to Magna.

So far the board has - reluctantly at times it seems - backed management's decision to sell to Magna; the question is will it continue to do so?

Probably, is the answer, although the board may yet pull a rabbit out of the hat and either keep the firm or find another buyer. That's unlikely, though, for a number of reasons, not least being the fact that GM probably can't afford to keep Opel.

Cadbury will be under the spotlight this Wednesday when the confectionery firm unveils its latest trading results. These will be critical in its fight to remain independent and avoid a Kraft takeover. The latter has kept its corporate head down after announcing its 745p a share offer last month.

Kraft has been waiting for this Wednesday's figures to see what to do next. It might not reveal its hand straight away, but may well wait until after its own trading update on November 3; that would give the US giant a few days to put in a formal offer before the Takeover Panel's deadline of November 9.

Last week a JP Morgan research note suggested that Cadbury's sales were below the company's target of 4-6 % revenue growth. We'll see. As the Daily Telegraph reports here, Cadbury has a long tradition of exceeding expectations when it announces its results. The JP Morgan note may actually turn out to quite useful for the firm, lowering City expectations ahead of the trading figures.

Here we go again. The assets of Birmingham van maker LDV have been bought by the firm Eco Concepts Ltd. This is owned by Dr Qu Li, who has close links with Shanghai Auto, the owner of MG Cars.

Let's be clear. In effect, this is a sad day for the region. Jobs, capacity and potentially R&D will be lost forever. Yet again a major local producer has gone under and will be shifted east.