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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Sunday newspaper round-up: BT Group, HSBC, IAG

(Sharecast News) - Kwasi Kwarteng, the Business Secretary, may be set to stop billionaire Patrick Drahi from taking over BT through new national security laws and from building up his stake in telecommunications group. Government may also block Drahi from taking a seat on the board. The current ban under takeover rules on any attempt by the investor to launch a bid is set to expire over the coming week. The Government has until the beginning of July to decide whether it wishes to act or not. - The Financial Mail on Sunday HSBC would be able to generate as much as $26.5bn (£22bn) of extra returns for its shareholders should it opt to spin-off its Asian unit, research used by angry investor Ping An to put further pressure on the lender to break itself up. Analysts have cast doubt on the feasibility of Ping An's proposal since it was first table in late April. According to the research, the three options are a full spin-off of the Asian business, a separate listing for a quarter of the unit or an IPO of a quarter of the Hong Kong retail business. - Sunday Times

British Airways owner IAG is facing opposition from advisors to pension funds and asset managers, Glass Lewis, Minerva Analytics and Institutional Shareholder Services, to its plans to boost chief executive officer Luis Gallego's share awards. All three have labelled the package as "excessive" and have urged shareholders to vote against it. Gallego did take a "significant" salary cut in 2021 but with the new package he stands to make £4,682,500 if he hits all his targets for 2022. Gallego had also foregone his bonuses for 2020-21, alongside voluntary salary cuts for both those years. His salary, as a ratio of that of the average employee, is 20, one of the lowest in the FTSE 100. - Financial Mail on Sunday

IAG boss, Luis Gallego, responded to criticism of the industry for the chaos at airports over the Jubilee weekend. "They have said the problem was that we overbooked and didn't forecast demand, but forecasting demand is one thing we as airlines know how to do [...] The more difficult thing has been to forecast what the government is going to do," he argued. Ahead of Easter, all restrictions on travel were suddenly dropped, but before that the list of countries from which travel to the UK was allowed had changed on 10 or 11 occasions in a few months. During the previous week, his predecessor at the post, Willie Walsh, had condemned what he termed were "idiot" politicians for saying airlines should have ramped up capacity sooner. - Sunday Times

The European Union is facing a backlash from lenders on Wall Street because of its plans to siphon jobs from the City after Brexit failed to produce that result. The bosses of US banks will express their concerns to the European Central Bank, which has pressured lenders to move jobs, in coming months. Following a review by the ECB, many institutions will need to augment their euro area operations or face penalties. The ECB has also warned that what it terms "empty shell" structures are a "very real concern". - Sunday Telegraph

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(Sharecast News) - A development company that sells off land no longer needed by Thames Water has paid out a £14m dividend despite warnings that it could become engulfed by the water group's financial woes. Accounts filed at Companies House show Kennet Properties paid out a £14.5m dividend in the year to 31 March 2023 despite the difficulties faced by the wider group, which is facing going into administration. - Guardian
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(Sharecast News) - Asset manager Redwheel told regulators they should reduce the UK postal service's legal obligations. The move followed a failed buyout attempt by Daniel Kretinsky for International Distributions Services, its parent company. The billionaire investor was said to be evaluating a possible improved bid. The company meanwhile has petitioned Ofcom to let it cut the number of days per week during which it must deliver second-class mail from six to two or three. That would save the company £300m and see it shrink its workforce by 1,000. According to Redwheel, as first reported by the Sunday Times, the enforced costs of its legal obligations left the company "vulnerable to corporate predators". - Guardian
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(Sharecast News) - "Misleading" and "inconsistent" labels make it hard for shoppers to know where their food comes from, the consumer champion Which? has said, as it found supermarket chains were selling products with "meaningless" statements on their packaging. Retailers must supply the "country of origin" for specific foods including fresh fruit and vegetables, unprocessed meats, fish, wine and olive oil but the rules do not generally apply to processed meat or frozen or processed fruit and vegetables. - Guardian

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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