Time to wrap up.

A major City investor has said it is divesting from mining giant Glencore and TK Maxx owner TJX over environmental concerns.

Legal & General Investment Management (LGIM) announced it is adding Glencore and retailer TJX to its divestment list.

The move will affect LGIM Future World fund range, LGIM’s ESG fund ranges, and all defined contribution auto-enrolment default funds in L&G Workplace Pensions and the L&G Mastertrust.

Michelle Scrimgeour, CEO of LGIM, said:

“With the world recently experiencing its first annual average temperature overshoot of 1.5˚C, the message is clear: there is much more to do to mitigate climate change, and we need to act now.

“I have been encouraged by progress over the last 12 months, with many of the companies with which we have engaged making significant strides in important areas. However, it is clear that the pace of the transition is neither smooth enough nor fast enough. It is not the role of the asset management industry alone to tackle climate change: this is a whole of system transition, the pace of which is influenced by global public policy, regulatory standards and the nature of energy demand. Radical collaboration is therefore key – to drive aligned action and decarbonisation on a global scale.”

Optimism is growing that the global economy will pull off a soft landing, as central banks move towards cutting interest rates.

But UK retailers suffered a bump this month, with sales weaker than in June 2023.

In the currency markets, the Japanese yen has hit a 38-year low against the US dollar, prompting concerns in Toyko.

German engineering group Robert Bosch is reportedly weighing a bid for U.S. appliances manufacturer Whirlpool.

Sales of new US single-family homes dropped to a six-month low last month,new data from the Commerce Department shows.

New home sales declined 11.3% to a seasonally adjusted annual rate of 619,000 units last month, the lowest level since November. This indicates that high mortgage rates are hurting demand, weakening the housing market.

April’s sales data was revised higher, though, to show 698,000 units were sold (on an annualised basis), not the 634,000 units first reported.

Japan’s currency chief has said the government is watching the yen with a high level of urgency, as the Japanese currency hits its lowest level since 1986 against the US dollar.

Vice Finance Minister Masato Kanda told reporters that recent currency moves were rapid and one-sided, saying:

“I have serious concern about the recent rapid weakening of the yen and we are closely monitoring market trends with a high sense of urgency.

“We will take necessary actions against any excessive movements,.

Kanda’s comments came as the yen fell, to 160 yen to the US dollar.

The yen has weakened in recent months, as investors have lost confidence that the Bank of Japan will be able to raise interest rates, due to Japan’s weak economy.

Today’s weakness puts pressure on Tokyo to intervene to strenthen the yen, by selling dollars.

Over on Wall Street, shares in Rivian have surged after Volkswagen agreed to invest up to $5bn in the Amazon-backed electric carmaker.

Volkswagen will initially invest $1bn as part of a partnership with Rivian to form a new, equally controlled joint venture to share electric vehicle architecture and software, the companies said on Tuesday.

The deal is a significant win for Rivian, which is grappling with steep losses as it attempts to ramp up production of its electric trucks and sport utility vehicles.

While EV startups have been dealing with a slowdown in demand amid high interest rates and dwindling cash, traditional automakers have struggled to build battery-powered vehicles and advanced software.

Shares in Rivian’s stock have jumped by 30% in early New York trading, from $11.96 to $15.47, following yesterday’s announcement.

The global economy remain on track for a soft landing, as central banks start to lower interest rates followin recent falls in inflation.

So says credit rating agency S&P Global, in its latest global economic update.

S&P Global is still optimistic that policymakers will pull off a ‘soft landing’ – bringing down inflation without triggering a recession.

It explains:

GDP growth has moderated in most economies (the U.S. remains an outlier) and recessions have been avoided.

Demand pressures have come down, bringing inflation back toward target. Services demand and employment remain robust, moderating the speed of decline, and bolstering the probability of a soft landing.

S&P Global argues that central banks have reached “the beginning of the end-game”, as some – such as the Bank of Canada, the Swiss National Bank and the European Central Bank – have recently started cutting interest rates in response to falling inflation.

Although inflation has been stickier than hoped, S&P Global argues this is “just the flipside” of resilient spending and strong jobs markets, and compatible with a soft landing.

They say:

A recession with a sharp drop in employment and labor demand would likely produce a faster decline in inflation, but is that what we really want?

Back in the UK retail sector, the former head of BHS is digesting a court ruling that he must pay at least £50m to cover losses racked up before its collapse.

Yeterday, a judge found that Dominic Chappell had sought to “plunder” the UK department store chain, which collapsed in 2016.

Mr Justice Leech said Chappell had agreed to purchase BHS without “any prospect” of obtaining working capital to meet its day-to-day financial needs.

He then took the “opportunity to plunder the BHS Group as and when he could”, the judge explained.

The Financial Times has more details:

At a hearing on Tuesday, the judge said Chappell “should make the payments” set out in a draft order.

A copy of the order, seen by the Financial Times, shows the sums include £21.5m for a wrongful trading claim, £17.5m for breach of fiduciary duty, plus costs and interest, totalling at least £50m.

Back in 2020, Chappell was been sentenced to six years in jail for evading tax on the £2.2m income he received from his doomed takeover of BHS.

Takeover drama is, ahem, swirling in the kitchen electricals sector, with a report that German engineering group Robert Bosch is weighing a bid for U.S. appliances manufacturer Whirlpool.

According to Reuters, Bosch has been talking to potential advisers about the possibility of making an offer for Whirlpool, which has a market capitalisation of about $4.8bn.

Whirlpool makes washing machines, driers, fridges, freezers, ovens, microwaves, cooktops, cooking hobs, hoods and dishwashers.

The report has got Wall Street in a spin – shares in Whirlpool have jumped 18% in pre-market trading.

Just in: UK retail sales have fallen faster than expected this month, as the sector went into reverse after May’s modest recovery.

The CBI’s latest healthcheck on UK retailers, just released, found that retail sales volumes fell in the year to June, following a modest recovery in May.

The CBI’s retail sales volume gauge fell to -24% this month, from +8% in May, showing that a majority of retailers reported a drop in volumes compared to the previous year.

UK retailers also expect sales to be weaker than usual next month, following a drop in orders.

The CBI explains:

• Sales were reported to be well below “average” for the time of year (-39% from +2% in May). Sales volumes are expected to remain below seasonal norms in July, albeit to a lesser extent (-29%).

• Orders placed upon suppliers fell moderately in the year to June at a broadly similar pace to last month (-14% from -11% in May). Retailers expect the cutback in orders to continue next month (-16%).

Alpesh Paleja, CBI interim deputy chief economist, says:

“Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month. Unseasonably cold weather in June may have played a role, but it’s notable that internet retail sales fell sharply in our survey, too.

Consumer fundamentals are improving, with inflation now at the Bank of England’s 2% target and real incomes rising. But it’s clear that households are still struggling with the legacies of the cost-of-living crisis, with the level of prices still historically high in some areas.

With consumer demand still on shaky ground, an incoming government can help business by ensuring that the UK is the most attractive place to start, grow and run a business. This will require bold action such as delivering a holistic cross-economy solution to the UK’s overly complex business rates system, which is a particular burden for retailers. This would help to alleviate the burden of higher costs.”

Legal & General Investment Management has also decided to divest its stake in US retail chain TJX, the parent company of UK chain TK Maxx.

LGIM says TJX, like Glencore, failed to sufficiently address concerns raised in recent years about its environmental impact.

LGIM says it concerned over TJX’s lack of a zero-deforestation policy and insufficient disclosure of “material Scope 3 emissions” that fail to account for its material value chains’ emissions.

Today’s decisions will raise the number of divestments through LGIM’s Climate Impact Pledge to 16.

LGIM says this “stewardship” of its investments is a critical lever in the global push to reach net zero.

Stephen Beer, senior manager sustainability and responsible investment at Legal & General Investment Management, adds:

We find that as time progresses, our conversations with companies can become harder-edged; not necessarily more difficult, but more focused. We use tools such as voting and divestment to encourage companies to meet our expectations on net-zero, while also sending a clear signal to the wider market. While divestment is one of the many stewardship tools we use as a mechanism for driving change, we see it as a last resort and by no means the last stage of engagement. Our engagement will continue, and where companies make sufficient progress, they will be reinstated.

Ultimately, whilst we are focused on a net-zero objective, there is no one size fits all approach; our engagement approach is nuanced, it is about listening to companies and understanding the challenges they face, as well as the potential opportunities ahead, in accelerating the pace of the transition at a global scale.”

LGIM took its decision to divest from Glencore after conducting its latest Climate Impact Pledge (CIP).

This is LGIM’s annual engagement programme to raise market standards and encourage companies to play their part in achieving the goals of the Paris Agreement.

Michelle Scrimgeour, CEO of LGIM, says:

“With the world recently experiencing its first annual average temperature overshoot of 1.5˚C, the message is clear: there is much more to do to mitigate climate change, and we need to act now.

“I have been encouraged by progress over the last 12 months, with many of the companies with which we have engaged making significant strides in important areas. However, it is clear that the pace of the transition is neither smooth enough nor fast enough. It is not the role of the asset management industry alone to tackle climate change: this is a whole of system transition, the pace of which is influenced by global public policy, regulatory standards and the nature of energy demand. Radical collaboration is therefore key – to drive aligned action and decarbonisation on a global scale.”

Investment management giant Legal & General’s ESG (environmental, social and governance) funds, and some of its pension funds, are to divest from Glencore due to concerns over its coal production.

LGIM warns this morning that it believes companies need to do more to play their part in efforts to mitigate climate change risks.

UPDATE: It will divest Glencore shares held in its Future World fund range, LGIM’s ESG fund ranges, and all defined contribution (DC) auto-enrolment default funds in L&G Workplace Pensions and the L&G Mastertrust. The decision applies to funds covering around £176bn in assets under management.

Glencore, which is the world’s biggest coal shipper, is “phasing down” its coal portfolio, as part of a plan to only achieve net zero emissions by the middle of the century.

That means some existing coalmines would run until 2050, despite concerns about the pollution caused by thermal coal.

Legal & General says:

“LGIM remains concerned that Glencore has not disclosed plans for thermal coal production that are aligned with a net zero pathway.”

LGIM are the 22nd largest Glencore investor overall, according to data from LSEG, with 0.44% of the company’s shares.

De Beers has warned that the recovery in diamond demand will be “protracted”, after reporting a drop in diamond sales this morning.

Rough diamond sales value for De Beers’ fifth sales cycle of 2024 (the month to 25 June) have dropped to $315m, compared with $456m a year ago.

Sales were also lower than in the fourth sales cycle, from 18 April to 22 May, when they were worth $383m.

Al Cook, CEO of De Beers, says:

“The northern summer is generally a quieter period for rough diamond sales, and this was reflected in our cycle 5 sales.

The recent annual JCK jewellery show in Las Vegas confirmed a resurgence in retailers’ interest in natural diamonds in the United States but ongoing economic growth challenges in China mean we continue to expect a protracted U-shaped recovery in demand.”

De Beer’s owner, Anglo American, is planning to sell the diamond miner as part of a corporate overhaul, after it fought off a £34bn takeover approach from rival BHP Group.

Online electrical retailer AO World has posted a surge in profits this morning.

AO, which sells televisions, computers and kitchen white goods over the internet, grew its operating profits by 192% in the year to 31 March.

It reports that tumble dryers were one of the biggest sellers during the winter, as the UK experienced the 8th wettest winter on record

TV sales are also booming this month, up 54% compared with June 2023, as football fans upgrade in time for Euro 2024 (although England fans may consider returning their tellies after last night’s efforts).

AO World, like Deliveroo, has been something of a stock market disappointment. It floated at 285p a decade ago, but sank to just 50p by early 2020 – before the Covid-19 pandemic sparked a surge of demand, driving shares over £4.

They’re trading at 117p, up 3.5% this morning.

AO’s founder and chief executive, John Roberts, says:

“We have made good progress on our profit performance in FY24, which is a testament to the success of our strategic pivot to focusing on profit and cash generation.

“We are now a much simpler, more efficient business and are performing better than ever for customers, with excellent and sustainable unit economics.

“Our focus now is on delivering profitable top line growth with an ambition for double digit revenue growth in FY25.

In the transport world, British Airways has apologised to passengers after its baggage system at Heathrow Airport suffered a “temporary technical fault”.

The disruption meant that many travellers on flights departing from the west London airport did not have their checked-in luggage put on the plane, while some of those on arriving flights faced long delays to retrieve their baggage.

According to the PA news agency, the issue began yesterday afternoon and was resolved towards the end of the day.

A British Airways spokesman said:

“We’ve apologised to those customers who were unable to travel with their luggage due to a temporary technical fault that was outside of our control.

“This issue has been resolved and we’ve brought in additional colleagues to support our teams in getting bags back to our customers as quickly as possible.”

Heathrow says no other airline was affected:

Several passengers have reported arriving at their destinations without their luggage:

Daniel Křetínský’s takeover offer for Royal Mail will be lucrative for the City.

Sky News report that advisers working on the deal are in line for a fee bonanza worth more than £130m.

Banks which will share in the pot include Barclays, Goldman Sachs, JP Morgan, BNP Paribas and Citigroup, who are all named as providing advice for either Křetínský or for International Distribution Services.

Czech billionaire Daniel Křetínský’s bid to take control of Royal Mail is taking a step forwards today.

Křetínský’s investment group has published the formal offer for International Distribution Services (IDS), Royal Mail’s parent company, online this morning, and send it by post.

UPDATED: This means around 100,000 retail investors, including former and current Royal Mail staff, must decide whether to accept Křetínský’s £3.57bn takeover offer. Asset managers who also own a stake in IDS will have the same decision to make.

Staff were given shares, totalling 10% of the company, when Royal Mail floated on the stock market a decade ago. Some will have sold since, but staff still hold around 5.5% of its equity (Křetínský is already the largest shareholder, with 27.5%).

Křetínský is offering to pay 370p a share (360p cash plus 10p of dividends) for Royal Mail; a premium on the 220p-ish levels they traded at in April, before he made his first approach.

Royal Mail shares closed at 315p last night, a sign that the City isn’t certain that Křetínský will succeed in his bid.

He does have the support of IDS’s board, which agreed to various terms and conditions pegged to Křetínský’s latest offer a month ago.

But, the deal will also be reviewed under the UK’s National Security and Investment Act.

Earlier this month, business secretary Kemi Badenoch was pressed to question Křetínský on his business links, after the Guardian raised questions about a series of controversial global property deals connected to the Czech billionaire’s longtime business partners.

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

Deliveroo has become the latest UK company to catch the eye of an overseas suitor.

According to Reuters, US meal delivery group Doordash flagged an interest in a takeover of Deliveroo last month.

San Francisco-based Doordash approached Deliveroo, but talks are set to have floundered over a disagreement on valuation.

There are no talks ongoing, one person close to the issue says.

After booming in the pandemic, food delivery apps are now facing a tougher macroeconomic environment as the cost of living squeeze has hit customers.

The Financial Times calculated a month ago that online food delivery groups in Europe and the US have racked up more than $20bn (£15.7bn) in combined operating losses since they floated on stock markets in recent years.

That includes operating losses of $777m for Deliveroo since 2021 when it listed in London.

Investors have not been terribly impressed. Deliveroo floated at 390p per share in April 2021, but was dubbed ‘Flopperoo’ after tumbling 26% on its first day.

By October 2022 they had sunk to 73p, but have rallied back to around 127p last night.

That values Deliveroo at just over £2bn, notably lower than its £7.6bn value when it floated.

In March, Deliveroo forecast it would grow its sales (gross transaction value) by 5-9%, and achieve positive free cash flow this year; DoorDash, which is worth $45bn, may have seen a profitable opportunity in the UK….

The agenda

• 9am BST: Swiss economic sentiment index for

• 11am BST: CBI distributive trades survey of UK retailers

• 3pm BST: US new home sales