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What to Watch: Fever-Tree crashes, Sirius deal and house prices leap

Tom Belger
Finance and policy reporter
Australia's Nick Kyrgios during the Fever-Tree Championship at the Queen's Club, London. Photo: Steven Paston/PA via AP

Here are the top business, market and economic stories you should be watching today in the UK, Europe, and abroad:

Fever-Tree shares crash on weak sales warning

Weaker-than-expected sales at Fever-Tree (FEVR.L) wiped more than a fifth off the tonic maker’s value on Monday, despite growth in Europe and the US.

The company said it was performing well in UK pubs, bars, and restaurants. But it blamed weak consumer spending for lower-than-expected sales in the second half of 2019 in supermarkets and off-licences.

“Fevertree has confirmed the market’s worst fears, namely that the UK operations are finding it hard to sustain previously high rates of sales growth,” said Russ Mould, investment director at AJ Bell.

“Competition has also been intensifying and one might even suggest that the gin craze which has helped Fevertree may have peaked.”

Its shares were down 21.5% in early trading in London on Monday. Reuters reported it could be on track for its worst ever day of trading.

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Anglo American deal saves jobs at Sirius Minerals

The Sirius Minerals test drilling station on the North Yorkshire Moors in 2013. Photo: Nigel Roddis/Reuters

A struggling Yorkshire mining project is set to be rescued from the brink by a takeover that will safeguard jobs but leave thousands of investors facing losses.

Mining giant Anglo American (AAL.L) said on Monday it had reached a deal to buy Sirius Minerals (SXX.L) for 5.5p per share, valuing the business at £404.9m ($525.4m). It comes around two weeks after deal talks were first announced.

The takeover will keep Sirius’s troubled potash mining project alive and potentially create thousands of jobs near Whitby in Yorkshire. It will also safeguard Sirius’s 600-or-so current employees.

But thousands of retail investors who backed the project are likely to face steep losses. Around 80,000 individual investors have invested in Sirius.

UK house prices leap at fastest pace in 18 years

UK property prices are rising at the fastest pace in 18 years, leaping 2.3% over the past month, according to new figures.

One estate agent said the property market was “exploding back to life,” after last month’s decisive general election result provided some short-term clarity over Brexit.

Rightmove’s house price index recorded its biggest ever monthly leap in asking prices at this time of year. The index, the largest monthly sample of residential sales, has been published since 2002.

Average asking prices in early January came in at £306,810 ($685,023), some £6,785 higher than one month earlier.

Beales ‘on the brink of collapse’

Department store chain Beales, one of the UK’s oldest retailers, is on Monday expected to go into administration in a move that could put around 1,300 jobs at risk.

The privately owned company has been searching for a buyer to avoid the potential collapse.

While there are reportedly no plans for immediate store closures, it is thought that a scaled-down operation could emerge from the administration process.

Founded in Bournemouth in 1881, Beales has around 20 department stores in England and Scotland, and is owned by veteran retailer Tony Brown.

Global leaders arrive for Davos

Presidents, prime ministers, chief executives, and billionaires will descend on a small Swiss skiing resort this week for the annual gathering of the world’s elite.

Around 3,000 people are set to travel to Davos for the World Economic Forum’s 49th annual meeting.

Attendees this year include Microsoft founder Bill Gates, US president Donald Trump, Google CEO Sundar Pichai, new European Central Bank chief Christine Lagarde, and German chancellor Angela Merkel.

The event is a chance for decision makers and power brokers from around the world to meet and discuss the issues of the day.

This year the climate crisis is at the top of the agenda, but some critics see Davos as little more than a talking shop.

European and Asian markets mixed

European and Asian markets had a mixed morning. Low trading volumes were reported in London with markets closed in the US for the Martin Luther King public holiday.

The FTSE (FTSE) dropped 0.3%, with Fever-Tree dragging the index downwards.

The German DAX (^GDAXI) was flat, while the French CAC 40 (^FCHI) lost 0.3% and the Euro Stoxx 50 (^STOXX50E) shed 0.2%.

Hong Kong Hang Seng Index (^HSI) dropped 0.9% and China’s Shanghai Composite index (000001.SS) fell by 0.7%, but the Nikkei (^N225) was 0.2% higher.