Takeda to win EU approval for €54bn takeover of Shire

Japanese drugmaker Takeda Pharmaceutical is set to win conditional EU antitrust approval for its $62bn (€54bn) bid for Dublin-headquartered Shire, the biggest ever overseas acquisition by a Japanese company, two people familiar with the matter said on Friday.

Both companies have operations in Ireland, but are relatively small compared to rivals like Pfizer and MDS’s Irish businesses. Takeda employs around 400 in three Irish units, one plant in Bray, Co Wicklow, and two sites in Dublin.

Shire controversially moved its official headquarters from the UK to Ireland in 2008, helping reduce its tax bill. But its main business is in the US.

Last month, Takeda offered to divest Shire Plc’s pipeline compound SHP647 along with some associated rights after the European Commission voiced concerns about the overlap with its own drug for inflammatory bowel disease called Entyvio.

Entyvio, a treatment for Crohn’s disease and ulcerative colitis, is Takeda’s biggest-selling drug. Shire’s shares moved into positive territory in London following the Reuters story, closing up 0.28pc.

Reuters

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Clontarf Energy boss dismisses rumour of Ghana progress as shares jump

Clontarf Energy owner John Teeling has dismissed reports that the company had recommenced negotiations with the government of Ghana to allow it to explore a potentially lucrative offshore exploration off the coast of the African country,

Clontarf – which is a long-time joint-venture partner in the Tano block with fellow Irish exploration firm Petrel Resources – saw its share price jump by over 25pc in one day this week after 64 million shares in the company changed hands.

The spike followed reports in industry publications that the parties had finalised a new agreement that would now be presented to the cabinet in Ghana for final approval.

But when contacted by the Sunday Independent, Teeling insisted that the company has had no word at all from Ghana that any new progress had been made in negotiations that stalled almost a decade ago.

Teeling said that Clontarf was prone to such fluctuations, but that it had been an unusually large jump.

“There was a big movement in the share price this week. But we have no evidence that anything has changed in Ghana,” said Teeling.

“We know that our proposal is before the cabinet in Ghana, but we haven’t heard anything on that. It is unlikely that it has gone through the cabinet, because I think we would know immediately. Sometimes in shares like this they can become the target of speculation.”

Clontarf, which is also searching for lithium deposits in South America, did the original deal on the Tano 2A block in 2008 before Tullow Oil’s massive Jubilee oil field had created major focus on the country’s resource potential.

The deal was renegotiated in 2010 with Ghana’s national petroleum corporation and that was due to go to government for parliamentary approval. But when the government changed the deal was sidelined. The previous administration, which had struck the original deal in 2010 – and is now back in power – has reignited industry speculation that a full licensing agreement for the block will finally be approved.

“They [the new government] are very keen to clean up any legal issues before they go out on their new bid round. I can’t – and won’t – give anyone a date on when all of this might be completed because nine years of fairly bitter experience, and a lot of money spent, has put manners on me. It has just sat there and we have been trying to do other things in recent years.”

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Dan O'Brien: 'What should the IDA be focusing on out to 2025?'

What is the future of foreign direct investment? This a crucial question for Ireland’s prosperity, because a central pillar of the country’s economic model is the attraction of globalised foreign companies.

IDA Ireland – the public body tasked with luring such businesses to Ireland – is in the process of formulating its next five-year strategy, to cover the 2020-24 period. Last week I gave a presentation to the organisation’s board of directors on issues of relevance to the formulation of that strategy. These are the six matters highlighted.

The global economy

Since 1960 the global economy has shrunk in only one year – 2009 – according to World Bank data. Although there is very likely to be some form of an economic downturn over the next seven years, it would take a protracted global depression for the world’s economic output in the middle of the next decade to be below current levels. Foreign direct investment has historically been correlated with economic growth. If this correlation is sustained – and there is little reason to believe that it won’t – it is likely that international flows of FDI will, at the very least, stay at their current relatively high levels out to 2025.

The future of globalisation

The internationalisation of human activity has been accelerating for centuries. The internationalisation of the firm, which marks out the current era of globalisation for previous ones, has been one of the defining features of the modern world economy. It would take severe measures by governments, such as bans on inward and/or outward capital movements, to halt companies from seeking out opportunities in foreign markets. Such measures, even in these more protectionist times, only seem likely in the event of extreme scenarios materialising, such as war between the US and China. As such, the pace of globalisation may slow or even be partially reversed, but the changes in international production patterns of recent decades are unlikely to be undone.

Globalisation of corporate China

Big economies create big companies. Barring a crash, China will move closer to overtaking the US as the world’s largest economy in the first half of the next decade. Among the many features of the country’s extraordinary modernisation has been the proliferation of large firms.

Many are now outgrowing their huge domestic market and going global. The stock of Chinese FDI (both from Hong Kong and the mainland) outside China is rising rapidly and has already one tenth of all FDI globally.

There is also every reason to believe that more investment will take the form of establishing greenfield operations, as opposed to the takeover of existing firms which has hitherto been Chinese companies preferred mode of market entry.

A number of cutting-edge Chinese companies, such as Huawei, have already established operations in Ireland. To replicate with Chinese multinationals the success achieved in attracting corporate America to Ireland is perhaps the biggest single opportunity for the IDA over the period to the middle of the next decade.

This, however, will not be easy for a number of reasons. The same historical and linguistic connections do not exist with China as exist with the US and national security concerns are much greater given the role of the (autocratic) Chinese state in all organisations of any size – private as well as public.

The taxation of companies

Ireland’s corporation tax rate and wider regime have long been considered to be under threat from various EU-level initiatives. These fears have always been exaggerated. Tax issues are subject to a veto by all of the bloc’s 28 members.

There is no foreseeable prospect that this will change over the period to 2025. While it is possible that agreement will be reached on some aspects of how companies are taxed, last week’s failure of EU finance ministers to agree a turnover tax on technology companies followed a long-standing pattern. An enforced change of any significance to Ireland’s tax regime in the outlook period is highly unlikely.

Brexit’s opportunities/challenges

The one upside of Brexit for Ireland is the impact it will have on the attractiveness of the UK for foreign companies seeking access to international markets.

Britain has by far the largest stock of inward FDI in Europe. The strongly negative reaction to Brexit by Japanese companies in the UK is just one indication of how the loss of access to the EU’s single market is viewed by internationalised businesses. Developments in British politics have further tarnished the image of the UK as a place known for effective government.

The British Labour Party under its current leadership is not pro-business and is highly sceptical of free markets. Given the depth to which this wing of the party has extended its control of the organisation, there is only a limited chance that it will move towards a more centrist stance by the middle of the next decade. Were it to be elected, coming on top of Brexit, the attractiveness of the UK as a business location would be further diminished.

Brexit poses not just FDI-related opportunities, but challenges too. In the shorter term, and if no withdrawal agreement is reached, a period of severe trade disruption is likely. If the Irish Government does not preserve the integrity of the EU single market by policing the southern side of the border with Northern Ireland, other member states will – sooner or later -introduce checks on goods arriving on the continent. This would quickly raise serious questions about Ireland’s de facto membership of the single market.

Given that single market membership is the basis of many companies’ presence in Ireland, any uncertainty around this issue would be extremely serious for the country’s economic model.

The future of Europe

The word ‘existential threat’ is often misused, but if there is a foreseeable existential threat to the European integration project it is the reigniting of the euro crisis. Greece is a tiny economy, but it almost brought down the single currency in the early years of the current decade.

Italy is one of the 10 largest economies in the world and is very close to going Greek. Its populist government, in office for six months, is openly hostile to EU budgetary constraints despite its large and unstable public debt position. Data in recent weeks suggest that the Italian economy is tipping into recession.

The last euro crisis caused a recession in Europe. An Italian-triggered crisis would likely do the same even if it could be contained. More fundamentally, if the euro were to fail, would the EU fail, as German Chancellor Angela Merkel remarked during the last bout of crisis?

If the EU itself were to fragment, what would this mean for the single market upon which Ireland and its FDI sector is so dependent? This is the biggest single risk to Ireland’s FDI sector out to the end of the IDA’s next strategy timeframe.

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Dollar Tree stock is a bargain, down 18 percent this year: Barron's

NEW YORK (Reuters) – Shares of Dollar Tree Inc (DLTR.O) are as big a bargain as the $1 goods it sells in its stores, with shares off 18 percent this year and trading at a discount to its biggest competitor Dollar General Corp (DG.N) and there is a possible activist investor in the wings, according to Barron’s.

The U.S. financial newspaper said that Dollar Tree is trading at near a five-year low but could bounce back. The company has been punished for its purchase of rival Family Dollar, but has begun renovating and rebranding the struggling Family Dollar stores, it said.

Barron’s said that analysts have been speculating on an activist investor may be interested. Carl Icahn and Nelson Peltz were Family Dollar shareholders who had encouraged a sale before the Dollar Tree acquisition, the newspaper reported.

The New York Post reported in October that Icahn was accumulating shares in the company.

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In Good Company: DXC's Lawrie has his ear to the digital ground

How does a history major get to run a US$24.6 billion (S$34 billion) information technology services company?

It is a question he has asked himself, concedes Mr Mike Lawrie, chairman, chief executive officer and president of DXC Technology, the company born of the April 2017 merger between CSC and the enterprise services division of Hewlett Packard Enterprise, or HPE as it is called these days.

While he did go to graduate school for a business degree, the history part is useful because, after all, it is all about leadership styles and how leaders dealt with the complexities of the day. Effective corporate leaders need to have a broad understanding of how the world has worked and how patterns tend to repeat themselves, he says.

Over his four-decade-long career in business – including more than a quarter century with IBM, where he was mentored by the likes of Lou Gerstner – Mr Lawrie, who was recently named 31st on the Harvard Business Review’s list of the top 100 global CEOs, has had a ringside view of the ebbs and eddies of tech currents.

In the 1990s, it was about the Y2K phenomenon and the tech boom. These days the world is consumed by the swift march of digital technologies, advanced analytics and bionics, the study of mechanical systems that function like living organisms. Indeed, the D and X in his company’s name, he says, stand for digital and transformation in a world where social media, robotics, drones and artificial intelligence are transforming not just companies but countries themselves.

DXC’s birth, he says, is emblematic of the industry consolidation that is inevitable as corporations swivel to confront the new landscape. Not too long ago, the big innovations in tech services had been to move high-cost jobs to lower-cost areas, chiefly India. But, as routinised jobs become automated, that leverage is fading. Scale becomes important not only to lower unit costs but also to enable effective competition on a global basis.

“A bigger platform would help us implement our business-partner strategy and become more important to other technology players like Microsoft, AWS, SAP and others because we are so big,” he says. “The other reason was customers needing an independent tech services firm to help them in their digital transformation journeys. It is rare that all these things line up as favourably as they did. It is still early stages, but we are very pleased with how the integration has gone.”

This month, the company reported fiscal 2019 second-quarter net income of US$262 million, or 92 US cents a share, compared with US$256 million, or 88 US cents a share, in the year-ago period. Revenue declined to US$5.01 billion from US$5.45 billion in the year-ago quarter. Since Wall Street had forecast revenue of US$5.3 billion, shares dropped.

“When we put the two companies together, we had indicated that our revenues would decline moderately for a couple of years as we integrated,” Mr Lawrie told me in a lengthy conversation that took place before the Q2 results announcement. “More importantly, some of our legacy and mainstream businesses are declining while a lot of new businesses like digital are beginning to grow rapidly.”

He says it would be no surprise that revenues should be flat or decline for a couple of years and, while there would be no big spurt, he does see growth ahead, based on both organic growth and acquisitions. Add US$400 million to US$600 million a year and you could be looking at a US$25 billion company in five years, he says.

Meanwhile, as he drives efficiency and cuts slack – many think HPE, particularly, had become rather wheezy in recent years – the year past has been a wrenching experience for some 30,000 staff who had lost their jobs. The most notable casualty was DXC America’s head Karan Puri, who joined the firm in January only to leave last month. Indeed, on the Glassdoor website, where employees and former employees anonymously review companies and management, there are harsh comments on Mr Lawrie.

How does it feel when you see comments on Glassdoor such as “Hitler died and Mike Lawrie was born”?

“To tell you the honest-to-God truth, it doesn’t bother me too much,” says the 65-year-old Mr Lawrie. “When you are in an industry and business that is constantly changing and evolving, you cannot let people that don’t want to evolve or change impact the rest of the body, because that would be the minority terrorising the majority. If I don’t do that I actually hurt far more people down the road.”

Meanwhile, hiring for the faster-growing business areas continues and there is an attempt to reskill thousands of staff. Last year, the internal “DXC University” spent a million man hours in training, using both virtual and physical methods. Many of those courses were certification programmes of partner companies such as AWS and ServiceNow.

DXC has some 60,000 people in Asia, two-thirds of them in India which is home to two of the six DXC digital transformation centres worldwide.

Those staffing numbers, he says, will grow, in part because of the intellectual capital being created in the Asian region in countries such as the Philippines and Vietnam, and of course, India.

“Asia is no longer just the back office and location for cheaper work. The number of Asian computational, informatics, analytical and data science skills entering the market in the next 10 years dwarfs those set to graduate in the US and European Union.”

I ask about his three biggest challenges running the merged company and he begins with people, especially against the background of the skillsets required for the next generation of companies. The other is leadership: finding the managers who can conceptualise the business differently from past ways. And then, of course, is the inherent conflict of managing a side of the business that is declining while another side is growing.

Fast facts

THE CEO

Mr Mike Lawrie is chairman, president and CEO of DXC Technology. He was ranked 31st in Harvard Business Review’s 2018 ranking of the world’s top-performing CEOs. He is 65 years old.

Mr Lawrie was previously chairman, president and CEO of CSC. Before that, he spent 27 years with IBM, where he rose to senior vice-president and group executive, responsible for sales and distribution of all IBM products and services worldwide. From 1998 to 2001, he was general manager for IBM’s business in Europe, the Middle East and Africa. Prior to that, he served as general manager of industries for IBM’s business operations in Asia-Pacific, based in Tokyo.

His previous corporate board service has included Juniper Networks (lead director), SSA Software, Symbol Technologies, Good Technology and the NTT DoCoMo USA advisory board. Mr Lawrie holds a BA in history from Ohio University and an MBA from Drexel University.

Mr Lawrie and his wife have a son and a daughter.

THE COMPANY 

DXC Technology, a Fortune 500 company, was formed by the merger of CSC and the enterprise services business of Hewlett Packard Enterprise (HPE). It describes itself as an “end to end IT services and solutions company”. Headquartered in Virginia, US, it has 134,000 employees. DXC reported US$24.6 billion (S$34 billion) revenue for fiscal 2018 and a return on equity of 16 per cent.

DXC’s digital workplace solution – which links mobility and standard desktops for a new world of employee productivity and connectivity – is apparently getting traction. Recently, says Mr Lawrie, DXC implemented it for the automaker BMW’s worldwide operations, linking some 150,000 users in the first phase. Another partnership doing well is with the on-demand cloud-computing platform AWS, short for Amazon Web Services.

Many of the CEOs I have met recently, such as Mr John Donahue, who moved from eBay to ServiceNow, and Mr Francois Locoh-Donou, who moved from Ciena to F5 Networks, seem to see their future with niche companies and I wonder if a big buffet-offering company such as DXC would have a future.

Mr Lawrie responds that whenever technology moves to a new generation, it is inevitable that many corporate flowers such as ServiceNow and Salesforce bloom. But, ultimately, these companies have to interface with the traditional IT world.

“The unique value proposition of DXC is that we know how to do this,” he says. “We are the largest partner of ServiceNow and Microsoft Dynamics. We integrate those two worlds. We can provide the integration that then allows the company to scale. The smaller, niche companies cannot do that.”

DXC itself is transforming as it adjusts to the landscape.

“We are huge users of ServiceNow, AWS and Microsoft365 and we are installing our Digital Workplace globally because we want our people to use it for the same reason we recommend these to our customers. We call ourselves ‘Client Zero’,” he says.

Mr Donald Trump’s climb into the US presidency has come with a lot of noise about reshoring and onshoring jobs. How does that play with DXC, which has half its people overseas?

“I wouldn’t say it has changed our business strategy but it has given us some other things to think about,” he says. “We put down a digital delivery location in New Orleans and did a deal with the state of Louisiana. We did some tax things and committed to creating jobs there.”

The sports-loving Mr Lawrie – he cycles, hikes, runs, golfs and plays tennis, in addition to boating – says he likes to live in different parts of the US at different times of the year. He is also creating a programme at his alma mater, Drexel University, to teach graduate students some of his own learnings.

I asked him what he had himself learnt from Mr Gerstner, the legendary CEO who turned IBM into a technology services company.

“The most important lesson I learnt is that you cannot outsource your thinking. Often, as you go up in any industry, you tend to rely on other people to do a lot of the thinking and you become a picker and chooser of ideas. You can’t ever really do that. You have to think things through yourself.”

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Iran sells more oil to private exporters to bypass U.S. curbs

DUBAI (Reuters) – Iran sold 700,000 barrels of crude oil to private companies for export on Sunday in a second round of sales aimed at countering U.S. sanctions on the country’s exports, oil ministry news website SHANA reported.

Three unnamed companies paid $64.97 per barrel for two crude shipments of 245,000 barrels each and one shipment of 210,000 barrels, which were traded on Iran’s energy bourse, SHANA reported.

Iran began selling crude oil to private companies for export in late October, just ahead of U.S. sanctions on sectors including oil which came into effect on Nov. 5.

Crude oil trade is state-controlled in Iran. Earlier, private refining companies could only buy crude oil for exports of oil products.

Iran said in July it would start oil sales to private firms as part of its efforts to keep exporting oil and would take other measures to counter sanctions after the United States told allies to cut all imports of Iranian oil from November.

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Oil pucks and pellets; Canada eyes new ways to move stranded crude

CALGARY, Alberta (Reuters) – Canada’s biggest railroad says it is attracting interest from oil producers in its effort to move crude in solid, puck-like form, as clogged pipelines divert more oil to riskier rail transport.

Congested pipelines have stranded much of Canada’s crude in Alberta, driving discounts to record-high levels. Canadian heavy crude traded on Friday for less than one-third of the U.S. benchmark light oil price.

The latest blow to the sector landed on Thursday, when a U.S. court ruled construction must stop on TransCanada Corp’s Keystone XL pipeline.

Pipeline pressure has pushed more crude onto trains owned by Canadian National Railway Co and smaller rival Canadian Pacific Railway Limited. But crude movement by rail is costly and prone to spills and sometimes disastrous accidents, such as the 2013 derailment at Lac Megantic, Quebec that killed dozens of people.

Enter CN’s patented Canapux product, which is solidified crude encased in plastic, named to evoke the country’s most popular sport, hockey. The railroad argues that solid crude, never before commercially shipped in the world, can be transported more cheaply, efficiently and with less environmental risk than liquid crude in tank cars. Since it floats, Canapux is easier to recover from a spill into a water body.

Interest from crude producers, buyers and transport companies picked up after a Canadian court in August overturned Ottawa’s approval for the Trans Mountain oil pipeline expansion, said James Cairns, CN’s vice-president of petroleum and chemicals.

“There have been a lot more discussions about, ‘How do we get this done?’” Cairns said. “Conversations are much more advanced than they were.”

CN is seeking commercial partners to build a pilot plant that will process 10,000 barrels per day of undiluted heavy crude into Canapux.

The plant, to be built either at the Alberta crude storage hub around Edmonton or on an oil producer’s site, is estimated to cost less than C$50 million ($37.8 million). It could be running as soon as 2020, Cairns said.

CN’s oil pucks would move in gondola cars, which weigh less than tank cars, allowing the railroad to load them with more crude. They also do not require diluent, an ultra-light oil that is mixed with crude when it is shipped in liquid form by rail or pipeline.

As a result, Canapux’ shipping costs would knock off nearly half the expense of rail transportation in liquid form, according to CN.

Other entrepreneurs have pursued similar ideas for several years, from semi-solid blobs to pellets.

Alberta inventor Cal Broder said two refineries in China are interested in his BitCrude product, which he intends to produce from bitumen. He plans a test shipment of several containers of his butter-like crude to Asia before year-end.

Both BitCrude and Canapux still require government regulatory approvals. Success of either product also hinges on convincing oil refineries to make changes needed to convert solid crude back to liquid for processing.

But the idea of shipping crude in solid form is compelling, said Alex Pourbaix, chief executive of Cenovus Energy, a major Canadian shipper of crude by rail.

“I am quite intrigued by those technologies,” he said in an interview. “We’re going to make sure we take a hard look at them all.”

($1 = 1.3222 Canadian dollars)

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Haughey's son to net €10m from One4All sale

The eldest son of the late Taoiseach Charles J Haughey stands to net €10m from his share in the One4All gift card company following its sale.

Shareholders, including Conor Haughey and businessman Michael Dawson, along with managers at the voucher company are set to share a massive windfall from the sale.

The One4all gift card can be used at a multitude of participating retailers.

The An Post-controlled firm has now been sold in a deal valuing it at €100m to US technology investor Blackhawk.

State-owned An Post has a more than 53pc stake in Gift Voucher Shop, the company behind the One4All business. Other shareholders include early backer Mr Haughey, who has a 9.96pc stake.

The business got a boost two years ago when then finance minister Michael Noonan lifted a tax-free ceiling on gift vouchers that companies give their staff to €500 each.

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Oil slide, China worries send Wall Street tumbling

NEW YORK (Reuters) – Wall Street’s three major stock indexes lost ground on Friday, after a week of recovery from the October sell-off, as oil prices fell further and more evidence of a slowing Chinese economy was reported.

Oil prices fell nearly 1.0 percent on Friday, and have now seen the longest stretch of daily declines since 1984, on rising global supply and evidence of a slowing world economy.

The United States formally imposed punitive sanctions on Iran this week, but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic.

“Oil is spooking the market. If oil prices are going to go lower that’s another sign that the global economy is going to slow its growth,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

The Dow Jones Industrial Average .DJI fell 201.92 points, or 0.77 percent, to 25,989.3, the S&P 500 .SPX lost 25.82 points, or 0.92 percent, to 2,781.01 and the Nasdaq Composite .IXIC dropped 123.98 points, or 1.65 percent, to 7,406.90.

The S&P energy index .SPSY dropped 0.4 percent after falling 2.2 percent in the previous day’s session when U.S. crude prices LCOc1 confirmed a bear market by falling 20 percent from their most recent high. [O/R]

“I think we’re going to go lower than the October low. Economic growth is slowing but it won’t slow enough to stop the Fed from hiking,” said Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis.

Investors appeared unwilling to take on risk, sending the S&P technology index .SPLRCT down 1.7 percent as Apple Inc (AAPL.O) dropped 1.9 percent and semiconductor stocks .SOX tumbled 1.9 percent.

Eight of the 11 major S&P sectors ended the day lower.

The consumer staples index .SPLRCS was the biggest gainer with a 0.5 percent rise while other defensive sectors such as utilities .SPLRCU and real estate .SPLRCR eked out small gains.

Against the backdrop of the trade policy dispute between the Washington and Beijing, Chinese data showed producer inflation fell for the fourth straight month in October on cooling domestic demand and manufacturing activity, while car sales fell for a fourth consecutive month.

The Chinese data sent global stocks into a tailspin and put pressure on trade and commodity sensitive sectors. The U.S. industrials sector .SPLRCI fell 1.0 percent and materials .SPLRCM dropped more than 1.4 percent.

U.S. Federal Reserve policymakers left interest rates unchanged on Thursday, as expected and its policy statement signaled more rate rises ahead even as it noted that business investment had moderated.

The latest data on U.S. producer price inflation did little to ease worries about rising interest rates which have hampered gains in stocks this year.

Shares in tobacco companies fell after an official said that the U.S. Food and Drug Administration would issue a ban on the sale of fruit and candy flavored electronic cigarettes in convenience stores and gas stations.

Altria Group (MO.N) ended 2.98 percent lower while British American Tobacco’s U.S. shared fell 4.2 percent.

Declining issues outnumbered advancing ones on the NYSE by a 2.22-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored decliners.

The benchmark S&P 500 index posted 29 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 46 new highs and 113 new lows.

On U.S. exchanges 7.93 billion shares changed hands compared with the 8.39 billion average from the last 20 sessions.

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Serangoon Gardens shophouse up for sale at $25m

A 999-year leasehold corner shophouse in Serangoon Gardens is up for sale with an indicative guide price of $25 million.

The two-storey non-conservation shophouse, located at 56 Serangoon Garden Way, occupies a land area of 2,122 sq ft and total built-up area of 3,482 sq ft.

According to marketing agent JLL, which is currently inviting offers through an expression of interest exercise, the shophouse benefits from a wide dual frontage and high footfall.

Approved for permanent restaurant use on the first floor and shop use for the second floor, the property is currently fully tenanted.

The first floor is leased to an Indian restaurant, while the second floor is leased to a beauty salon.

The potential alternative uses for the property include retail, education, entertainment and medical, subject to approval from the authorities.

JLL senior director of capital markets Clemence Lee said the shophouse presents an “exceptional opportunity” to acquire an asset in the Serangoon Gardens residential enclave.

“All keen-eyed investors will recognise its excellent attributes, including its superior 999-year tenure, impeccable location, prominent corner plot frontage and stable rental income.

“We expect good interest from investors, funds, family offices as well as owner-occupiers,” he added.

He noted that opportunities to acquire corner freehold assets in prime affluent residential estates are extremely rare as these are seldom made available for sale.

Over the last two years, notable assets of similar attributes transacted include 8/8A Sixth Avenue, which sold for $12.5 million ($4,962 per sq ft on gross floor area) in April this year, and 22/22A Lorong Mambong, which transacted at $16.2 million ($4,830 psf on gross floor area) in September last year.

As the shophouse sits on land zoned for commercial use, JLL said foreigners are eligible to purchase the property.

There is no additional buyer’s stamp duty or seller’s stamp duty imposed on the purchase.

The expression of interest closes on Dec 11 at 3pm.

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