Today’s Must Know Headlines

Lionsgate, the film studio home of “The Hunger Games”, has agreed to buy US premium cable channel Starz for $4.4bn including debt.

Trader's Remarks: A merger between film studios can lead to significant economies of scale as they diversify away the risks associated with the production of TV series and movies. Also, they can negotiate better deals with distributors such as Netflix and Sky. Together, the new combined company will boast a 16,000-title film and television library, the largest independent television business in the world, including 87 original series on 42 US networks and a feature film business that has generated over $7bn at the global box office over the past four years.
Inflation in the euro zone picked up as core inflation which strips out volatile elements rose to 0.9% from 0.8% according to an initial flash estimate from Eurostat.

Trader's Remarks: Inflation is now at its highest level since January as the drag from lower oil prices began to fade away. But subdued wage prices are likely to keep a lid on inflationary pressures raising the prospect of further monetary stimulus from the European Central Bank. With the risk of political contagion from the UK’s referendum weighing on the euro zone, ECB might be forced to act quickly.
A Government decision on airport expansion in London has been delayed until a new Conservative party leader has been selected, dealing a crippling blow to Heathrow’s ambitions to build a controversial third runway.

Trader's Remarks: It casts serious doubt over Heathrow's plans to build a £17.6bn third runway, provoking anger among businesses. It marks yet another delay to the Government tackling the thorny topic of airport expansion to avert the looming runway capacity crunch in the south-east. Building another runway at Britain’s busiest airport, which has been proposed a number of times in the past, has always proved controversial because of worries about the air and noise pollution it would cause.
Mark Carney signalled the Bank of England could cut interest rates within months as the central bank tries to shield an economy rattled by the shock of Brexit.

Trader's Remarks: Mr Carney, who faced a barrage of criticism from prominent Leave campaigners over his warnings about the financial risks of a vote to exit the EU, made it clear that the BoE is likely to slash its growth forecasts. He also warned that increased uncertainty meant both consumers and businesses are likely to delay spending and investment, lowering the country's growth prospects and driving inflation higher.
Vodafone and EasyJet have both raised the prospect of moving their headquarters out of the UK in the aftermath of Britain's decision to leave the European Union.

Trader's remarks: Just 11% of Vodafone's profits were generated in the UK in the last financial year, compared to 55% from its European operations. Vodafone said the single legal framework spanning all member states, retaining freedom of movement were "integral to the functioning of any pan-European business". EasyJet is looking at contingency measures including obtaining an air operator's certificate in an EU country, to ensure continued access to the European Common Aviation Area.

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The Daily Spotlight
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Trader's Remarks: Consumer price inflation in Brazil has increased to the highest rate in 13 years, despite the country’s economic contraction, underscoring one of the main challenges facing Latin America’s largest economy. Consumer prices in Brazil increased by 9.3% year-on-year in May of 2016, following April's 9.3% growth. Brazil’s consumer inflation has continued to accelerate primarily due to a rise in housing-related costs. Brazil is going through the worst recession in its history, with rising unemployment and considerable fiscal challenges.

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Trader's remarks: The Brazilian economy contracted 0.3% in the first quarter, registering continued recession in its fifth straight quarter. The exploding debt load, political challenges and gloomy economic outlook all add up to a tough road ahead. This consecutive contraction and sluggishness in major sectors are increasingly pressing on interim President Michel Temer's government. The Latin America's largest economy is expected to contract 4.3% in 2016 and 1.7% in 2017 due to political uncertainty and continuing corruption investigations. Tough times ahead.

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Trader's remarks: Oil is the lifeblood of Venezuela. It accounts for nearly all of its exports and two-thirds of the state budget. Unfortunately, the price of petroleum fell by more than half from its peak two years ago. Venezuela's foreign reserves have plunged to a 13-year low of $12.6 billion, and will see its economy shrink 8% this year while inflation will soar to almost 500%, according to the International Monetary Fund. Also, the reduction in imports to save the currency is aggravating shortages of everything from toilet paper to medicine.

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Trader's Remarks: The chart shows that Olympic Games overrun their budget with 100% consistency. No other type of megaproject is this consistent regarding cost overrun. In 2007, after underestimating the cost of cleaning up the Olympic Park site and the construction of venues, the UK government more than tripled the original spending plan for the 2012 games to 9.3 billion pounds. For Brazil’s political leaders, spending became an issue after the country’s biggest protests in decades. One reason is, Olympic budgets are always underestimated as part of the years-long selection procedure to win the games.

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Trader's remarks: It is not surprising to see Cristiano Ronaldo top the chart for being the highest paid footballer. It is interesting to note that half of the top six earners play for the Premier League. There is a constant debate whether the astronomical salaries earned by top footballers are justified. The fact is, like with anything else price is determined by demand and supply. As long as football continues to be a global sport, those who are at the pinnacle of the sport will continue to be paid in line with their market value.

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The Brexit vote was characterised by age being a major factor in voter interests. Brexit voters below the age of 50 were inclined to remain within the EU, while those above 50 were heavily supportive of leaving the union. This has sparked debate over whether interest in the future or an angry response over previous failures were more at play. Markets, as well as the pound, tumbled fantastically within the opening hours of markets across the globe and have remained at record lows.

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Trader's remarks: The vote for the most powerful person in the world, the President of the United States, was narrowed down to the final two; Hilary Clinton, aiming to be the first female President, of the Democrats, and Donald Trump, a polarising figure, of the Republican party. Current polls suggest Hilary Clinton leads Donald Trump by a significant margin with many intimating that Trump lacks the political skill to win over multiple demographics, such as young voters or minorities. However, debate has begun over America’s willingness to accept a female as its leader and if the power of the republican

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Trader's remarks: The top ride-hailing companies have raised some of largest mega-deals that private markets have ever seen, to finance their fierce competition across the globe. The 6 most well-capitalized ride-hailing companies currently are Uber, Didi Chuxing, Lyft, Olacabs, Grab and Gett with Uber the most capitalised one. The capital is primarily to develop technology and increase market share. In the transportation industry, there is a big reward for being the biggest in a market because the service with the most passengers and drivers tends to be more efficient.

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Trader's remarks: Over the last forty years, UK opinion to leave or remain in the EU has swung greatly in both directions. Very rarely has the country been so evenly split over what it should do.

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: Trader's Remarks: FTSE 100 is used as an indicator of performance of companies regulated by UK company law. The FTSE 100 has been monitored intensely during the referendum build up with the unpredictability of the referendum suspected to have caused greater volatility.

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