24 September 2014 by lberuti
Over the last few sessions, consumers have been under pressure amid signs of a stagnant Eurozone economy. Most of them are high beta, and they also suffered from the renewed interest regarding the decompression theme. That was particularly true for UK retailers, which were impacted yesterday by the closely watched data from Kantar Worldpanel which shown that discounters are still gaining market shares. But the main driver was definitely the restatement by TSCOLN ( Tesco Plc) of their 1H earnings on Monday. They identified accounting issues relating to supplier rebates, the effect of which was to overstate 1H guidance for trading profits by an estimated £250mln. No explanation was given at the time regarding the reason of this profit warning, and the sanction was instantaneous and brutal. Credit investors know that fraud is their biggest risk, and the Banco Espirito debacle is fresh in everybody’s mind. Whenever the “F” word is mentioned, you can expect a torrid time for the corporate in question.