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Daily News Roundup: Friday, 19th June 2020

Posted: 19th June 2020

BANKING

Banks could pay to access consumers’ financial data

UK Finance has said that banks would pay for access to a central open banking resource under proposed next steps to introduce the concept in the UK. Under proposals from the trade body, open banking functions to let people share their spending habits, regular payments and payees with other banks would move into a separate service company. Banks would then pay “fairly and equitably” for their use of this centralised data. The Competition and Markets Authority first proposed the introduction of open banking under the EU’s Payment Services Directive, which came into force in 2018, with the UK’s nine largest banks having invested £1.5bn in open banking since 2016.

Firms under pressure over historic slave trade links

Businesses are being urged to face up to their past links with slavery, with banks including Barclays, Royal Bank of Scotland, HSBC, Lloyds Banking Group and Arbuthnot Latham considering their historic links to the slave trade. Insurer Lloyd’s of London has apologised for its links to the slave trade and pledged financial support for ethnic minority communities, while the Bank of England has apologised for the "inexcusable connections" of its former governors and directors who were involved in the slave trade.

PRIVATE EQUITY

KKR buys vacation parks firm Roompot

KKR has agreed to buy Dutch holiday parks company Roompot from French firm PAI Partners. While details of the price were not disclosed, a source familiar with the deal said it valued Roompot at around €1bn. PAI Partners bought Roompot for €600m from Dutch investor Gilde in 2016.

INTERNATIONAL

ECB’s negative rates prompt banks to borrow record €1.3tn

The European Central Bank, which is attempting to boost liquidity amid the coronavirus crisis, says 742 banks have applied to borrow €1.31tn under a refinancing scheme offering negative interest rates.

Banks warn of new delays in US small business bailout

Small US businesses that took rescue loans could face delays in finding out if debts will be forgiven, with banks calling for greater guidance on what can be written off.

AVIATION

Qantas cancels all international flights

Qantas has cancelled all international flights until late October except for those to New Zealand. The news comes as the Australian government said its border would remain closed into next year to slow the spread of the coronavirus. The airline and subsidiary Jetstar are now boosting domestic flights as travel restrictions within Australia ease. Qantas has seen domestic passenger numbers double to 64,000 this week.

CONSTRUCTION

Taylor Wimpey raises funds for land purchases

Taylor Wimpey has raised £522m from investors to help it acquire land which has seen prices fall amid the coronavirus pandemic. The housebuilder raised funds from both new and existing shareholders in a share placing, where shares were bought at 145p each. CEO Pete Redfern bought up £200,000 worth of shares, bringing his stake in the company to about £3.1m. Retail investors and employees were also able to take part in the placing.

FINANCIAL SERVICES

FCA bans mini-bond marketing

The mass marketing of speculative mini-bonds to ordinary investors has been banned by the Financial Conduct Authority (FCA). The move by the regulator comes after a series of scandals involving unregulated bonds, including the collapse of London Capital & Finance last year. The FCA introduced a temporary ban in January amid concerns the products could cause harm to retail investors following a spate of losses, and has now announced plans to make the restrictions permanent. The City watchdog said the ban would protect against the most "complex and opaque arrangements" where funds raised are used to lend to a third party, buy or acquire investments, or to buy or build property.

Wirecard auditor questions cash balances

Wirecard has said that its auditor has raised questions over cash balances worth £1.7bn, refusing to sign off on the payments company’s accounts, saying it was unable to confirm the money existed. The missing sum amounts to about a quarter of the fintech firm’s total balance sheet. Wirecard has said there was evidence of "spurious" figures intended "to deceive the auditor".

US firm offloads Woodford assets

Acacia Research, the US buyer that acquired cut-price assets from Woodford’s failed Equity Income fund, has offloaded the stocks just days after the deal, according to reports. In one instance, the US firm generated a profit of £750,000 from a sale of one asset, according to regulatory filings

LEISURE AND HOSPITALITY

Wagamama sales hit by COVID-19

Wagamama has reported that UK sales and earnings fell in the first quarter as the COVID-19 crisis brought an abrupt end to its run of strong trading. Like-for-like sales at the restaurant chain jumped 8.4% in the first eight weeks of the year, but trading fell sharply in the final weeks of the quarter as the lockdown saw its 151 restaurants closed. This left total sales 1.2% lower in the 13 weeks to March 29, while gross profit fell 2.7% quarter-on-quarter to £33.2m.

MEDIA AND ENTERTAINMENT

TikTok enters education market

TikTok is to enter the education market with the launch of a new learning platform in Europe. The social media company unveiled its #LearnOnTiktok platform, which will see TikTok partner with universities, experts and charities across Europe to deliver educational content to youngsters. The short-form video app will invest an initial 11.7m into the project.

REAL ESTATE

Northern towns lead property surge

Eight of the ten places in England recording the biggest jumps in buyer demand since the housing market reopened were towns in the North, according to Rightmove. Hereford took the top spot, with a 77% jump in buyer demand between June 1 and 14 compared to the first two weeks of March. It was followed by Wigan (71%), while Rochdale, Wilmslow, Scarborough and Bolton saw spikes of between 66% and 59%. Overall, Rightmove found that buyer demand in England was 32% higher between June 1 and 14 than in the first two weeks of March.

RETAIL

All Saints in rent talks

All Saints is seeking to shake up the way it pays its rent after warning that “a small number” of branches are set to close. The retailer will launch a CVA to switch most of its stores to a model where rent is based on how much money the store makes. All Saints says the turnover-based arrangement would prevent it from shutting a string of stores. UK landlords will vote on the plan on July 3.

ECONOMY

BoE pumps an extra £100bn into the economy

The Bank of England (BoE) has announced a new stimulus package for the economy in an effort to mitigate against the impact of the coronavirus crisis and lift inflation from the current 0.5% and closer to the 2% target. The Bank confirmed a fresh £100bn in quantitative easing, with this following a £200bn boost announced in March. The £100bn added yesterday takes the BoE’s asset-purchasing programme to £745bn, a figure equivalent to around a third of GDP. BoE governor Andrew Bailey said the pace at which bonds would be purchased will be slower than in the previous period as financial markets are far calmer than three months ago, saying: “We are slowing from warp speed to something that by historical standards still looks fast.” The Bank’s Monetary Policy Committee (MPC) also voted to keep interest rates at the historic low of 0.1%. On the immediate state of the economy, the Bank said there are signs of a post-lockdown increase in consumer activity, with this coming in the current quarter when the Bank had anticipated it would be Q3 before evidence of an upturn. The Bank said it now expects the economy to contract by 20% in the first half of the year, having previously suggested a 27% reduction was on the cards. Andy Haldane, the Bank’s chief economist, said if the recovery in demand and output continues, the loss of output due to the pandemic may be half that previously envisioned by the Bank, “boosting inflation prospects”. Meanwhile, Ben Broadbent, the BoE’s deputy governor for monetary policy, voiced concern over future unemployment rates as the job retention scheme is unwound.

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