Banks only move 1,000 jobs despite Brexodus fears
Analysis shows that large investment banks have so far relocated fewer than 1,000 jobs out of Britain despite fears that Brexit would see an exodus from the City. A report highlights that firms “still have significant work to do” before the scheduled Brexit date, with it suggested that around 7,000 jobs could shift from London to Europe “in the near future”. Previous long-term projections for job losses in financial services pointed to a worst-case scenario where up to 75,000 UK jobs were lost. Of 222 companies monitored, 92 have at some point suggested they were considering moving or had already moved operations or staff. Dublin is the most popular destination, followed by Luxembourg and Frankfurt.
Harris: PE can find 'diamonds in the rough'
Joshua Harris, senior managing director of Apollo Global Management, believes there are still plenty of undervalued companies to improve and profit from, saying that firms in the sector are “able to find really interesting diamonds in the rough." He suggested that sectors including banking, insurance and energy are under significant pressure, and still needed capital, providing opportunity for firms like Apollo. He added that while private equity profits "have come down a bit," they are "still way better" than returns in the public market, such as stocks.
Charles Taylor shares soar on takeover talk
Private equity house Lovell Minnick has offered to take insurer Charles Taylor private in a £261m deal. Charles Taylor’s board will recommend the “compelling” bid to shareholders at a meeting in November.
Swiss National Bank holds rates
The Swiss central bank has held interest rates at minus 0.75%. The Swiss National Bank also lowered its growth expectations, down from 1.5% in June to between 0.5% and 1%. Meanwhile, Credit Suisse is to start charging wealthy clients for Swiss franc deposits as it looks to ease the blow of negative interest rates.
MUFG set to halve workforce in Hong Kong and Singapore
Mitsubishi UFJ Financial Group is set to cut half its Asian investment banking workforce outside its home market of Japan, with staff numbers in Hong Kong and Singapore to be trimmed.
Deutsche Bank appoints executive body
Deutsche Bank has appointed a new executive committee to help to oversee its German retail business. Manfred Knof, head of the retail division, announced that the body will steer the retail division in the group's domestic market under the Deutsche Bank and Postbank brands.
Muted take-up by banks for ECB cheap loans
The European Central Bank has acknowledged poor take-up from lenders for its latest targeted longer-term refinancing operation money, as many banks wait until the next round in December.
Fed rate cut too soft, Blackrock says
US investment giant Blackrock has suggested that the Federal Reserve’s decision to cut interest rates was a “missed an opportunity for a bolder stance”. Rick Rieder, chief investment officer of global fixed income at Blackrock, suggested the Fed should instead have cut interest rates by 50 basis points, or 0.5 percentage points, double the amount it agreed.
Ryanair sees revolt over pay report
Ryanair’s shareholders have protested over its remuneration report, with just 50.5% backing a deal that could see CEO Michael O’Leary make €99m from stock options if he doubles Ryanair's profit or share price.
Kier crashes to hefty loss
Construction firm Kier has revealed a £245m loss before tax for the 12 months to the end of June - down from a £106m profit. Revenue slipped from £4.24bn to £4.12bn, after its adjusted operating profit margin narrowed to 2.8%, down from 2018’s 4.1%. Kier announced that its chairman, Philip Cox, is stepping down from the board to retire, and noted that the sale of its housebuilding division, Kier Living, is “progressing well.”
London holds second in financial centre index
London has retained its position as the world’s second-best financial centre in the Global Financial Centres Index, with Shanghai in third and New York holding top place. The index ranks 114 financial centres by combining the views of 3,360 professionals in the finance sector with data. The most recent review saw respondents suggest New York, Hong Kong and Singapore “will benefit substantially from Brexit”, while Frankfurt, Paris and Luxembourg are the European centres deemed most likely to benefit.
Hargreaves Lansdown scraps exit fees
Hargreaves Lansdown has followed the lead of Interactive Investor and Fidelity by removing exit charges - and has urged rivals to follow suit. Hargreaves Lansdown scrapped nine charges in a “simplification of its fee structure”, with transfer fees among those axed.
P2P investors queuing to cash out
Peer-to-peer investors are queuing to withdraw their loans following the raft of high-profile collapses, such as those of Lendy and Collateral. Funding Circle customers appear to be the worst-affected and they face more than three months in a queue to access their funds - which could be sold within the day as recently as January.
Travel woes weigh on Saga
The tough over-50s tourism space has taken pre-tax profits at insurance giant Saga down by more than 50% year-on-year, from £109.7m to £52.8m. Full year guidance remains unchanged however, with underlying profit before tax expected to come in between £105m and £120m.
LEISURE AND HOSPITALITY
Thomas Cook needs extra funds to seal rescue
Thomas Cook, which is hoping to seal a rescue led by Chinese conglomerate Fosun, has been told to find extra contingency funding in order to secure its future. The travel firm’s banks - led by Royal Bank of Scotland - say it must find an additional £200m of underwritten funds in case it needs extra finance to draw on during the winter period. If Thomas Cook fails to agree a restructuring, it may be left with no option to put the business into administration.
MEDIA AND ENTERTAINMENT
WPP appoints former Unilever marketing chief to its board
Keith Weed, Unilever's long-serving former marketing boss, has joined WPP as a non-executive director.
Firms agree merger
Investment group Tilney and professional services firm Smith & Williamson have agreed a merger that will create a combined business - Tilney Smith & Williamson - with an enterprise value of £1.8bn, revenue of around £500m and profit of around £150m. The combined firm will be responsible for £45bn in client funds - 80% of which is in discretionary mandates or funds.
Five-year mortgages at record high
Customers are being offered a record number of five-year mortgage deals, with 1,542 different five-year fixed-rate mortgages available at building societies and banks. According to Moneyfacts, this is almost twice as many as five years ago, and suggests banks are hoping to take advantage of borrowers who want to lock in interest rates that are close to all-time lows.
Airbnb planning to float
Airbnb has revealed its intention to become a publicly-traded company in 2020 but has not yet said whether it will opt for an IPO or a direct listing.
Retail sales drop unexpectedly in August
UK retail sales fell in August as British shoppers bought fewer goods than in July, defying expectations of zero growth in a worrying sign for the UK economy. The volume of sales dropped 0.2% compared with the previous month, the Office for National Statistics said on Thursday. Economists polled by Reuters had forecast no change. Year-on-year, sales grew 2.7% in August, down from 3.7% in July. In the three months to the end of August, they were 0.6% compared to the previous quarter.
Bank of England holds interest rates
The Bank of England's monetary policy committee has unanimously held interest rates at 0.75% amid continuing Brexit uncertainty. In a statement, the Bank underlined the intensifying trade war between the United States and China for stifling global growth, and warned of the “increased uncertainty about the nature of European Union withdrawal,” which it said meant “the economy could follow a wide range of paths over coming years”.
OECD blames trade war for poor global growth
The Organisation for Economic Co-operation and Development (OECD) has urged a “collective effort” to halt the global trade war, as it cut growth prospects for almost all the world’s major economies for this year and next. The global outlook for 2020 is now 0.4 percentage points below its estimates four months ago, while in the UK, where the prospect of a no-deal Brexit remains a “serious downside risk”, the OECD cut growth estimates from 1.2% to 1% this year and to just 0.9% in 2020.
Britain at a Brexit crossroads or set for Groundhog Day
BTG Advisory’s Mark Fry reflects on the current position of Brexit, saying Britain is at a “curious point in time” as it is either “entering the final Brexit crossroads” or “on the brink of a repeated Groundhog Day” that would come from an extension akin to “simply kicking the can down an ever-lengthening road.” He suggests that while the probability of a no-deal Brexit on October 31 has grown less likely, it cannot be entirely ruled out. Mr Fry says with the economy expected to avoid a second consecutive quarter of contraction, fears of a pre-Brexit recession will be allayed, adding that the “unexpectedly strong” performance serves as “a reminder of the underlying resilience of the UK economy in even the most uncertain of times.”