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Daily News Roundup: Friday, 22nd November 2019

Posted: 22nd November 2019


Couples share just £1 in £5

Research by AIG shows that couples share just a pound in every £5 that comes in to their home in joint bank accounts, while one in six have no joint current or savings accounts, opting to keep their finances entirely separate. The survey of 3,000 people found that 77% split some, but not all, of their income with their partners.

Close Brothers loan book rises

Close Brothers has reported 0.9% growth in its loan book during the three months to 31 October, with it hitting £7.7bn having been driven by commercial while retail and property remained flat. The asset management division posted client assets rising by 2% to £11.9bn


Avaloq hires banks for sale or IPO

Warburg Pincus is working with Goldman Sachs and Barclays on the planned sale or initial public offering of Swiss banking software company Avaloq. The firm, which owns 45% of Avaloq, is expected to launch an auction in the first quarter of 2020.


Saudi Aramco uses 25 bookrunners

State-owned oil company Saudi Aramco has hired a near-record 25 banks to work on its forthcoming listing on Riyadh's stock exchange. International banking firms including Credit Suisse, Goldman Sachs and HSBC helped it line up a sale of 1.5% of stock, with Bank of America Merrill Lynch, BNP Paribas, Citi, Crédit Agricole, Deutsche Bank, JP Morgan, Morgan Stanley, RBC Capital Markets, Santander, Société Générale and UBS among other members of the syndicate. Postal Savings Bank of China holds the record for the biggest team, listing in 2016 with 26 bookrunners.

Bundesbank and ratings agency in Germany warning

Bundesbank has warned over Germany’s financial stability, while Moody’s cut its outlook for its banking system to negative, saying profitability and overall creditworthiness of German lenders will fall over the next 12 to 18 months. This comes in a period that Deutsche Bank and Commerzbank have reported profit dips over the first three quarters.

MUFG unlikely to cover Softbank's WeWork exposure

Mitsubishi UFJ Financial Group, Japan’s largest bank, will likely withhold additional loans from Softbank to cover its $9.5bn (£7.3bn) rescue package for WeWork. Softbank has asked for around ¥300bn (£2.1bn) in additional loans from Japan’s three biggest lenders in attempt to recoup losses from its large bets on the struggling office space firm.

Danske Bank cuts jobs

Danske Bank has cut about 50 jobs in its foreign exchange and fixed income business. Danske Bank chief executive Chris Vogelzang recently said that the bank needed to cut up to 15% of staff-related costs in FX and fixed income in the short term.


Experts warn over closet trackers

Experts have suggested that issues which prompted the Financial Conduct Authority to fine Janus Henderson £2m may be a more widespread problem. The fund manager was punished for informing only institutional investors that it would be moving towards a more passive investment style. Alan Miller of wealth manager SCM Direct says the regulator has not done enough to stamp out misleading “closet trackers”, saying: “It is scandalous that it has taken the FCA so long to address the closet index mis-selling scandal.” It is estimated that £100bn is invested in funds that are charging fully active fees but only offer partially active or passive investments. Anthony Morrow of fund shop Open Money said: “This is likely to be very much the tip of the iceberg in respect of ‘closet’ trackers”, which are well on the regulators’ radar.”

CMC Markets income up 45%

CMC Markets has posted net operating income of £102.3m for the six months to September 30, up 45%. Turnaround was driven by higher contract for difference (CFD) revenue per active client as traders adapted to changes following the regulatory clampdown on high-risk bets. Stockbroking net revenue increased 164%, profit before tax surged 318% - from £7.2m to £30.1m - and the company now expects net operating income for the full year to exceed £180m.

Investec profit falls ahead of demerger plans

As the Anglo-South African business group prepares to spin off its asset management business next year, Investec has revealed that pre-tax profit fell just over 10% to £349m for the six months to September 30. Though return on equity dipped slightly, from 14.2% to 13.1%, its asset management division generated inflows of £3.2bn during the period, helping to increase Investec’s third party assets under management 6.4% to £117.9bn and cost to income ratio from 67.2% to 67.3%.

SJP names Helena Morrissey as non-executive director

St. James’s Place has named Dame Helena Morrissey as a non-executive director with effect from January 1. Dame Helena is former head of personal investing business at Legal & General Group and former chief executive of Newton Investment Management. The Times says the appointment appears to rule out the prospect of Dame Helena becoming Bank of England governor in the near future.

Moore Capital to close

Veteran hedge fund manager Louis Bacon is to close Moore Capital, which he founded. After 30 years of trading, the firm had $10.2bn assets under management in 2018 and, following diminished performances at some of its funds, will return capital to investors.


Wetherspoon chairman backed by shareholders

JD Wetherspoon’s chairman Tim Martin has been re-elected with the support of more than 98% of shareholders, despite shareholder advisory firm Pirc opposing Mr Martin’s re-election. Pirc argued that as an executive, Mr Martin was not an independent chairman. It also suggested the pub chain may have broken company law when it failed to tell shareholders it had spent £95,000 on pro-Brexit beer mats and magazines. Other votes saw just 6.4% of investors vote against remuneration for Wetherspoon’s top team, while almost 28% voted against a measure to allow the company to buy back more stock.

Thomas Cook's new owner creates 1,500 new jobs

Hays Travel, which bought Thomas Cook after it collapsed and took on 2,330 former employees, has announced plans to hire an extra 1,500 staff. It plans to hire another 200 people at its head office, an extra 500 to handle foreign exchange, and an apprentice at each of its 737 branches. Hays took on all of Thomas Cook's 555 shops and has reopened 450.


McLaren tycoon takes music streaming position

British F1 mogul Ron Dennis has taken a 10% stake in UK "family-focused" music streaming outfit Roxi, which counts a wealth of celebrity backers including Robbie Williams and Sheryl Crow. The McLaren founder's investment comes after Roxi pushed back its planned October float over the continuing Brexit uncertainty.


Overseas buyers face higher stamp duty

The Conservatives plan to introduce a 3% stamp duty surcharge for non-UK residents, whether the overseas buyer is an individual or a company. Rishi Sunak, the Treasury chief secretary, said the move could raise up to £120m, adding that this would be used to tackle rough-sleeping. Meanwhile, the Liberal Democrats would crack down on foreign buying of second homes with a stamp-duty surcharge on overseas residents buying such properties.

WeWork axes 2,400 staff

Office rental company WeWork is cutting about 2,400 jobs globally, saying the cuts are "necessary" in order to "create a more efficient organisation". WeWork, which lost nearly $1bn in the first half of the year, has been hit by the collapse of plans to raise money by listing shares on the stock market. It has also faced questions about its finances and governance.


Kiddies Kingdom in Mothercare bid

Online retailer Kiddies Kingdom is in talks to buy up to ten of Mothercare’s stores, saying it has made a proposal to administrators and is awaiting a response. Director Mohammed Patel said: “We are happy to take on some existing staff to minimise redundancy claims and explore the option of taking over the bestperforming stores across the spine of the UK."

Arcadia reveals new chairman

Sir Philip Green’s fashion group Arcadia has appointed Andrew Coppel, former boss of the De Vere hotel and leisure group, to replace corporate restructuring expert Jamie Drummond Smith, who stepped down as interim chairman in September after being appointed to steer the high street giant’s restructuring process.


Government borrowing hits five year high

Government borrowing hit £11.2bn in October, the Office for National Statistics (ONS) has said, £2.3bn more than in October 2018. The total is well above economists’ predictions of £9.3bn and represents the highest level in five years. Over the financial year so far borrowing has reached £46.3bn, a 10.3% increase on the same period last year. Debt climbed by £32.1bn to £1,798.5bn, or 80.4% of GDP, double the 40% ratio before the 2008 financial crisis. Central government borrowed £7.6bn and local governments added another £1bn, while the Bank of England borrowed £2.5bn and £100m was borrowed to cover pension costs.

OECD warns on global growth

The OECD has warned that the global economy is set to grow at its slowest pace since the financial crisis this year, increasing 2.9% in both 2019 and 2020 - the weakest rate in 10 years. Growth is forecast to hit 3% in 2021, a dip on the 3.5% predicted a year ago. The report says that while growth in the UK will hit 1% next year and 1.2% in 2021 if the Prime Minister’s Brexit deal is passed by 31 January, “an exit from the EU without an agreed deal would significantly damage the economy.”

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