MPs to review progress on economic fraud
The Treasury Committee has launched a new inquiry into how effectively people are being protected from bank-transfer scams as well as anti-money laundering systems and the sanctions regime. Mel Stride, chair of the Treasury Committee, said: "It's important that the relevant bodies are held to account and scrutinised effectively to ensure that the UK is a clean place to do business and that consumers are protected from economic crime." Gareth Shaw, head of money at Which?, welcomed the move adding that after the Brexit transition period ends, the Government should legislate so that all banks are governed by a statutory industry code on bank-transfer scams, with strong standards in place to ensure that consumers who are not at fault are reimbursed."
HSBC froze £1.5bn of customers cash in dormant accounts
An internal report reveals that HSBC has frozen £1.5bn in funds in customer accounts after labelling them dormant, raising concerns that the bank was unwilling to address the issue of reunited customers with their money. The report, seen by the Guardian, shows compliance staff tried to warn HSBC more than three years ago that it was running a "significant reputational risk" by failing to overhaul its policies. HSBC denied it had mistreated customers, or that it took insufficient action. It told the Guardian it had made "substantial and continuous improvements" to its dormant-account policy since 2016.
NS&I could cut rates further
National Savings & Investments has indicated that it may cut its interest rates further and close products in the coming months after a record £38.3bn was poured into its accounts during lockdown.
Asset managers in $300bn drive to build private lending funds
Investors including Goldman Sachs and Oaktree are seeking to raise almost $300bn to plough into private lending deals with managers arguing that private credit is one area that has not yet become saturated.
Goldman Sachs to pay $3bn to settle 1MDB probe
Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) to end a probe of its role in the 1MDB corruption scandal. The settlement resolves a probe led by US authorities into the bank’s role in underwriting three bond offerings in 2012 and 2013 that raised $6.5bn for Malaysia’s government. The bank has been investigated by regulators in at least 14 countries over its work for 1MDB. The settlement includes a £96.6m fine for Goldman Sachs International (GSI) from the UK’s Financial Conduct Authority and Bank of England’s Prudential Regulation Authority over risk management breaches. “There is no amnesty for firms that tackle financial crime poorly, and the size of GSI’s fine reflects that,” said FCA enforcement director Mark Steward.
Japan faces rising defaults if virus downturn is prolonged, warns BoJ
The Bank of Japan has warned that the country’s financial system is at risk of rising defaults if the COVID-19 downturn is prolonged.
Tesla grows profits and deliveries
Tesla has recorded its fifth consecutive quarterly profit, making $331m in the three months to September 30. Revenue was nearly $8.8bn, exceeding analysts' expectations of $6.3bn, while shares in the firm were up as much as 4.5%. The electric car maker is also adding Model Y production capacity at a plant in Shanghai and building new construction facilities in Germany and Texas.
No-deal will add £3k to cost of electric car
A no-deal Brexit will lead to £2,800 being added to the price of an electric car, according to the Society of Motor Manufacturers and Traders, nearly wiping out the £3,000 plug-in grant handed to motorists who buy them.
IAG shares down as full-year outlook reduced
International Airlines Group (IAG) saw shares fall more than 1.2% to 99p in London trading after the British Airways owner reduced its full-year outlook. The company reported a €1.3bn (£1.2bn) loss for the quarter to 30 September, while revenue fell 83% to €1.2bn. In a statement, IAG said bookings failed to improve as expected due to ongoing Covid lockdowns across Europe and a failure of governments to adopt measures to replace quarantine and boost customer confidence.
Brexit will not bring disaster to the City of London
The Economist considers the impact of Brexit on the City of London, surveying interim agreements made so far by both sides to ensure ongoing financial stability. In general the full impact will only be known when temporary extensions to current rules come to an end; but Covid-driven changes to technology, working practices will affect location-based regulation in a way that could make Brexit look “almost quaint”, in the words of Jan Putnis of Slaughter and May. In the immediate term, steps taken by regulators should mean even a no-deal Brexit will result in “more a broken-arm than broken-neck cliff edge,” according to one British regulator: “Some market disruption, perhaps, but not a financial-stability event.” Separately, the Mail’s Alex Brummer decries a lack of representation for financial services during the Brexit negotiations.
AJ Bell sees increase in new customers
Total assets under management at investment platform AJ Bell have increased 8% to £56.6bn, up from £54.3bn at the end of June and £52.3bn in September of last year. Chief executive Andy Bell commented: “Our focus on the needs of our customers and our easy-to-use platform has fuelled a 29% increase in platform customers, with particularly strong progress made in the direct-to-consumer market.” He also noted that the company is planning to “enhance our platform propositions this year as part of our growth strategy.”
EU explores tougher curbs on City hedge fund managers
The European Commission issued a consultation paper on Thursday questioning whether delegation of fund management should be limited, preventing hedge funds from being managed from overseas financial centres.
Gilead secures FDA approval for remdesivir
The US Food and Drug Administration has approved Gilead’s antiviral drug remdesivir for patients hospitalised with COVID-19, sending the company’s shares up 4.2% to $63.18 in after-hours trading. Remdesivir, now known by the brand name Veklury, was already being used to treat patients under an emergency use authorisation.
UK manufacturing decline slows – survey
The CBI’s industrial trends survey has shown that UK manufacturing activity continued to fall in the most recent quarter, but at the slowest pace since March. Output dropped in ten of the seventeen manufacturing sub-sectors followed in the CBI’s industrial trends survey, with aerospace leading the falls. Separately, a survey by Lloyds Bank has found that 31% of manufacturers believe that a no-deal Brexit would be good for business while 81% said they had made the necessary preparations for operating outside the EU. Those who thought business would improve cited increased demand from domestic buyers and the ability to be more competitive with EU rivals on pricing.
Dutch 'departure tax' is illegal, Unilever told
A proposed “departure tax” that will hit Dutch companies leaving Holland has been deemed illegal by the boss of Unilever, which is looking to move its legal base to London as it looks to end its dual Anglo-Dutch structure. Alan Jope said two out of three of the law firms the company consulted said the legislation would contravene EU law and multiple tax treaties.
MEDIA & ENTERTAINMENT
CMA says Viagogo may have to sell parts of StubHub
Ticketing site Viagogo may need to sell all or part of StubHub after an investigation by the Competition and Markets Authority found the merger of the two firms could lead to higher fees. Viagogo bought StubHub in February for $4.1bn (£3.1bn). "The evidence we've seen so far consistently points in the same direction - that Viagogo and StubHub have a market share of more than 90% combined and compete closely with each other," said Stuart McIntosh, chairman of the CMA inquiry group. The CMA's findings are from its provisional report. Its final report is due in December.
DMGT raises profit outlook amid advertising boost
Full-year profit outlook at the Daily Mail and General Trust (DMGT) has been raised in response to growth in advertising revenue, with group adjusted revenue for the year expected in the region of £1.205bn to £1.215bn and adjusted operating profit between £85m to £90m. The company cautioned that “limited visibility” of the year ahead, resulting from the “severity and duration of the COVID-19 pandemic and its economic repercussions,” meant that long-term outlook remained uncertain.
Shaftesbury seeks to raise £297m through share offering
West End landlord Shaftesbury has announced that it intends to raise some £297m through a discounted new share offering, months after reporting a £287m loss in the first half of the year.
Private equity boost for Countrywide
Private equity firm Alchemy is to provide a £90m lifeline to estate agent chain Countrywide as it seeks to reduce debt, while investor Catalist Partners is opposing the proposals, describing the deal as “destructive for shareholders.”
Like-for-like sales building at Travis Perkins
Like-for-like sales at Travis Perkins increased 3.9% in the third quarter, with total group sales down 3.4%. Chief executive Nick Roberts commented: “We have reported a positive overall like-for-like sales performance in the quarter as our markets have continued to recover following the impact of the national lockdown earlier this year. This has been driven by a strong recovery in demand across domestic RMI markets, benefitting the Travis Perkins, City Plumbing, Wickes and Toolstation businesses who serve these markets.”
EFL seeks delay on tax payments for clubs
The English Football League has asked for permission to defer tens of millions of pounds of tax payments until the Government ban on crowds is lifted. Approximately half of clubs' salary bills goes to HMRC in tax and national insurance, but the EFL says it is losing a combined £22m a month playing behind closed doors and is seeking a postponement of the payments.
Drop in UK consumer confidence fuels double-dip recession fears
Data from research company GfK show a fall in consumer confidence in the first half of October as coronavirus infections rose and restrictions tightened, fuelling fears of a double-dip recession. Joe Staton, client strategy director at GfK, said: "There's a worrying threat of a double dip in consumer confidence as concerns for our personal financial situation and even deeper fears over the state of the UK economy drag the index down six points this month. The prospect of rising unemployment is severely depressing our outlook. Worryingly, this data was collected before the new restrictions came into force and the end of the furlough scheme, so this will negatively impact the index in the run-up to Christmas."
Brits suffer largest erosion of wealth
A study by Credit Suisse has found that Britain has suffered the biggest hit to household wealth of that in any of the world’s major economies this year. Total wealth in the UK fell from $14.6trn to roughly $13.7trn in the six months to the end of June while the number of ultra-high net worth individuals - with assets of more than $50m - declined by 1,544 between the start of 2019 and the middle of this year. Over the same 18-month period the number of super-wealthy adults in the US rose by 14,008 and in China by 4,148. The report suggested currency fluctuations driven by Brexit concerns and a failure of equity markets in the UK to recover from the onset of the pandemic have created a “perfect storm” leaving the UK the biggest casualty of the pandemic among major economies.