HSBC facing fresh pressure over Hong Kong
Reports that HSBC has been screening Hong Kong clients for ties with the region’s pro-democracy movement has sparked fierce criticism from across the UK political establishment. A Reuters report this week suggested Credit Suisse, Julius Baer and UBS had also begun probing clients’ pro-democracy ties. MPs said HSBC should never have backed China’s new security law and was now complicit in the destruction of Hong Kong’s political and economic freedoms. Tom Tugendhat, Conservative MP and chairman of the foreign affairs select committee, said: “The key is that this indicates the level of pressure on even banks that are not domiciled in Chinese jurisdiction is considerable, which raises huge concerns about the pressure that must be on Chinese businesses.”
Bank branches closing at “alarming” rate
Despite a code being introduced in 2017 requiring banks to assess the impact on communities of branch cuts, an investigation by consumer group Which? found that banks have continued to close branches at an “alarming rate”. HSBC, Lloyds, Santander, the Co-Op Bank, TSB and Virgin Money have together closed more than 600 branches since the measures were put in place, while NatWest and Barclays have shut 651 and 386 branches respectively in the period. The figures come after the Financial Conduct Authority last week said it was consulting on its guidance to banks which are planning to close a branch or ATM.
Bank of England promises to spur long-term investing
The Bank of England's executive director for financial stability Alex Brazier has suggested that the central bank could change its rules to encourage long-term investing in companies left with huge debt piles after COVID-19. In a speech on Thursday, Mr Brazier argued that firms should be encouraged to put their finances back on track by selling shares to new investors rather than take on debt. Some £275bn of debt will mature next year and if measures are not taken to create new opportunities for issuers and investors then the economy will be put at risk, said Mr Brazier.
Stamp duty cut driving resurgence of mortgage sector
Lenders are already seeing a strong resurgence in mortgage applications from first-time buyers after the housing market reopened, the boss of Yorkshire Building Society has said. Mike Regnier’s firm was one of the first to reinstate its 90% loan-to-value mortgages after many disappeared from the market amid coronavirus-related economic uncertainty, said it has completed 31,384 mortgages in the first six months of 2020. It advanced 3,002 mortgages to first-time buyers. The recent surge, he said, has been driven both by pent-up demand and the Chancellor’s announcement of a higher stamp duty threshold.
Blackstone claws back pandemic investment losses
Blackstone has recorded $1.6bn of investment income in the last quarter, up from a loss of $4.2bn the previous three months. CEO Stephen Schwarzman said investment performance had “rebounded sharply”.
Venture capital firm Ribbit plans $600m Spac
A special purpose acquisition company is being formed by venture capital firm Ribbit Capital, which is aiming to raise $600m with which to focus on fintech businesses.
Warren Buffett ploughs $800m into BofA shares
Berkshire Hathaway has increased its stake in Bank of America by more than $800m taking its holding to 11.3% in what the FT says is a sign of confidence in the US banking sector.
Morgan Stanley blocks interns in China from accessing network
Morgan Stanley has told interns in China they will have to work in the office rather than from home amid concerns that granting remote access in the country could leave it vulnerable to infiltration or attack.
Daimler confident on recovery after sales fall
Daimler has reported a 34% decrease in vehicle sales as a result of coronavirus, with sales in the second quarter at 541,800, down from 821,700 in the year earlier period. Chairman Ola Källenius commented: “Due to the unprecedented COVID-19 pandemic, we had to endure a challenging quarter. But our net industrial liquidity is a testament to effective cost control and cash management, which we must continue to enforce.”
Pilots at BA to vote on pay and redundancies package
Pilots at British Airways will vote at the end of the month on pay cuts and voluntary redundancies, with union Balpa recommending that proposals including voluntary working, an initial 20% pay cut and the creation of a standby pool of 300 pilots on reduced wages, are accepted.
Construction contract value drops
The total value of construction contract awards has dropped almost 10%, according to the Economic & Construction Market Review from industry analysts Barbour ABI. In June 2020 the value was £2.2bn based on a three-month rolling average. Compared with May, this is a decrease of 9.2% and is also 57.3% lower than June 2019, the study found.
Online investment firms boosted by surge in small investors
Trading at online investment companies IG Group and AJ Bell has been boosted by small investors trying their luck on stock markets during lockdown over the past few months, with pre-tax profits at the former up 52% to £296m over the year to May. Revenues increased 36% to £649m in the period. Meanwhile AJ Bell added 20,370 platform customers in the three months to 30 June, with chief executive Andy Bell announcing a push into the savings market with a new hub enabling customers to apply for multiple accounts with no paperwork. Brewin Dolphin also reported total funds grew 12.8% in Q3, from £41.4bn to £46.7bn.
Beazley to take ‘evasive action’ ahead of recession
Andrew Horton, the CEO of insurer Beazley, has said the company will move away from business areas that could be vulnerable to a big jump in claims as insurers brace for an economic downturn. "We are taking evasive action to reduce our losses in areas such as employment practices and professional negligence," said Horton.
Lloyd’s of London to offer COVID-19 vaccine insurance
A new Lloyd’s of London syndicate led by Parsyl, a cargo insurance specialist, in partnership with insurers Ascot and Axa XL, is to start offering cover for the delivery of potential COVID-19 vaccines.
Government buys vaccine factory in £100m drive to boost production
The UK government has spent £16m on a manufacturing facility in Essex to scale up production of a COVID-19 vaccine, as a growing number of companies report promising results in early-stage trials. The manufacturing site, purchased from the genetics, health and nutrition company Benchmark Holdings for £16m, will work alongside the £93m Vaccines Manufacturing and Innovation Centre that is being built in Oxfordshire which will have enough capacity to produce all necessary vaccine doses in the UK.
Dubai court freezes NMC founder Shetty’s assets
The assets of NMC founder BR Shetty have been frozen by a Dubai court at the request of Credit Europe Bank, which is pursuing $8.4m in outstanding debt.
LEISURE & HOSPITALITY
Gyms open waiting lists for sold out classes
Gyms are opening waiting lists for exercise classes after many saw them sell out hours ahead of reopening. Figures from UKactive, the trade body, showed that demand is high, with 87% of gym members saying they planned to return as soon as their centre reopened and more than a third of non-members saying they plan to sign up.
Johnson Matthey sees sales fall in first half
Johnson Matthey has reported first half performance “materially below” last year’s figure. The catalytic converter maker said April sales were down 75%, and down 20% by June. William Ryder, equity analyst at Hargreaves Lansdown, noted: “The bulk of Johnson Matthey’s business is making catalytic converters, and demand for these is tied directly to car manufacturing. When car makers downed tools earlier this year demand for JMAT’s converters fell too.”
Dyson to cut 900 jobs as coronavirus changes customer habits
Dyson is cutting 600 jobs in the UK and a further 300 worldwide with most of the positions being lost in retail and customer service roles. A Dyson spokesman said: "The COVID-19 crisis has accelerated changes in consumer behaviour and therefore requires changes in how we engage with our customers and how we sell our products."
MEDIA & ENTERTAINMENT
Pandemic sends millions flocking to Twitter
Twitter saw usage jump by 34% in the three months to the end of June compared with the previous year, the biggest quarterly spike in the social media platform's history. Users were driven to Twitter because of the pandemic and the Black Lives Matter protests, analysis suggests. However, the company suffered a fall in second quarter revenues from £662m to £537m due to advertisers holding back spending.
Daily Mail owner suffers 45% hit to advertising
Advertising across news titles owned by DMGT were down 45% in the three months to the end of June, with underlying revenues declining 23% to £241m in its third quarter.
Outsourcing firm exceeds expectations for first half
G4S has exceeded first half profit expectations, with shares in the outsourcing firm up 6.2% in morning trading. Profit was down 4.6% over the period, down from £196m in the year earlier period to £187m, while revenue fell 1.5% to £3.35bn, a fall from £3.4bn in 2019.
Latest spending data shows pause in UK economic recovery
Spending data indicate the economic recovery which began in April may be going into reverse as consumers remained cautious. The figures suggest hopes for a V-shaped recovery maybe optimistic. Meanwhile, the latest Lloyds Bank International Trade Index hit a low of 34.6 for new manufacturing exports between April and June, down from the 46.8 recorded in the first quarter of 2020. A separate survey by the CBI found factory production fell by a record 59% between April and July. "Manufacturers continue to face extreme hardship due to the COVID-19 crisis”, said CBI chief economist Rain Newton Smith. "There are tentative signs of gradual recovery on the horizon, with firms expecting output and orders to begin to pick up in the next three months. But demand still remains deeply depressed."