BANKING
Regulators call for new rules
Regulators have proposed rules to make banks and payment firms more resilient to major problems after MPs called for regulatory changes on the back of technological failures by institutions including TSB, Visa, Barclays and RBS. The Bank of England and Financial Conduct Authority (FCA) say banks and payment firms should have to identify their most important businesses and set the maximum level of disruption they would accept. FCA chief executive Andrew Bailey said: “Disruptive events can have a high impact on consumers and businesses so firms and financial market infrastructures need to know where the risks to their service delivery lie and to make sure that they are prepared for any service disruption by testing their planned response.”
Investor sells more Metro Bank shares
Hedge fund billionaire Steve Cohen, Metro Bank’s biggest investor, has sold a portion of his stake in the lender, with this his fourth cut to his holding in a fortnight. The move, which comes a day after the bank announced that its chief executive Craig Donaldson is to stand down, takes Mr Cohen’s stake to 5.8%, a share that is worth around £18m. Before the recent sell offs, he held 9.8% of the bank’s shares. Metro has seen other major investors trim their holdings, with Wasatch Advisors having reduced its stake from 4.4% to 2.8%, while investor Ben Stein's Spruce House Partnership last week cut its holding from 6.7% to 5.9%. While these large investors have reduced their stakes, Colombian billionaire Jaime Gilinski Bacal recently acquired 4.28% of shares worth almost £15m.
PRIVATE EQUITY
European exits via IPOs dip
Data from Mergermarket shows a decline in the number of European private equity exits executed via listings. The analysis shows that just 1.4% of European private equity exits so far this year came via an IPO, down from 2.1% across 2018 and 4.8% in 2017. The figures reveal that there have been 11 IPO listings so far this year, with a combined offering size of €5.84bn. This compares to the 21 deals recorded in 2018 which had a combined value of €7.8bn, while 2017 saw 53 offerings worth €16.19bn. Gustav Sandstrom of Mergermarket said European private equity firms were “increasingly shying away from exits via IPOs as tough market conditions force them to consider other options”.
INTERNATIONAL
New Zealand unveils tough new bank capital rules despite opposition
New Zealand’s banks must hold an extra $13.1bn in capital by 2027, with the four largest lenders required to have tier one capital ratios of 16% while smaller lenders must hold 14%.
Ultra-low interest rates spur euro to become world’s new carry trade
Deutsche Bank strategist George Saravelos says the eurozone is the new global provider of liquidity, commenting “no one wants to hold euro cash as an asset … everyone wants it as a liability.”
Experts expect female governor for Bank of Canada
Bank of Canada governor Stephen Poloz is expected to step down when his seven-year term ends next June, with experts predicting he will make way for the country's first female central bank chief. Eight of 10 economists and market strategists surveyed by Reuters said current senior deputy governor Carolyn Wilkins is the front-runner to take his place.
Commerzbank plans IT hub
Commerzbank is considering opening an IT hub in Bulgaria, Bulgarian Economy Minister Emil Karanikolov has said.
AUTOMOTIVE
Battery-powered vehicle sales surge
Pure electric battery car sales surged 228% in November compared to the same period last year, according to the Society of Motor Manufacturers and Traders, with 4,652 of the vehicles registered. One in every 10 new cars sold last month was a hybrid or fully-electric car, as so-called alternatively fuelled vehicles took a record 10.2% market share. In total, 156,621 vehicles were registered in November, down 1.3% from the same month a year ago, after a 6.7% drop in October.
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AVIATION
South African Airways to be placed in bankruptcy protection
South African Airways has announced plans to apply for bankruptcy protection to avert liquidation. The airline, which has seen a number of state bailouts, has not turned a profit since 2011.
FINANCIAL SERVICES
Fintech boom slows
Data compiled for the Telegraph by analyst firm PitchBook shows that the boom in financial technology start-ups appears to be slowing, with just 11 fintech firms founded so far this year in Britain. This marks a drop on the 91 founded last year and the high of 164 recorded in 2015. Analysis by former Credit Suisse analyst Ian Green suggests the decline stretches beyond Britain, with 12 wholesale financial technology start-ups founded globally this year, down from 2015’s 390. Considering the climate for UK fintech firms, the Telegraph’s Hasan Chowdhury cites a report from venture investor Atomico which shows the UK accounted for 50% of all European fintech investment in 2018. The study also found that there was 76% more investment across European fintech this year than last
Landbay shuts doors to retail investors
Landbay has returned cash to investors after the firm announced it would close its retail business with immediate effect, pulling out of the peer-to-peer market. “The decision is about commercial viability and scalability,” said John Goodall, chief executive. The business, which focuses on buy-to-let mortgages, will now only accept cash from institutional investors, such as investment banks and pension funds.
Equity funds recovering well
Investors put £648m into equities in October, according to the Investment Association (IA), following £1.7bn outflows the month prior. Overall savers stuck £2.5bn in funds in October, £1.3bn into bond funds, while fixed income, mixed asset and money market asset classes all also experienced net inflows. “Following a tough third quarter of record outflows, equities experienced a modest revival,” said IA chief executive Chris Cummings.
AJ Bell reveals record year
Investment platform AJ Bell’s 2019 was the most profitable year ever, with profit up almost a third. Revenue hit £104.9m, up from £89.7m in 2018, while profit hit £37.7m, up 33% on last year. The firm also added 34,154 customers, with their total number of retail clients reaching 232,066.
MJ Hudson targeting December float
Fund specialist MJ Hudson is planning a mid-December floatation on London’s Alternative Investment Market. The firm has appointed broker Cenkos Securities to advise on the listing and has issued a schedule one document as a first stage in the listing process. MJ Hudson has not yet said how much money it is looking to raise in its Aim float.
LEISURE AND HOSPITALITY
Thomas Cook customers face refund delay
Customers of defunct tour operator Thomas Cook will face delays in getting refunds for Atol-protected package holidays. The Civil Aviation Authority originally said all valid claims made on the first day of its refund programme would be paid within 60 days, but now says only two thirds will be paid on time. Thomas Cook ceased trading on September 23 and the CAA received 67,000 claims on the day an online refund application system opened in October. It says two thirds would be paid by this weekend – meeting its 60 day target and bringing the total amount of compensation paid to date to £160m. CAA boss Richard Moriarty commented: “We thank consumers for their ongoing patience as we continue to do all that we can to work through the UK travel industry's largest ever refunds programme."
MEDIA AND ENTERTAINMENT
DMGT's digital pivot hits profits
Daily Mail and General Trust (DMGT) has revealed pre-tax profits of £145m for the year to the end of September, a 21% drop, as the firm continues its pivot towards digital advertising. Acquisitions also took their toll after DMGT bought the i newspaper for £50m. With revenue slipping just 1% to £1.41bn, DMGT hailed “good progress” in its transformation strategy.
REAL ESTATE
M&G suspension prompts Aberdeen withdrawals
Investors withdrew £31m from Standard Life Aberdeen’s Aberdeen UK Property fund on Wednesday, close to the total for the previous four months combined. This came after the suspension of a rival M&G product. Andy Bell, boss of investment platform AJ Bell, suggests that it is only a “matter of days” before other property funds with small cash holdings follow M&G and block investors from accessing their money. Figures show ordinary investors pulled a net total of more than £1.7bn from open-ended UK property funds in the 12 months to October, with some concerned over falling property prices. Data shows Columbia Threadneedle and Kames Capital property funds have sold off more than £156m of property in the past two months.
Million-pound property sales surge
Sales of properties valued at £1m or more increased 5% in the first half of this year, estate agents have reported. Buyers and sellers are said to be trying to pre-empt a rise in house prices. Data collated by Lloyds Bank using Land Registry figures shows that a total of 6,891 homes worth more than £1m were sold, a rise of 5% on the first six months of last year. This compares with a 1% rise between 2017 and last year.
Blackstone weighing IQSA move
Blackstone, the world’s largest property investor, is considering a £4bn bid for IQ Student Accommodation. IQSA is the UK’s largest provider of purpose-built student accommodation by value. Initial bids for IQSA, which is controlled by Goldman Sachs and the Wellcome Trust, must be submitted before Christmas. IQSA is considering either a stock market float or a sale in 2020.
SPORT
CVC looks to score FIFA deal
CVC Capital Partners has held talks with football’s governing body over acquiring the commercial rights to the revamped Club World Cup. The private equity firm is reportedly in discussions with FIFA over funding the event in a deal that would include gaining television rights to matches it would then sell to broadcasters.
ECONOMY
Household debt climbs
Figures from the Office for National Statistics (ONS) show that debts are climbing, with average household financial debt rising 9% to £9,400 in the two years to March 2018. Median financial debt grew 12% to £4,500. In total, debts excluding mortgages have risen 11% to £119bn. The analysis shows that personal loans account for £35bn of total household debts, £32bn is from student loans, £25bn is hire purchase, and £22bn is on credit cards, while the remainder includes £3bn of overdrafts.