BANKING
New laws on crypto may be needed
Warning that a “patchwork” of rules across member states is leaving consumers vulnerable, the European Banking Authority (EBA) has called for the introduction of definitive pan-European rules on crypto assets. “Divergent approaches to the regulation of these activities are emerging across the EU,” the EBA said in a report to the European Commission. “These factors give rise to potential issues, including regarding consumer protection, operational resilience, market integrity and the level playing field.”
Met Police handed funds from TSB
TSB has invested £200,000 in a partnership with the Metropolitan Police to help fight fraud and cybercrime. The bank said the scheme was aimed at fraud prevention and enforcement. Figures from Financial Fraud Action UK show fraud leads to £2m of losses every day in the UK.
Hampshire Trust opens new HQ
Hampshire Trust Bank’s development finance division is opening a new northern HQ in Leeds. The new office will aim to expand HTB's presence across the North East, the North West, and Yorkshire.
PRIVATE EQUITY
UK trails Europe in private equity deals
Figures from Unquote Data have revealed that the value of European private equity deals hit €173bn (£155.92bn) last year, up from €149.2bn the previous year. In the UK the value fell to €27.2bn from €41.3bn the previous year. Unquote head of data and research Julian Longhurst said: “This might well be because potential target companies with international suppliers and clients - which tend to be larger businesses - are more vulnerable to any Brexit outcome that would raise barriers to trading with the European Union.”
Brown to advise Swiss private equity fund
The former PM Gordon Brown is to become an adviser for Partners Group, a Swiss private equity firm. Partners, which has $78bn of assets under management, started its $1bn “impact” fund PG Life last year. The fund is focused on investments that meet the UN’s sustainable development goals.
Pay doubles at Terra Firma
According to its annual accounts, Terra Firma Capital Partners rewarded employees significantly after the firm’s revenues rose 73% to £39m. The company more than doubled its wage bill to £24.6m in the year ending March 2018 from £11.4m.
KKR warns investors on giant corporate debt loads
KKR’s asset allocation head Henry McVey has warned investors to scale back lending to highly indebted companies.
INTERNATIONAL
Hedge funds suffer worst year since 2011
Hedge Fund Research’s main index has revealed that hedge funds were down 4.07% last year, the worst performance for seven years. However, the index beat the S&P 500 index.
N26 takes Europe fintech lead
N26, the Berlin-based digital bank, has become Europe’s most valuable fintech firm after raising $300m to fund international expansion.
AUTOMOTIVE
Chinese car sales fall
Car sales in China, the world's biggest vehicle market, have seen their first annual fall in twenty years. Sales fell 6% to 22.7m units in 2018, according to the China Passenger Car Association (CPCA). The deceleration comes amid a slowdown in China's economy which has hit performance at car manufacturers around the world.
AVIATION
Airports prepare to crack down on drones
Airports have said they are stepping up measures to stop drones from grounding flights following the latest incident at Heathrow. The Department for Transport said the UK government is working with the aviation industry to explore technical solutions. A spokesman for the Airport Operators Association, a trade association representing UK airports, commented: “This includes looking at what technology is available and what deterrent action, such as increased police patrols, can be taken.”
FINANCIAL SERVICES
JP Morgan warns delaying Brexit is 'worst-case scenario' for markets
Extending Article 50 could lead to a “death by a thousand cuts” for the UK economy, JP Morgan market strategist Karen Ward has said. Prolonging Brexit is the “worst-case scenario” she warned, because it prevents the UK “reaching a clear, final outcome that provides certainty for businesses.” She added: “Where we’re stuck in the UK is we want to have access to the EU [single market, customs union] in some way ... but we want to be sovereign. That’s impossible. We could talk about it for the next 10 years but you cannot square that circle. A lack of investment, paralysis in the corporate sector is just not good for the economy.”
Struggling Woodford still turns a profit
Despite a sluggish fund performance, Woodford Investment Management still managed to turn in a profit of £41.7m for the 12 months to the end of March 2018. The firm also paid out a £36.5m dividend to Woodford Capital, a holding company 65% owned by founder Neil Woodford and 35% by chief executive Craig Newman, to be recycled into funds and used to pay an income to the duo. Turnover for the year was £78m, with average assets under management pegged at £16m.
ASI reaches deal with Virgin Money
Aberdeen Standard Investments (ASI), the fund management arm of Standard Life Aberdeen, is set to acquire 50% - less one share - of Virgin Money Unit Trust Managers for an upfront cash payment of at least £40m to create a new investment and pensions joint venture. The proposed tie-up is designed to broaden Virgin Money's retail investment proposition, allowing it to offer a wider range of funds. Martin Gilbert, co-chief executive at ASI, said: “The partnership offers a fantastic opportunity to develop a business that combines the best talents of Virgin Money and ASI.”
Pension cold call ban comes into force
A ban on pensions cold calling is now in force, with those breaching the regulation facing fines of £500,000. However, Kay Ingram, director of public policy at advisory firm LEBC, warns that the ban in itself will not stop determined criminals, asserting that people needed to understand that no legitimate adviser or pension provider would call them out of the blue.
Kuwaiti fund sues Man Group
Kuwait’s Public Institution for Social Security (PIFSS) has said that it has filed a lawsuit against Man Group and its subsidiaries. The pension fund is seeking $156m in compensation relating to secret contracts between a former PIFSS executive and Man Group between 1996 and 2013. Man Group has said it will robustly defend any proceedings.
MANUFACTURING
Rolls-Royce will keep manufacturing in UK
Rolls-Royce has revealed that it will not move manufacturing abroad after Brexit, as it unveiled record sales figures. Rolls-Royce sold 4,107 vehicles in 2018, a 22% increase on 2017. Boss Torsten Müller-Ötvös said the idea of moving the carmaker was a “complete no-go for me”.
REAL ESTATE
Taylor Wimpey leveraging cheap mortgage climate
Amid the wealth of cheap mortgage deals available, housebuilder Taylor Wimpey is keeping buyers interested - despite Brexit uncertainty. Although average selling prices were flat at £264,000, sales volumes rose 3% to 14,947, while forward orders were up 9% to £1.78bn. Chief executive Pete Redfern said the extension of the Help to Buy support scheme had also helped: “People look at these big political situations and at first they’re nervous but after a while, they tend to want to get on with life,” he added.
RETAIL
Mothercare reveals heavy festive losses
Mothercare has reported heavy falls in sales both online and in its stores over Christmas. During the 13 weeks to January 5th, online sales dropped 16.3% while store sales fell by 11.4%. Mothercare blamed the slide on the “difficult consumer backdrop” and said it had discounted heavily in stores at the same time last year, resulting in tougher comparisons.
ECONOMY
Productivity growth hits two-year low
Britain’s struggle to improve productivity shows little sign of ending after output per hour slumped to its weakest level in two year during the three months to September. ONS data shows productivity was just 0.2% better during the quarter than the same period in 2017 – the worst annualised rate of growth since the third quarter of 2016. Manufacturing experienced labour productivity growth of 1.7%, while services achieved 0.1%. Tej Parikh, senior economist at the Institute of Directors, commented: “We remain well behind the growth rates we saw prior to the 2008 downturn. For sustained increases in our productivity we need more support for skills, infrastructure and technological development at national and regional levels.”
OTHER
London retains tech investment top spot
Data published by Pitchbook and London & Partners shows that London remains top of the tech investment charts in Europe. Tech firms in the capital raised £1.8bn in 2018, accounting for 72% of the UK's £2.5bn total and more initial public offerings than anywhere else in Europe. Berlin secured second place on the list with £936.5m in funding last year, while Paris came in third at £797m. London’s most attractive tech sector continues to be fintech, scoring more than £1bn in funding and hosting over 90% of the UK's financial start-ups that raised throughout the year.