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Daily News Roundup: Thursday, 3rd January 2019

Posted: 3rd January 2019


First-time buyer mortgage approvals at decade high

First-time buyer mortgage approvals hit an estimated 367,038 last year, according to analysis from Yorkshire Building Society using UK Finance data, up from 362,800 in 2017 and 359,000 in 2007 and almost double the 193,300 taken out following the 2008 financial crisis. Yorkshire Building Society says first-time buyers represent 50% of all homes bought with a mortgage, marking the highest proportion since 1995. The researchers said the figures suggest government initiatives such as Help to Buy Isas and stamp duty relief have had a positive impact.

Analysts: Brexit deal would boost banks

Laith Khalaf, senior analyst at Hargreaves Lansdown, says banks could be boosted if a no-deal Brexit is avoided, saying: “If we do get some resolution that looks like we are heading for an orderly Brexit that is not going to harm the economy, there could be considerable upside for the banking sector.” Offering a similar view, Michael Hewson, chief market analyst at CMC Markets, says banks could benefit if there is progress on Britain’s exit from the EU, commenting: “If we do get a deal, I can foresee a scenario where they rally very strongly, Lloyds especially.”

Technology can broaden financial inclusion

Shanu Hinduja, chair of Hinduja Bank, calls for greater financial inclusion, noting that an estimated 1.7bn adults worldwide do not have access to formal financial services. This, she notes, means that 31% of the adult population do not have a bank account. She highlights the importance of technology in addressing the issue, pointing to the fact the two thirds of unbanked adults own a mobile phone and offering that mobile devices and the internet make it possible to deliver financial services to areas without bank branches. Ms Hinduja cites World Bank data showing that since 2014 the number of adults with a mobile money app has almost doubled to 21% while the proportion of adults with a bank account “has not witnessed a considerable increase”. She also points to Global Findex Database figures showing that financial inclusion has increased by 7% since 2014.

Big Issue calls on banks to help vendors

The Big Issue Foundation is urging banks to make it easier for its homeless vendors to take contactless payments. Currently, vendors who take cashless payments need to have a bank account, which can only be opened with proof of identity and a permanent address. Russell Blackman, managing director of Big Issue, said: “We are actively working with a number of retail banks, who, in turn, are having conversations with the Financial Conduct Authority to help develop easier access, basic banking facilities.” The Big Issue Foundation has recently worked with payments company iZettle on a trial enabling magazine sellers with a home address to accept contactless payments.

British Business Bank role for Mitchelmore

The British Business Bank has appointed Ian Mitchelmore to the new position of senior manager, UK Network for Scotland. Mr Mitchelmore, who has worked at Bank of Scotland and the Scottish Investment Bank, will be supporting Jennifer Donnellan, the recently appointed UK Network director, devolved nations.


EQT increases offer for Karo Pharma

EQT has increased its offer for Swedish specialty pharma group Karo Pharma to $694m. The revised bid, made through the EQT VIII fund, offers shareholders a premium of 29% to the stock's close on October 26, the last trading day before the original offer was made. Per Franzen, partner at EQT Partners and investment advisor to EQT VIII, said: “We now hope that the remaining shareholders share our perspective that this revised offer is attractive.”

Share suggestions

The Times looks at shares to buy in 2019, saying that 3i “offers investors a reassuringly diverse exposure” and is “driven by the quest for private equity returns.”


ECB appoints administrators to Banca Carige

The European Central Bank has appointed a surveillance committee, along with three temporary administrators, to struggling Italian lender Banca Carige, following a mass board resignation. Italy's 10th largest bank said the administrators would seek talks with the country's deposit guarantee fund, which lent it €320m via a convertible bond last year.

Denmark shakes up watchdog after Danske Bank scandal

Rasmus Jarlov, Denmark’s business minister, says the country’s government will seek to strengthen its financial regulator on the back of concerns over its response to the money laundering scandal at Danske Bank.


Tesla shares dip

Tesla has cut the US price of all its vehicles to offset lower green tax credits. The firm also revealed that it delivered fewer new vehicles in the final three months of 2018 than most analysts had forecast. Bank of America analyst John Murphy said in a client note: "In our view, this move could suggest that what many bulls assume to be a substantial backlog … for Tesla may be less robust." Concerns over future profitability saw Tesla shares dip 6.8% on Wednesday.


UK-based financial groups eye Dublin

With a number of firms seeking to move operations to Dublin from London ahead of Brexit, an official has told the FT that Ireland's central bank is examining applications from "significantly" more than 100 financial institutions.

Didi Chuxing moves into financial services

Chinese ride-hailing app Didi Chuxing has unveiled a range of financial services, including personal loans, medical and car insurance, via its Didi Finance app, rivalling WeBank and Alibaba's Ant Financial. Didi says that its financial products were designed for the "era of new economy and flexible employment", lowering the entry barrier into the gig economy.

Watchdog freezes UK provider of mini-bond investments

The Financial Conduct Authority has banned London Capital and Finance from paying out interest pending an investigation into concerns about its marketing practices, which promised hefty returns.

Crypto funds appeal for patience after market rout

Cryptocurrency funds, like Pantera Capital, Galaxy Digital and Systematic Alpha Management, are appealing to investors’ visionary nature following the torrid year endured by digital assets.


Playtech settles Israeli audit

London-listed betting software firm Playtech has agreed to pay €28m (£25.2m) to Israeli tax authorities following an audit of its accounts between 2008 and 2017. The firm recently warned that it expects to take an earnings hit of up to €25m this year following the introduction of higher taxes on betting in Italy.


Factory output jumps amid Brexit stockpiling

Britain’s manufacturers ramped up their stockpiling efforts last month in response to the prospect of a no-deal Brexit, with factory output rising to the highest level in six months. The IHS Markit/Cips manufacturing purchasing managers’ index rose to 54.2 in December from 53.6 in November, on a scale where a reading above 50 indicates economic growth. The pound’s weakness also helped support export orders, with growth from the US, Europe, China, India, Brazil and Africa.


Gordon Dadds completes Ince merger

Shares in Gordon Dadds have resumed trading after it finalised a merger with shipping firm Ince & Co. The takeover makes Gordon Dadds the largest of the law firms that have listed since Gateley became the first, in 2015, though DWF could steal the crown with plans to list in London this year. Gordon Dadds' results for the six months to September 30 reveal revenue was up 56% to £20.11m and operating profit up 23% to £4.27m.


Foreign investors at home in London offices

Investors have poured £20bn into central London offices this year - one third above the long-term average. More than 90% of the cash came from overseas investors, as the capital's commercial property market continued to defy fears of a capital exodus in the run-up to Brexit. Meanwhile, foreign buyers have invested £144.3bn in London's commercial property over the past 20 years.


Labour shortages squeeze firms

UK firms are being squeezed by labour shortages, rising prices and a slowdown in sales. More companies than ever before are finding it hard to recruit staff, according to the British Chambers of Commerce. Four fifths of employers in manufacturing, and almost as many in the service sector, reported difficulties in finding the right workers.

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