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Daily News Roundup: Thursday, 7th October 2021

Posted: 7th October 2021

BANKING

NatWest acquires pocket money app RoosterMoney

NatWest has acquired children's pocket money app RoosterMoney in a move the bank says will help families and young people manage their cash more easily. The bank plans to offer Rooster as part of its existing products and services in the coming months. Features on the app include reward charts and chore reminders to help encourage a savings habit from a young age. Children can also get a contactless debit card with flexible parental controls and no risk of going overdrawn. The app currently has more than 130,000 UK users and existing customers can continue to use it as they normally would.

HSBC extends availability of buy-to-let mortgages

HSBC is expanding the availability of its buy-to-let mortgages to brokers meaning thousands of independent mortgage advisers from more than 510 broker firms can now include HSBC UK's buy-to-let deals within their advice to clients. Nationwide Building Society meanwhile has unveiled a “one-stop shop” to help landlords manage their properties in one place.

Revolut mulls crypto token launch

Fintech payments service Revolut is set to launch an exchange token which could reward app users for their loyalty by reducing fees, according to CoinDesk insiders. A source said Revolut is seeking permission from the Financial Conduct Authority to go ahead.

PRIVATE EQUITY

Blue Prism defends Vista takeover bid

UK robotics company Blue Prism has defended its processes after major investors questioned the speed of its sale to US private equity firm Vista Equity Partners. Shareholders Hawk Ridge Capital and Coast Capital both oppose the deal, with the latter believing the offer from Vista undervalued the company. Coast asked last week what  incentives had been offered to management to complete the deal. Blue Prism, in response, said it reached out to 15 strategic parties and 12 financial sponsors during its sale process and that assertions of conflicts of interest were "entirely flawed".

Private equity pays record premiums for public companies

Depressed share prices in the wake of the pandemic mean private equity firms are paying an average premium of 47% when buying UK companies, 45% for European companies and 42% for US companies.

INTERNATIONAL

SEC pressed for more disclosure rules on China investments

Marco Rubio, a Republican Senator from Florida, wants the Securities and Exchange Commission to apply rules that would require publicly-traded companies to disclose more about workforce diversity and ESG-related efforts to also apply to Chinese companies that trade in the U.S.. In a letter to SEC chairman Gary Gensler, Rubio said leaving them out would be “highly inconsistent and arbitrary.” Rubio also wants U.S. companies that do business in China and funds that hold investments from there to release the same information.

Santander launches €841m share buyback

Santander launched a share buyback programme on Wednesday worth about €841m - part of plans announced last week to pay €1.7bn, equivalent to 40% of its first-half underlying profit, to its shareholders through dividends and share buybacks.

Citigroup makes Asia banking appointments

Citigroup has appointed David Jiang and Lei Li as co-head of industrials investment banking for Asia. The Hong Kong-based duo replace David Biller, who was recently appointed to be the Banking, Capital Markets and Advisory co-head of industrials for EMEA, Asia and Japan for the bank.

Bank of America raises minimum hourly wage to $21

Bank of America Corp has raised its U.S. minimum hourly wage to $21 as the bank seeks to fulfil its pledge of increasing the pay to $25 an hour by 2025. The U.S. bank has also asked its vendors to set a minimum wage of $15 an hour.

AUTOMOTIVE

Volvo cruising toward IPO

Ian King reports on the revival of Volvo for Sky News, lauding Geely’s heavy investment in the brand. Volvo is already back to pre-pandemic performance levels, reporting a profit in July of $1.52bn for the first six months of 2021, double the sum it achieved during the same period in 2019. Mr King suggests Volvo could dust off plans for an IPO which would, “set the seal on what has been, by anyone's standards, a most impressive turnaround.”

AVIATION

BA to rehire some of thousands of staff laid off during pandemic

British Airways plans to rehire about 3,000 cabin crew after cutting roughly 10,000 jobs last year due to the COVID-19 crisis. But unions have criticised the airline for offering workers “substantially reduced terms and conditions”.

CONSTRUCTION

Construction growth hit by shortages and price rises

The IHS Markit/CIPS UK construction purchasing managers’ index (PMI) fell to an eight-month low of 52.6 in September - down from 55.2 in August and below economists’ forecasts of 54. Supply chain disruption and staff shortages put pressure on costs and rising prices weighed on demand, dragging on momentum. “The volatile price and supply environment has started to hinder new business intakes as construction companies revised cost projections and some clients delayed decisions on contract awards,” said Tim Moore, director at IHS Markit. “As a result, the latest survey data pointed to the worst month for order books since January’s lockdown.”

FINANCIAL SERVICES

Standard Life creates financial services jobs in Edinburgh

Phoenix Group, the new owner of Edinburgh-based Standard Life, has announced plans to invest in the life and pensions business and related brand, which it reckons can help power growth in a range of attractive markets.

Pandemic reduces number of spurious UK insurance claims

The latest data from the Association of British Insurers show spurious UK insurance claims by 10% last year, with the fall attributed to business being closed and restrictions on travel during the pandemic.

HEALTHCARE

UBS backs biotech impact fund

Biotechnology investment firm MPM Capital has raised $850m for its Oncology Impact Fund 2, with $650m of that coming from UBS clients. Mark Haefele, chief investment officer for UBS Wealth Management, lauded the “extremely bold” impact fund which will send 20% of managers’ performance fees to cancer charities and research.

LEISURE & HOSPITALITY

Tui plans €1.1bn capital raise after demand for holidays returns

Package holiday operator Tui plans to raise €1.1bn by selling new shares after demand shot up during the summer with CEO Friedrich Joussen saying the move would “provide us with a capital structure more appropriate for more normal operating conditions.” Some of the cash will be used to pay off state-backed loans it took from the German government during the pandemic.

MANUFACTURING

Factory orders slump in Germany

German manufacturers suffered a 7.7% drop in demand over August - more than triple the average drop expected by economists. Germany’s automotive sector saw orders slump 12% amid a severe lack of semiconductors which forced Daimler and Volkswagen to cut down on working hours during the month. Claus Vistesen of Pantheon Macroeconomics said: “We never expected manufacturing to have supported growth in the third quarter, but we didn’t expect it to fall off a cliff either.” Meanwhile, retail sales in the eurozone rose 0.3% during August, below the 0.8% increase forecast.

MEDIA & ENTERTAINMENT

Video-sharing platforms face fines for online harms

Ofcom has issued new guidance to video-sharing platforms (VSPs) about how they must protect their users from harmful online content. The communications regulator says that 70% of all users have reported being exposed to harms online. The move means VSPs including TikTok, Snapchat, and Twitch now face fines of up to £250,000 if the companies don't properly tackle content relating to terrorism, child abuse, or racism. The new guidance is a result of European legislation which became British law after Brexit, but will be superseded by the UK's own Online Safety Bill. Sky News reports that the legacy from the EU legislation means that YouTube and Facebook still fall under Irish jurisdiction.

Amazon-owned Twitch hit by huge data leak

The Amazon-owned live-streaming platform Twitch has been hacked with reports that confidential earnings data for its streamers and the service’s source code have been compromised.

RETAIL

Ocado trialling driverless deliveries

Ocado is to invest £10m in Wayve, a driverless car start-up, as part of year-long trial could result in autonomous grocery deliveries. The companies said that the trial will test how Wayve's technology can cope with congested city streets and the "challenging manoeuvres" that last-mile delivery technology has to navigate.

ECONOMY

Markets predict price rises could exceed 6%

Rising inflation is hampering the global economic recovery from the pandemic, the International Monetary Fund has warned. Kristalina Georgieva, the fund’s chief, is calling on central banks to take action if needed to keep rising prices under control. In the UK, analysts are predicting a 7% rise in the cost of living in 2022, up from the current 4.8%. This would be the highest rise in the Retail Price Index since the 1990s. Even if RPI were to average 4.8% for this year, a further £13bn in interest would need to be paid on the national debt, according to economists at BNP Paribas. Derek Halpenny, head of global markets research at MUFG, said: “Inflation is obviously being priced higher everywhere but it’s certainly more problematic in the UK and that’s a reflection of the supply constraints being a bit more severe on the ground as we speak.”

UK households warned of further 30% rise in energy bills next year

Analysts are predicting an increase in household energy bills of between 30% and 40% next year as wholesale gas prices continue to surge. Energy consultancy Cornwall Insight said the main energy price cap is expected to climb to £1,660 a year from next April for a household with average consumption that buys both electricity and gas.

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