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Daily News Roundup: Tuesday, 11th June 2019

Posted: 11th June 2019

BANKING

MPs call for action to protect bank victims

The co-chair of the All-Party Parliamentary Group on Fair Business Banking (APPG) has called on regulators to protect Britain's consumers and small businesses by banning the sale of debt to unregulated and inactive lenders. Kevin Hollinrake MP has called for the creation of a new tribunal to protect SMEs who have disputes with major banks or other financial services firms. His comments followed a cross-party motion which aimed to step up the pressure on the Financial Conduct Authority (FCA) and the Treasury to act to free 'mortgage prisoners' and protect SMEs from asset stripping by unregulated lenders. The APPG estimates that there are around 200,000 mortgage prisoners across the UK who are trapped with inactive and unregulated lenders and are unable to take advantage of historically low interest rates. "The FCA must now act quickly to free the mortgage prisoners and outlaw the sale of debt to unregulated and inactive lenders. SMEs must also be protected by legal requirements to treat SME customers fairly and must be given access to an independent and fair Financial Services Tribunal," said Mr Hollinrake.

Barclays picks Kilmarnock for economic pilot

Barclays has chosen Kilmarnock as the first Scottish town in its local economy pilot. Chief executive Jes Staley will launch the bank's second Thriving Local Economies drive at a school in the Ayrshire town today. It will see the bank join forces with local leaders for a three-year study to identify how to help businesses and stimulate growth in the area.

PRIVATE EQUITY

Apollo to buy Shutterfly in $2.7bn deal

Apollo Global Management is to acquire Shutterfly for $2.7bn and will combine the business with privately held Snapfish, a rival photo publishing service.

INTERNATIONAL

Deutsche Bank finds serious failings in payments screening

Deutsche Bank’s internal auditors have discovered weaknesses in its anti-money laundering and sanctions controls that allowed cheques and high-value electronic payments to be processed without proper screening.

Bank stocks hit as investors bet on rate cuts

Investors have begun selling bank stocks amid increasing expectations that the Federal Reserve is likely to cut US interest rates as early as next month.

SGX plans push into foreign exchange markets

SGX, the Singapore exchange, is seeking to capitalise on regulators’ efforts to promote Singapore as a currency trading hub by expanding in foreign exchange markets over the next five years.

Morgan Stanley sells out of oil tanker business Heidmar

Morgan Stanley has divested its 49% stake in supertanker operator Heidmar as part of the $17m sale of a slim majority of Heidmar to DryShips.

AUTOMOTIVE

French try to keep Renault-FCA merger alive

French politicians are attempting to keep alive the prospect of a merger between Renault and Fiat Chrysler Automobiles (FCA), with the country’s finance minister Bruno Le Maire describing a tie-up as a “good opportunity”. Last week FCA abandoned talks about a full merger with Renault, citing “unreasonable” interventions by the French government.

CONSTRUCTION

Bid boosts Helical shares

Shares in Helical were up by almost 10% yesterday on confirmation it has received multiple takeover approaches. However the commercial property firm, which now has a market valuation of £466m, said that none of the unsolicited offers reflected its "fair value".

Housebuilding rules add to regional wealth divide

A report by the Centre for Cities has found strict regulations limiting house building in the UK’s most successful cities have exacerbated the wealth gaps between north and south.

FINANCIAL SERVICES

Morgan contacts FCA over Woodford fund

Treasury Select Committee chair Nicky Morgan has written to the Financial Conduct Authority (FCA), asking whether Woodford Investment Management should forgo its management fee while investors are locked out of its equity income fund. She said that as the move had given Neil Woodford “some breathing room to fix his fund; he should afford his investors the same space and waive the fund’s fees while the fund is suspended." Ms Morgan asked FCA chief executive Andrew Bailey if fund houses should be allowed to continue to charge a management fee when redemptions are suspended. Ms Morgan also asked what dictates how long a suspension should be, and whether there was a maximum length; at what point the watchdog would intervene in a suspension; and whether it has initiated any formal investigation into events that led to the suspension. The FCA is also facing calls to reform the system of “best buy” investment funds promoted by brokers such as Hargreaves Lansdown, which has been thrust into the spotlight by the suspension of the Woodford equity income fund. Meanwhile, the FT reports that Hargreaves is consulting on whether to remove the equity income fund from its range of own-branded products.

Saga partners with Goldman Sachs

Saga is hoping to revive its fortunes by partnering with Goldman Sachs, with the tie-up expected to be announced this morning. Saga chief executive Lance Batchelor said that the group has signed a partnership with Goldman's savings arm Marcus, the online bank that was launched in the UK late last year, because many of the group's customers "hold a large proportion of their wealth in savings".

HG targets £80m fundraise

HG Capital Trust is seeking to raise £80m through a share placing to fund opportunities in an “attractive proprietary pipeline”. The investment trust will issue 37m new ordinary shares at 217.1p each, representing around 10% of its current issued share capital.

Lindsell Train pays director £8.2m, beating big fund company bosses

Profits at boutique investment group Lindsell Train have surged close to 50%. Funds under management rose 24% to £16.3bn due to net inflows and investment performance.

HEALTHCARE

Roche’s Spark Therapeutics takeover delayed

Swiss pharmaceutical firm Roche’s $4.3bn (£3.4bn) acquisition of US gene therapy company Spark Therapeutics is facing increased scrutiny from US and UK regulators and has been delayed until July 31 for further investigation.

LEISURE AND HOSPITALITY

Thomas Cook confirms Chinese takeover approach

Thomas Cook has received a takeover approach for its tour business from Fosun. The Chinese firm is already Thomas Cook's largest shareholder, and also owns the Club Med holiday business. Last month, Thomas Cook reported a £1.5bn loss and said there was "little doubt" that Brexit had caused customers to delay their summer holiday plans.

MEDIA AND ENTERTAINMENT

BBC to scrap free TV licences for over-75s

The BBC is scrapping its blanket free TV licence scheme for over-75s and will introduce a new, means-tested system. BBC director general Tony Hall said it had “not been an easy decision”, but argued it was the fairest option for the poorest pensioners.

ECONOMY

UK economy shrank in April

The UK economy contracted by 0.4% between March and April, according to the latest data from the ONS, which indicates that British GDP grew by just 0.3% in the three months to April compared to 0.5% from January to March. UK car manufacturing fell by 24% in April, as firms planned shutdowns around the original Brexit departure date of March 29 and manufacturers' stockpiling boost unravelled.

Bank sees danger in delaying rate rise

Michael Saunders, an external member of the Bank of England’s monetary policy committee, has suggested that interest rates may have to rise before Brexit uncertainty clears. In a speech at Solent University in Southampton, Mr Saunders said that the economy was at capacity and inflation a risk as he signalled that rates will need to rise.

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