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Daily News Roundup: Tuesday, 27th October 2020

Posted: 27th October 2020

BANKING

Government accused of being opaque over Covid loans

Labour MP Darren Jones, the chair of the Business, Energy and Industrial Strategy (BEIS) committee, has criticised the Government’s decision not to publish the names of companies receiving money through schemes such as the Coronavirus Businesses Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS) and the Future Fund. “I am still not satisfied by the Government’s explanation as to why it isn’t publishing the data of which companies have received what funding, including through the Future Fund, given taxpayers could end up as shareholders of a whole portfolio of start-up businesses”, he wrote. Jones also accused the Government of letting private equity groups “cash in” on state-backed coronavirus loans, by allowing the companies they own to use the funding to cover the costs of the large debts used to buy them.

Now would be a crazy time for banks to resume dividends

The FT’s Patrick Jenkins says it would be madness for a UK regulator to allow banks to deliberately deplete their capital to pay dividends in the midst of a global pandemic.

PRIVATE EQUITY

Coutts partners with BlackRock for exclusive fund launches

Coutts has teamed up with BlackRock to launch six funds for clients of the wider NatWest Group. The range will consist of three actively managed portfolios — US equities, UK equities and global investment grade credit — and three index funds, investing in US, UK and European equities.

INTERNATIONAL

ECB: the EU needs a regional ‘bad bank’

Andrea Enria, chairman of the supervisory board of the ECB, says with non-performing loans at euro area lenders set to reach €1.4tn, a new entity is needed to offer a relief scheme to banks.

AUTOMOTIVE

PSA and Fiat Chrysler expecting Brussels' approval for merger

Fiat Chrysler and PSA are expecting to become the world’s fourth largest carmaker when the European Commission approves their $38bn (£29bn) merger. The green light from the EU, hopefully in the first quarter of 2021, would formalise the creation of Stellantis.

Arrival to expand in London

UK electric vehicle start-up Arrival has agreed with landlord Schroder UK Real Estate Fund to double the size of its headquarters in Kensington. The electric van maker raised $118m from funds managed by BlackRock last month to aid expansion.

AVIATION

Aircraft orders suffer worst ever quarter

There were just 13 orders placed for commercial aircraft between July to September, a decline of 91.4% on the same quarter last year to mark the global aviation industry's worst ever quarter on record due to the coronavirus pandemic.

FINANCIAL SERVICES

EU takes step to ease jitters over dual listings after Brexit

The European Securities and Markets Authority has indicated that EU investors will be able to trade sterling-quoted shares of European companies listed in London after Brexit. The guidance comes in response to concerns from EU businesses and governments that the bloc’s regulations could “fragment” the share market and barricade companies from large amounts of capital in London. However, the revised share trading obligation (STO) will only apply to a small portion of market trading across the Channel. Esma said that fewer than 50 EU-listed shares are traded in sterling in London, accounting for less than 1% of total EU trading.

Peer-to-peer investors told loans are gone

Over 3,500 people who invested through the peer-to-peer lending platform Funding Secure have been told the prospect of recovering many of the loans is zero and that administrators may lack the resources to pursue errant borrowers for shortfalls. Funding Secure was founded in 2012 and arranged more than £175m of loans. At the point of its collapse about £80m was outstanding.

PrimeStone goes after St James's Place

Activist investor PrimeStone has called for a major shake-up St James’s Place. “SJP has a bloated organisational structure while its compensation is overly generous,” it said, and suggested that a “well regarded consultancy firm” could help overhaul the company. SJP is set to announce its third quarter financial performance today.

UK regulator censures Aviva over preference share debacle

The Financial Conduct Authority has scolded Aviva over its plans to cancel its preference shares in March 2018, when it threatened to cancel them at below market value. But the FCA stopped short of fining Aviva, despite finding a “serious failing” by the insurer over its failure to ensure information disclosed to investors was not misleading.

PrimaryBid secures expansion funding

UK fintech start-up PrimaryBid has secured £38m in new investment from the London Stock Exchange Group, OMERS Ventures and Fidelity International Strategic Ventures, among other new weighty backers. The app, set up by former Goldman Sachs banker Anand Sambasivan, allows individuals to register, be vetted and then apply for shares in a company, before collating investor applications into a one larger submission for each firm.

Carlyle Group takes majority position in Calastone

Washington DC-headquartered investment firm The Carlyle Group, the world’s second-largest private equity firm in 2020 by capital raised after Blackstone, is to take a majority position in funds network Calastone. The sellers include venture capital firms Octopus Ventures and Accel.

Ant poised for world’s biggest stock market flotation

Chinese financial technology giant Ant Group yesterday priced its IPOs in Hong Kong and Shanghai to raise at least $34.4bn. If the raise is achieved Ant would be valued at $313bn.

LEISURE & HOSPITALITY

EU digital crackdown would hurt Booking.com

Booking.com, which is responsible for around 13% of all hotel revenues in Europe, has warned that new legislation for digital businesses in the European Union would "handcuff" the travel firm. Regulators are said to be considering measures including forcing larger tech firms to share data with rivals in a bid to open up markets to smaller competitors.

Hotels unlikely to recover for four years

Forecasts published today indicate the UK hotel industry could take four years to return to 2019 levels of business. Occupancy rates are expected to average 45% next year, up from between a third and two-fifths in 2020 but still an unprecedentedly bleak outlook.

Major payouts due for William Hill advisers

Advisers are in line for more than £165m of fees if William Hill investors vote through a takeover by US casino giant Caesars Entertainments next month.

US hedge fund bets on The Restaurant Group

Coltrane Asset Management has taken a £10m stake in The Restaurant Group betting the Wagamama owner will bounce back after losing nearly three quarters of its value.

MEDIA & ENTERTAINMENT

ByteDance considers listing video app

ByteDance, the owner of TikTok, is in discussions with investment banks to list its Chinese short video app Douyin in Hong Kong.

PROFESSIONAL SERVICES

Software group SAP plunges after forecasts cut

Shares in SAP, Europe's largest software company, fell 20% yesterday after it cut its revenue and profit forecasts for this year as a resurgence of coronavirus cases depressed business spending.

REAL ESTATE

Half of house purchases at risk of collapse

Property market analysts Twentyci predict that as many as 325,000 homebuyers who agree to purchase a property before the end of the year are expected to miss out on the stamp duty holiday, which comes to an end on March 31. Conveyancing, surveying, mortgage and search services have been overwhelmed after the stamp duty cut and an end to lockdown led to a boom in house sales. Twentyci calculates that if one in five buyers decides to pull out of their purchase it could lead to 53% of sales collapsing by March.

RETAIL

Hut forecasts rapid rise in sales forecasts

The Hut Group has issued its first update since going public last month increasing its full-year revenue guidance to between about £1.48bn and about £1.52bn. The company also sought to address governance concerns by announcing the appointment of independent special advisers to its board committees.

Footfall falls again across the UK

The number of people shopping at UK retail destinations - including high streets, shopping centres and retail parks - dropped by 1.2% last week, according to the latest data from Springboard. The annual decline in footfall across the UK reached a 32.9% last week, with the biggest annual fall in Wales at 40.3%.

ECONOMY

Haldane: Working from home stifles creativity

Bank of England chief economist Andy Haldane has said the effects of working remotely are not yet fully known and in the long term may threaten productivity and creativity. Virtual discussions failed to build trust and strengthen relationships in the same way as informal conversations, he argued, adding: “This cannot be done indefinitely.”

OTHER

Campaign launched to recruit 10,000 black interns in British companies

Credit Suisse, Zurich Insurance and Linklaters are among the first groups to sign up to a campaign offering paid work experience to 10,000 black graduate interns.

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