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Daily News Roundup: Tuesday, 30th July 2019

Posted: 30th July 2019

BANKING

UK banks hit with forex rigging lawsuit

Barclays, Royal Bank of Scotland, Citi, JP Morgan and UBS are being targeted in a £1bn class action lawsuit, through the Competition Appeal Tribunal, over forex rigging. The European Commission said the banks had coordinated their trading strategies via two cartels, exchanging commercially sensitive information and trading plans. US law firm Scott + Scott, which obtained over $2.3bn in settlements after a class action against 15 banks in the US for forex rigging, is bringing the claim with backing from litigation funder Therium.

Metro Bank finance boss heading to Revolut

Metro Bank finance director David Maclean is heading to fintech group Revolut. Former Goldman Sachs executive Michael Sherwood is also set to join Revolut - as a non-executive director - while asset management veteran Martin Gilbert is being touted as new chairman.

Mortgage approvals rise

The number of UK mortgage approvals hit 66,400 in June, up from 65,650 in May, according to the Bank of England's latest data, above economists’ expectations and the highest number since January. Annual lending growth to UK consumers slowed to 5.5% in June however, from 5.7% in May, the slowest rate since April 2014.

Bank of Scotland offers lower lending rates for green schemes

Bank of Scotland has launched the Clean Growth Financing Initiative, a new £2bn scheme offering farmers and rural business owners reduced lending rates for projects to improve their green credentials.

PRIVATE EQUITY

Cobham up after takeover offer

Shares in aviation services and defence electronics specialist Cobham have risen following a takeover offer of 165p a share in cash from Advent International. But Cobham's shares are still trading at half the level they reached in 2015 making it a target for a rival bidder. Paul Everitt, the CEO of aerospace trade body ADS Group, has called on the government to secure “appropriate commitments” from the buyer describing Cobham as a major UK industrial asset.

INTERNATIONAL

Brussels shortlists three for top IMF post

Brussels has excluded Mark Carney and George Osborne from its shortlist of candidates to replace Christine Lagarde at the IMF. There are three contenders remaining: Jeroen Dijsselbloem, former Dutch finance minister, Kristalina Georgieva, Bulgarian chief executive of the World Bank, and Olli Rehn, Finland's central bank chief.

Citigroup to trim global markets headcount

Citigroup is planning to cut hundreds of jobs across its fixed-income and stock-trading business over the course of the year. Earlier this month the bank posted second-quarter profit of $4.8bn (£3.8bn), up 7% on last year, but advisory revenues plunged 36% on last year to $232m.

Deutsche sets cut-off date for derivatives book bids

Deutsche Bank has set a September deadline for bids on the huge portfolio of equity derivatives it is selling. The derivatives are among the assets earmarked for disposal in Deutsche's ‘bad bank.’

BBVA caught up in corporate spying probe

BBVA has been named by a judge in Spain's National Court as a legal entity of interest in an investigation into corporate spying at the bank.

Europe’s bank bosses have less skin in the game than US peers

Data from executive pay specialists Equilar show US bank CEOs have 15 times the level of stock in their banks than their European counterparts have in theirs.

AUTOMOTIVE

Could PSA move trigger production exodus?

The Telegraph’s Paul Hudson considers whether, if PSA Group transfers Vauxhall production out of the UK to southern Europe, it will be trigger panic in the industry and lead to more manufacturers scaling down UK production or withdrawing altogether. Meanwhile, unions have said they will fight “tooth and nail” to protect jobs at the Ellesmere Port plant.

AVIATION

Ryanair profits descend

Ryanair's fares in the first quarter to June dropped 6% - and the budget carrier is expecting to take a 6% hit in the first half. Though passenger numbers jumped 11% to 41.9m, first-quarter profits after tax fell 21% to €243m. Competition in Germany and Brexit concerns in the UK continue to “weigh negatively on consumer confidence and spending,” boss Michael O'Leary said.

FINANCIAL SERVICES

Woodford faces the sack after £1m trust share sale

Neil Woodford sold 60% of his stake in Woodford Patient Capital Trust (WPCT) earlier this month reportedly to “meet personal financial obligations”. He sold 1.75m shares worth £1m between July 3 and July 8 but the board of WPCT was only notified by Mr Woodford on Saturday. Shareholders said failing to make the sale public was “disgraceful”. The trust also revealed it had held talks with rival fund managers to take over WPCT’s management contract. Mr Woodford also informed investors in his flagship Equity Income fund that they face the prospect of being locked in the £3.5bn vehicle until December.

Refinitiv deal could flush out a bid for the LSE

Analysts have suggested that London Stock Exchange’s £22bn ($27bn) bid for data business Refinitiv could make the group itself a target as rivals seek to snap it up before the acquisition makes it less attractive. Blackstone spun Refinitiv out of Thomson Reuters last year and it still owns a 45% stake. LSE Group plans to pay for the acquisition with shares, a move that will hand Refinitiv's shareholders a 37% stake in LSE Group.

Wider financial services could benefit from open banking revolution

Sam Bowman, principal at Fingleton Associates and a senior fellow of the Adam Smith Institute, asserts the open banking revolution as a model for other industries to follow. If it were extended to products like mortgages, insurance, energy and telecoms, he suggests, customers could use open banking-based services that monitor the market on their behalf - driving competition and lowering borrowing costs in the market.

Hiscox reveals solid performance

Profit for the first half of the year at insurer Hiscox rose 3% to $168m, despite a higher volume of claims compared to the same period last year. Gross written premiums increased by almost 4.9% to $2.3bn (£1.8bn), representing a 7% rise in constant currency terms.

HEALTHCARE

Pfizer and Mylan to combine off-patent drugs businesses

Pfizer is combining its Upjohn unit with Mylan's new generics and biosimilars offering to form an off-patent group, bringing together big names like Viagra and Lipitor.

LEISURE & HOSPITALITY

Heineken shares sink after profits miss forecasts

Poor weather and rising aluminium prices saw Heineken report a 0.3% rise in operating profit to €1.78bn for the first half of this year, below the 6.6% growth expected by analysts.

MANUFACTURING

Lambson boosts investment after £14m funding

Laminated products manufacturer Lambson Building Products has invested in new machinery and increased its stock ahead of Brexit after securing a funding package worth £14m from HSBC.

MEDIA & ENTERTAINMENT

Future snaps up US publisher Smartbrief

Media firm Future has bought US-based news curation site Smartbrief for up to $65m (£53m). Future said the acquisition will enhance its B2B division by tripling its subscriber base and giving it access to automated email marketing.

Fox to step down as Reach posts strong digital growth

Simon Fox, the CEO of Daily Mirror publisher Reach, is stepping down after seven years. Fox will leave on 16 August with Ladbrokes Coral CEO Jim Mullen replacing him. The move comes as Reach posted a 10% increase in revenue from its digital business.

REAL ESTATE

CVAs and administrations hit Hammerson

Hammerson has reported net rental income at its UK flagship sites was down 6.8% in the half-year period, as retailers’ woes continued to dent the firm’s performance. In the first six months of the year, net rental income (NRI) across the company fell 0.1% year-on-year - while it fell 6.8% at flagship destinations, so-called premium outlets enjoyed a 11.1% NRI rise. Adjusted profit was down 10.5% at £107.4m. Hammerson's announcement that it has sold a 75% stake in Parisian shopping centre Italie Deux for £423m brought its net debt to £3.1bn.

Yield-starved investors push values up

The European Systemic Risk Board has warned that housing and commercial property are showing signs of being overvalued across Europe. The EU’s financial watchdog said high investor demand and the search for higher yields have “potentially made investors vulnerable to a repricing of risk premia.”

RETAIL

Investors punish Sports Direct following results farrago

Investors punished Mike Ashley’s Sports Direct on Monday morning - following revelations in last week's shambolic financial results of its £600m unpaid tax bill in Belgium. Share prices fell by more than a quarter at one point - to an eight-year low - leaving Mr Ashley alone more than £80m poorer.

ECONOMY

Threat of no-deal sends pound to 28-month low

A hardening of rhetoric from the Boris Johnson government over Brexit pushed the pound to a 28-month low against the dollar on Monday. Sterling dipped 1.1% to $1.2242 and €1.1004, with analysts at ING Group now assuming an early election will take place and that the pound will sink as low as $1.18 and €1.05.

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