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Daily News Roundup: Tuesday, 6th July 2021

Posted: 6th July 2021

BANKING

Barclays blocks customers from transferring cash to Binance

Barclays has blocked its UK customers from transferring money to the Binance cryptocurrency exchange after the Financial Conduct Authority banned the company from carrying out regulated activities in Britain. The bank said: “Barclays intends to stop credit and debit card payments to Binance. This action does not impact on the ability for customers to withdraw funds from Binance. The decision has been taken following the FCA warning to consumers, to help keep our customers’ money safe.”

FCA warns banks over replacing Libor with credit sensitive rates

The Financial Conduct Authority said on Monday that banks should consult with the regulator before using "credit sensitive rates" to substitute for the Libor benchmark. "We ask that any regulated UK market participants looking to use these so-called 'credit sensitive' rates in UK-based business consider the risks carefully, and raise with their FCA supervisors before doing so," Edwin Schooling Latter, the FCA's director of markets and wholesale policy, told a UK Finance event.

BoE staff to focus on collaborative work

Joanna Place, the deputy governor and chief operating officer of the Bank of England, told an event hosted by the Investment Association on Monday that she expects the return to the office “might be a bit bigger than we anticipate”. The comments came as she launched a pilot that will see all Bank of England staff work for at least one day per week in the office from September this year.

Santander moves to Milton Keynes

Santander is building a new £150m, 44,000 square metre head office in Milton Keynes in a move CEO Tony Prestedge says was driven “primarily about access to talent and the working environment.”

PRIVATE EQUITY

Warburg Pincus launches distressed asset venture in China

US private equity firm Warburg Pincus is to seek distressed opportunities in the Chinese real estate sector, as it launches an asset management company in partnership with asset manager Wensheng.

Forward Partners to list on London market

Forward Partners has announced plans to float on the London stock market and raise £25m. The venture capital firm, which has invested in the likes of Cazoo and Patch, will seek admission for its shares to trade on the junior Aim index.

Rapid break-up of Cobham fuels debate over private equity in UK

The role of private equity in the UK is being questioned further following news that Advent has sold more than half of Cobham despite a promise to commit to the defence group long-term.

Schroders chief urges reform of UK rules to thwart private equity raid

Peter Harrison, chief executive of asset manager Schroders, has warned that private equity groups will continue to raid UK firms without comprehensive reform of City regulations.

INTERNATIONAL

Credit Suisse introduces flexible working policy for Swiss staff

Credit Suisse will phase in a new flexible working policy for its Swiss staff, the bank said on Monday. Credit Suisse said that under the The Way We Work programme employees and managers would be able to decide what percentage of their time they spend outside the office and which days of the week they would be present.

Klarna investigated over bank secrecy breach

Klarna is being probed by Sweden's financial watchdog over a potential breach of banking secrecy laws in connection with an IT incident at the firm in May, which saw customers shown other users' data for a brief period.

Asia’s digital banking race dominated by big names

The FT reports on a flurry of digital bank start-ups in south-east Asia, but experts warn large players are behind many of the companies creating competition and “too big to fail” risks.

Poland's central bank chief insists inflation data not 'worrying'

Adam Glapinski, Poland's central bank governor has said short-term inflation is not currently a reason for concern, citing transient external factors including base effects and fuel prices.

AUTOMOTIVE

Van and electric car sales counter chip gloom

A boom in home deliveries and a reopening of the economy led to sales of new vans in the UK coming close to record levels during the first six months of 2021. However, data from the Society of Motor Manufacturers and Traders show registrations of new cars remained sluggish, with a shortage of computer chips limiting supplies of some models. The SMMT said the supply issues would restrict the UK car industry's recovery. Despite the disruption, sales of electric vehicles have continued to rise rapidly. More than one in every 10 cars sold in June was electric while plug-in hybrids now account for 17% of the total market.

Rimac to take control of VW’s Bugatti

Croatian electric hypercar start-up Rimac will take control of Volkswagen’s Bugatti brand. The deal will see Rimac, which is backed by Porsche and Hyundai, own 55% of the new company, while VW’s Porsche brand will own the rest. Meanwhile, Daimler confirmed that it would bundle three of its luxury brands - AMG, G-Class and Maybach - into one business unit this autumn, to position itself more effectively in the “top luxury and performance segment”.

Volvo, Daimler and Traton plan European electric charging network

Truckmakers Volvo Group, Daimler Trucks and Traton have announced plans for a dedicated €500m superfast electric charging network for haulage vehicles and coaches.

AVIATION

Sydney Airport gets $16.7bn takeover offer

A consortium made up of IFM Investors, pension fund QSuper and Global Infrastructure Management have made a A$22.26bn ($16.7bn; £12.1bn) offer for Sydney Airport, sending its shares up 30%. The offer of A$8.25 a share is a more than a 40% premium to Sydney Airport's closing price on Friday.

Credit card fees alternative embraced by Emirates airline

Dubai-based carrier Emirates has adopted a system developed by Deutsche Bank intended to provide an alternative to payment processing fees levied by the credit card industry.

FINANCIAL SERVICES

FCA launches listing rules consultation

The Financial Conduct Authority has launched a wide-ranging consultation to improve the effectiveness of Britain’s financial markets. The consultation has been opened in response to changes put forward by Lord Jonathan Hill in the UK Listing Review and the Kalifa Review of UK FinTech to the country’s primary market regime. The FCA is seeking feedback from firms on several proposed reforms intended to strengthen the UK primary markets regime and build on the reforms recommended in the two reviews. After the trio of reviews and consultations, the Government hopes any relaxation in regulations will attract more fintechs and high-growth businesses to IPO on the London stock market. The consultation will last for 10 weeks and will close on 14 September. The FCA will seek to implement the changes before the end of the year.

EU plot to destroy City a catastrophic failure

The Telegraph’s Matthew Lynn asserts that EU efforts to damage the City since the UK voted to leave five years ago have failed. Only a handful of jobs have left while London has already reclaimed its position as the key centre for equity trading after briefly losing the crown to Amsterdam. Lynn says the strategy adopted by Paris and Frankfurt, along with the Commission officials in Brussels, was all stick and no carrot – they figured they could simply legislate their way to commercial success, but business simply worked around the rule changes. Lynn concludes: “Brussels has failed in lots of ways over the last couple of decades, from mis-managing the single currency, to stifling industry in red tape. But this will go down as one of the most glaring failures.”

Protect financial regulators from ministerial interference, say MPs

MPs say the UK's financial regulators should be free of political interference from the Government to safeguard their independence. A proposal to give ministers oversight of new regulations by the Financial Conduct Authority and Prudential Regulation Authority before they are enacted should not go ahead, according to a report published today by the Treasury select committee. The committee’s verdict comes in response to a consultation by the Treasury on the future of regulation in the light of Brexit.

HEALTHCARE

UK hospital group Spire accepts new £1.4bn offer from rival Ramsay

Ramsay Health Care has agreed to buy UK hospital group Spire Healthcare in a sweetened £1.4bn deal after large shareholders objected to the first offer from the Australian group.

Approval of Biogen Alzheimer’s drug reignites ‘amyloid’ debate

The FT reports that investor interest in the causes of Alzheimer’s disease has been sparked by the recent US approval of Biogen’s aducanumab treatment.

MANUFACTURING

UK’s largest microchip factory sold to Chinese-owned tech firm

Chinese-owned technology company Nexperia has seized control of Britain’s biggest microchip plant after forcing its owners to sell the facility when they failed to deliver on a contract. Nexperia, a Dutch business owned by Chinese electronics company Wingtech, is believed to be paying around £65m for the Newport Wafer Fab facility in South Wales. Executives at the facility had urged ministers to prevent the sale, and sought funding for an alternative rescue bid, but the Government refused to intervene despite fears for national security.

REAL ESTATE

London’s commercial property market bouncing back

Central London office spending appears to have been revived, as more than £4bn of deals were completed in the first half. Deals totalling £4.2bn completed in the first six months of 2021, with close to £3bn of that in Q2. 

RETAIL

Bidding war hots up for UK grocers

US private equity firm Apollo Global Management is mulling a bid for Morrisons after the board of the supermarket chain recommended a £6.3bn bid from rival Fortress. The news sent Morrisons' shares up, taking other grocers with them. One analyst said: “It seems certain that a takeover of Morrisons is inevitable. With Asda also gone, it is looking like ‘when’ rather than ‘if’ for Sainsbury’s.” But City investors say the takeover saga promises to be a test case for how willing buyers are to stand by their environmental, social, and governance commitments. Trevor Green, head of UK equities at Aviva Investors, said the Morrisons situation was “focused on valuation and price rather than who the best owners of the business should be for all stakeholders, including farmers. Fund managers talk about and strongly believe in [ESG] so shouldn’t there be a wider debate than the absolute take out price?”

ECONOMY

Inflation tracks up causing alarm

Advanced nations are experiencing the fastest rise in inflation since 2008, with OECD members averaging an annual rate of 3.8% over May, up from 3.3% in April. In the UK, services businesses raised prices at the fastest rate on record, according to a survey by the Chartered Institute for Procurement and Supply (CIPS). Duncan Brock, group director at CIPS, said: “With the sharpest escalation in price inflation for 25 years, it is no wonder businesses are concerned that they are paying substantially more for fuel, food and transport costs than they were a year ago.” Meanwhile, prices across Europe rose at the fastest pace for 20 years in June as restrictions were lifted, according to IHS Markit. Its chief business economist Chris Williamson said the data signalled “a broad-based increase in inflationary pressures”. The IHS Markit/CIPS purchasing managers’ index for the UK’s services sector came in at 62.4, down slightly from 62.9 in May but well above the 50 mark that signals growth.

OTHER

Almost all coronavirus rules to be ditched on 19 July, PM says

Boris Johnson has confirmed that face masks will no longer be legally required and distancing rules will be scrapped at the final stage of England's Covid lockdown roadmap. The rule of six inside private homes will be removed and work-from-home guidance abolished as 16 months of on-off restrictions on daily life end. The PM said he expected the final step would go ahead as planned on 19 July. This will be confirmed on 12 July after a review of the latest data. Further updates on school bubbles, travel and self-isolation will follow in the coming days, Mr Johnson told a Downing Street news conference. The Government has also chosen not to impose the use of domestic COVID "passports" for people to demonstrate their vaccination or testing status when attending pubs, bars and restaurants or other venues.

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