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Daily News Roundup: Wednesday, 14th August 2019

Posted: 14th August 2019

BANKING

Online shopping anti-fraud scheme delayed

A new system designed to tackle fraud in online shopping has been delayed for 18 months. Banks and retailers had been expected to introduce a new layer of security from mid-September that would normally see a passcode sent to a customer's mobile phone at the point of checkout for online purchases of £28 or more. However, following pressure from the industry, the Financial Conduct Authority has effectively granted an 18-month delay. Jonathan Davidson, from the regulator, said: "The FCA has been working with the industry to put in place stronger means of ensuring that anyone seeking to make payments is not a fraudster. While these measures will reduce fraud, we want to make sure that they won't cause material disruption to consumers themselves, so we have agreed a phased plan for their timely introduction."

PRIVATE EQUITY

Fintechs raise record amount from investors

Venture capitalists poured around $892m (£740m) into UK fintech companies in the second quarter of 2019, almost double the amount invested during the same period last year. A report from CB Insights said challenger banks were the fastest-growing fintech cohort with Starling Bank and Monzo both raising significant funds. However, although the amount invested was up year-on-year, the number of deals in the latest quarter had slipped to 33, from 42 the previous quarter, and 37 a year earlier, leading analysts to suggest the large deals are masking a "drop-off of investment in new stage deals".

CMA extends Inmarsat inquiry

The Competition and Markets Authority has extended its probe into the sale of the UK-based satellite communications firm Inmarsat to a consortium of funds led by Apax Partners and Warburg Pincus. The CMA is scrutinising the deal to see if it raises national security concerns.

SoftBank fund picks team of veterans to help tech start-ups forge alliances

The FT reports that SoftBank has created an "operating group" in its Vision Fund to form alliances between the tech investor's portfolio of start-ups and help prepare them to go public.

INTERNATIONAL

JPMorgan Chase set to scoop record fee for Allergan sale

JPMorgan Chase is set to collect $123m for advising Botox-maker Allergan on a planned $63bn sale to US pharmaceutical group AbbVie - the largest individual fee to a bank for selling a company.

Jyske Bank launches world’s first negative interest rate mortgage

Denmark’s third largest bank has launched the world’s first negative interest rate mortgage. Jyske Bank has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.

What the Apple Card gets right, and wrong

Apple hopes to attract customers to its Apple Pay service with its titanium card created with Goldman Sachs. The card uses a Wallet app to bring "transparency" to personal finance.

Time to buy battered-down European banks, says Algebris founder Serra

Fund manager Davide Serra says European bank stocks now offer "massive value" to long-term investors. He points to Santander, BNP Paribas, UniCredit, KBC, ING and Nordea but is cautious on Germany.

AUTOMOTIVE

Hedge funds short Aston Martin

Hedge funds have taken record short positions in Aston Martin Lagonda's debt and equity, with shares on loan now exceeding 8%, compared with about 5% at the start of the year.

AVIATION

Boeing 737 Max grounding costs Tui and John Menzies

Tui has said that the grounding of the Boeing 737 Max could cost it up to €300m (£278m) for the current financial year. The Anglo-German travel firm’s markets and airlines business posted a €103.9m loss for the third quarter, compared to a profit of €37.2m in the same quarter the year before. The company said the third quarter was “negatively impacted by the 737 Max aircraft grounding”. Boeing’s woes also impacted on airport services company John Menzies, whose weak cargo volumes helped pushed it to a pre-tax loss of £4.4m in the six months to the end of June after making a profit of £8.3m a year earlier.

Moody’s cuts Rolls-Royce rating

Rolls-Royce has had its credit rating slashed by Moody’s over concerns about its cash flow and the mounting costs of fixing its faulty Trent 1000 engines. Moody's has lowered Rolls' rating from A3 to Baa1.

CONSTRUCTION

Persimmon launches major consultation

Persimmon has begun a major new consultation, with 100,000 customers, existing and former employees, as well as suppliers and councils, contacted about their views on the housebuilder's customer care, quality, snagging issues, governance and advertising. The move is part of new boss Dave Jenkinson’s bid to boost the firm’s reputation following a turbulent period. Stephanie Barwise QC, of Atkin Chambers, is leading the independent review handling the consultation, and she says: “We are braced for some negative feedback. I think Persimmon will be the first to recognise there have been things that haven’t gone well.”

Polypipe reports profits rise

Building industry supplier Polypipe has reported an 8% rise in profits for the first half of the year to £35m, on revenues up 6%. However, after acquisitions, like-for-like revenues from housebuilding were up by only 0.8%.

FINANCIAL SERVICES

Muddy Waters to report Burford to FCA

Hedge fund Muddy Waters is to report litigation funder Burford Capital - the firm and its directors - to the Financial Conduct Authority and ask it to launch a probe. Muddy Waters has a 25-page report on Burford, which alleges that the litigation fund uses "particular accounting techniques which manipulate its financials.” The Telegraph’s Tom Rees considers whether Burford has a case against Muddy Waters which it accuses of coaxing algorithmic trading systems into dumping its stock.

Close Brothers names new MD

Close Brothers Asset Management (CBAM) has appointed financial services veteran Alastair Wilson as its new managing director as it aims to enhance its offering across the UK.

MANUFACTURING

Government told to prevent bid for Cobham

The Liberal Democrats’ new Treasury and Business spokesman Chuka Umunna has called on Business Secretary Andrea Leadsom to intervene in the takeover of Cobham by US private equity outfit Advent on grounds of national security. The Mail’s Alex Brummer says Leadsom should see off the bid, which has also been opposed by Lady Cobham, the daughter-in-law of founder Sir Alan Cobham.

MEDIA AND ENTERTAINMENT

‘Hostile Planet’ maker wins private equity backing

Plimsoll Productions has been valued at £80m after the private equity unit of Lloyds Banking Group bought a stake in the natural history documentary maker.

PROFESSIONAL SERVICES

Recruiters claim Google exploiting monopoly with job ads

Google's online recruitment tool has been attacked as anti-competitive by job search companies in the UK, who say the tech giant it is using its power over search “as a lever to dominate yet another online industry”. European job search sites including UK recruitment companies Adzuna and Best Jobs Online have written to Europe's competition commissioner Margrethe Vestager arguing that Google’s job ad feature, which appears in a box above the main websites of the search companies, represents a “predatory offer” and on mobile devices fills the entire search screen.

REAL ESTATE

Canary Wharf veteran Iacobescu to step down as CEO

Canary Wharf Group CEO and Chairman George Iacobescu is stepping down after more than two decades. Shobi Khan, most recently president and chief operating officer of US retail landlord General Growth Properties, will take over in October. Mr Iacobescu will move to executive chairman later this year.

RBS funding boosts Glasgow firm

Glasgow-based Murphy Young Property is expanding its commercial property portfolio after agreeing a seven-figure funding package from Royal Bank of Scotland.

RETAIL

Card Factory posts strong sales

Card Factory is to issue a special dividend for its shareholders amid rising sales. The retailer, which runs 991 UK stores and employs 9,000 people, posted strong growth despite what it described as a "challenging consumer environment". Like-for-like sales in its shops open for more than a year grew 1.2% in the six months to July, while total sales grew 5.5%.

ECONOMY

Wages surge amid rising employment

Pay is rising at the fastest rate in 11 years with a record number of workers in employment, according to the Office for National Statistics. Annual average pay – excluding bonuses – rose by 3.9% in the three months to June, the highest rate since June 2008. The ONS also said total pay, including bonuses, was 3.7% higher in the three months to June than in the same period a year earlier. Unemployment rose slightly from 3.8% to 3.9% but remains at its lowest level since the mid-1970s.

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