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Daily News Roundup: Wednesday 24th March 2021

Posted: 24th March 2021


Lords committee says broad equivalence may not be worth it

A House of Lords committee has stressed the need for the UK to negotiate better EU access for the financial services industry post-Brexit. Despite recent calls for divergence from EU regulations, the EU Services Sub-Committee said equivalence should still be the goal. “There will be real problems for UK professionals whose qualifications are not recognised in the EU under current arrangements,” they said. However, lawmakers added that they “recognise that in many areas the EU is unlikely to grant [broad positive equivalence determinations] without the UK sacrificing more decision-making autonomy than equivalence is worth”. The report from the Lords comes ahead of a memorandum of understanding on financial services between the UK and the EU due by the end of March.

Santander cuts savings rates

Santander is slashing the rate on its Easy Isa from 0.1% to a paltry 0.01% from April 6th meaning those with £40,000 in savings will earn just £4 interest a year. Additionally, on April 12, the bank will halve the rate on its popular 1/2/3 current account from 0.6% to 0.3%, although the monthly fee will drop from £5 to £4.


Abu Dhabi set to invest billions in British business

The United Arab Emirates will reportedly invest billions of pounds in British technology and infrastructure as part of a post-Brexit deal. As part of the agreement, Abu Dhabi will invest up to £5bn through its state-run fund Mubadala in assets such as healthcare companies and green energy plants. A British government fund will invest alongside Mubadala. Lord Gerry Grimstone, the UK’s investment minister, described the “sovereign investment partnership” as the first deal of its kind for the UK and the Office for Investment adding that he hoped it would act as a “catalyst” to attract the world’s best venture capital funds to the UK’s life sciences industry.


Goldman Sachs could hire extra staff to reduce workload on junior bankers

Goldman Sachs CEO boss David Soloman has reacted to a survey on social media in which junior bankers at the firm complained of working 100-hour weeks and getting only five hours sleep per night, explaining that he would be strengthening enforcement of “the Saturday rule” that junior bankers should not be expected in the office from 9pm on Friday until 9am on Sunday. He added that more junior staff could be hired at the company’s investment banking faction to ease pressure on employees.

Citigroup to introduce extra holiday for staff

Citigroup chief executive Jane Fraser has announced changes including Zoom-free Fridays and an extra day of holiday for staff. She noted that it "became apparent we need to combat the 'Zoom fatigue' that many of us feel," continuing: "The blurring of lines between home and work and the relentlessness of the pandemic workday have taken a toll on our well-being.”

Spain makes bad bank a public entity

Spain has absorbed the liabilities of its 'bad bank' SAREB into the country's total public debt bringing its debt-to-GDP ratio to around 120% from 117%. SAREB took over more than €50bn in real estate and other toxic assets from nine Spanish savings banks during the financial crisis in 2012.

Danish banks' emergency buffer should remain at 0% for now

Denmark’s Systemic Risk Council said on Tuesday that banks’ countercyclical capital buffer should remain at 0% for now, but be increased later if there is no new shocks to the economy.


China’s Geely challenges Tesla with launch of premium electric car brand

Geely Auto has launched a premium electric vehicle brand under the Zeekr name, positioning itself against competitors such as Tesla along with Chinese groups Nio, Xpeng and Li Auto.


New restrictions hit travel firm shares

A new UK law which would see people fined as much as £5,000 for travelling abroad between now and June has seen shares in IAG, easyJet, Tui, Wizz Air and Intercontinental Hotels fall for a second day. Airlines UK chief executive Tim Alderslade noted: “We know that universal, restriction-free travel is unlikely from 17 May but under a tiered system, based on risk, international travel can meaningfully restart and build up, with minimal restrictions in time.”

Norway intervenes in Rolls-Royce engine maker sale

Norway’s Justice and Public Security Ministry has blocked Rolls-Royce’s plan to sell its Norway-based Bergen marine engine business to Russian engineering firm TMH Group, citing national security concerns.

BA owner offers landing slots as collateral to secure $1.8bn funding

In an unusual move, IAG has put up prime landing slots at London’s airports as collateral in order to secure $1.8bn in new funding.


Crest Nicholson hikes profit expectations

The UK housing market has remained “resilient” to the impact of COVID-19, Crest Nicholson has announced, as the housebuilder hiked its profit expectations for the year. The firm said profit before tax for the year ended 31 October 2021 is expected to be around £85m, up from previous expectations of £74.3m


FCA issues social media investor warning

The Financial Conduct Authority has cautioned that many young people are increasingly engaging with foreign exchange, cryptocurrency and other risky investment strategies promoted on social media sites such as video platform TikTok. James McManus, chief investment officer at digital wealth manager Nutmeg, remarked: “In truth, what we’ve seen with the meme stocks’ saga and the extreme volatility in cryptoassets are timely examples of the perils of a short-term approach to investing driven by hype. These moments should act as a clear warning that market noise is often just that and if something sounds too good to be true, it probably is.”

PensionBee IPO plans announced

PensionBee is to float on the high-growth segment of the London Stock Exchange, with a valuation of some £350m expected. The firm saw revenues grow by 77% last year to £6.3m. Commenting on the IPO to the Times, founder Romi Savova voiced her concern over plans to relax standards to encourage entrepreneurs to list in Britain. “We think London should be a model for good governance,” she said. “We think it’s important that the long-term confidence of investors is not undermined.”

Freetrade raises £35m from private equity

Commission-free stock trading app Freetrade has raised £35m from venture capital institutions valuing the company at £265m. CEO Adam Dodds said the cash injection will help get “everyone investing”.

Former PM ‘lobbied on behalf of failed financial firm’

Opposition MPs have called for a probe after it was revealed that former Prime Minister David Cameron lobbied the Bank of England in a bid to secure assistance for Greensill Capital, which employed him as an adviser.


Tui to shut nearly 50 more High Street shops

The UK's largest tour operator, Tui, has announced that a further 48 high street shops will close affecting 273 jobs. The company said it would offer to redeploy employees at risk of redundancy to other stores or to work from home. In July last year Tui closed 166 stores hitting some 900 jobs. The moves come after the pandemic sped up a shift to people making online holiday bookings.


Order books looking strong for manufacturers

The latest CBI industrial trends survey indicates UK factories have seen their strongest order book performance since April 2019 in March. The balance for total order books improved from -24% in February to -5% this month while output also held broadly flat, marking the best performance since May 2019. Anna Leach, CBI deputy chief economist, said: “It’s great to see the mood lift among manufacturers, buoyed by a jump in order books. But firms continue to grapple with higher freight costs as well as raw material shortages.”


Cineworld confirms reopening plans, deal with Warner Bros

Cinema chain Cineworld is to reopen its properties in the UK in May in line with government advice on easing restrictions. The company has also signed a multiyear deal with movie studio Warner Bros to keep big new releases in the US and UK exclusive to its theatres.

Trustpilot London IPO sees shares up 14%

Online reviews platform Trustpilot has seen shares increase by 14% in its debut on the London stock market on Tuesday. With a market capitalisation of £1.1bn, the firm’s IPO will raise £473m.


New figures reveal fall in London office lettings

New figures show that the amount of central London office space let last year fell 67%, though enquiries are reported to be picking up since the start of this year. Office lettings between March 2020 and end of February 2021 in central London were recorded at 3.8m square feet, a decrease from 11.7m square feet in the year-earlier period.

WeWork reveals $3.2bn loss

WeWork has seen its finances hit by falling demand for commercial office space throughout the pandemic. The property company has told prospective investors that it lost $3.2bn last year, as it seeks to raise funds and go public. These losses fell from $3.5bn the previous year, however, after it drastically cut spending.


End snapped up by Carlyle in £750m deal

Christiaan Ashworth and John Parker, the co-founders of End, have offloaded control of their luxury online fashion retailer to Carlyle Group for about £750m after 16 years at the helm. The pair will retain a significant minority stake and be co-chief executives. In the year to March 2020, End made revenues of £170.5m and profits of £31.8m, up 16.9% on the previous 12 months.


ONS reports fall in jobless rate

The Office for National Statistics (ONS) has released data showing that the jobless rate in the UK has decreased for the first time since the onset of the coronavirus pandemic. The rate of unemployment returned to 5% between November and January, from 5.1% in previous months, with Chancellor Rishi Sunak noting: “Coronavirus has caused one of the largest labour market shocks this country has ever faced, which is why protecting, supporting and creating jobs has been my focus throughout this crisis. We have taken decisive action with a £352bn package of support.” Suren Thiru at the British Chambers of Commerce added: “With many firms struggling with the damage done to their cashflow by a year of COVID restrictions, unemployment is likely to remain on an upward trajectory until well beyond a full reopening of the economy.”

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