BANKING
Spate of cheap mortgages hit the market
Homebuyers can now choose from Britain's cheapest-ever mortgages as the property market continues to boom. HSBC has cut the rate on its two-year fixed-rate deal to 0.94% for those with a 40% deposit, the cheapest home loan the bank has ever offered in the UK and worldwide. TSB also launched a 0.94% two-year deal for borrowers remortgaging with a 40% deposit last week, with a fee of £995. The launch of the deals, at all-time low-interest rates, marks the latest stage in an escalating price war among lenders that has pushed the cost of deals to below 1%. Iain Swatton, of the mortgage switching service Dashly, said: "It's a smart move from lenders such as HSBC to offer low-interest rates on mortgage products. This is a clear sign that lenders want people to buy houses. "
Lloyds enters private rental market
Lloyds Banking Group said on Wednesday it has launched its private rental business and aims to buy more than 1,000 residential properties by the end of next year. Under the brand "Citra Living", Lloyds plans to acquire around 400 properties by the year-end and double the target next year. Andy Hutchinson, Citra managing director, told the Financial Times that the move to become a major landlord was a “natural extension” of its existing businesses and “will benefit shareholders as well as customers”.
PRIVATE EQUITY
Global VC investment hits all-time high
Venture capital investment has surged to an all-time high in 2021 with more than €259bn (£221bn) invested globally - more than double the €114bn recorded in the same period in 2020. “Tech continues to be a major economic driver, attracting investment and jobs at a time when the rest of the economy slowed down as a result of the COVID-19 pandemic,” said Yoram Wijngaarde, founder and chief executive at Dealroom. He added: “Investment into start-ups are at an all-time high because investors see tech as a safe asset and innovation is continuing as entrepreneurs are identifying gaps in the market and are bulging with ideas. This is a huge vote of confidence in the global tech sector.”
Marshall Wace to make foray into investing in crypto sector
Marshall Wace is looking to target investments in areas such as blockchain technology, payments systems for digital currencies and stablecoins, as interest in cryptocurrencies and related technologies booms.
Bridgepoint confirms plans to float
Bridgepoint has confirmed plans to raise £300m through a float on the London Stock Exchange. The private equity firm says it seeks to sell a quarter of its shares while a further 15% will be available through an over-allotment option.
KKR steps up pursuit of UK companies amid buyout frenzy
Private equity firm KKR is targeting further takeovers in Britain, with the establishment of a new team of dealmakers to focus on buying
UK-based companies.
INTERNATIONAL
SEC advisers push for details on race, gender
The U.S. Securities and Exchange Commission is recommending that mutual fund boards should be required to disclose information on the gender and racial diversity of their directors. At present, there is "virtually no representation of women and minorities" on the industry’s boards, Gilbert Garcia, chair of an advisory subcommittee of the SEC and managing partner of a Houston investment firm, said in an interview on Monday.
Credit Suisse poaches Morgan Stanley banker
Morgan Stanley banker Kyle Berry is set to join Credit Suisse as a managing director in the global industrial group later this month. He will focus on business services across Europe, the Middle East and Africa. Separately, Qatar Investment Authority (QIA) has raised its stake in Credit Suisse to 6%, in a move seen as underlining its long-term commitment to the troubled lender.
Visco warns about crises for small banks
Bank of Italy Governor Ignazio Visco warned on Tuesday that although there should be sustained growth in the Italian economy over the next two years, small banks were at risk of a rise in bad loans as a result of last year's record economic contraction.
Deutsche expands wealth management business
Deutsche Bank has hired five wealth managers from UBS. Led by Raoul Zehnder, the team will serve ultra-rich customers and the family offices that manage their wealth.
AUTOMOTIVE
Northumberland gigafactory approved
Northumberland County Council has approved plans for an electric vehicle battery "gigafactory" that could create up to 3,000 jobs. Britishvolt has secured planning permission for the facility, which will be built on the 235-acre site of the former Blyth power station. Britishvolt says the facility will be operational by 2023, and will bring "much needed" employment to the area.
AVIATION
BA settles claim for data breach
British Airways has settled a legal claim relating to a data breach in 2018 that affected 420,000 customers and staff. Terms of the agreement have not been disclosed.
CONSTRUCTION
PMI survey: Construction grows at fastest pace in 24 years
The construction sector expanded at its fastest pace in 24 years last month on the back of surging demand for new homes and commercial property. The IHS Markit/CIPS construction PMI exceeded forecasts to jump from 64.2 to 66.3 in June - the highest reading since June 1997 and well above the 50 mark that separates growth from contraction. “Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening UK economy,” Tim Moore, economics director at IHS Markit, said. “Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997. Survey respondents widely reported delays due to low stocks of building materials, shortages of transport capacity and long wait times for items sourced from abroad.”
FINANCIAL SERVICES
FCA warns fund managers on value assessments
The Financial Conduct Authority has told fund managers to improve their systems after a critical investigation found they were not doing enough to justify the fees they charge. The FCA said that most of the 18 asset management firms it inspected had failed to meet the requirements of the new fund disclosure and governance regime that came into force in 2019. The regulator found widespread failings by asset managers in their value-for-money reports, while newly appointed “independent” non-executive directors were sometimes ignorant of their role and not challenging enough. The report follows an earlier critical review by the CFA Society, the professional body for fund managers, which in January found widespread flouting of the spirit and letter of the new rules.
Binance ‘temporarily suspends’ payments from EU’s Sepa network
Binance has told customers they would no longer be able to deposit funds through the Single Euro Payments Area from 8am on Wednesday, as access to payment infrastructure slips away for the crypto exchange.
Covid risks making face-to-face sectors harder to insure, regulator says
The European Insurance and Occupational Pensions Authority said on Tuesday that the pandemic risks making it harder for businesses that rely on physical contact to secure trade credit insurance.
Investment industry at ‘tipping point’ as $43tn in funds commit to net zero
Almost half of the global asset management sector has signed up to the Net Zero Asset Managers initiative launched last December, covering $43tn in assets.
HEALTHCARE
AstraZeneca wins green light for US biotech takeover
AstraZeneca shares climbed yesterday on news that the European Commission had cleared the drugmaker's acquisition of US biotech group Alexion. The UK's Competition and Markets Authority is yet to approve the deal and is expected to announce a decision later this month after launching an investigation in May.
LEISURE & HOSPITALITY
Hospitality companies expected to ditch compulsory face coverings
Hospitality and leisure groups have pledged to throw off face mask mandates from July 19th - dubbed “Freedom Day” - putting employers on a collision course with unions over safety. Just hours after Boris Johnson announced that hospitality businesses will no longer legally have to enforce face coverings past that date, companies including Revolution Bars and Young's Pub Group said they would scrap the requirement for customers and employees to wear masks. Other businesses are more cautious and are keeping their policy under review for now. Meanwhile, hospitality chiefs have said the Health Secretary should bring forward the date from which fully vaccinated people should no longer have to self-isolate. Sajid Javid said the requirement would be lifted from August 16th, but UK Hospitality chief Kate Nicholls said the move "fails to recognise the carnage the current system" is causing with pub and restaurant staff who "have been told to isolate despite not having shared shifts with colleagues who tested positive".
MEDIA & ENTERTAINMENT
Channel 4 needs new owner to compete with streaming services
Ministers have said in a briefing document on the sale of Channel 4 that the best option is for it to be sold to a private investor that could inject new funding into the broadcaster to tackle "persistent competition" from well-funded streaming services. Oliver Dowden, the Culture Secretary, said that in the face of rising global competition, “now is the right time to strengthen UK public service broadcasters and consider releasing Channel 4 from the constraints of public ownership, enabling it to thrive for the next 40 years and beyond.”
British public shuns BBC
The "BBC is haemorrhaging support amongst a significant proportion of the British public,“ says Julian Knight, chairman of the Commons media select committee after the broadcaster reveals it has lost one million UK licence fee holders in the past two years. The BBC’s report says that “viewing habits and falling audience share poses a financial risk as people are less likely to pay the licence fee if they do not view licensable content”.
Nextdoor goes public via Spac route
Social media platform Nextdoor has agreed to go public through a merger with a special purpose acquisition company, launched by Silicon Valley venture capital group Khosla Ventures, raising $686m in gross proceeds, including $416m in cash and $270m in so-called Pipe financing.
PROFESSIONAL SERVICES
Blackstone to buy ESG software provider
Genstar Capital is selling ESG software, data and consulting services provider Sphera to Blackstone Group in a $1.4bn deal. "The increasing importance of ESG issues to businesses globally is a key thematic investing focus for Blackstone, " said Eli Nagler, senior managing director at Blackstone.
REAL ESTATE
Landlords continue to face challenges from eviction ban
The Times reports on how commercial property landlords continue to be hampered by a ban on tenant evictions. It quotes British Retail Consortium figures which show that shop vacancy rates have continued to rise, standing at 14.1% at the end of March.
Property sales soar as stamp duty holiday closes
Ten times more homes sold than usual on the final day of the stamp duty holiday. Almost 36,000 property sales were sealed on June 30 as lawyers rushed to push through deals before the maximum stamp duty saving fell from £15,000 to £2,500 in England and Northern Ireland, according to data from TwentyCi.
RETAIL
Sainsbury’s sees sales increase by 1.6%
Sainsbury’s has hiked
profit expectations, with the chain recording a 1.6% like-for-like sales rise during the 16 weeks to June 26. Chief executive Simon Roberts stated that “we are very focused on the plan we laid out in November to really deliver for our customers and shareholders,” and in response to questions about possible takeovers noted: “if we had something to update on, we would but we have nothing to
update."
ECONOMY
Rising interest rates threat to national debt
With Britain now burdened with a record peacetime deficit, the Office for Budget Responsibility (OBR) has warned that increasing interest rates to dampen inflation could make the country’s debts "unsustainable" and cause serious damage to the wider economy. In a scenario that sees the Bank of England respond to “persistent inflation” of 4% over three years, and where the UK is charged more to borrow in debt markets, the cost of servicing debt could rise from 1% to 4% of GDP by 2050 - around £80bn in today’s terms. The OBR said: "Were rates to return to levels that were more normal in the past, it would raise the cost of servicing a given stock of debt and could – in extreme circumstances – push the debt-to-GDP ratio onto an unsustainable path." The OBR also raised red flags over unfunded COVID-19 legacy spending of £10bn a year and predicted the cost of hitting net zero targets over the next 30 years would be in the region of £469bn, swelling debt by 21 percentage points as fuel duty revenues fall drastically.
OTHER
FTSE bosses criticised over virtual talks with CCP
The bosses of AstraZeneca, Clifford Chance, BP, Jaguar Land Rover, PwC, Rio Tinto, Abrdn, Standard Chartered and HSBC were among those who took part in a virtual meeting with the Chinese premier Li Keqiang on Tuesday. The meeting was organised by the lobby group the China-Britain Business Council, but was criticised by the Inter-Parliamentary Alliance on China. The Times points out that UK businesses with operations in China have faced scrutiny for their role in facilitating the communist party’s anti-democratic policies. A spokesman for the Alliance said: "The age of business lobby groups thinking they can conduct their own shadow diplomacy is over. Politicians around the world are going to increasingly hold the feet of big executives to the fire over human rights. These companies should think long and hard about whether they want to start a war with parliamentarians."
Insurance boss Nick Lyons appointed next London lord mayor
The chair of the insurer Phoenix, Nick Lyons, has been picked as the next lord mayor of London. The appointment, which needs to be rubber-stamped, was made despite Lyons not being a British subject.