Published: 18 March 2021
Sterling has soared to a 12-month high against the euro, after a poor start to the week, which saw sterling fall 0.65% against euro and 0.5% against the dollar. It made up some ground against the euro, passing the 1.17 mark yesterday.
Oil prices fell yesterday after the International Energy Agency said prices are unlikely to mount a dramatic and sustained rise despite COVID-19 vaccination programmes, which are expected to boost demand later this year. The Paris-based body expects American crude production to fall by 180,000 barrels a day and expects demand to be 1.4 million barrels a day short of pre-pandemic levels, in the final quarter of 2021.
The EU has threatened to block vaccine exports to the UK and other countries with higher vaccine rollouts, a move the Foreign Secretary has described as "brinkmanship". Dominic Raab said he was "surprised" at Ursula von der Leyen's comments, saying: "It is normally what the UK and EU team up with to reject when other countries with less democratic regimes than our own engage in that kind of brinkmanship." The EU’s delivery of COVID vaccines has been far slower than the rollout in the UK, where 25 million adults have now had their first dose, partly because it decided not to approve vaccines on an emergency basis, as the UK's regulator - the Medicines and Healthcare Regulatory Agency (MHRA) - has done. The European Medicines Agency meanwhile, is due to issue updated guidance on the AZ jab today. So far it has consistently backed the shot amid concerns about the risk of blood clotting.
The government is set to announce new rules to end 'rewards for failure' with the release of a white paper on audit and corporate governance reform today. Sky News reports that the consultation document will propose a further review that could make it mandatory for all listed companies to incorporate 'malus and clawback' arrangements in directors' pay arrangements. The move, if implemented, would represent a significant strengthening of the current regime covering executive remuneration.
MPs on the House of Commons' Northern Ireland affairs select committee were told by representatives from the hospitality and retail industries yesterday that the Northern Ireland Protocol is adding costs and complexity that risk reducing choice and increasing prices for consumers. One said the protocol had created "much more than teething problems - it was like wisdom teeth removal". A major food supplier said the trading arrangements were "like peeling an onion…the more you peel the more you keep crying." Last week the UK government announced it was extending by six months the "grace period" before new customs checks on goods sent to NI from GB would be applied.
Yahoo Finance UK reports that the government has spent the equivalent of £6,700 on COVID-19 support for every household in the country, according to new Resolution Foundation research. In the last 12 months, of the £340bn of emergency COVID support Chancellor Rishi Sunak poured into the UK economy, £186bn has directly supported households and companies via the furlough scheme, benefits uplift and grants for firms and the self-employed. The research shows however that the impact of the pandemic has not been felt evenly, with poorer households bearing the brunt of both the health and the economic crises: mortality rates in the most deprived parts of England have been nearly twice that in the least deprived regions.
Boris Johnson’s former chief advisor Dominic Cummings yesterday told MPs on the House of Commons’ Science Committee that when lockdown ends that there should be an "urgent and very, very hard look in this building into what went wrong in 2020." Cummings also said the UK was successfully rolling out Covid-19 vaccines because procurement was taken away from the health department in 2020. The department was a "smoking ruin" after its "total disaster" securing personal protection equipment, he said.
Financial companies in the UK are facing a regulatory crackdown unless they improve diversity on their board of directors and amongst their employees, the Financial Conduct Authority warns. The financial watchdog is also considering making it a requirement for companies who wish to list in Britain to meet diversity standards. FCA boss Nikhil Rathi made the comments as part of a speech yesterday, saying the regulator would "look hard at the way capital markets work" as part of a review of the finance sector.
Bloomberg reports that BP Plc is fielding final bids from a handful of junior energy companies for its North Sea assets, according to people familiar with the matter, who said oil and gas producers Tailwind Energy Ltd., Serica Energy Plc, Ithaca Energy Ltd., EnQuest Plc and newcomer Waldorf Production U.K. Ltd. have been considering binding offers for BP’s Shearwater and Andrew fields. These were due to be bought by Premier Oil Plc last year, but the transaction, valued at $625 million, was later dropped following a reverse-takeover of Premier by Chrysaor Holdings Ltd. BP aims to sell $25 billion of assets by 2025 to help ease its debt burden and fund its transition to low-carbon energy.
Royal Dutch Shell Plc has announced that earnings from the trading of crude oil and refined products increased two-fold year over the year to $2.6 billion, accounting for 43% of the company’s Oil Products division earnings in 2020. BP also revealed that its trading operations boosted returns by 2% per year, which implies an annual profit of $2.5 billion.
A survey of 1,976 UK office workers by Ezra, a digital coaching provider, found that 35% of office workers would prefer to work from home more even if it meant less chance of progressing within their role. 28% stated they would give up company benefits such as cars and healthcare if they could work from home for part of their week, and 22% said they would choose to work from home more even if it meant they had less chance of receiving a pay rise. Some 9% would also opt for remote working at the expense of their holiday allowance and 7% would take a pay cut to stay working from home.
Trade union Unite has announced that Heathrow Airport's workers will go on a 23-day strike next month in a series of 41 strikes, as a long-running dispute over the airport’s ‘fire and rehire’ policy and pay cuts continues.
Funeral provider Dignity swung to a £19.6m loss last year despite a surge in the number of deaths amid the coronavirus pandemic. Although Dignity carried out a record 80,300 funerals last year, 10,900 more than in the previous year, the business, which operates from a network of 795 locations, was faced with higher costs because of having to spend more money on personal protective equipment, while at the same time facing reduced revenues per service as it withdrew the use of limousines and saw restrictions limiting the number of attendees.
Pub chain JD Wetherspoon has announced it will open 60 pubs and 7 hotels in Scotland from 26 April, the date restrictions in the country are expected to be significantly reduced. "In accordance with Scottish government rules the pubs will serve food and non-alcoholic drinks inside the pubs and the pubs will also be able to serve alcohol in external areas" Wetherspoon said.
A tech entrepreneur who turned a £12m software business into a £750m bonanza for investors is capitalising on surging interest in ‘blank cheque’ companies by raising £130m for a London-listed acquisition vehicle. Sky News says Vin Murria, who became chairman of a cash shell called Marwyn Acquisition Company 1 in December, will announce on Thursday that she has raised the funds to pursue an as-yet unidentified takeover in the software industry. One market source suggested last night that it would be the biggest sum raised by what is essentially a cash shell in the London market.
The Special Purpose Acquisition Company (SPACs) has been around for decades but they exploded in popularity last year, raising around $80bn on the US stock exchanges in 2020, half of all money raised through US IPOs. Britain is hoping to tap into the boom: Chancellor Rishi Sunak recently proposed stock market reforms to make it easy for SPACs to list in London, following a review led by Lord Jonathon Hill. Not everyone is in favour of them though: Charlie Munger, Warren Buffett's right-hand man, recently called SPACs "an irritating bubble" and said it was a "kind of crazy speculation in enterprises not even found or picked out yet". "I don't participate at all," the 97-year-old billionaire investor said, "and I think the world would be better off without them."
Eni SpA, Royal Dutch Shell Plc and several of their current and former executives were acquitted of corruption charges related to a Nigerian oil deal by a court in Milan yesterday. The verdict ends a three-year legal saga that loomed over Eni Chief Executive Officer Claudio Descalzi, who was among those found not guilty on Wednesday. Italian prosecutors had sought an eight-year jail term for him. The ruling is a blow for Nigeria’s government, which joined the case as a civil party in 2018 and was seeking compensation. The companies and executives accused have consistently denied any wrongdoing. In 2018, two middlemen were found guilty of corruption in a separate trial.
Changes to the way Uber treats its UK drivers, and historical settlements, could cost the ride hailing giant over $500m (£360m), as it would push Uber’s UK costs up by as much as 9%, according to a research note published on Wednesday by Bank of America analyst Justin Post.
Reuters reports that HSBC is in final talks to sell its French retail banking business for a token price to private equity firm Cerberus. The planned disposal is part of HSBC boss Noel Quinn's push to cut costs and get out of underperforming businesses. HSBC is working with Lazard to sell its 270 retail branches in France but has struggled to drum up interest from potential bidders faced with restructuring costs and complex talks with regulators. Cerberus and one other bidder were reported in September to have bid one euro for the business.
The founder of high-flying Chinese e-commerce group Pinduoduo has stepped down unexpectedly as chairman, and despite the business overtaking rival tech giants JD.com and Alibaba with 788m annual active buyers on its platform last year. Colin Huang is China's seventh richest person and is worth more than $50bn from his stake in the online firm. The move could be connected to recent criticism of the company’s work culture and the death of two employees. In December, one collapsed after leaving work, a victim of the "996" schedule, based on working daily from 9am to 9 pm, six days a week. Two weeks later, another young employee killed themselves, and the next day, a third worker was fired for criticising Pinduoduo’s work culture.
The BBC reports that the US Federal Communications Commission (FCC) is looking to strip three Chinese telecom firms of their US operating licenses. China Unicom Americas, Pacific Networks and ComNet had failed to explain their links to Beijing, the FCC said. The US communications watchdog has long argued those links could pose a national security risk, and the move signals that US president Joe Biden may continue Donald Trump's tough approach on Chinese tech firms.
Donald Trump's net worth dropped by about $700m to $2.3bn (£1.65bn) during his time as president, according to the Bloomberg Billionaires Index. Covid hit his fortunes hard, with Mr Trump's office buildings, branded hotels and resorts losing revenue and falling in value. His fleet of planes and golf courses have also seen drops in their value.
Morgan Stanley has reportedly become the first big US bank to offer its wealth management clients access to bitcoin funds. CNBC cited people with direct knowledge of the matter as saying that the investment bank is launching access to three funds that enable ownership of bitcoin. It was understood that clients demanded exposure to the cryptocurrency.
The Bank of America says that Tesla's $1.5bn (£1bn) investment in bitcoin has a carbon footprint equivalent to the annual emissions of 1.8m cars. The analysis was included in a report concluding that the cryptocurrency has a large and growing impact on the environment.
Disney has announced plans to re-open its two theme parks in California next month, but the firm will limit attendance, require masks for those aged two and above, and have temperature screenings at some locations. Disney will also advise against potentially ‘risky’ activities such as screaming on rides.
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