New virtual study to measure stress in Covid-19 healthcare workers

Bronte Carvalho
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0
New virtual study to measure stress in Covid-19 healthcare workers
Cambridge Cognition Holdings plc (AIM:COG), a leading digital neuroscience software development firm, has teamed up with charity 4YouandMe and The Centre for International Emergency Medical Services (CIEMS) to launch a study using mobile phones to assess the stress recovery rates of frontline Covid-19 healthcare workers in the USA. The project is to be funded by charitable donations, and the study will take place over a 6-12 month period across up to 500 participants. With mobile phones being so commonly stored in pockets during the working day, they provide a unique opportunity to chart the ‘subtle fluctuations in wellbeing’ of healthcare workers throughout their shift, as they cope with the tremendous emotional stress of caring for Covid-19 positive patients. While the ‘primary goal’ of the study is to determine whether mobile phones can be used to detect and chart ‘real-time changes in stress and recovery’, Cambridge Cognition is also looking to see if high stress levels can inform a greater risk of Covid-19 infection. Stress can take an enormous toll on psychological and emotional health, but it can also negatively impact the immune system, causing greater susceptibility to contracting a virus or infection. With frontline Covid-19 healthcare workers enduring intense stress levels, the study is designed to assess how this pressure may relate to the disproportionately high rate of medical professionals contracting the virus.

Matthew Stork, Chief Executive Officer at Cambridge Cognition, welcomed the study’s announcement in a statement this morning:

“Tracking stress and recovery for frontline healthcare workers is important research and we are pleased to provide our cognitive assessment expertise for this project. Wearables and mobile phones are unparalleled for tracking real-time responses and Cambridge Cognition has extensive experience in virtual trials such as this. We hope that the environment for healthcare workers may be improved in the future as a result of the objective information gathered in the study”.

Earlier this week, biotechnology firm Avacta (LON:AVCT) confirmed it has launched a collaboration with Integumen (LON:SKIN) to develop a testing system for the presence of Covid-19 proteins in waste water.

Will the airline industry survive Coronavirus?

Safiya Bashir
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Will the airline industry survive Coronavirus?
The Coronavirus pandemic has hit the airline industry hard, as planes were grounded and holidays were cancelled. Ryanair, easyJet and British Airways have all announced large-scale redundancies and total industry losses in 2020 are expected to reach $84.3bn (£67.4bn). Over the course of lockdown, over 90% of global planes were grounded, flights were cancelled and 13 carriers worldwide fell into administration – including Flybe in the UK. Whilst the UK government has tentatively offered bailout loans, ministers have made clear that taxpayers money is only available as a last resort. Virgin Atlantic has secured a £1.2bn rescue deal after the UK government refused to give the airline’s request for state funding. The privately funded loan will allow Virgin Atlantic to survive for a further 18 months, with Richard Branson also providing £200mn of his own money into the company. The airline will still cut 3,500 jobs, however, the remaining 6,500 staff will continue to work. “Virgin Atlantic has been working on a comprehensive, solvent recapitalisation of the airline to ensure that we can continue to provide essential connectivity and competition to consumers and businesses in Britain and beyond,” said a spokesperson from the group. “We greatly appreciate the support of our shareholders, creditors and private investors and by working together, we will ensure that Virgin Atlantic can emerge from the crisis a sustainably profitable airline, with a healthy balance sheet.” It’s a difficult time for the industry, which has seen collapse and wide-scale redundancies. However, rescue deals seen by Virgin Atlantic offer hope to the industry so hard hit by the pandemic.  

How reckless housing policy will further divide UK society

Jamie Gordon
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How reckless housing policy will further divide UK society
As British philosopher John Gray discussed in a recent article, there is a deep and widening cultural rift in British society. While this rift, as Gray sees it, is between the metropolises and everywhere else, the nationalists and the woke, and those with and without university degrees, we should also remain aware of intergenerational divides, and the split between the haves and the have-nots. Within this context, the ‘haves’ refer to those who benefited from twentieth century housing policies, and who are if anything helped by the Johnson government’s housing policy. Now to be clear, the opinions I hold are non-partisan. Had it not been for later changes to; wage-to-mortgage ratios; building programmes led by local authorities to increase supply; and curbs on buy-to-let, Thatcher’s right-to-buy would have been an unprecedented success. Indeed, while social democratic policies saw home ownership increase from 30% to nearly 60% between 1950 and 1980, within the space of a few years, Thatcher’s flagship policy saw property ownership rise to over 70% in the early eighties. This, forgetting for a moment, the subsequent and momentous failures, was a roaring success, and one that could have laid the foundations for an aspirational and motivated age of property-owning Brits.

Why is it important for as many people as possible to own property?

The answer to this question – both of which entail societal benefits – should be discussed in two parts. First, the social value of property ownership. Put simply, by increasing the proportion of people who own homes, you increase the proportion of people who have an active stake in society. As stated by Oxford University Economist Paul Collier, in his book The Future of Capitalism: “Owning a home enhances the sense of belonging, and that, as I have suggested, is a vital social good. Belonging is the foundation for reciprocal obligations. Home ownership also gives people a greater sense of having a stake in society, and inclines them to be more prudent: psychologists discovered that, once people have something, they become highly averse to losing it. And owning a home anchors people.” Once people own a property, they feel attached to that belonging. They put a large part of their toil, time and money into an asset, and in return – in an ideal scenario – it offers them physical and financial security for themselves and their families – in short, it becomes a home. This attachment to property, with all things being well, increases the likelihood of attachment to the surrounding place and people. This sense of mutual belonging, and shared enjoyment of owning property, can contribute to the fabric of a community, by ultimately creating a shared understanding between peoples who each benefit from owning a tangible chunk of the society they call home. This privilege, being part earned and part afforded (by rights, laws, property prices) to people, makes them more likely to look favourably upon society, and in turn upon its peoples and its institutions (traditions, laws, culture etc). Secondly, property ownership has some benefits for aspiration and productivity. We should note that too much aid to first-time buyers would increase demand and in turn inflate prices. Similarly, too many houses being build would drop millions of existing property owners into negative equity. However, a goldilocks point of discounts and consistent supply (as seen at the start of the Thatcher government), could offer a sweetspot for homes as an aspirational asset for young, median income groups. The benefits of this, are twofold. Not only would more young and median-income people touch upon the social benefit previously discussed – and in turn go some way to mending the intergenerational rift – but would more than likely create a generation of engaged, ambitious and productive future property owners. The benefits of making property ownership something not necessarily to be taken as a given, but as something attainable for anyone willing to put the work in, would be a generation of young people not embittered by not having the same access to affordable property ownership their parents had, and a mass of people inspired and more likely – perhaps – to work hard and start families in a society they could be proud of. I should add, though, that we cannot discredit the hard work that regular people of the older generation had to put in to earn their place on the property ladder. Also, we should bear in mind that the younger generation will benefit far more than their parents did from larger inheritances (facilitated by wider property ownership). However, with property prices rising well ahead of wages, there is a growing trend that needs to be discouraged: property ownership is afforded to those bequeathed with sizeable inheritances, before those who work hard. Such an attitude removes individual agency and discourages industry. Instead, we should aim for property ownership to be a reward for those that contribute and play their part in society, and crucially, more widely accessible.

So what has the Johnson administration got wrong on housing?

To his credit, the Johnson ‘New Deal’ principle of increasing the supply of residential properties is correct in spirit. In terms of execution, a lot can be said about forgoing quality checks to speed up development and the need to make a space liveable. However, at least in spirit, Johnson’s policy of building more homes doesn’t betray his ‘man of the people’ narrative. What really does tear a hole in it though, is the combination of last week’s stamp duty holiday, and the offer to grant UK citizenship to nearly three million Hong Kong nationals. Again, to vindicate the PM: the stamp duty holiday will allow first-time buyers to save up to £10k when buying properties worth around £500k, and offering wealthier Hong Kong nationals UK citizenship was first done over two decades ago – so it’s pretty much extending an old olive branch. Having said that, and as I’ve discussed in previous analysis, the stamp duty holiday offers the biggest benefit to multiple property owners, at a saving of up to £14.99k. While some might argue this is part and parcel of a stamp duty holiday, where the initial duty is (rightly) most punitive to multiple property owners, it is at best an oversight and at worst a disregard of home ownership. The goal of the policy is clear: lower costs to increase housing market liquidity. While stimulating demand at the expense of long-term house price inflation is a pretty cheap and unoriginal policy idea, we might be forgiving given the current circumstances, and the attractive opportunities the housing market offers for a boost to the national balance sheet. What we really ought to take issue with, though, is having the greatest benefits being targeted towards those who might look to add another property to their portfolio. While the short-term balance sheet benefits of such a move are intuitive – as those who own multiple properties are the ones most likely to take advantage of a property discount – the long-term implications for home ownership and the costs ensued to the social fabric of the country, don’t bear thinking about. Similarly, and compounding this poor policy direction, is the decision to extend the hand of British citizenship to Hong Kong nationals. While not a vastly unpopular political move, nor something with a definite impact, it is something we should see as somewhat insulting. After two decades in which average UK house prices have risen by 300%, while the average wage has lagged behind with a 70% increase, the government now offer wealthy individuals from overseas the right to live, work and own property in the UK. If we can attribute some key causes of recent UK housing shortages to a mixture of property speculation and immigration, then we ought to consider property purchases by overseas businesspeople, princes and oligarchs, some of the biggest cases of policy negligence in recent history. We should look upon the invitation offered to Hong Kong nationals with the same eye of suspicion. While I don’t suggest there is inherent malice in the policy, the UK’s current housing situation would suggest that it is misjudged.

In summary

In a time where we find our society divided, at odds and playing corrosive, mass-scale blame games, housing policy geared towards aspirational property ownership is a history lesson we need to learn, and one that offers a salve to many of society’s ills, offered on a silver platter (talk about oven-ready). I reserve some hope for the Johnson government and its future housing policy. Trying to increase the stock of residential property is a good place to start, though I cannot help but conclude for now, that facilitating the construction of low-quality units and an expansion of buy-to-let, is both irresponsible and a betrayal of many of the working class voters who thought he had their best interests at heart. A good place to start would be a consistent supply of social housing stock, allegible for the right-to-buy discounts for tenants, and subject to some iteration of the previous buy-to-let and wage-to-mortage ratio restrictions. Boris’s ‘First Home’ pilot scheme is the right kind of idea – we can only hope he chooses to extend it beyond the 1,500 units the government have currently committed to.

Offshore wind investment surges during lockdown

Bronte Carvalho
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Offshore wind investment surges during lockdown
The latest figures released by energy researchers Bloomberg NEF (BNEF) have revealed that global investments in offshore wind farms surged to a new high of $35 billion in the first six months of 2020 – up by 319% year-on-year, and comfortably above 2019’s full-year figure of $31.9 billion. It appears that despite the enormous disruption caused by the coronavirus pandemic – which caused notable declines in solar, onshore wind and biomass investment – offshore wind enjoyed its ‘busiest half year ever’. A total of 28 sea-based wind farms were given the go-ahead in the first half of 2020, including the industry’s largest on record: the 1.5GW Vattenfall Hollandse Zuid array located off the coast of the Netherlands, which cost an estimated $3.9 billion. Other major projects included the 1.1GW SSE Seagreen farm off the UK coast at an estimated $3.8 billion; the 600MW CIP Changfang Xidao off Taiwan at an estimated $3.6 billion; and the Fecamp and Saint-Brieuc projects in French waters, together reaching a combined total of 993MW and $5.4 billion. The report also outlines that at least 17 additional Chinese projects received investment deals, noticeably the Guangdong Yudean Yangjiang Yangxi Shapaat 600MW at $1.8 billion. Despite the major investments during the first half of 2020, head of wind analysis at BNEF Tom Harries was quick to dampen hopes of a sustained upward trajectory for the offshore wind sector: “Offshore wind is benefitting from the 67% reduction in levelized costs achieved since 2012, and to the performance of the latest, giant turbines. But the first half of this year also owed a lot to a rush in China to finance and build, in order to take advantage of a feed-in tariff before it expires at the end of 2021. I expect a slowdown in offshore wind investment globally in the second half, with potentially a new spike early next year”. Overall investment in new renewable energy projects (excluding large hydro-electric dams of more than 50MW) totalled $132.4 billion in the first half of 2020, up 5% from $125.8 billion in the same period of 2019. However, biomass investments plummeted 34% to $3.7 billion, onshore wind slipped 21% to $37.5 billion, and solar fell 12% to $54.7 billion. Small hydro projects were down 14%, and biofuel production plants slid a whopping 83% to $250 million. Geothermal projects bucked the trend, however, and followed in the footsteps of offshore wind with a colossal 594% jump to $676 million. The BNEF’S figures clearly demonstrate that China was the biggest investor in offshore wind in the first half of 2020, pumping a total of $41.6 billion into the growing industry – up 42% on the same period in 2019. While the UK’s investments soared 265% to $5.7 billion, the USA was down a concerning 30% to $17.8 billion, and India’s investments dropped 49% to just $2.7 billion. Angus McCrone, chief editor at BNEF, commented on the impact of the pandemic on the renewables sector so far in 2020: “Renewables have been helped by vastly improved competitiveness and by investor appetite for assets offering secure cash flows. However, project developers face the challenge that key people, whether at the permitting, financing or construction stages, can’t meet face-to-face. And buyers of small-scale solar systems are sensitive to changes in consumer confidence”. Nevertheless, overall clean energy investment – across renewables capacity financing and corporate-level equity deals – reached $137 billion in the first half of 2020, up 4% on the first six months of 2019 at $131.9 billion. Albert Cheung, head of analysis at BNEF, explained that the new figures are ultimately a streak of good news amidst a difficult year so far for the renewables industry: “We expected to see Covid-19 affecting renewable energy investment in the first half, via delays in the financing process and to some auction programs. There are signs of that in both solar and onshore wind, but the overall global figure has proved amazingly resilient – thanks to offshore wind”.

UK house prices soar 300% in 20 years

Bronte Carvalho
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0
UK house prices soar 300% in 20 years
New research by estate agents Coulters has revealed that average UK house prices have soared by 300% in the last 20 years, while average income has only seen a 70% increase over the same period. The report outlines just how hard it has become for first-time buyers to get on the property ladder. In 1999, the average price for a house in the UK was just £77,961. Today, that figure has essentially trebled to £230,735. To make matters worse, even though average income has grown, the difference is only from £17,803 to £30,353 per year. In London, sky-high house prices have risen by an average of £365,958.33 since 1999, marking an eye-watering 316.34% increase in just 20 years. The widening gap between house prices and income has subsequently raised the cost of a deposit as well – in 1999, a 10% deposit on a house would have been equivalent to about 43.8% of an average salary. But by 2019, the average deposit now works out at around 76% of annual income, showing how the UK housing market has become increasingly out of reach for first-time buyers. Analysis by the Office for National Statistics (ONS) released last year revealed that the average full-time UK salary in 2019 was £36,611 – slightly higher than Coulters’ estimate – but nonetheless well below the £230,735 average price tag on a house. With a standard deposit now sitting at about 76% of average income, it would cost the average buyer around £27,824.36 to lay down a deposit, a hefty figure and one which may well be out of reach for many young people. Coulters’ report concludes with a sobering reflection on the housing market in the capital, where the average amount needed for a 10% deposit on a house has rocketed from 51.4% of a Londoner’s average salary to 120.9% in the last 20 years. Last week, Chancellor Rishi Sunak unveiled a ‘stamp duty holiday’ on UK properties as part of a long-awaited mini budget. Even though analysis by Zoopla (LON:ZPG) has outlined how the scheme will take the total number of homes in England eligible for stamp duty exemption from 16% of all sales to 89% – up by 73% – the move is set to benefit first-time buyers the least. UK Investor journalist Jamie Gordon commented on the Chancellor’s proposal, stating: “It serves the understandable purpose of encouraging economic activity, but by making it disproportionately easier for speculators to add to their portfolio, could actually make it more difficult for first time buyers to get on the ladder”. With Brexit on the horizon this autumn and after a painstaking few months during the coronavirus lockdown, the UK housing market looks set for a tumultuous year for 2020. House prices rose in January by 1.3%, but during the peak of the pandemic prices fell for three consecutive months, and it is likely to take some time for the market to make a full recovery – even with the Chancellor’s new stamp duty scheme. Howard Archer, chief advisor to economic forecasters EY Item Club, predicted in June that house prices will fall by about 5% over the next few months, driven primarily by employment uncertainty as the government prepares to wrap up its furlough scheme in October. “Housing market activity is likely to be limited in the near term… Many people have already lost their jobs, despite the supportive government measures, while others will be worried that they may still end up losing theirs once the furlough scheme ends”.

UK fiscal sustainability questioned as May GDP growth 3.7% below expectations

Jamie Gordon
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UK fiscal sustainability questioned as May GDP growth 3.7% below expectations
While some have praised the 1.8% growth in UK GDP in May, it lagged far behind the forecast 5.5% growth for the month, as consumer anxiety began to diminish and businesses readied themselves for the ‘new normal’. In what has been dubbed the biggest economic decline in 300 years, the Office for Budget Responsibility predicted that the UK economy would shrink by 12.4% in 2020. In contrast, then, the 1.8% rise may appear to some an unexpected success – this is not so. After suffering the biggest monthly contraction on record in April, a 5.5% growth forecast was seen as a realistic but ultimately small bounce-back from the freakish performance of the previous month. Instead, what was noted was a worryingly muted bounce of under 2%, which raises questions about the possibility of a so-called ‘V-shaped’ recovery. While there is reasonable hope that June’s figures will be better, the short-term bounce-back is needed to offset long-term challenges. The OBR doesn’t expect the economy to recover to pre-crisis levels until the latter stages of 2022, while unemployment is expected to hit a record 12% by the year’s end, in a worst-case scenario as high as 4 million, compared to 1.9 million in 2019. Speaking on the GDP announcement, Rupert Thompson, Chief Investment Officer at Kingswood, said: “Today’s GDP numbers showed the UK economy bouncing back less than expected in May from the collapse in March and April. GDP rose only 1.8% m/m in May, rather than the 5.5% expected, and remains a massive 24.5% lower than back in February. While the manufacturing and construction sectors both saw gains of over 8% in May, the service sector rose only 0.9% m/m as lockdown had only just started to be relaxed back then.” “These numbers paint a rather gloomier picture than painted both by Andy Haldane, the BOE’s Chief Economist, a couple of weeks ago and the larger than expected increases in retail sales and business confidence reported over the last couple of months. The data only emphasises the economy’s need for the range of stimulus measures announced by the Chancellor last week.”

The GDP – fiscal resource gap

In its report, the OBR said that the pandemic had ‘materially altered’ the outlook for public finances, with the government set to borrow £322 billion this year, which would push the UK’s debt share to 104% of its GDP. In its Fiscal Sustainability Report, the OBR stated: “In almost any conceivable world there would be a need at some point to raise tax revenues and/or reduce spending (as a share of national income) to put the public finances on a sustainable path.” The organisation’s view is that the government need either increase taxes or reimpose austerity measures, to balance its recent spending sprees. It said that without budget balancing, the UK’s debt share would grow to more than 400% of GDP in the next 50 years. In the meantime, however, budget balancing is a difficult act for Boris Johnson to pull off politically. While his more ardent supporters might support the traditional conservative route of spending cuts, his more middle-of-the-road supporters might feel cheated. Having been promised a five-year term of big spending, infrastructure and national grandeur, being saddled with more Cameronite fiscal retrenchment and Blitz spirit slogans may leave some former red wall voters feeling short-changed. Alternatively, Johnson may opt to take another spending note from the Corbynite playbook. While imposing higher taxes on regular people may prove even more unpopular with his supporters, than austerity measures, the option is always there to be more stringent in tax collection from wealthy individuals and corporations. With an estimated three in ten of the companies receiving state aid during the pandemic, having their taxes based off-shore, perhaps the latter group are the first place Johnson ought to look to for his missing fiscal resources.    

US hedge fund invests in £4bn British fintech star TransferWise

Bronte Carvalho
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0
US hedge fund invests in £4bn British fintech star TransferWise
US-based global investment firm D1 Capital Partners L.P. (D1) has announced it has purchased a stake in one of the UK’s leading fintech companies – online money transfer service TransferWise. Sky News reported on Monday that D1 has bought a $200 million stake in TransferWise as part of a secondary share sale last week, which saw the start-up’s value soar to $5 billion, a $1.5 billion increase on this time last year – and roughly equivalent to £4 billion. Both companies involved in the transaction are young blood in the industry. TransferWise was set up 9 years ago by Kristo Käärmann and Taavet Hinrikus – an Estonian financial consultant and a former Skype employee respectively – to provide a solution to the ‘pain of international money transfer’. The company has since grown to offer more than 750 currency routes, with Forbes reporting that it had reached a generous net profit of $8 billion in 2018. D1 is barely getting started, having been launched in 2018 by Wall Street investor Daniel Sundheim, who previously stood at the helm of Connecticut-based hedge fund Viking Global Investors until 2017. Last year, Business Insider deemed the budding firm ‘one of the hottest new hedge funds’ in the industry, and the company already has an established portfolio of stakes in Amazon, Netflix and Facebook. The $200 million purchase will give D1 a 4% share in TransferWise’s operations, which boast over 2,200 employees nationwide and more than 8 million customers. Its impressive £4 billion valuation sets TransferWise above the vast majority of UK fintechs, joining only the likes of money transfer giant Revolut in surpassing the lofty benchmark. At the start of this month, City A.M. reported that the Financial Conduct Authority (FCA) had granted TransferWise with a license to offer investment products, opening up its customer accounts to earn interest on their funds, although the company still does not own a full bank license. Commenting on TransferWise’s growth, CEO Käärmann stated: “TransferWise is evolving from being a pure payments provider, to the number one alternative for the banking needs of those living and working between countries. With £2bn in deposits we know that people want to hold their money with TransferWise, so we’re very happy to soon provide a way to make a return on that money”. The company reportedly racks up £1 billion in savings compared to cross-border transactions made through standard high street banks.

Google to invest $10bn in India’s ‘digital future’

Bronte Carvalho
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0
Google to invest $10bn in India’s ‘digital future’
Tech conglomerate Google (NASDAQ:GOOGL) announced at its annual online Google for India 2020 event on Monday that it plans to invest $10 billion in India over the next five to seven years to scale up the country’s digital infrastructure. The initiative comes as part of the company’s ongoing commitment to being ‘a part of India’s digitisation journey since 2004’, when Google opened its first offices in Hyderabad and Bangalore. Google Chief Executive Sundar Pichai launched the new programme – named the Google for India Digitisation Fund – via video link at the company’s annual conference, focused on making information ‘universally accessible and useful’ so that Indians can ‘make a positive impact on their communities’. The investment drive will include a mixture of private equity, partnerships, and infrastructure investments, with emphasis on four key areas:
  • ‘enabling affordable access and information for every Indian in their own language, whether it’s Hindi, Tamil, Punjabi or any other’
  • ‘building new products and services that are deeply relevant to India’s unique needs’
  • ’empowering businesses as they continue or embark on their digital transformation’
  • ‘leveraging technology and AI for social good, in areas like health, education, and agriculture’
India is a key emerging market for Google, with more than 500 million people connected to the internet and 450 million smartphones nestled in pockets across the country. And, with a population of more than 1.3 billion, India represents an unprecedented opportunity for the tech giant to scale up its services. A number of Google products – such as YouTube and Android – have already taken off on the subcontinent, but the Google for India Digitisation Fund is designed to herald a new ‘digital-first future’ for the developing market. Welcoming Google’s announcement, Pichai said: “India’s own digital journey is far from complete. There’s still more work to do in order to make the internet affordable and useful for a billion Indians…from improving voice input and computing for all of India’s languages, to inspiring and supporting a whole new generation of entrepreneurs. “As we make these investments, we look forward to working alongside Prime Minister Modi and the Indian government, as well as Indian businesses of all sizes to realize our shared vision for a Digital India. “There’s no question we are facing a difficult moment today, in India and around the world. The dual challenges to our health and to our economies have forced us to rethink how we work and how we live. But times of challenge can lead to incredible moments of innovation. Our goal is to ensure India not only benefits from the next wave of innovation, but leads it. Working together we can ensure that our best days are still ahead”. Google is not the only company set on capitalising on India’s astonishing potential for market growth, however. Earlier this year, Jeff Bezos announced that Amazon would be pumping $1 billion into helping small and medium-sized Indian businesses get online, on top of the $5.5 billion that Amazon has already invested in the country. India’s own Prime Minister Narendra Modi previously launched the Digital India campaign, aiming to ‘transform India into a digitally empowered society and knowledge economy’. The investment drive marks Google’s second business venture in India. Back in 2015, the company teamed up with the Sir Ratan Tata Trust and Intel to launch Internet Saathi, a programme designed to improve digital literacy among women living in rural areas. Forbes reported in 2017 that 17 million women had already benefited from the initiative. Both Mr Pichai and Mr Modi hailed Google’s new programme on their Twitter accounts on Monday morning: Google, a subsidiary of Pichai-owned Alphabet Inc., appears to be doing well on the back of the news, adding to a year of pretty consistently good results – no doubt aided by the surge in internet use during the worldwide coronavirus lockdown. The company’s share price is up 1.98% or 30.46 to 1,569.47 USD at GMT-4 11:07 13/07/20, up considerably from its July 2019 shares which traded at just 1,145.34 USD.

G4S cuts 1,150 jobs as it adjusts strategy for cashless future

Jamie Gordon
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G4S cuts 1,150 jobs as it adjusts strategy for cashless future
Security services company G4S (LON:GFS) saw its shares rally by around 10% on Monday morning, as the company announced that first half trading had far exceeded expectations. Despite this, the company announced it would cut 1,150 jobs from its cash-handling operations. The move comes as the company adjusts its strategy to new consumer behaviours amid the the Coronavirus pandemic, where physical cash transactions lost significant ground to virtual payments. As a result, the company noted that customer needs had changed during the period, and decided to undergo a full review of its Cash Solutions arm, which included the vans it uses to deliver cash to businesses across the UK. Speaking on the strategic shift and job losses, G4S Managing Director of UK Cash Solutions, Paul van der Kneep, commented: “Following a review of our Cash Solutions operational footprint in the UK, we are proposing to reshape the business to better align it with the changing needs of our customers.” “Regrettably this will result in a reduction in headcount, and today we have entered into a period of consultation with affected staff.” “We are working closely with unions and individuals to offer opportunities for redeployment within the group.” As was previously suggested, the shift from physical cash to virtual payments appears to be an unstoppable tide. With Fintech offerings growing in number and range over the last few years, today’s news is a sign that the rest of society are being forced to catch up. With either some second iteration of a lockdown, or just socially-distanced normality, being the reality going forwards, British investors and consumers will need to prepare for Fintech offerings to gain an increasing share of the payments industry. Lamenting the G4S redundancies and the wider job losses a move away from physical cash would herald, GMB national officer Roger Jenkins noted: “These cuts are devastating for our members and their families. GMB will fight to the end for every single job.” “They are also another worrying step towards a cashless society – the cash industry really is on a knife edge.” “The collapse of cash industry could have a terrible impact on the elderly and most vulnerable and wreak havoc on small and medium enterprises which rely on cash transactions.” “GMB is calling on the government to take action to protect the cash industry and all those who will be hit hard is it disappears.” Following the announcement of its stellar first half performance, and unaffected by the news of job cuts, G4S shares remained up 9.08% or 10.85p, to 130.30p by 13:53 BST 13/07/20. This is down form the company’s year-to-date high of 208.00p on January 21, but a great improvement on its 81.04p nadir on April 6. G4S shares are currently sat about their consensus prediction of 127.00p.

Quiz shares dip on allegations of using underpaying subcontractor

Jamie Gordon
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1
Quiz shares dip on allegations of using underpaying subcontractor
Shares in online fashion outlet Quiz (LON:QUIZ) began trading on Monday by dropping 21%. This followed allegations by a reporter from the Times on Saturday, who claimed that one of the company’s subcontractors in Leicester had been paying its staff at levels far below the National Minimum Wage. The company said that it had already launched an investigation, but already understood that a supplier had used a sub-contractor “in direct contravention of a previous instruction from Quiz”. Speaking on the allegations, company Chief Executive Tarak Ramzan responded: “We are extremely concerned and disappointed to be informed of the alleged breach of national living wage requirements in a factory making Quiz products. The alleged breaches to both the law and Quiz’s ethical code of practice are totally unacceptable.” “We are thoroughly investigating this incident and will also conduct a fuller review of our supplier auditing processes to ensure that they are robust. We will update our stakeholders in due course.” The news follows similar allegations being brought against fellow online shopping outlet Boohoo (LON:BOO), who were also alleged by the Times to have used subcontractors that paid staff little more than £3 an hour in factories in Leicester. The allegations against both companies will need to undergo full formal reviews by authorities, in addition to their own internal investigations. Substantiated or not, one upshot of the news is that a spotlight has been shone on potential malpractice in the Leicester region, and we have once again been reminded to remain vigilant of potential instances of employee mistreatment in the UK. Following the news, Quiz shares dipped by more than a fifth. Thanks to the company’s quick response in launching their internal investigation, shares recovered, now down 5.01% or 0.34p to 6.41p per share 13/07/20 12:50 GMT. The company’s p/e ratio is 20.45 and their dividend yield is 6.25%. Going forwards, investors will be keen to have these matters put to rest. While Boohoo and Quiz have faced the brunt of criticism so far, shareholders of other online and fast fashion retailers will no doubt be wary about similar allegations being brought against other companies in the sector.
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