Tory leadership: who’s in the running?
The Tory leadership is well and truly underway after Prime Minister Theresa May announced her resignation week last week.
After a tumultuous three years as Prime Minister, May took on the challenge of delivering Brexit, a task which many had deemed a ‘poison chalice’.
Despite various setbacks, including a reduced majority after the 2017 election, a vote of no confidence and a series of cabinet resignations, the Prime Minister refused to back down.
However, in the end, she has eventually gave in to mounting pressure from the party, agreeing to step aside to allow for a new leader to emerge.
So, who is in the running to succeed May to become Tory leader?
Boris Johnson
Arguably the frontrunner, it has been no secret that Boris Johnson has harboured ambitions to take the reigns at No.10 for quite some time.
After a failed leadership bid in 2016, Johnson has been a vocal critic of the government despite his time in Theresa May’s cabinet as Foreign Secretary.
Michael Gove
Former Johnson ally and ardent Brexit supporter, Michael Gove has also thrown his hat into the ring of a particularly crowded leadership race.
Michael Gove has held various cabinet positions, including his role as Environment Secretary.
Famously, Gove dashed the hopes of Boris Johnson’s leadership bid in 2016, when he spoke out about his candidacy.
Jeremy Hunt
Often regarded as a safe pair of hands, Jeremy Hunt holds the title of the longest serving Health Secretary.
Nevertheless, there is some residual public distrust over his controversial decision to impose a junior doctor’s contract, which led to mass strikes at the time.
Hunt currently holds the post of Foreign Secretary, having succeeded Boris Johnson.
Dominic Raab
Another contender is Dominic Raab. Formerly the government’s Brexit secretary, he resigned amid disagreements over the Prime Minister’s withdrawal deal.
Raab campaigned in favour of leave in the run-up to the EU referendum, favouring a pivot towards trading with other markets such as Asia and Latin America.
However, his campaign has already got of to a shaky start, after he was forced to defend comments he made in 2011, in which he called feminists ‘obnoxious bigots’.
Matt Hancock
At 40 years old, he is the youngest contender in the running – thus far.
Hancock has been a member of the Conservatives since 1999 and has held numerous ministerial posts, including his current role as Health Secretary as well as Energy Secretary and the minister for Digital and Culture.
Esther McVey
One of only two women in the race, McVey is also one of the least experienced having held one ministerial post as the Secretary for Work and Pensions.
Prior to her role as MP for Tatton, McVey was a journalist and co-presenter alongside Eamonn Holmes for GMTV.
McVey recently launched the Blue Collar Conservatism Group, a movement designed with the aim of reconnecting the party with working people.
Andrea Leadsom
Having previously run back in 2016, Leadsom will be keen to build upon momentum from her previous bid.
Leadsom recently resigned from her role as Leader of the Commons, confirming her bid on Sunday.
She supported Brexit back in 2016, and has said she will be a “decisive and compassionate leader”.
Rory Stewart
Rory Stewart is the current International Development Secretary, having taken over from Gavin Williamson, after he was dismissed in connection to the Huawei national security leak.
Eton educated and a former tutor to Prince William and Harry, Stewart may have difficulties connecting with a wide support base, representing much of the ‘establishment’.
Nonetheless, Stewart has pledged to ‘tackle Britain’s everyday injustices’, as he launched his campaign to become PM.
Sajid Javid
Last but not least, Home Secretary Sajid Javid has also recently confirmed his bid.
Javid has already taken to twitter to announced his candidacy, pledging to unite and bring opportunities across the UK.
Javid will be facing criticism over his handling rising knife crime in London, with a record number of offences in the capital in 2018. Opinions are also divided over Javid’s tough stance on Shamima Begum, an ISIS bride whom he stripped of her UK citizenship back in March.I’m standing to be the next leader of @Conservatives & Prime Minister of our great country. We need to restore trust, bring unity and create new opportunities across the UK. First and foremost, we must deliver Brexit. Join @TeamSaj to help me do just that #TeamSaj pic.twitter.com/qfH1lLNusQ
— Sajid Javid (@sajidjavid) 27 May 2019
EU Elections 2019: Brexit party dominates, as Conservatives fall behind Greens
EU Elections 2019: It proved a successful night for Nigel Farage’s Brexit Party and the Liberal Democrats, with both making gains over Labour and The Conservatives.
The Brexit party secured 31.6% of the vote, gaining a total of 29 MEPs, whilst the pro-remain Liberal Democrats followed with 20.3% of the vote, bringing its total MEPs to 16.
Meanwhile, it proved a particularly disappointing evening for the UK’s two main political parties – Labour and The Conservatives.
The Conservatives, who are in the midst of a leadership contest, were down 14.84 percentage points, loosing 15 MEPs, and falling behind the Green party.
Labour also performed disappointingly in the EU elections, securing just 14.1% of the vote and losing 10 MEPs.
Meanwhile, both national parties in Scotland and Wales increased their share, with the SNP commanding 3.6% and Plaid Cymru with 1.0%. Votes are yet to be announced for Northern Ireland.
A good night for Leave or Remain?
Whilst overall The Brexit Party came out on top, suggesting Leave remains ahead, many have pointed out that the Remain vote was splintered across various different parties.
Alongside the Liberal Democrats, Change UK, The Green Party, The SNP and Plaid Cymru all campaigned in favour of remain in the lead-up to the EU elections.
Collectively, remain parties secured 40.4% share of the vote, ahead of Brexit supporting parties such as The Brexit Party and UKIP with 34.9%.
This does not factor in the votes of Labour and The Conservatives, which although both committed to delivering on the EU referendum result, they have supporters from both sides of the spectrum.
Whilst Brexit has proved one of the most divisive issues in the UK for the last decade, turnout did not significantly improve.
In total, 36.7% of the UK took the polls, an increase of just 1.8 percentage points.
UK retail sales flat in April, says ONS
UK retail sales in April remained flat on March, according to the latest figures from the Office For National Statistics (ONS).
Retail sales rose by 1.8% in the three months to April, largely driven by a strong quarter for online sales.
Despite remaining unchanged from March, the figures proved ahead of economists expectations of a 0.3% decline.
In particular, online retail increased in April year-on-year, now making up 18.7% of total sales.
Conversely, sales at department retail stores fell by 0.5%, alongside a further 2.9% decline in household goods sales during their period.
Overall however, alongside strong demand online, sales were boosted by warmer weather, particularly for clothing.
The figures suggest that the UK economy is coping better with Brexit related uncertainty than anticipated.
Nevertheless, it has proved a challenging few years for the UK high street, with a record number of stores closing in 2018.
Retailers have been struggling with a host of troubles including rising rents, currency movements and lower footfall.
Earlier this week, Marks and Spencer’s (LON:MKS) announced the closure of an additional 110 stores, as it looks to transform its business in an era of weaker consumer confidence.
Head of retail sales at the ONS, Rhian Murphy, commented on the figures: “Retail growth was strong in the three months to April with a record quarter for the online sector, driven mainly by clothing purchases, with warmer weather boosting sales.”
“Elsewhere, department stores continued to see their sales fall,” she said.
However, it’s not just retailers that prioritise the traditional brick and mortar model that are feeling the pressure.
Whilst online retailers such as Amazon (NASDAQ:AMZN) go from strength to strength, others such as ASOS (LON:ASC) have still seen profits take a hit in recent quarters.
Raj Badarinath, Vice President of RichRelevance, attributed these difficulties to issues such as the digital tax proposed in the UK, alongside changing privacy legislation in Europe.
Raj told UK Investor Magazine:
“A 2% tax rate sales made by ‘large digital companies’ would affect income in that it taxes all revenue, and not just profits. If this does indeed go ahead in April 2020, companies such as Amazon and eBay will need to rethink the way they sell.”
He continued: “In addition, GDPR affects all companies with respect to customer acquisition due to data privacy issues”.
Uber set to trial electric bike rental service in the capital
Uber (NYSE:UBER) is set to launch the electric bike service JUMP in London.
The taxi app will be trialling the scheme in the capital, offering bikes available to rent through its app. 350 red JUMP electronic bikes will take to Islington as part of the trial, which will expand across more London boroughs across the next few months.
Uber has said that the JUMP bikes are pedal-assist electric bikes with an integrated GPS and lock which allows riders to find locate a bike close by and rent it out.
Riders must simply launch their app and select a bike located nearby to unlock it. They will then receive a PIN to unlock the JUMP bike, with prices depending on the city. The bike will then unlock and can be taken for a ride.
London is not the first city to experience the service – countries across the world such as the US and Canada, in addition to European cities such as Berlin and Paris, have the bikes already available to them.
According to the Guardian, Local Councillor Claudia Webbe said the “shared electric bikes are accessible to many people of different ages and fitness levels and can help encourage even more people to switch to cycling, which is healthier and more environmentally friendly.”
Elsewhere for Uber, it recently launched its initial public offering on the New York Stock Exchange under “UBER”.
Its drivers across the UK were set to strike against pay and working conditions just days before its IPO was unveiled, in addition to drivers in New York, San Francisco, Chicago, Los Angeles, San Diego, Philadelphia and Washington DC in the US.
From its work place culture, in which certain sexual harassment and discriminatory practices have occurred, to the treatment of its drivers, Uber’s past involves several controversies.
At 19:59 GMT-4 Thursday, shares in Uber Technologies Inc (NYSE:UBER) were trading at -1.89%.
Nairobi: Is it still Africa’s ‘Silicon Savannah’?
The Kenyan capital of Nairobi is a chaotic metropolis, with over 3 million people residing in the city, there’s plenty going on at all junctures.
We take a deep look at some of Kenya’s key industries, including the city’s once burgeoning tech sector, alongside some of the latest political developments affecting Kenya.
Economy
The Kenyan economy is largely driven by its Agriculture, with 80% of its population employed by the farming sector.
Whilst Nairobi is one of East Africa’s largest urban cities, it is also home to some of the nation’s prime agricultural lands. As such, various crops such as maize, beans, and fruit are all grown in the region, and exported all over the globe.
Kenya also happens to be the largest tea exporter in the world.
Goods such as clothing, textiles, building materials, beverages and cigarettes are also all manufactured in Nairobi.
Foreign companies such as Coca-Cola, General Motors and IBM all have factories in the Kenyan capital.
The city also has a budding financial centre, home to the Nairobi Securities Exchange, which is also of Africa’s largest.
It is Africa’s 4th largest in terms of trading volumes, and 5th largest in terms of Market Capitalization as a percentage of GDP.
As of 2018 estimates, Kenya had a GDP of $85.980 billion making it the 69th largest economy in the world. Per capita GDP was estimated at $1,790.
However, tourism continues to drive economic growth in the region. Surrounding safari parks mean Nairobi is a top tourist destination, attracting travellers from all corners of the world.
Silicon Savannah
Nairobi is often referred to as the Silicon Savannah, in reference to the over 200 tech-start-ups residing in the city.
Some of that initial buzz may have fizzled out in recent years however, with tech hubs increasingly spreading outside the confines of the city.
Still, innovative companies such as ihub, which opened its doors in the city back in 2010, have made Nairobi their home.
Its nickname is no doubt a nod to the over 200 start-ups hosted in the capital.
As it happens, Nairobi was the only African city to appear on their shortlist of 21 broadband hubs throughout the world for 2015.
In fact, Kenya enjoys one of the fastest mobile Internet speeds across globe, beating the United States and Sweden.
Moreover, according to a Disrupt Africa report, shows tech start-ups across Africa raised over $129 million in 2016, a 17% increase on the previous year, with Kenya attracting the second highest investment after South Africa.
Yet Nairobi, like all cities, has room for improvement – ranking 186 on Mercer’s Quality of Living City Rankings 2017. The ranking flagged traffic, crime levels, poor public transport and housing as some of its key concerns.
Safaris and Scenery
Nairobi is often referred to as ‘The Green City in The Sun’, due to its greenery and warm, balmy temperatures.
It is also called the ‘Safari Capital of the World’, with safari tours bringing in rafts of tourists and visitors.
Africa’s Media Hub
Nairobi is also home to many multi-national news corporations’ regional headquarters including the BBC, CNN, Agence France-Presse, Reuters and Deutsche Welle.
Most recently, the BBC announced it had launched its largest bureau outside of the UK in Nairobi.
Almost half of the 600 BBC journalists working across Africa are to be based in the new facility in Nairobi.
Kenya’s Politics
The Economist Intelligence Unit rated Kenya as a “hybrid regime” back in 2016.
A hybrid regime is considered to be a partial democracy, where elections take place but there are also elements of political repression and corruption.
Currently, the Kenyan President is currently Uhuru Kenyatta, who is leader of the National Alliance party.
He also happens to be the son of Jomo Kenyatta, the nation’s first President.
Kenyatta was re-elected for a second term back in August of 2017, with an alleged 54% of the popular vote.
However, the result was challenged in the Supreme Court. The court ruled that another election must take place within 60 days of the ruling.
Kenyatta was re-elected in the second election, with 98.26% of the vote, on a turnout of 38.84%.
Crime in the capital
Unfortunately, Nairobi’s reputation in terms of crime continues to drag down its potential.
In particular, crime tends to increase during the time of an election – with political unrest proving a key driver of civic violence.
Moreover, the Kenyan capital is also at high risk of terror attacks, with extremist group Al Shaabab launching violent terror attacks on shopping centres, embassies and tourist hotspots.
Mothercare posts £66.6 million annual loss, completes store closure plan
Mothercare (LON:MTC) posted a £66.6 million pre-tax annual loss for 2018, but insists the completion of its UK store closure programme leaves the business on a “sounder financial footing”.
Founded in 1961, it has been publicly listed on the London Stock Exchange since 1971.
The British childcare retailer said on Friday that it had successfully completed its UK store closure programme ahead of schedule. It has reduced its UK estate from 134 stores last year to 79.
Last July, Mothercare was forced to compose a survival plan as its traditional high street position faces challenge by online competitors, forcing it to close a third of its stores in the UK.
In a trading update released in April, the company said that the rate in which its like-for-like sales were declining has improved when compared to the prior two quarters.
Its international business has shown sides of “moderate” recovery. International retail sales were down 0.3% in constant currency and Mothercare said that its core markets in Russia, China and Indonesia had experienced growth.
The retailer said that the next stage of its strategic transformation plan is to develop Mothercare as a global brand. It will simultaneously, however, remain primarily focused with its online proposition in the UK.
“We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business. The majority of that work is now done, including the completion of our store closure programme, leaving us with 79 stores which are well positioned to support our UK customer base,” Mark Newton-Jones, CEO of Mothercare, commented on the results.
“We have also sold Early Learning Centre and our Head Office, and the proceeds have been used to greatly reduce our debt. Combined with a new approach to sourcing product and our organisational restructuring, we have a much reduced cost base,” the CEO continued.
“Whilst this major restructuring activity has resulted in significant headline losses for the year, the business is now on a sounder financial footing.”
At 08:09 BST Friday, shares in Mothercare plc (LON:MTC) were up 21.96%.
Oil under pressure as US stocks sink
- The FTSE 100 closed not far off its day’s lows yesterday, having been under pressure from the open following rising concerns over US-China trade tensions along with increasing evidence that Prime Minister Theresa May is now on borrowed time.
- Oil price came under severe pressure yesterday.
- US stocks ended deeply in the red again yesterday, albeit recouping some of their losses in the final hour of trading.
- Asia is set to close shortly, mixed with mostly just modest moves having after seeing Japan stage a half-hearted rally from its opening lows.
- Today’s UK financial updates include finals from: Mothercare, Urban Logistics, Tiger Resources and Westminster Group, with General Meetings due for Bodycote, Bezant Resources, Fevertree Drinks, Informa, Luceco, Pagegroup, Spectris and the Yew Grove REIT.
SVS Securities morning call and market round-up 23rd May
- Sterling weakens further as Theresa May’s ‘bold offer’ falters, Commons Leader, Andrea Leadson, resigns and Cabinet allies desert the PM amid demands she quits.
- US major averages soften, giving back some of yesterday’s gains with techs again in focus.
- Asia markets are falling quite sharply this morning on concerns that the trade dispute may be entering an extended stand-off.
- Today’s UK financial updates include finals from: Helical, Hummingbird Resources, Mediclinic International, PayPoint, Renewi, TalkTalk Telecom, Tate & Lyle, QinetiQ, United Utilities and Young & Co’s Brewery, interims from AJ Bell, Hollywood Bowl, Mitchells & Butlers and Premier Asset Management, quarterlies from Atalaya Mining and Sabre Insurance Group, with General Meetings due for Acacia Mining, Alliance Pharma, Avast, Aviva, Bakkavor, Coats Group, EnQuest, Essentra, Gocompare.Com, Hastings, Henry Boot, Highland Gold, Ibstock, Inchcape, Intertek, Legal & General, Nucleus Financial, Polypipe, S&U, StatPro Group, SOCO International, Strix and XLMedia.
