Miranda Wadham on 10/08/2015
Diversity low in FTSE 100, according to Green Park
Diversity in business has been a contentious topic, with company boardrooms traditionally ruled by one demographic: white men. Several government initiatives have been launched to improve the diversity of Britain’s top companies, with ex-business secretary Vince Cable setting a voluntary target for company boards to make sure 25% of their positions were held by women, after a report by Lord Mervyn Davies suggested that the numbers were severely imbalanced. Furthermore, in 2014 the 2020 campaign was launched to ensure that, by 2020, every FTSE 100 board had at least one ethnic minority member.
This year’s Green Park Leadership report shows that, whilst figures are improving, the numbers are not yet encouraging. This is the second of these reports by the company, who are committed to greater transparency in business and hope to provide robust benchmarks for companies. They provide intelligence and insight, strategic advice and recruitment support to leading companies, and are acting to try and change the lack of diversity in UK businesses.
Green Park’s survey was conducted on the FTSE 100 companies and published in April 2015. At the very top, the results are alarming; out of all the companies in the FTSE 100, only 3 chair were non white. 96 of the Chief Executive positions were white, as well as 95 Chief Financial Officers. According to the figures, there has actually been a decline in executive positions held by ethnic minorities, suggesting that opportunities for advancement are unfortunately declining rather than increasing.
By sector, transport and utilities are the worst for diversity; out of 6 companies, there with no non-white members in top leadership positions. The construction and property sectors are almost as bad, with just 2.2% of top positions held by those from ethnic minorities. However, health and natural resources came out on top, with 15.9% and 11.7% respectively.
The natural resources sector is also one of the highest for women’s representation too, with 14.1% of their top positions held by females. The best for women is the utilities industry, at 29.7%.
If fact, news for women is far brighter across the board than for ethnic minorities. Following the Davies report, the percentage of women on boards has doubled and has now hit the 25% target, with 26.1%. The report showed that out of the ethnic minority leaders who did hold top positions, they were more likely to be women.
Whilst Green Park’s report has shown some progress for diversity, the low figures for ethnic minorities clearly highlights the need for diversity campaigns. Britain is, after all, applauded for its diversity, tolerance and accessibility for people of all backgrounds – so why doesn’t this show on the boards of the country’s top companies?
The Markets and Carney disagree over when rates will rise
In last week’s Bank of England press conference, Mark Carney said he saw rates raising in early 2016, a dovish adjustment to comments made in May that suggested lift off could be as early as this year.
The change in stance from the governor caused an initial knee jerk reaction in sterling that fell against the dollar.
However, markets that reflect the timing of the rate hike are still pricing in a chance of a rate hike by December.
Short Sterling futures for expiry in December are fractionally off pricing in a 0.25% increase in UK Interest rates by the end of the year.
Using the same method, interest rates are expected to be 1% by the middle of 2016.
The futures market highlights the conflict in opinion of the first rate hike but share consensus by the middle of next year rates will have increased, possibly by as 0.5% to 1%.
The uncertainty over when rates will initially rise is very much a product of comments by Mark Carney who said the timing of a rate hike is data dependent and his apparent willingness to change guidance at the drop of a hat.
Greek bailout to be finalised on August 11
A final bailout agreement for Greece is on the brink of being finalised, after significant concessions were made by Alexis Tsipras.
According to sources, the country hopes to negotiate final agreement with creditors by August 11th.
Finance ministers and creditors have been in talks over the weekend, which stretched into early Monday morning. A source has told Reuters that they are confident an 86 billion euro deal will be reached by the early hours of tomorrow.
“Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday,” said a Greek official who declined to be named.
“When the new bailout comes to parliament for a vote it will be one bill with two articles – one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions,” the official said, referring to measures Greece needs to take for the bailout accord to take effect.
The new bailout agreement comes just a week before their first 3 billion euro repayment, due on Aug 20.
Chinese merger speculation causes market rise
Chinese stocks rose more than 4.5% on Monday, their biggest gain in a month, after rumours of company restructuring in the shipping industry.
The CSI300 index .CSI300 rose 4.5 percent to 4,084.36 points, with the Shanghai Composite Index .SSEC climbing 4.9 percent to 3,928.82.
Merger speculation has propped up the markets, with major shipping companies halting trading due to pending announcements. China is planning to merge China Ocean Shipping Co and China Shipping Co, the two major state owned shipping companies, according to Bloomberg.
Du Changchun, an analyst at Northeast Securities in Shanghai, told Reuters:
“China’s economic indicators are not very good which means monetary policy will continue to be accommodative.
“Investors are also betting that SOE (state-owned enterprise) reforms will inject life into the market. Trading volumes in the stock market today picked up why.”
The Chinese government have implemented measures to stimulate the markets and fight off a crash. Analysts at Goldman Sachs estimate that the “national team” has potentially spent 860-900 billion yuan to support the stock market in over the last two months.
Hackers attack Dixons Carphone
Dixons Carphone (DC.L) have been subject to a cyber attack that may affect 2.4 million of its customers, the retailer announced on Saturday.
The electrical and mobile phone company said that it had learned of the data breach on Aug. 5 and had taken immediate action.
The affected part of the company includes the OneStopPhoneShop.com, e2save.com and Mobiles.co.uk websites, as well as around 400,000 TalkTalk customers.
Up to 90,000 customers may also have had their encrypted credit card details accessed, it said in a statement.
Sebastian James, chief executive of Dixons Carphone, said: “We are, of course, informing anyone that may have been affected, and have put in place additional security measures.
“We take the security of customer data extremely seriously, and we are very sorry that people have been affected by this attack on our systems.”
Saxo Payments leads the way for global transfers
Fintech industry body Innovate Finance announced its 2020 Manifesto last week, with the aim of advancing the UK’s standing as a leader in financial technology innovation.
Their vision for 2020 is for the UK to be the most investment-friendly environment for FinTech globally, attracting $4 billion of venture investment and $4 billion of institutional investment. Currently, UK fintech investment stands at $623 million, up from $264 million the year before.
Anders la Cour worked as a technology and financial M&A lawyer at a tier one law firm in Copenhagen, before co-founding the Saxo Payments Banking Marketplace. He fully agrees with the manifesto’s potential for UK fintech industry:
“There is no question that the FinTech sector represents a significant opportunity for the UK economy. There seems to be a growing appetite amongst a broad range of organisations to get involved in FinTech – from the creation of the UK Government’s FinTech special envoy, to investment in the sector by a number of traditional banks. And it’s vital that everyone understands the broader benefits that can be delivered to the economy by allowing this sector to grow.”
Saxo Payments are a fintech company who send and receive money internationally, sidestepping traditional banks and reducing fees in the process. Transfers occur instantly within the Saxo Payments community, even across borders. According to them, businesses are afraid to stand up and demand instant global transfers, cheaper international payments and better, more customer-centric service.
The payments company has just secured its fourth contract win in the space of a month. The latest partnership, with Valitor, a leading online and e-commerce payment solutions company, shows the hunger of start-up companies for a cheaper alternative to global bank transfers. Vidar Thorkelsson, Chief Executive Officer at Valitor believes its merchant clients will benefit from the deal.
“The Saxo Payments Banking Marketplace tackles the big challenge for our merchant clients of processing cross border payments quickly and cost-effectively, enabling us to significantly enhance our customer proposition.
“By joining the Saxo Payments Banking Marketplace we can also reduce the amount of extra time and money which is inevitably spent when working with multiple service providers. Now we can manage all the cross border payments for our merchant clients from one unique solution. We are looking forward to working closely with Saxo Payments to enhance the Valitor service offering, allowing us to build on an already extensive customer portfolio across various international markets.”
Miranda Wadham on 07/07/2015
US economy adds 215,000 jobs, unemployment remains flat
The US economy added fewer jobs than expected in July, according to US non farm payroll figures released this afternoon.
215,000 jobs were added over the last month, as opposed to the 223,000 expected by analysts.
June’s figure was revised higher to 231,000 from 223,000 while May was also revised up to 260,000 from 254,000. So far this year, job gains have averaged at 208,000 per month.
US unemployment remained at 5.3%, and average wages increased by 0.2%, after showing no change in June.
The figures released today by the Department of Labor suggest that Janet Yellen will raise rates sooner rather than later – possibly as early as September. Yellen told congress last month:
“If we wait longer it certainly could mean that when we begin to raise rates we might have to do so more rapidly. An advantage to beginning a little bit earlier is that we might have a more gradual path of rate increases.”
Leeds-born businessman set to revolutionize Yorkshire air travel
According to Leeds-born businessman James Thorpe, HS2 and the Northern Powerhouse are not the answer for economic improvement the North.
Instead, he believes the weakness in Northern infrastructure lies in the lack of business air travel. To that end, he is seeking to raise £2 million of funding to set up his own airline, Extrajet, which will run twice daily direct flights from Leeds-Bradford International Airport, to Copenhagen & Antwerp, with other UK and European cities to follow.
“Business people wanting to travel internationally, to drive their export sales, are very badly served by Yorkshire’s airports. It is impossible to fly to many of the key European business destinations, and those looking to fly to other continents from Yorkshire are forced to fly to London first. The same applies to business or pleasure travellers from Europe wishing to travel to the region. This is simply unacceptable for a county the size of
Yorkshire ”
The ticket price will be slightly higher than low cost operators, with no discount available – but for them, service is key. Unlike the infamous service provided by operators such as Ryanair and Easyjet, Extrajet will offer all the trimmings, including car parking, in-flight entertainment, an aiport lounge, speedy boarding and in-flight light meals and drinks.
Yorkshire is the largest of England’s regions and, with a population of almost 6 million, its economic output of £88 billion is significant – almost 7% of the UK’s total economic output. The need to improve business links to the area is unavoidable.
Though he started raising investment through a a corporate finance firm based in the city, he has decided that individual investors with a real interest in seeing Yorkshire thrive are the best way forward for his business.
His plan is to attract investors through press releases and business groups which – to his own surprise – has worked exceedingly well. In the last few days alone he has received emails from a few hundred interested parties; it seems that he is not alone in thinking that an improvement in business air travel is the right thing for Yorkshire.
Thorpe said: “We would like to find a small group of ‘qualified’ investors who are passionate about Yorkshire and perhaps also aviation. We are looking to raise £2M in total in exchange for 45% equity. I would imagine we need around four or five serious investors.”
Furthermore, Thorpe believes that the business will be eligible for the Enterprise Investment Scheme, offering tax relief for investors – an encouraging incentive.
Thorpe is an experienced, well qualified and highly motivated business entrepreneur with almost 30 years experience at an international level, and has a strong team supporting the company with solid backgrounds in business, finance and aviation. Starting his own airline is a bold move; but it might just be exactly what Yorkshire is looking for.
HTC post record profit loss
HTC shares fell 10%, the daily limit, in the wake of a record quarterly profit loss.
Their second quarter report, released today, showed weaker than expected demand at the high end and weak sales in China, leading to year on year fall in profits.
For the three months to June, losses dropped to 8bn Taiwanese dollars (£163m) from Tw$2.26bn a year earlier. Shares fell to their lowest price since February 2005
“HTC has begun to implement company-wide efficiency measures to reduce operating costs across the organisation and ensure resources are appropriately allocated to future growth,” the company said in a statement.
HTC have faced strong competition in recent months from Apple and Samsung, as well as being undercut by cheaper Chinese smartphone companies.
Miranda Wadham on 07/08/2015
MPC’s dovish approach hits pound, helps housing stocks
The Bank of England’s unexpectedly dovish approach to interest rates this morning had a knock-on effect on the stock markets and the strength of the pound.
The FTSE 100 index was up 0.1 percent at 6,757.74 points by 1200 GMT, having been in negative territory all morning. now down 0.04% 1445 GMT.
The lack of change has been beneficial to rate-dependent industries such as housing development, with the prospect of higher interest rates being pushed back and supporting mortgage applications .
Housebuilder Taylor Wimpey (LON:TW) rose 3.1 percent, making it one of the best-performers on the FTSE 100 and taking it to a new eight-year high. Barratt Developments (LON:BDEV) rose 2.3 percent, also hitting its highest level since 2007. Persimmon (LON:PSN) rose 2 percent to a record high.
However, the pound has fared less well on the back of the announcement. Sterling strengthened this morning against the euro this morning for the fourth day in a row, up to its strongest level since 2007, however quickly fell at the MPC’s news. The pound has fallen 0.65 per cent against the dollar and 0.66 per cent against the euro.
Mark Carney made it clear that the strength of the sterling will continue to have an effect on inflation and will be “taken into account” when discussing the time for a rate increase, saying that there was “no question of the strength of sterling having an influence on policy”.
When asked about the impact of recent events in both China and Greece, Mark Carney stated that they were not taken into account and that he “wouldn’t characterize what has happened in the market as turmoil and did not weigh on the MPC’s decision”
However, he does see oil prices and movements in China as risks to global growth.
Carney remained ambiguous on the subject of rate rise, saying that the “rate hike is moving closer, but cannot be predicted in advance”. Carney’s reluctance to give away hints is nothing new, with one MP likening him to an “unreliable boyfriend”.
BNP Paribas economist Dominic Bryant said expectations that the BoE could move as soon as this year now looked a stretch, though a move in February was still a possibility.
Miranda Wadham on 06/08/2015