This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2019/nov/20/donald-trump-tariff-stock-markets-general-election-sterling-pound-uk-brexit-business-live
The article has changed 15 times. There is an RSS feed of changes available.
| Version 8 | Version 9 |
|---|---|
| European Central Bank warns of growing risks to global financial stability – business live | European Central Bank warns of growing risks to global financial stability – business live |
| (32 minutes later) | |
| Rolling coverage of markets, economics and business news amid warning of increased risks posed by non-bank lenders | Rolling coverage of markets, economics and business news amid warning of increased risks posed by non-bank lenders |
| Today is an important day for Aston Martin, with the launch of its make-or-break DBX, the company’s first sports utility vehicle. | |
| Chief executive Andy Palmer launched the car in Beijing, a clear indication of the company’s priority to sell to wealthy Chinese buyers. | |
| The company is particularly keen to increase its sales to women, diversifying a masculine-dominated image most associated with James Bond. It even hired a “Female Advisory Board” to help with design. | |
| Palmer has staked the future of the business on the SUV bet paying off. Carmakers have responded to surge in demand for the bulkier vehicles – despite the terrible toll for the planet of manufacturing less efficient modes of transport. Growing demand for SUVs was the second largest contributor to the increase in global CO2 emissions from 2010 to 2018, according to the International Energy Agency. | |
| Aston Martin Lagonda is following the well worn path trodden already by Lamborghini’s Urus and Bentley’s Bentayga, and the car is priced similarly at £158,000, before extras. | |
| Those extras include a bumper protector and in-built hose to prevent dogs marking the car or boot warmers for cold weather. Aston Martin did not give details of how much the extra features will cost. | |
| Just after midday, shares on the FTSE 100 have lost 1.2%. | Just after midday, shares on the FTSE 100 have lost 1.2%. |
| Kingfisher remains the biggest faller, down 6.4%, while educational materials provider Pearson las lost 3.7% and insurer Aviva has lost 3.6%. | Kingfisher remains the biggest faller, down 6.4%, while educational materials provider Pearson las lost 3.7% and insurer Aviva has lost 3.6%. |
| Only four stocks were in positive territory at the time of writing on the blue-chip index. Mid-cap stocks on the FTSE 250 – less exposed to global trade tensions – were down by 0.5%. | Only four stocks were in positive territory at the time of writing on the blue-chip index. Mid-cap stocks on the FTSE 250 – less exposed to global trade tensions – were down by 0.5%. |
| The Chinese e-commerce company Alibaba has raised about $11bn in a share offering in Hong Kong, the city’s biggest offering since 2010 despite ongoing protests against the Chinese-controlled regime. | The Chinese e-commerce company Alibaba has raised about $11bn in a share offering in Hong Kong, the city’s biggest offering since 2010 despite ongoing protests against the Chinese-controlled regime. |
| Alibaba said Wednesday that it has set the price for the offering at 176 Hong Kong dollars per share, raising 88bn Hong Kong dollars (£8.7bn) – the largest fundraising of 2019. That amount could rise to £10bn if bankers exercise options to sell an additional lump of shares over the next 30 days. | Alibaba said Wednesday that it has set the price for the offering at 176 Hong Kong dollars per share, raising 88bn Hong Kong dollars (£8.7bn) – the largest fundraising of 2019. That amount could rise to £10bn if bankers exercise options to sell an additional lump of shares over the next 30 days. |
| In a statement, Alibaba said: | In a statement, Alibaba said: |
| The company’s share code, 9988, shares the same pronunciation as the Chinese expression for “eternal prosperity”. Shares are due to begin trading on 26 November. | The company’s share code, 9988, shares the same pronunciation as the Chinese expression for “eternal prosperity”. Shares are due to begin trading on 26 November. |
| Back on the ECB, here’s a bit more detail on those building financial stability risks. | Back on the ECB, here’s a bit more detail on those building financial stability risks. |
| Low interest rates – designed by central bankers to stimulate spending – have had the knock-on effect of making it more difficult for investors to make returns on their money. That has pushed investors outside the heavily regulated banking sector to look for returns, or yield, elsewhere. | Low interest rates – designed by central bankers to stimulate spending – have had the knock-on effect of making it more difficult for investors to make returns on their money. That has pushed investors outside the heavily regulated banking sector to look for returns, or yield, elsewhere. |
| The ECB said: | The ECB said: |
| If markets do fall significantly investment funds, including hedge funds, could exacerbate any instability if they rush to sell assets that are difficult to sell, the ECB said. | If markets do fall significantly investment funds, including hedge funds, could exacerbate any instability if they rush to sell assets that are difficult to sell, the ECB said. |
| The following chart shows the build-up in riskier bets. In the left-hand chart the two rings represent the credit ratings of companies in 2007 and 2018. The growth in high-yield debt (the yellow portion) is particularly striking; “high yield” is another way of saying riskier, in comparison to debt given safer A or B ratings. | The following chart shows the build-up in riskier bets. In the left-hand chart the two rings represent the credit ratings of companies in 2007 and 2018. The growth in high-yield debt (the yellow portion) is particularly striking; “high yield” is another way of saying riskier, in comparison to debt given safer A or B ratings. |
| The right-hand side of the chart shows the growth in house prices across the euro area – another tell-tale sign of a growing bubble. | The right-hand side of the chart shows the growth in house prices across the euro area – another tell-tale sign of a growing bubble. |
| South African investor Prosus has criticised Takeaway.com’s offer for food ordering service Just Eat as “unrealistic” as it pushes for shareholders to reject the Dutch company’s approach in favour of its own. | South African investor Prosus has criticised Takeaway.com’s offer for food ordering service Just Eat as “unrealistic” as it pushes for shareholders to reject the Dutch company’s approach in favour of its own. |
| Takeaway.com and Just Eat published the offer document for its £4.7bn bid – which is backed by Just Eat’s management – this morning, but Prosus is still holding out hope that shareholders will back its £4.9bn unsolicited offer. | Takeaway.com and Just Eat published the offer document for its £4.7bn bid – which is backed by Just Eat’s management – this morning, but Prosus is still holding out hope that shareholders will back its £4.9bn unsolicited offer. |
| Prosus argues that Takeaway.com is underestimating the scale of investment needed in Just Eat’s own delivery capabilities, which face stiff competition from rivals such as Deliveroo and Uber Eats. | Prosus argues that Takeaway.com is underestimating the scale of investment needed in Just Eat’s own delivery capabilities, which face stiff competition from rivals such as Deliveroo and Uber Eats. |
| Bob van Dijk, chief executive of Prosus, said the company was “excited about the prospect of adding Just Eat to our portfolio”. He said: | Bob van Dijk, chief executive of Prosus, said the company was “excited about the prospect of adding Just Eat to our portfolio”. He said: |
| There’s a lot to digest in the European Central Bank’s financial stability review – the first under the leadership of newly appointed president Christine Lagarde. | There’s a lot to digest in the European Central Bank’s financial stability review – the first under the leadership of newly appointed president Christine Lagarde. |
| Some of the headline points from the ECB: | Some of the headline points from the ECB: |
| The financial stability environment remains challenging, with “prominent downside risks to growth”. | The financial stability environment remains challenging, with “prominent downside risks to growth”. |
| Signs of excessive leverage and risk-taking in some sectors – such as non-bank lenders, debt-burdened companies and property – “require targeted action”. | Signs of excessive leverage and risk-taking in some sectors – such as non-bank lenders, debt-burdened companies and property – “require targeted action”. |
| Excessive risk and leverage in non-banks amplifies cycles in capital markets and contagion of stress to the wider financial system. | Excessive risk and leverage in non-banks amplifies cycles in capital markets and contagion of stress to the wider financial system. |
| Consolidation between European banks could help aid financial stability. | Consolidation between European banks could help aid financial stability. |
| Risks to the stability of the global financial system have increased as shadow banks have lent more money to businesses in place of traditional lenders, the European Central Bank (ECB) warned on Wednesday. | Risks to the stability of the global financial system have increased as shadow banks have lent more money to businesses in place of traditional lenders, the European Central Bank (ECB) warned on Wednesday. |
| Regulators around the world have increased their scrutiny on the banking sector since the financial crisis a decade ago. While central banks believe that has made the banking sector safer, there are growing concerns that a financial shock could leave shadow banks – such as investors, insurance companies and pension funds – exposed. | Regulators around the world have increased their scrutiny on the banking sector since the financial crisis a decade ago. While central banks believe that has made the banking sector safer, there are growing concerns that a financial shock could leave shadow banks – such as investors, insurance companies and pension funds – exposed. |
| The ECB said: | The ECB said: |
| Low interest rates have been an important part of the shadow banking phenomenon, as investors seek better returns. | Low interest rates have been an important part of the shadow banking phenomenon, as investors seek better returns. |
| Luis de Guindos, vice-president of the ECB, said: | Luis de Guindos, vice-president of the ECB, said: |
| An interesting story from the Financial Times (£) this morning for watchers of the UK’s most systemically important bank: HSBC is reportedly set to replace its investment banking head. | An interesting story from the Financial Times (£) this morning for watchers of the UK’s most systemically important bank: HSBC is reportedly set to replace its investment banking head. |
| Interim head Noel Quinn took over in August with a remit to cut thousands of staff, after his predecessor John Flint was ejected after barely 18 months in the job – reportedly for moving too slowly on improving returns. Now the shake-up could extend to the top of the bank. | Interim head Noel Quinn took over in August with a remit to cut thousands of staff, after his predecessor John Flint was ejected after barely 18 months in the job – reportedly for moving too slowly on improving returns. Now the shake-up could extend to the top of the bank. |
| The FT said that Samir Assaf, head of global banking and markets, is expected to be moved to a non-executive role to allow a successor in who could shrink the unit serving the fundraising needs of large companies, citing people briefed on the matter. | The FT said that Samir Assaf, head of global banking and markets, is expected to be moved to a non-executive role to allow a successor in who could shrink the unit serving the fundraising needs of large companies, citing people briefed on the matter. |
| The top riser anywhere on the FTSE 350 is Mitchells and Butlers, the restaurant owners bucking the struggles of many other consumer-facing companies (cf. Kingfisher today). | The top riser anywhere on the FTSE 350 is Mitchells and Butlers, the restaurant owners bucking the struggles of many other consumer-facing companies (cf. Kingfisher today). |
| The owner of brands such as Harvester, Toby Carvery and Nicholson’s pubs reported like-for-like sales growth of 3.5% for the year ending 28 September. It increased adjusted operating profits by £14m, or 4%, and revenues and profits before tax also rose. | The owner of brands such as Harvester, Toby Carvery and Nicholson’s pubs reported like-for-like sales growth of 3.5% for the year ending 28 September. It increased adjusted operating profits by £14m, or 4%, and revenues and profits before tax also rose. |
| It even managed to cut net debt (although it is still 3.6 times earnings before interest, tax, depreciation and amortisation). | It even managed to cut net debt (although it is still 3.6 times earnings before interest, tax, depreciation and amortisation). |
| Phil Urban, the company’s chief executive, said: | Phil Urban, the company’s chief executive, said: |
| An hour into trading, and blue-chip shares in London are down by 0.9%, accelerating losses from initial exchanges. | An hour into trading, and blue-chip shares in London are down by 0.9%, accelerating losses from initial exchanges. |
| The mid-cap FTSE 250 has lost 0.6%. | The mid-cap FTSE 250 has lost 0.6%. |
| Kingfisher is the biggest faller, down by 6.9%, while accounting tech company Sage Group and insurer Aviva have lost 3.6% and 3.3% respectively. | Kingfisher is the biggest faller, down by 6.9%, while accounting tech company Sage Group and insurer Aviva have lost 3.6% and 3.3% respectively. |
| On the latter two, from Reuters: | On the latter two, from Reuters: |
| Sage reported a 13% drop in full-year organic operating profit to £432m on Wednesday as its margin was squeezed by increased investment in its cloud and subscription products. | Sage reported a 13% drop in full-year organic operating profit to £432m on Wednesday as its margin was squeezed by increased investment in its cloud and subscription products. |
| Shares in Aviva slid on Wednesday after the British insurer announced it would reorganise into five divisions and sell its stake in its Hong Kong business, falling short of investor expectations for a broader change in strategy. | Shares in Aviva slid on Wednesday after the British insurer announced it would reorganise into five divisions and sell its stake in its Hong Kong business, falling short of investor expectations for a broader change in strategy. |