Overall the BCC described the economy as ‘uninspiring’, with political uncertainty, currency fluctuations and Brexit clearly affecting British businesses
The head of Britain’s financial watchdog has admitted that he held talks with oil giant Saudi Aramco over a potential two trillion dollar (£1.5trillion) stock market flotation in London, as MPs warned over lax governance standards and political interference in the deal.
Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), said that discussions were held earlier this year amid a barrage of criticism over his proposals to change listing rules that would allow the Arab firm to plump for London over rival financial centres.
‘We can confirm that we held conversations with Saudi Aramco and their advisers in light of their interest in a possible UK listing in the early part of this year.
‘We emphasised during those conversations that we were reviewing the Listing Regime,’ Bailey said in response to a letter from Nicky Morgan, chair of the influential Treasury Select Committee.
Morgan wrote to the FCA demanding it explain a raft of proposals which would exempt companies controlled by governments from stringent listing rules.
The move would create a new category of listing that could pave the way for Aramco to float in London in what is set to be the biggest initial public offering (IPO) in history.
Saudi’s state-owned Aramco is preparing to list only around 5 per cent of its shares and the FCA plans would allow the group to side-step rules that companies must sell at least 25 per cent of their shares to gain a ‘premium’ status.
But the rule change has drawn sharp criticism from big-hitting City institutions such as Royal London Asset Management, the Institute of Directors and the International Corporate Governance Network.
In defence of the FCA’s proposals, Bailey added: ‘We do not think protections for investors will be weakened.
‘We have previously made clear publicly that we will permit lower percentages than 25 per cent, where the value and distribution is such that there can be a liquid market.’
However, Morgan said that ‘questions remain about the level of political involvement in the consultation’ and her comments come as the Government scrambles to secure overseas investment amid Brexit uncertainty.
Prime Minister Theresa May and London Stock Exchange boss Xavier Rolet met with the company’s boss Khalid Al-Falih in April when they pressed home the advantages of bringing the listing to London.
Bailey added: ‘Our proposals are consistent with the Treasury’s recommendations to the FCA, published at the time of the Spring Budget in early March.
‘The recommendations include the point that London retaining its position as the leading international financial centre supports the aim of sustainable economic growth. Those recommendations had been discussed with Treasury.’
Embattled lingerie chain Agent Provocateur is set to leave £28million in unpaid debts.
The chain, which went into administration earlier this year, will pay unsecured creditors – many thought to be small suppliers – just 4p for every pound that they are owed.
The biggest of them is thought to be private equity backers 3i. However, the group has 444 unsecured creditors in total, including a Moroccan garment manufacturer that is set to lose more than £500,000.
Vogue publisher Conde Nast, ad agency Saatchi & Saatchi, Microsoft and The Ivy restaurant are also thought to be owed money.
A recent Companies House filing from the company’s administrators, Alix Partners, found that while unsecured creditors were owed £29.7million, they were likely to receive just £1.2million, to be shared between them.
Read more here.
Pearson have a third quarter update out on October 17.
Plenty of speculation on what the numbers will look like.
Mining companies are in demand this morning on the back of the Chinese data.
In September, Chinese imports grew by 18.7 per cent, which was a increase on August’s growth rate of 13.3 per cent.
The country is an enormous importer of minerals so Rio Tinto, Anglo and Glencore are higher.
German newspaper reports doing the trick.
Handelsblatt claims the EU are prepared to offer the UK a 2-year transitional deal, where the latter would meet all of its financial obligations but give up its voting rights.
Not exactly a fresh-take – a transitional period has been batted about since Brexit day.
Investors are being selective in what Brexit news they want to listen to, with the Handelsblatt report sending sterling sharply higher.
Aviva announced it is to sell its 49 per cent stake in its Taiwan joint venture to its partner First Financial Holding.
The decision came after a strategic review of the business found it did not fit with the group’s strategy of focussing on markets where it can achieve scale or have a distinct competitive advantage.
Engineering firm GKN has warned that profits will only be ‘slightly above’ 2016 after it disclosed a £40million hit linked to legal claims and a £15million writedown.
The company said in a stock market announcement that it has been made aware of two ‘probable claims’ which are expected to result in a charge of around £40million in the fourth quarter.
One claim relates to GKN Aerospace and the other GKN Driveline, but the firm did not reveal any further details.
In addition, GKN Aerospace North America will book a £15million non-cash charge at its Alabama facility, relating to ‘revised assumptions’ on programme inventory and receivables balances.
Shares in British hedge fund Man Group have risen after a rise in third quarter assets and a new share buyback was announced.
Man Group assets rose 7.9 per cent in the three months ending September 30, boosted by market gains and net inflows to its funds, including in emerging market debt.
At the same time Ashmore, the FTSE-250 listed asset manager, attracted inflows of $4.3billion in its latest fiscal period as investors flocked to emerging markets despite geopolitical uncertainty.
Meanwhile troubled subprime lender Provident Financial confirmed that it will book heavy losses at its consumer credit business this year, but claimed that it is making progress with a turnaround plan.
A management shake-up at the firm’s consumer credit business announced last month has ‘prevented any further deterioration in performance’, Provident said.
The group’s collections performance in September was 65 per cent, up from 57 per cent in August, whilst sales were only £6million per week lower than last year, compared with £9million during August.
Home credit receivables in the month stood at £316.3million, down 33 per cent from June 2017 and down from £489.2million in September 2016.
It comes after a brutal few months for the firm which saw a string of profit warnings and a management reshuffle.
Britain’s economy shows little sign of breaking out of its lethargy and it is ‘extraordinary’ that the Bank of England is considering raising interest rates, the British Chambers of Commerce has said.
The BCC’s Quarterly Economic Survey of businesses, the largest of its kind, said sales at services firms that make up the bulk of the economy were steady in the third quarter.
But there was little sign of a pick-up in pay pressures or investment, both of which the BoE expects to rise markedly next year.
Overall the BCC described the survey as ‘uninspiring’, with political uncertainty, currency fluctuations and Brexit clearly affecting British businesses.
Despite confounding forecasts that the 2016 vote to leave the European Union would lead to a sudden slowdown, Britain’s economy has struggled this year, posting its worst first-half performance since 2012.
The BCC said price pressures in companies, while high historically, looked likely to peak soon.