Britons will get a tax break to encourage investment in the London stock market, the U.K. government said as it set out a spring budget that also cut workers’ employment taxes, as the Conservative party looked to boost its election hopes.
Chancellor of the Exchequer Jeremy Hunt told a packed Parliament on Wednesday that new British Individual Savings Accounts would allow an extra £5,000 in tax-free investment into U.K. equities. Rules currently allow investors to put £20,000 a year into the accounts, which are exempt from capital-gains tax.
The move is an attempt to revive the London stock market, which has been suffering from a lack of liquidity, low valuations and a scarcity of IPOs. A recent report from Calastone found that British investors are increasingly selling their U.K. holdings to purchase shares in the U.S., particularly tech stocks.
The FTSE 350
UK:NMX,
an index of large- and midcap U.K.-listed stocks, is down 2.9% over the past 12 months, whereas the S&P 500
SPX
on Wall Street is up 27.9%.
As part of the drive to encourage more investment in the London stock market, Hunt confirmed plans to introduce a new requirement that pension funds must disclose their allocations to the U.K. and said he would consider what “further action” could be taken to stimulate domestic investment by funds.
“We strongly welcome the chancellor’s announcement of a British ISA,” said Charles Hall, head of research at investment bank Peel Hunt. “It is an important initiative that should encourage saving, start to reverse the outflow from U.K. equity funds and support investment in our growth companies.”
Shares in ISA providers such as Hargreaves Lansdown
HL
and AJ Bell
AJB
rose 2.2% and 2.7%, respectively, on the news, although AJ Bell chief executive Michael Summersgill played down how much of a boost Hunt’s decision would provide the London bourse.
“Increasing investment into U.K. companies is a laudable aim, but this ill-conceived, politically motivated decision will simply not achieve that objective,” Summersgill said.
“Fifty percent of the money our customers currently invest through their stocks-and-shares ISAs is invested into U.K. assets, so this new allowance will have no impact whatsoever on their investment behavior,” he added.
Still, the FTSE 250 index
UK:MCX,
which is populated by domestically focused midcap stocks, was up 1.4% Wednesday afternoon in the U.K.
The spring budget came ahead of a U.K. election that must be held this year, with the incumbent Conservatives heading for a heavy defeat, according to polls. Capital Economics, the London-based research boutique, titled the occasion: “Jeremy Hunt goes shopping for votes.”
There were some crowd-pleasing fiscal tweaks. The most notable was a two-percentage-point cut in national insurance taxes, which according to Financial Times calculations would add £29.04 (the equivalent of $36.95) to the monthly take-home pay of someone on a £30,000 annual salary.
Hunt also extended the freeze on alcohol duty to 2025, a measure he said would support “the great British pub.” Shares of pub giant J.D. Wetherspoon
JDW
rose 2%, and smaller competitor Marston’s
MARS
added 1.9%.
Another popular measure supports reducing the cost of driving, so Hunt said he would maintain the 5-pence cut on fuel duty and freeze it for another 12 months, a move he said would save the average driver £50 next year.
In terms of spending, Hunt said the government would allocate £6 billion ($7.6 billion) in additional funding for the NHS, which included £2.5 billion to cut wait times for appointments, a particularly sore point for many Brits.
Hunt said that the government was in a position to help families with permanent tax cuts given that inflation has slowed. “Lower tax means higher growth. And higher growth means more opportunity, more prosperity and more funding for our precious public services,” he said.
The pound was little changed at around $1.2724 after the budget was delivered, though government bond yields were quite choppy, with the 10-year later trading down 1.8 basis points at 4.088%.
Concerns about extra gilt supply came after the U.K.’s debt-management office said Britain aims to sell £265.3 billion in government bonds in the 2024-25 fiscal year, higher than analysts’ forecasts of £258.4 billion, according to Reuters.
Hunt said that the Office for Budget Responsibility, the independent fiscal observer, estimated that inflation would likely fall back to the Bank of England’s 2% target in a few months’ time, a move in line with the central bank’s own forecasts.
The OBR expects the economy to grow by 0.8% this year and 1.9% next year.
Published: March 5, 2024 at 10:02 a.m. ET
Story developing. Stay tuned for updates here.
The numbers: U.S. factory orders fell 3.6% in January large due to fewer contracts for Boeing passenger planes, but there was not much sign of a broad revival among manufacturers.
Economists surveyed by the Wall Street Journal had forecast a 3.1% decline.
…
Story developing. Stay tuned for updates here.
The numbers: U.S. factory orders fell 3.6% in January large due to fewer contracts for Boeing passenger planes, but there was not much sign of a broad revival among manufacturers.
Economists surveyed by the Wall Street Journal had forecast a 3.1% decline.
If transportation is excluded, orders for manufactured goods dropped a smaller 0.8%.
Big picture: Manufacturers have struggled to achieve robust growth for the past few years because of shifting consumer spending habits and higher interest rates orchestrated by the Federal Reserve to quell inflation.
Large subsidies and incentives by the Biden administration have helped to prop up industrial spending to some extent, but manufacturers could get a boost later in the year if the Fed cuts interest rates as expected.
That could help increase business investment once borrowing costs get cheaper.
Key details: Businesses are investing plenty in new computing power, an offshoot of Bide subsidies and the budding artificial-intelligence revolution. Spending is up sharply compared to a year earlier.
All other major areas of the industrial sector are quite weak, however.
Core capital goods orders, a proxy for broader business investment, was flat in January. These orders dropped 0.6% in the prior month and are down slightly compared to a year earlier.
Shipments of manufactured goods already produced fell almost 1% and have declined in four of the past five months.
These figures are factored into gross domestic product report — the official scorecard of the U.S. economy — and suggest GDP in the first quarter might not get much help from business investment.
The Dow Jones Industrial Average
DJIA
and S&P500
SPX
fell in Tuesday trades.
Published: Feb. 23, 2024 at 5:33 a.m. ET
Shares of Tata Consultancy Services Ltd. 532540 inched down 0.84% to 4,051.95 Indian rupees Friday, on what proved to be an all-around rough trading session for the stock market, with the S&P BSE Sensex Index 1 falling 0.02% to 73,142.80.
Tata Consultancy Services Ltd. closed 132.60 rupees short of its 52-week high (4,184.55 rupees), which…
Shares of Tata Consultancy Services Ltd.
532540
inched down 0.84% to 4,051.95 Indian rupees Friday, on what proved to be an all-around rough trading session for the stock market, with the S&P BSE Sensex Index
1
falling 0.02% to 73,142.80.
Tata Consultancy Services Ltd. closed 132.60 rupees short of its 52-week high (4,184.55 rupees), which the company reached on February 9.
The stock underperformed when compared to some of its competitors Friday, as MphasiS Ltd.
MPHASIS
rose 1.08% to 2,727.60 rupees and Wipro Ltd.
WIPRO
rose 0.96% to 536.15 rupees.
Trading volume (171,592) eclipsed its 50-day average volume of 170,295.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
An Australian Home With a Historic Racecourse
This Victoria, Australia, home is the perfect fit for any equestrian. Located in the town of Lancefield, the 89-acre property features a full-sized, 1,600-meter racetrack that hosted horse races until the 1930s. In addition to the track, there’s also a stable complex, multiple paddocks and yards. The residence, built in 2000, has five bedrooms and two bathrooms, and its style mixes elements of Victorian architecture with modern details. The property has a guide price of A$4 million (US$2.62 million). Domain
Home Prices Are Still Climbing in the U.S.
January marked the 10th consecutive month of home prices rising across the U.S., according to the latest Home Price Index from First American. House prices increased 0.3% from December to January and jumped 7.2% year over year, which is a slight decline from December’s 7.7% annual increase. December’s peak was driven by buyers taking advantage of decreased mortgage rates, said First American’s chief economist Mark Fleming, and the rate of appreciation is likely to slow in the coming months. MPA Mag
Scottish Homes Are Selling Well Above Asking
Homes across much of Scotland have been selling for more than their asking price, according to analysis of Zoopla data. This trend is most prominent in East Renfrewshire, where properties are selling for £272,187 (US$343,468) on average, which is £36,708 more than the typical listing price of £235,479. Additionally, the typical sold price is exceeding asking by £31,662 in East Dunbartonshire, £30,627 in Edinburgh and £29,456 in East Lothian. PropertyWire
Podcaster Tim Dillon Lists His Hollywood Hills Home for $5 million
Comedian and podcaster Tim Dillon is selling his Los Angeles home, asking just under $5 million. Dillion bought the Hollywood Hills home less than two years ago from actor Thomas Middleditch for $4.6 million. Built in the early ’70s, the 3,000-square-foot Spanish-style estate has been renovated over the years. It has three bedrooms, two bathrooms and an attached two-car garage. There’s also a separate guest cottage with a bedroom and a bathroom. The home sits on a little more than a third of a clifftop acre above Mulholland Drive. Robb Report
Published: Feb. 21, 2024 at 5:33 a.m. ET
Shares of Tata Consultancy Services Ltd. 532540 dropped 1.01% to 3,989.30 Indian rupees Wednesday, on what proved to be an all-around dismal trading session for the stock market, with the S&P BSE Sensex Index 1 falling 0.59% to 72,623.09.
Tata Consultancy Services Ltd. closed 195.25 rupees short of its 52-week high (4,184.55 rupees), which…
Shares of Tata Consultancy Services Ltd.
532540
dropped 1.01% to 3,989.30 Indian rupees Wednesday, on what proved to be an all-around dismal trading session for the stock market, with the S&P BSE Sensex Index
1
falling 0.59% to 72,623.09.
Tata Consultancy Services Ltd. closed 195.25 rupees short of its 52-week high (4,184.55 rupees), which the company achieved on February 9.
Despite its losses, the stock outperformed some of its competitors Wednesday, as MphasiS Ltd.
MPHASIS
fell 4.00% to 2,654.35 rupees and Wipro Ltd.
WIPRO
fell 1.98% to 521.40 rupees.
Trading volume (24,380) remained 150,722 below its 50-day average volume of 175,102.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
HSBC’s global banking and markets unit jumped 8% last year as the UK lender increased fees from dealmaking and maintained trading revenue in most asset classes.
The UK lender posted revenue of $16.1bn for its global banking and markets unit last year, according to its annual accounts. Fees from capital markets and M&A work surged 36%, with HSBC’s investment bank benefiting from a resurgence in debt underwriting revenue.
HSBC’s pre-tax profit of $30.3bn for 2023 was a record for the bank and an increase of 78%, but still below the $34bn expected by analysts. In a statement, chief executive Noel Quinn said that the results “reflected four years of hard work and the strength of our balance sheet in a higher interest rate environment.”
HSBC finished 16th in the investment banking fee league tables last year, according to data provider Dealogic, with 1.3% share of the market. This is up from 17th a year earlier.
The UK lender’s markets and securities services business posted revenue of $9bn, which was largely in line with 2022. However, equity trading fees of $552m were nearly half of the $1bn it earned in the unit in 2022.
HSBC’s GBM business dipped 4% in the final quarter of the year to $3.7bn.
READ HSBC hikes bonuses to $771,700 for its top investment bankers
HSBC has bolstered its UK investment bank over the past year, hiring two senior dealmakers for corporate broking in July, but faces stiff competition from Barclays, which is aiming to consolidate its first place finish in the UK dealmaking fee league tables last year. In recent months, hires within its investment bank have focused on its core markets of China and the Middle East.
Investment banks have struggled against an ongoing drought in deals, with Wall Street banks and Europeans alike posting sharp declines in M&A fees in 2023. UK rival Barclays unveiled a 12% decline in investment banking fees for 2023, led by a 23% slump in revenue from M&A work.
Barclays also unveiled its first investor day since 2014, separating its business into five key units including separating its investment bank from its corporate bank. While the UK lender will look to reduce its reliance on its investment bank, it is not pulling back and within its dealmaking team intends to shift the balance away from debt underwriting to do more M&A and equity capital markets work.
Deutsche Bank’s origination and advisory business was up by 25% in 2023, buoyed by a rebound in debt capital markets activity as its M&A unit slipped 25%. A hiring spree of 50 managing directors at the German lender last year aims to shift the balance of its investment bank towards more M&A and equity capital markets work.
To contact the author of this story with feedback or news, email Paul Clarke
Published: Feb. 19, 2024 at 5:33 a.m. ET
Shares of Tata Consultancy Services Ltd. 532540 inched down 0.67% to 4,101.60 Indian rupees Monday, on what proved to be an all-around positive trading session for the stock market, with the S&P BSE Sensex Index 1 rising 0.39% to 72,708.16.
Tata Consultancy Services Ltd. closed 82.95 rupees short of its 52-week high (4,184.55 rupees), which…
Shares of Tata Consultancy Services Ltd.
532540
inched down 0.67% to 4,101.60 Indian rupees Monday, on what proved to be an all-around positive trading session for the stock market, with the S&P BSE Sensex Index
1
rising 0.39% to 72,708.16.
Tata Consultancy Services Ltd. closed 82.95 rupees short of its 52-week high (4,184.55 rupees), which the company reached on February 9.
Despite its losses, the stock outperformed some of its competitors Monday, as MphasiS Ltd.
MPHASIS
fell 0.81% to 2,779.35 rupees and Wipro Ltd.
WIPRO
fell 1.30% to 535.95 rupees.
Trading volume (56,840) remained 118,238 below its 50-day average volume of 175,078.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
The biggest Wall Street banks cut 30,000 jobs last year, kicked off by Goldman Sachs who informed its staff of plans to make its deepest reductions since the 2008 financial crisis shortly after Christmas 2022.
Goldman’s 3,200 job cuts were swiftly followed by 3,500 at Morgan Stanley, and then 5,000 at Citigroup. Bank of America refrained from deep redundancies, but 4,000 employees departed regardless through its ‘natural attrition’ approach last year.
With the exception of Credit Suisse, which started cutting thousands of roles before being acquired by its biggest rival UBS in March, European banks refrained from deep redundancies last year.
Times have changed.
Whether it’s an attempt to revive a flagging share price, free up funds for buybacks, the march of technology, strategic overhauls or simply reining in costs, top European banks are cutting jobs and reducing bonuses for those that remain.
READ ‘Doughnuts’ loom: Bankers brace for brutal bonus season
“It’s a balancing act for a lot of European banks, particularly after two years of poor performance for investment banking. There’s only so long you can keep paying expensive talent in the hope that revenue will recover,” said Gary Greenwood, a bank analyst at Shore Capital.
Barclays is expected to unveil a strategic overhaul alongside its annual results on 20 February, with the UK lender looking to save £1.25bn in costs. So far, job cuts have mainly hit support functions. Deutsche Bank said that 3,500 jobs will go over the next year, largely in back office functions, as it looks to save €2.5bn after headcount swelled 6% in 2023.
Societe Generale is cutting 900 jobs within its Paris headquarters as part of new CEO Slawomir Krupa’s plans to pull back on costs, while UBS has earmarked around $6.5bn in employee expenses to be stripped out as it integrates Credit Suisse.
On a smaller scale, Rothschild cut around 10 investment banking jobs in January, with former Goldman dealmaker John Brennan departing.
“The US banks are much more reactive in terms of cutting headcount than their European counterparts,” said Stephane Rambosson, co-founder of headhunters Vici Advisory. “European banks are now focused on costs, but each case is specific to their circumstances rather than market conditions. Wall Street banks are also quicker to hire again when the tide turns.”
As well as job cuts, bankers are enduring another brutal bonus round. There is widespread disgruntlement at UBS as the bank spread an already small pool around its existing employees, the influx of Credit Suisse staff and a flurry of senior Barclays dealmakers brought in last year on guarantees, according to bankers.
Barclays has handed zero bonuses to up to a third of dealmakers in some units, bankers told Financial News, with Bloomberg previously reporting that “dozens” of employees were set for doughnuts this year. Deutsche Bank, which also has to digest an expensive hiring spree and its £410m acquisition of City broker Numis, is also set to reduce bonus payments.
READ Investment banks face talent crunch even after deep job cuts
“We have observed a similar, but even more aggressive, trend with the European banks regarding layoffs and bonus pool reductions,” said Chris Connors of Wall Street compensation consultants Johnson Associates. “The European banks have struggled to keep pace with their American counterparts on business results and compensation. From the employee perspective, we anticipate European bankers to be similarly disappointed to US bankers given the muted results in advisory and other units such as underwriting, which are still well below 2021 levels.”
While US banks cut dozens of dealmakers last year, some European players took advantage of the dislocation. Deutsche hired 50 senior bankers, while Santander picked up dealmakers from both the fallout from Credit Suisse’s takeover and from Goldman Sachs and Morgan Stanley.
Most cuts so far at European banks have focused on management or back office functions, and there’s little suggestion that deep investment banker redundancies are on the cards, particularly as banks prepare for a revival in dealmaking activity after a near two-year lull. However, headhunters told FN that many banks were taking a much more cautious approach about bringing in senior talent.
During its fourth quarter earnings call, Deutsche Bank chief executive, Christian Sewing said that the bank had “positioned ourselves for a recovery in origination and advisory” after its hiring spree. “Now, this is where we see considerable growth potential,” he added.
“Investment banking is a people business, so banks will be reluctant to let too much talent depart,” added Greenwood. “This could change — a recovery is possible, but there are still a lot of risks in the market.”
To contact the author of this story with feedback or news, email Paul Clarke