The Financial Conduct Authority (FCA) has published its final report in its investigation into the asset management industry. The already well-flagged proposals included a single all-in fee for investors, that the Treasury brings investment consultants into the regulatory arena, as well as a market study into competition within the investment platform market. Shares in UK-listed asset managers were unbothered, although the latter suggestion may have been behind a slight dip in Hargreaves Lansdown (HL.) shares on the day. Our personal finance team discusses the potential implications for investors here.
Management switch-up
Petropavlovsk shareholders decide
It wasn't a good week for Petropavlovsk's (POG) management. Following weeks of petitioning by management to block a bid by activist investors Renova, M&G and Sothic Capital to oust four of its board members - including founder Peter Hambro - shareholders voted against their re-election. Mr Hambro, along with non-executive directors Robert Jenkins, Alexander Green and Andrew Vickerman, were not re-elected at the group's latest AGM and have retired from the board. Mr Hambro had suggested he step down from the top job but stay on as an executive director. Instead, Ian Ashby, Bruce Buck, Vladislav Egorov and Garrett Soden were voted in as directors at the company. Mr Ashby has been appointed non-executive chairman.
Italian bailout
Bad loans guaranteed
The Italian government has taken further measures to shore up its fragile banking system. It set aside €17bn to wind down two failing Venetian banks and handed their good assets to much sturdier lender Intesa Sanpaolo. The branches and employees of Veneto Banca and Banca Popolare di Vicenza will become part of Intesa. Around €4.8bn will be provided for Intesa to maintain its capital ratios after absorbing the two banks' assets, and a further €400m in guarantees against the risk of some of these assets turning bad. What's more, the government has agreed to offer guarantees of another €12bn to cover losses from bad loans.
Tasty offer
DP Eurasia gives pricing
Domino's Pizza's (DOM) latest business to launch on the London market has announced its offer pricing. DP Eurasia (DPEU) has set an offer price of 200p a share, which would result in a market capitalisation upon admission to trading of around £291m. The offer size is around £148m, representing 51 per cent of the group's total share capital. DP Eurasia is the exclusive master franchisee of the Domino's Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The offer is open to institutional investors only, but the shares are expected to begin unconditional trading on 3 July.
WPP in lurch
Cyber attacks disable
Companies including WPP (WPP), Modelez and Maersk, as well as the Ukrainian government, were subject to a major cyber attack, which shut down computers, ATMs and other technology. Ransomware, exploiting the same vulnerabilities as the recent WannaCry cyber attack, uses encryption to prevent users accessing their computers unless they pay a $300 bitcoin ransom. It also affects a machine's ability to operate. WPP said via Twitter: "IT systems in several WPP companies have been affected by a suspected cyber attack. We are taking appropriate measures and will update asap."
Co-Op saved
Last-minute deal
The Co-Operative Bank has secured a £700m rescue deal, after hedge fund investors agreed to swap their debt for a stake in the bank. In an effort to avoid being wound down by the Bank of England, the bank will raise £250m in new equity from existing investors - who will take a 68 per cent stake in the bank - and £450m from bondholders swapping debt into equity. The debt-for-equity swap will mean the Co-Op's stake in the bank will fall from around 20 per cent to just 1 per cent. However, retail investors with under £100,000 in bonds will receive less than 45 per cent of their original investment back in cash, with the bank saying it will pay back a maximum of £13.5m to retail bondholders.
Kraken awakes
First oil for EnQuest
North Sea driller EnQuest (ENQ) pumped first oil from its Kraken development, kick-starting production that could eventually reach 50,000 barrels a day. The oilfield is one of the largest oilfields to come on stream since Canadian oil and gas group Nexen's Buzzard. The gross capital costs of the development are expected to be around $2.5bn (£1.9bn), compared with the $3.2bn expected when the project was sanctioned. The shares, which are down this month on a lower oil price, rose 9 per cent on the day of the news.
The average house price rose 1.1 per cent to £211,301 in June, compared with the previous month, according to the Nationwide House Price Index.
That’s the first month-on-month rise since February and represents a 3.1 per cent increase on the same time in 2016. However, London saw a marked slowdown in annual growth, at just 1.2 per cent. What’s more, the gap between house price growth in the strongest and weakest performing regions – the South East of England ex-London and the Northern England respectively – was the smallest on record.
