- Markets unmoved by signals of interest rate rises in the next two years
- New issues have boosted London Stock Exchange's performance
- UK House prices rise again
Capital markets performance boosts LSE
London Stock Exchange’s (LSE) half year results benefited from the most active period for new issues on the London market since 2014, although the fee earning benefits of new issues are spread over several years. Overall capital markets revenues grew by 9.6 per cent but some of the effect of stronger new issues figures was dampened by lower volatility towards the period end as the surge in interest in the equity markets abated as covid restrictions were lifted.
One key consideration for the likes of LSE and its capital markets operations will be maintaining the retail investor interest in equities post the pandemic. This week Dave Baxter reported on efforts to improve retail participation in new issues being led by the likes of PrimaryBid.
Group income during the six months came in 4.6 per cent ahead of last year as profits rose from £457m to £1.2bn on an adjusted basis. Integrating LSE’s acquisition of data provider Refinitiv remains a focus with cost savings of £77m achieved in the first half, a number which is expected to reach £125m by year end. But extra IT costs and the resumption of some of the costs of trading in more normal times, such as travel, will dampen margins in the second half of the year. Half year adjusted margin of 49.4 per cent is expected to be lower in the second half before trending back towards target of 50 per cent.
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Record boom in private equity-backed IPOs: is it too risky to invest?
Are global stock markets in a bubble?
Meanwhile, policymakers here in the UK want to bring more racy founder led companies to the London market as they battle with the likes of New York where the likes of Elon Musk and Jeff Bezos have added star quality and appeal to equity markets. But is the cult of the founder healthy? What happens when it spirals out of control, as we have seen in the past. Oliver Telling investigates the Rock Star boss effect in this week’s cover feature.
How long can UK house prices defy gravity?
According to the Halifax House Price Index (HPI), UK house prices moved back into growth mode in July after a blip in June with a 0.4 per cent rise in prices over the month - given an annual growth rate of 7.6 per cent and an average house price for the UK of £261,221. Annual inflation is down from 8.7 per cent in June but there is little evidence yet that the impending end of the stamp duty holiday is causing transactions to stall, in fact the most likely limiting factor on the market right now appears to be a lack of supply.
What remains to be seen now is how the combined effect of the end of stamp duty freezes in September coupled with tapering of furlough support into the Autumn affects the market. Certainly recent results from housebuilders and suppliers to the industry such as brick makers reflect the recent strength of the market, but it should be noted that investor reaction to strong results has been somewhat muted.
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Demand for repairs boosts Travis Perkins
Strong housebuilder updates get muted market reaction
UK housebuilders - when the taps run dry
Live events lifeline
After a period of purgatory for the UK’s live events sector the government has today finally come through with a scheme which may allow events to go ahead without fear of a lack of insurance leaving them bankrupt in the event of rapid changes to Covid rules again.
The rapidly moving goalposts of covid restrictions over the past two summers have laid waste to the UK’s events industry, especially the formerly lucrative festivals sector which has suffered dozens of cancellations. Almost since the start of the pandemic the sector has been calling for government support to provide a backstop for events and finally a scheme has been unveiled. The £750m initiative will basically make the government the reinsurer of last resort for events insurance. Backed by insurance names such as Beazley, Hiscox and Munich Re, the scheme will allow events to buy insurance against cancellations caused by changing Covid restrictions and runs through to September 2022, allowing event planners comfort that they can push ahead with plans for this summer and right through the next.
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Which companies will benefit from the return of live concerts?
