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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Barclays AGM disrupted by Spice Girl-themed climate protests; oil and gas prices slide – as it happened

United States FCA London Nikhil Rathi Stock Market City (Geopolitical Entity) United Kingdom PacWest Bancorp First Republic the Financial Conduct Authority
Climate protesters have disrupted chairman Nigel Higgins, less than five minutes into the Barclays annual general meeting
Climate protesters have disrupted chairman Nigel Higgins, less than five minutes into the Barclays annual general meeting Photograph: @fossilfreelondon/Twitter

Closing post

Markets are now nervously waiting the Federal Reserve’s announcment on US interest rates, in four hours time.

Our US Politics Live blog will have all the action, along with developments on the US debt ceiling, as fears of an unprecedented default rise.

Here are today’s main stories:

The UK financial regulator has contacted clients of Capita, the outsourcer which suffered a cyber attack in March, urging companies including insurers and pension funds to determine customer data losses from the data breach, the Financial Times reports.

The involvement of the Financial Conduct Authority comes amid growing concerns over what the hackers may have accessed.

Over the weekend, The Pensions Regulator confirmed it had written to the hundreds of pension funds that employ Capita to help administer their payment systems, urging them to “determine whether there is a risk to their scheme’s data”.

The FCA told the Financial Times:

“We have continued to engage with Capita since their cyber incident was reported to understand the extent of any data compromise and impact on the firms they provide outsource services to including their underlying customers.”

In New York, the stock market has opened a little higher after falling on Tuesday.

With investors awaiting the Federal Reserve interest rate decision at 2pm EDT (7pm BST), the Dow Jones Industrial Average rose by 42 points, or 0.13%, at the open to 33,726.64.

The broader S&P 500 index opened 2.67 points higher at 4,122.25, while the tech-focused Nasdaq Composite gained 0.14%.

While Barclays AGM was taking place, US payroll operator ADP was reporting a rise in private sector employment across America last month.

ADP reported that US private payrolls rose by 296,000 for April, more than double the downwardly revised 142,000 the previous month, and well ahead of the estimate for 133,000.

The fastest job growth in April came in leisure and hospitality with a gain of 154,000, followed by education and health services (69,000) and construction (53,000).

But there were 28,000 job losses in the financial sector, while manufacturing cut 38,000 workers.

This may be an indication that the official US jobs report for April, due on Friday, will be stronger than forecast.

The Non-Farm Payroll is expected to show that the US added 179,000 new jobs, down from 236,000 in March.

Climate activists also channeled The Bard, as well as the Spice Girls, at Barclays AGM today.

Extinction Rebellion explain:

At 11am teams of activists infiltrated the AGM of Europe’s biggest funder of fossil fuels, Barclays.

A 70-strong Climate Choir sang a climate crisis version of the Spice Girls “Stop Right Now” to bank board members. Further disruption followed as other shareholders from Fossil Free London, with a Shakespearean condemnation of Barclays as being on the wrong side of history.

Pulling out hidden ruffs and quills, they performed Shakespeare-based lines generated by ChatGPT about the bank’s funding of fossil fuels. Lines included: “The people thee harm, and our air thou pollute! And yet, there is more, I tell you this day, For Barclays is guilty in a vile way. Thou art on the wrong side of history, I say!”

Updated

A representative of climate campaigners ShareAction asked what it promised was the last question from the group, saying she was asking it jointly with a group of 12 institutional investors including the Merseyside Pension Fund and the Barrow Cadbury Trust.

They are pushing for a “comprehensive update” on Barclays’ policy on climate transition plans for clients.

Nigel Higgins has said the work is ongoing, and that they’ve taken around 150 clients through the process already, a number which they hope will rise to 750 over the next 12 or so months.

The Barclays chairman said:

“We will be saying more about how we’re doing that. We’re not going to tell you exactly what we’ll be saying, we’ll do that later…And we’re happy to continue to engage with ShareAction on that.

And that brings an end to an eventful AGM.

During today’s AGM, Barclays chief executive CS “Venkat” Venkatakrishnan said the banking giant has been “insulated” from the recent volatility in the global banking sector.

Venkat told shareholders that the “global turmoil”, such as the collapse of Silicon Valley Bank and Credit Suisse, had created “a challenging operating environment”.

But, he added:

“Nonetheless, the events that unfolded serve to reaffirm the critical role that Barclays plays in helping our customers and our clients manage uncertainty.”

He added that the group has strong risk management, robust liquidity and has a prudent approach to lending.

“And these have insulated Barclays from the volatility which we have seen in markets, and have enabled us to continue to support our customers and clients through an uncertain period.”

Nigel Higgins has said that it is Barclays ambition “to be one, if not the leading transition-financing banks” but one proxy shareholder has challenged the Barclays chairman, saying “it seems you’re not leading, it seems you’re lagging”.

They’ve also warned the chairman and Barclays investors that the bank is going to lose customers quickly unless it changes its climate strategy:

“I suspect you will probably need to make it more and more difficult for the public to access these AGMs, but that will not stop people being unhappy with Barclays.

Every parent who is concerned about their children’s future is starting to consider where they want to spend their finances, and every person who you’ve heard raise a concern is trying to tell everybody else they know to leave Barclays, go to other banks that have much better records on sustainability, and that are that have much better options.

“Nobody has to stick with Barclays and I think people are realising that more and more so I’d just like you to be aware - and I’d like all investors to be aware - that if Barclays continues to be the worst fossil fuel funder in the UK, it’s going to lose a lot.”

Updated

A shareholder and activist has accused the Barclays chairman of showing of “arrogance and hubris” and not taking campaigners’ concerns seriously, as he again tried to list the bank’s climate commitments.

The activist said:

“It’s like a parallel universe, with the greatest love and respect to all of you and your families, this isn’t real.

What’s real is record-breaking temperatures, in the world’s oceans, crops failing around the world, and a third of humanity is in record-breaking heat in 12 countries in Asia. That’s real.

I don’t know if you feel that your privilege is going to protect you, but it isn’t.

Barclays chairman: We can't abandon energy sector

Barclays chairman Nigel Higgins has tried to outline the bank’s own climate commitments, but was disrupted as another protester shouted “bullshit.”

Higgins said the bank had “significantly enhanced” its climate disclosures, and listened to shareholder feedback after nearly 20% voted against a climate strategy, which campaigners said was too weak and contained a number of loopholes, at last year’s AGM.

The chairman said Barclays had committed to ending thermal coal financing in the OECD and EU countries by 2023, and had “substantially exited” the carbon-heavy oil sands sector, while increasing its financing for green energy.

However, Higgins said Barclays would not abandon the fossil fuel sector entirely:

“It is our view – and I know that not everybody agrees -that the state of energy provision today, and the questions of energy poverty and energy security, mean that we cannot simply abandon this sector”.

More from the AGM:

Inside the Barclays’ AGM, the disruption continues….

…. with a group of activists outside the QEII Centre in Westminster, too.

Activists from the Campaign Against Arms Trade and Palestine Solidarity Campaign are also attending Barclays’ AGM today, urging the bank to stop financing major arms suppliers.

PA Media has the details:

Ben Jamal, the director of the Palestine Solidarity Campaign, told the PA news agency: “Our research has uncovered that Barclays has invested over £1 billion in companies supplying military weapons and technology to Israel.

“They use this to commit human rights violations against Palestinian people.

“Our demand is simple – we are asking Barclays to live up to the human rights public statements they have made… we don’t want this bank being complicit in human rights abuses.”

Updated

Protesters from Fossil Free London also disrupted the Barclays AGM, telling the bank that “enough is enough”, adding:

Don’t shuffle us off this mortal coil.

Barclays, keep it in the soil!

Another clip of the Climate Choir’s performance:

Here are more video clips of climate activists disrupting Barclays annual general meeting today, demanding an end to the financing of oil and gas projects.

They’re from Jeanne Martin, the head of banking programme at ShareAction, who is attending the AGM:

Barclays chairman Nigel Higgins, clearly a bit exasperated, is now trying to push through as he outlines how to vote for the bank’s resolutions.

He says:

“I would like to shuffle you off out of here if that’s OK, so we can get on with the meeting”

And as he tries to co-opt some of the messages from climate protesters, Higgins says:

“I think as you said, enough if enough, I suspect a lot of people in the room agree with that.

Another protestor stood up just minutes after the climate singers were ushered out of Barclays AGM, and is yelling:

“You are the worst fossil fuel funder in Europe in a climate crisis”

Barclays’s company secretary Hannah Ellwood has whispered to chairman Nigel Higgins to ask the protester to leave.

Others have taken over in a chorus, after that protester was ushered out, and Ellwood is trying to push through.

Higgins is trying to ask for calm, saying:

We are obviously very happy to hear opinions on what we do, but it may be helpful to wait until the Q&A and have a two-way discussion”

Updated

The climate protesters at Barclays’ AGM are being escorted out, after their Spice Girls rendition urging the bank to stop funding fossil fuel extraction….

Climate protesters disrupt Barclays AGM

Climate protesters have disrupted chairman Nigel Higgins, less than five minutes into the Barclays annual general meeting today, with a rather catchy rendition of Spice Girls’ “Stop”.

The group have reworked the 90s classic’s lyrics, singing:

“Stop right now, no more oil and gas, stop burning fossil fuels and end this madness… hey you burning up the earth, gotta stop it now baby we have had enough…do do do do...you dirty, dirty bank”.

Climate protesters have disrupted chairman Nigel Higgins, less than five minutes into the Barclays annual general meeting

Higgins has suggested that security ask the protesters to leave. We don’t expect this will be the last disruption. Stay tuned.

Here’s a clip of the disruption:

Updated

UK gas prices have hit their lowest levels in months too.

The wholesale day-ahead UK gas price has dropped by 2.8% to 83.65p per therm, the lowest since last November.

Gas for delivery next month is down 1.3% at 84p per therm, the lowest since July 2021.

European wholesale gas prices hit 21-month low

The cost of wholesale gas in Europe has hit its lowest level since July 2021, which will hit Russia’s revenues to fund the Ukraine war.

The month-ahead cost of wholesale gas has fallen by 3.65% today to 36.95 euros per megawatt hour, tracking the fall in oil today.

Wholesale European gas price
The wholesale European gas price Photograph: Refinitiv

After the full-scale invasion of Ukraine in February 2022, the European wholesale gas price tripled to €215/megawatt hour.

It then surged over €300/megawatt hour last August, when European countries were scrambling to fill their gas tanks before last winter.

But now, with the weather turning a little warmer, demand for gas for heating and power generation has dropped.

Energi Danmark analysts said in a morning note.

“Supply is abundant, with storage sites across the continent now 60% full, with prospects of reaching 100% before the winter. We expect further losses in Wednesday’s trading.”

Oil slides as Fed rate hike nears

The oil price has fallen to its lowest level in over five weeks, as traders fear that higher interest rates will drive the US economy into recession.

Brent crude, the international benchmark, has fallen below $75 per barrel for the first time since 27 March.

It’s down 2% today at $73.86 per barrel, following a 5% tumble on Tuesday.

Oil weakened as investors anticipated the US Federal Reserve will raise interest rates by a quarter-point today, to a range of 5%-5.25%. That would be the highest level since 2007.

The turmoil in the US banking sector also hit oil, says Ole Hansen, head of commodity strategy at Saxo:

Risk sentiment in general was challenged by continued worries about the stability of the regional US banking system despite the bailout of First Republic by JP Morgan.

Despite current demand and growth concerns, the Fed is expected to hike once again later today, and it continues to weigh on the demand outlook even as supply side is looking stable for now.

How the average price of items is changing

Britain’s Office for National Statistics has launched a new Shopping Prices Comparison Tool, to let you track inflation in more detail.

The Tool tracks how the average prices of over 450 individual goods and services in the basket used to measure inflation have changed over the last year.

It covers food and drink, clothing and footwear, food and drink establishments, health, household items, recreation and culture, services and transport.

It’s online here, and here’s an embedded version to try:….

The launch of this comparison tool follows complaints that the official inflation report wasn’t properly capturing the cost of living squeeze, particularly for poorer households.

The ONS today points out that some grocery items showed increases of over 40% in the year to March 2023, or around quadruple the headline rate of inflation.

For example, cheddar and other hard cheeses saw an average increase of over 40% in the 12 months in March 2023.

Oil and fats have also surged in price, partly due to the Ukraine war.

The ONS says:

All items in oils and fats have seen an increase in price but olive oil has increased the most, increasing by nearly 50% in the 12 months to March 2023.

Fast food and takeaway prices are up 13% over the last year, but fish and chips saw the largest increase, at 19%.

Updated

Cars of German manufacturer Porsche parked outside the stock exchange in Frankfurt, Germany

Porsche has posted a 25% surge in sales and operating profits in the first quarter of this year, as demand for luxury cars remained strong.

The German carmaker reported “record deliveries and unchanged strong demand” in the January-March quarter.

Porsche says it made a strong start to 2023 “despite difficult economic and geopolitical conditions”.

Revenues rose 25.5% to €10.1bn, with operating profit up 25.4% to €1.8bn, leaving its return on sales stable.

Rival luxury carmarker Aston Martin Lagonda, meanwhile, has cut its quarterly pretax loss. Aston is sticking with its forecast for 2023, as it sees strong sales of its sport utility vehicle DBX and higher selling prices.

Updated

Nicholas Holmes, head of Equity Capital Markets at law firm Ashurst, fears the FCA’s proposed stock market listing reforms won’t have too much impact, saying:

“The changes in themselves are welcome, although their impact is likely to be limited.

The challenges to London’s equity capital markets status run much deeper.”

In the travel sector, budget airline Ryanair has posted its third busiest month ever.

Ryanair flew 16 million passengers in April, up 13% year-on-year, it reported this morning. That’s despite 650 flights being cancelled due to French air traffic control strikes last month.

This is only the third time it’s flown at least 16m passengers in a month; last July and August it carried 16.8 million and 16.9 million passengers respectively.

RS Group CFO quits after personal relationship with colleague

The finance chief of electronics products distributor RS Group has quit, revealing that he has had a personal relationship with a colleague.

David Egan resigned from his role as Chief Financial Officer (CFO) and as a director and will leave the business with immediate effect, RS Group told shareholders this morning.

Egan, who has also served as RS Group’s acting CEO twice, says his actions have “fallen short” of what is expected.

Egan explained:

“I have thoroughly enjoyed my seven years at RS and I am proud of what we have achieved. Very recently I notified the Board of a personal relationship with a colleague.

Following a detailed review by the Board, I recognise that there have been some shortcomings of judgment on my part and my actions have fallen short of the high standards expected of RS leadership. Therefore, it is right for me to step down from my role.

RS Group’s chair, Rona Fairhead (a former trade minister), says:

“Following a thorough review, the Board has accepted David’s resignation and in stepping down he recognises the importance of leaders setting and abiding by exemplary standards.

Egan will be replaced by RS Group’s VP Corporate Development, Jane Titchener.

The company says there are no changes to its profit expectations, but shares in RS Group are down 2.5% this morning, one of the biggest fallers on the FTSE 100 index of blue-chip shares.

RS Group, which distributes electrical and electronics components to manufacturers, has been hiy by a recent drop in sales in the US. Last month it predicted that operating profits for the last financial year would be slightly ahead of consensus expectations.

Updated

Haleon, the consumer health giant, has missed profit expectations despite hiking prices.

Haleon, which was spun out of GSK last summer, has reported earnings of 4.2p per share for the first quarter of the year, below forecasts of 5.24p per share.

That’s despite lifting its prices by 7.1%, which helped to grow revenues by 13.7%.

Haleon makes a range of oral health products, plus vitamins, minerals and supplements, respiratory pain relief and digestive health products.

Rising costs ate into Haleon’s profits, explains Victoria Scholar, head of investment at interactive investor:

“Haleon confirmed it expects full-year organic revenue growth to come in at the upper end of its guidance range for 4-6%. First quarter adjusted earnings per share hit 4.2 pence, falling short of analysts’ expectations for 5.24 pence while revenue reached almost £3 billion, roughly in line with forecasts.

The consumer health spin-off from GSK has been dealing with squeezed profit margins which fell by 90bps on the back of cost inflation. It has been raising prices to offset the challenge of rising cost pressures with price increases rather than volumes mostly responsible for revenue growth in its biggest regions. However these price hikes have been insufficient to prevent a bottom line miss.

Nonetheless it reported strong sales growth across respiratory health, pain relief, oral health and digestive health thanks to demand for drugs during the cold and flu season. It has benefited from strength in China as Beijing unwound its strict anti-covid lockdown measures.

Since the spin-off last summer, shares got off to a difficult start, reaching a trough in September last year but the stock has been progressing nicely in recent months, rallying almost 30% over the past six months. But the disappointing earnings are weighing on shares today.”

Updated

Scott McCubbin, EY UKI IPO Leader, is urging the FCA to be careful about removing safeguards for shareholders, as it tries to make London a more attractive place to invest:

McCubbin says:

“The FCA’s proposals to reform and streamline the listing regime in the UK are a positive step in simplifying the process and could go some way in raising the UK’s profile as a global listing destination. However, caution is required as the proposals remove some key investor protections, such as the ability to vote on key transactions.

“Importantly, revising listing regulation is just one piece of the puzzle. A comprehensive package of measures across listings and other areas such as secondary markets, tax, retail investor access, forward guidance, analyst coverage, regulatory capital treatment and labour is needed, rather than a siloed approach.

“How FTSE Russell modifies the FTSE indexation rules as a result of any FCA revisions to the listing regime will also be a critical factor in enhancing London’s attractiveness as a listing venue.”

Lloyds Banking Group has reported a jump in profits, as higher interest rates boosted its earnings, but warned that the economic outlook is uncertain.

Lloyds made a pre-tax profit of £2.26bn in January-March, up from £1.5bn a year earlier, and beating forecasts.

Its net interest margin – the gap between what it charges for loans and pays on deposits – widened, which may intensify calls for banks to pass on higher interest rates to savers, as well as borrowers.

Charlie Nunn, Lloyd’s CEO, warned that customers were suffering from economic pressures, saying:

The macroeconomic outlook remains uncertain. We know that this is challenging for many people. Our purpose driven strategy, alongside our financial strength, means we can continue to support our customers across the country, helping Britain prosper.

Updated

Markets rally ahead of Federal Reserve decision

European stock markets have opened higher, as investors await tonight’s decision on US interest rates.

In London the FTSE 100 index has gained 37 points, or 0.5%, to 7810 points, having closed at the lowest level since 11 April last night.

Pearson, the educational publisher, is the top riser on the FTSE 100, up 3%. Yesterday Pearson’s shares tumbled 15%, as the education sector was rattled by fears that artificial intelligence could upend their business models.

As we reported last night, California-based online learning service Chegg spooked the market by reporting that its customer growth was suffering from a “significant spike in student interest in ChatGPT.”

Shares in Duolingo, the language learning site, fell 10%.

Interactive investor: reforms mustn't come at expense of investor rights.

Efforts to make the UK a more attractive place must not come at the expense of investor rights, warns investment platform interactive investor.

Richard Wilson, CEO of interactive investor, is concerned that there are several ‘red flags’ in the FCA’s proposals, such as removing mandatory shareholder votes on takeover deals.

Wilson says:

“We strongly support the principles behind listing rule reform to make the UK more competitive, but eroding shareholder rights risks undermining market standards, and this is not the right answer.

“Dual-class structures, which come with differential voting rights, erode shareholder rights. Distorted rights distort governance and accountability. When company founders seek external capital from shareholders, as equity owners they must respect their shareholder rights. One share, one vote is a bedrock of shareholder democracy and we are concerned to see that the spectre of dual share classes, which we have actively lobbied against, still looms large.

Reference to removing mandatory shareholder votes on transactions such as acquisitions is another major red flag.

“We would also be concerned if the FCA were looking to sidestep responsibility for conducting due diligence as part of it acting as UK Listing Authority.

“It will be interesting to see which companies qualify for inclusion in FTSE trackers once the ‘premium’ definitional point is dropped.”

Shaking up the listing rules won’t stop pension funds taking a risk-averse approach to investing, points out Jason Paltrowitz, Director and EVP, Corporate Services at OTC Markets Group.

Paltrowitz says that some of the FCA’s proposals are ‘long overdue’, but there is a risk from watering down regulations.

While it is always prudent to review regulations to make sure they are fit for purpose, there is a risk that the FCA’s proposed reforms to UK listing rules are swinging the pendulum too far in the other direction.

We (OTC Markets Group) in the US have long supported a disclosure-based system which allows investors to determine the suitability of a security and efforts to bring London up to par are long overdue. However, the proposed reforms do not address the issue of a secondary market that is overwhelmingly made up of pension funds and index investing.

Firms within this space won’t change their investment appetite simply because it is easier for the issuer. The issues around early stage and growth companies choosing the likes of New York over London runs far deeper than regulation and will require a more holistic set of reforms to reverse the listings decline observed since 2008.

In the short-term, while many will welcome the FCA’s efforts to increase London’s attractiveness, there should be caution around any adverse impact on traditional UK investors from watering regulation down too much.

The Lord Mayor of the City of London, Nicholas Lyons, hope the FCA’s reforms can stop the City losing companies to rival exchanges, saying:

“Recent decisions by companies to list in the US have shown that an initiative of this kind is urgently needed to improve London’s stock market attractiveness.

These reforms today are therefore a step in the right direction and will give us the edge over other financial centres. Against the backdrop of slowing growth, unlocking capital and supporting our high-growth firms to stay and list in the UK will need to remain firmly on the agenda.”

Nils Pratley: FCA’s plan for stock market reform is both depressing and pragmatic

The FCA’s proposed changes to UK stock market listings are both “depressing and pragmatic”, our financial editor Nils Pratley writes.

For all the spin, the grand plan could be summarised “if you can’t beat ‘em, join them” – them being the US markets that have never shared London’s worries over shareholder rights and boardroom governance. It looks as if the UK financial authorities, prodded by ministers, have concluded that principles are great until they starting costing you business.

The FCA’s core proposal is to adopt a single class of listed company. So goodbye to London’s “premium” segment that could only be claimed by companies that signed up to strong governance standards. And, just as in the US, companies would no longer have to gain approval from shareholders for very large transactions, or ones with related parties.

What’s more, London would fling the doors open wider to companies with US tech-style unequal voting structures. So much for “equal rights for equal economic risk” – an entirely worthy cause, as many of us have argued for years. Thus it is hard to summon much real enthusiasm for the FCA’s vision. In governance terms, it looks a step backwards by about half a century.

But here, unfortunately for us purists, is the rub: there is little point in trying to operate the world’s most protection-heavy and virtuous stock market if fewer and fewer people want to use it. That way lies irrelevance.

And, since the theoretical governance protections have proved useless in preventing blow-ups like Carillion and NMC Health, one can reasonably ask if London’s high-minded ambitions were always hot air. Thus it is possible to see the regulator’s policy U-turn as simultaneously depressing and pragmatic.

Here’s the full piece:

FCA CEO Nikhil Rathi adds that the regulator wants to stimulate the debate about the UK’s appetite for financial risk, telling Today:

Wwhat we want to do with these proposals is stimulate that debate and recognise that if we are going to move to an environment where companies get access to markets quicker, grow faster, with that comes risk.

Risk will often entail significant profits for investors, but things will also go wrong as well. And that’s part of a healthy dynamic market.

FCA chief: reforms mean greater risks for shareholders

Today’s proposed changes to the UK’s stock market listing rules will make it “easier for companies to join the market quickly,” insists the head of the FCA.

But Nikhil Rathi is also clear that they will make the market riskier.

Speaking on Radio 4’s Today Programme, Rathi says the FCA is proposing some “really important reforms”, at a time when there is a “global phenomenon” of companies leaving public markets.

Rathi says:

What this is doing is striking a new balance between companies that are selling shares and investors.

It does entail more risk for investors, having to get to know companies better and make their own judgments about how they wish to invest and at what price they wish to invest.

Q: But won’t scrapping the premium section of the stock market damage London’s reputation?

Rathi insists London will “always maintain high standards” regarding disclosure and regulation.

But in a world where companies are growing very fast, it makes sense to have a single listing regime rather than offering two which they have to choose from to list in London, Rathi argues.

And he points out that that there will be “greater risk for shareholders” by allowing companies to rely more on disclosures rather than shareholder votes on major questions such as deals.

Rathi syas:

That does entail greater engagement with shareholders and greater risk for shareholders and I think that’s the trade off which we’ve been quite open about, as we think about how these reforms will work.

Introduction: Regulator proposes sweeping changes to UK listing regime

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

New measures to encourage companies to float on the London stock exchange rather than abroad are being revealed today, but the changes would expose investors to more risk.

The UK’s financial watchdog plans to shake up the City’s listing rules, in the hope of halting the flow of companies to rival markets such as Wall Street.

The plans being detailed today by the Financial Conduct Authority (FCA) aim to make London a more attractive site to list, removing some of the eligibility requirements that can deter start-ups and newer companies.

The FCA is proposing several measures in a new consultation document, including:

  • simplifying the market, by merging London’s standard and premium markets into a single category for equity shares, scrapping the gold-standard “primary listing” category.

    This “single equity category” would include measures to tempt company founders to list in London, such as being more tolerant of dual class share structures with different voting powers, such as so-called ‘Golden Shares’

  • Ditching removing mandatory shareholder votes on transactions such as acquisitions, so companies can press on with deals and grow faster

  • removing a requirement for firms to have three years of audited financial accounts, which would make it easier for companies to join the market

The FCA says:

The proposed changes aim to provide a simpler and more accessible UK listing regime for companies, improving the attractiveness of listing in the UK and providing a wider range of investment opportunities for investors.

But…shifting to a listing regime based on disclosure and engagement, rather than regulatory rules, does bring more risk into the system.

So, the FCA says it wants an open discussion about the change to risk appetite that this would entail.

A recent review found that the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008, and that between 2015 and 2020, the UK accounted for only 5% of IPOs globally.

My colleague Jasper Jolly reports:

The Financial Conduct Authority (FCA) on Tuesday night said it plans to abolish the stricter “premium” class of London stock market listing, and make it easier for company founders to keep control of businesses using US-style “golden shares”, among a series of big changes to City regulations.

The changes are part of a push by the Conservative government to arrest the decline of the London stock market since the global financial crisis and lure new companies to list here. There were 2,101 companies listed on London’s main market in 2003, but that number has fallen to 1,097 today, according to London Stock Exchange data. The average number of companies floated has fallen from 177 a year before the financial crisis in 2008 to 66 a year in the period since then, according to the data company Dealogic.

Also coming up today

The US Federal Reserve is expected to raise US interest rates again tonight, as it tries to push inflation down to its 2% target.

The Fed’s FOMC committee is forecast to lift its benchmark policy rate by a quarter of one percent, to a new target range of 5-5.25 per cent, the highest level since mid-2007.

The Fed meeting is overshadowed by jitters over America’s regional banks. Shares in midsize lenders fell again yesterday, despite president Joe Biden insisting the banking system was ‘safe and sound’ following the collapse of First Republic.

JPMorgan’s takeover of troubled Californian lender First Republic’s deposits and most of its assets on Monday has not stemmed concerns over the health of the sector.

Trading in PacWest, the Los Angeles-based lender, was briefly halted for volatility yesterday and closed down almost 28%.

Western Alliance of Phoenix, Arizona, lost 15%.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:

Banking relief after JP Morgan swallowed the First Republic Bank on Monday remained short-lived, as some regional bank stocks, like Valley National Bankcorp lost another 3%, Western Alliance Corporation another 15%, and PacWest Bancorp another 28%, even though it had said last week that the deposit outflows had slowed in March.

As such, SPDR’s US regional bank ETF was down by more than 6%.

It means that, no, the US regional banking crisis is hard to wane, high interest rates are truly being felt and the latter will likely have a sizeable impact on credit lending, hence on economic activity.

The agenda

  • 9.30am BST: Office for National Statistics report: “How is the average price of items changing over time?”

  • Noon BST: US weekly mortgage applications data

  • 7pm BST: Federal Reserve interest rate decision

  • 7.30pm BST: Federal Reserve press conference

Updated

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By now you may have found uses for many of the holiday leftovers
The Independent UK
The Independent UK
Why you shouldn’t bother budgeting
With the new year approaching, people may be looking to reorganize their finances. Brittany Miller writes about how one of the best money tips might be to avoid budgeting altogether
The Independent UK
The Independent UK
All I want for Christmas is $1.22bn: Mega Millions ticket matches all six numbers
Circle K in Cottonwood, California, where ticket was sold celebrates $1m bonus as winner remains unknown
The Guardian - US
The Guardian - US
How ‘sad’ bananas could help tackle food waste
Bananas are a sociable fruit. They thrive in bunches, bound by a unifying stalk which joins them happily together in curvy yellow brightness.
The Conversation
The Conversation
Most restaurants don’t make it. Here’s how Jean-Georges restaurants have survived the test of time—and even a pandemic
Legendary chef Jean-Georges Vongerichten also tells young hopefuls that if they can’t handle 14-hour days, the chef life is ‘not for you’.
Fortune
Fortune
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