Capital Markets

December 20, 2017

Our Weekly Newsletter

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At Instinctif Partners’ Financial Services Team we constantly keep our eyes peeled for the key developments taking place in the financial services space, evaluating their impact on the many businesses we represent. Here we share our picks of the week’s most interesting news, as well as our expert views.

  • Speak Now Or Forever Hold Your Peace

The Financial Conduct Authority has called on asset managers to let them know if they are struggling with the implementation of Mifid II, which comes into force on 3 January 2018. Fewer than 10 per cent of them are believed to be fully ready by the deadline. Companies are better off speaking out, as not admitting there is an issue is not an option. Financial Times, 9 December 2017

  • Fat cat shaming commences

The Investment Management Association has released its list of shame, as dictated by the Prime Minister, where shareholders have voted down attempts to increase the pay or bonuses of leading executives. The list is now a living document and will record all instances of what the PM calls the “unacceptable face of capitalism”. Listed firms beware: your dirty laundry is about to be aired The Guardian, 19 December, 2017

  • Robots write the news

In what is being called a world first, the Press Association officially rolled out a series of local news stories written by a computer. The stories, originally sourced by humans, were taken and augmented by AI to localise the news. Is this the end for traditional media? And will machines produce more or less ‘fake news’ than we are seeing today? Press Gazette, 12 December, 2017

  • Prepare for disaster

The academic who predicted the dot com crash and the sub-prime mortgage crisis is now signalling another market drop on the horizon. Professor Robert Schiller notes an “epidemic of excitement driven by envy” has taken over the US stock market, and “the mother of all bubbles” is set to burst at any moment. The Times, 9 December, 2017

  • Cash Revolution

From the issuing of the first cheque in the 17th century, and the original wire transfer in the 1870s, to the advent of the credit card and the cash machine, society has had to adapt to the changing nature of moving money. Online technology and its inherent issues are the latest trends to impact the public’s money-moving habits. Financial Times, 12 December 2017

Crystal balls are being polished as we type, and the predictions for 2018 will soon begin. But how successful were last year’s soothsayers? We take a look at a few 2017 market predictions to see how close the experts got to the truth.

  • The FTSE to reach 7,100 and maybe reach 7,500 – thankfully we achieved this and more, with the FTSE comfortably ending 2017 above 7,500
  • More right wing  backlash to stymie the Euro – Trump and Brexit might have been a portend for things to come, but the Euro continues to fare well into 2018, almost reaching parity with GBP back in August
  • UK economy to achieve 2% growth – perhaps the mystics did not predict quite how gloomy the UK’s Brexit economy would get, but we are nowhere near 2% and the recent budget indicated we will not be for a while
  • Sterling will be buoyed by Brexit breakthrough – well, it did…in December. A rollercoaster year for the currency hinged on the UK government’s less-than-stellar bargaining tactics
  • Dearth of IPOs will continue – IPO activity was not quite as gloomy as in 2016. European IPOs did well, and even amidst Brexit woes we managed 71 floats offering values of £6.3bn, up from 48 offering £3bn in 2016

So, some ups, some downs but overall — considering the unknowns on the horizon — it might be worth taking some of the upcoming predictions with a pinch of salt. They might or might not come to be.

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