Capital Markets Corporate

July 24, 2020

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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Whiskey sales spike as investors seek alternatives to equities
Whiskey sales are soaring as investors are turning away from volatile equities and poor bond returns to alternative investments, including whiskey. Cask whiskey sales have strengthened this year, with a total of 258.5 pallets being purchased since the start of the lockdown according to the Whiskey & Wealth Club, which has seen sales double since last year. Recent research by the club also found that 55% of investors would considering investing in cask whiskey. (From What Investment, 20 July 2020)

Klarna implements stricter lending rules
The buy now, pay later service, Klarna, saw an increase in business during lockdown. However, even though sales soared, more shoppers face financial uncertainty therefore the company has tightened its rules on lending. Klarna is now only accepting customers who it believes will and can repay on time and as a result Klarna’s VP has said there should be no rise in defaults: “[Klarna’s] default rate is less than 1% and we are working super hard to make sure that we are only accepting customers that can pay over time.” (From BBC News, 20 July 2020)

Treasury to strengthen FCA’s oversight of cryptoassets  
The Treasury is considering granting the Financial Conduct Authority greater powers to oversee unauthorised firms in the investment industry marketing unregulated cryptoassets. The enhanced powers are designed to provide stronger safeguards to protect retail investors from investing their capital off the back of misleading adverts and promises of high returns. Under the new rules, authorised firms would have to obtain specific FCA consent before promoting products from unauthorised firms. If granted the powers, it would be the first time cryptoassets would come under the City regulator’s regime. (From FT Adviser, 21 July 2020)

Global venture capital fundraising thrives amid pandemic  
The global venture capital market withstood intensifying fears over the coronavirus pandemic and an impending global recession to remain robust through the first half of the year. Private companies worldwide raised $112bn in venture capital funding in the first six months of 2020, just 2% shy of the total for the same period in the previous year. The persistent high levels of venture capital funding are in part the result of investors betting on start-up tech companies showing promise of thriving in the post-Covid economy. (From Private Equity News, 20 July 2020)

Campaigners aim to create pension scam database  
At an online meeting hosted by Transparency Task Force founder Andy Agathangelou, campaigners behind the All-Party Parliamentary Group on Pension Scams discussed the creation of a database to help combat these kinds of scams. MP Bob Blackman suggests that people who have a reasonable level of savings in pension funds are among the biggest victims, adding that “we need to build up a database, make sure people are aware of scammers and get the pensions industry to front this”. It is noted that the Pension Scams Group aims to officially launch on 7 September and has the backing of multiple MPs. (From Money Marketing, 20 July 2020) 

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