Capital Markets Corporate

November 20, 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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Pressure mounts on FCA to do more to tackle inadequate transfer advice
The UK financial regulator is facing mounting pressure to shed light on its investigations into the pension transfer market. The intensifying scrutiny on the FCA has been prompted by a Freedom of Information request revealing it had opened fewer than 70 mis-selling cases in three years. The low volume of probes launched by the regulator suggests it is taking little action to tackle mis-selling in the pension transfer market. The findings follow the publication of an FCA review of the DB transfer market, in which it found fewer than 50% of transfer advice recommendations for DB pension scheme members was suitable. (From FT, 13 November 2020)

UK housing market continues to defy poor economic climate
The UK housing market continues to defy the poor economic climate, as the latest data from the ONS reveals house prices in the UK rose 4.7% in the year to September, up from 3% in August. The sustained growth in property prices has been triggered by a combination of the higher Stamp Duty threshold stimulating buyer activity and by the rapid shift to remote working practices prompting workers to reassess their housing needs. (From BBC News, 18 November 2020)

Benefits from PE ownership prompts firms to stay private
There are 17,000 large businesses in Europe that could be listed on a stock market that are choosing to stay private, contributing to a wide ‘listings gap’ on the continent. Research conducted by Oxera shows the UK has the widest listings gap in Europe, with more than 3,500 large unlisted businesses, followed by Italy (2,911) and Germany (2,833). The benefits of private equity ownership is prompting companies to stay private for longer. (From Private Equity News, 17 November 2020)

Bailey hints at looser regulations to drive investment 
Governor of the Bank of England Andrew Bailey, has suggested that the financial regulation of pension schemes be loosened to enable investment in higher long-term “productive investments”. Speaking at a CityUK conference, Bailey warned that progress in this area was being stalled because regulations prevent defined contribution schemes investing in illiquid long-term assets like property. He added that following the Covid-19 crisis, overall investment in the economy needs to increase to ensure a successful recovery. (From FT Adviser, 18 November 2020)

Brands struggling to get a handle on woke capitalism
A new generation is demanding more than clever advertising from the world’s corporate giants. Amazon is used as an example of lacking authenticity, with the company criticised for piggybacking off Marcus Rashford’s efforts to provide free meals to schoolchildren when they re-tweeted the footballer, attaching an Amazon watermark, instead of launching their own initiative. The importance of brand engagement with social affairs continues to grow, with a study by Edelman finding that 64% of people chose or avoided a brand based on its stand on societal issues. (From The Times, 16 November 2020)

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