Capital Markets Corporate

September 7, 2018

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.

Oversight over social sites

In the latest move that underlines the power of Big Tech, a joint letter signed by the heads of the BBC, Sky, ITV, Channel 4, BT and TalkTalk has called for the government to introduce independent regulatory oversight of the content carried over social networks. Telecommunications firms have highlighted that they abide by heavy regulation – so shouldn’t social media companies too?

(From Financial Times, 2 September 2018)

Public sector pensions come out on top

According to recent research by the TaxPayers Alliance, new public sector workers will retire on pensions three times larger than those in the private sector. Some have claimed this means the UK has a ‘two class pensions system’ and that more should be done to close this gap – or, at least, raise awareness of it among taxpayers.

(From Daily Telegraph, 27 August 2018)

Banks set to replace Libor with Sonia

Lloyds Banking Group is set to become the first UK commercial lender to issue bonds tied to the Sterling Overnight Index Average, or Sonia – the Bank of England’s replacement for Libor (which has in recent years been plagued by manipulation scandals). Will Sonia prove to be more robust than its predecessor? And will other banks follow suit?

(From Bloomberg, 3 September 2018)

The unstoppable rise of AIM IPOs?

London’s AIM market IPOs have been thriving, with the trend looking set to continue, according to analysis by MergerMarket. While historically AIM was popular with mining and oil & gas companies, in recent times there has been a surge in tech-labelled businesses listing on the exchange, including fintech firms.

(From Mergermarket, 5 September 2018)

Let’s hear it for the Lehman Sisters

As the anniversary of the collapse of the Lehman Brothers nears, the head of the International Monetary Fund, Christine Lagarde, has said that the last financial crisis would have never taken place if the banking industry were to have been dominated by women instead of men. In a blog, she praised the steps that have been taken to make the industry and financial systems more equal, but also stressed that there was still a long way to go.

(From The Guardian, 5 September 2018)

 

Rise of the Chatty Unicorns – Setting New Standards for IPOs?

News out this week that Funding Circle, the peer-to-peer fintech lender, plans to raise £300 million through a stock market flotation was covered by most UK news outlets.

Aside from the headline-worthy success story of the three Oxford University graduate friends who first started Funding Circle in 2010 in a room above a waffle shop in London, it was interesting to see how the news was communicated to the market.

Funding Circle not only published the mandatory documents required by the regulations, but its CEO, Samir Desai, also gave an interview to BBC Radio 4’s Today Programme (at 1h19m) on the morning of the announcement, highlighting the purpose and benefits of the business.

With the recent change in the FCA’s IPO rules ensuring that main market deals can no longer fly below the media radar, it was refreshing to see Funding Circle’s proactive approach to communicating the story via the media.

If the FCA’s intentions were to promote a more transparent process then the media spotlight, once avoidable, should aid this aim. The heightened disclosure also brought coverage from the investment columns, again giving potential buyers of the stock a broader church of opinion.

With IPOs set to be a matter for media debate ahead of pricing, a well thought through media engagement strategy, a proactive stance (if appropriate) and a tight equity story will allow IPO candidates a head start in the race to the finish line. For some floats, this will mean the difference between success and failure.Creds Button

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