Finance Updater - May 2017
Global Publications, Written by Martin Mitchell
04/06/2017

  1. Continuing positive news on Eurozone growth.
  2. StanChart chooses Frankfurt for its post-Brexit EU hub.
  3. HSBC announces first quarter results.
  4. Apple regains dividends leadership and hits market cap of $800bn.
  5. Standard Life and Aberdeen Asset Management reveal merger plan.
  6. Elliott loses legal action to call Akzo Nobel EGM.
  7. General Electric attracts massive bids in its euro denominated bond sale.
  8. Amazon’s landmarks.
  9. Singapore’s GIC begins to crystallise a loss on UBS stake.
  10. UK finally exits from Lloyds Bank.
  11. Improbable? UK virtual simulation start-up gets unicorn status.
  12. How much? UK courts order £454m divorce settlement.
  13. Spotify hires advisers for NYSE listing.
  14. Moody’s downgrades China.
  15. US SEC facing $50m budget cut.
  16. RBS reaches settlement with investor action group.
  17. DB scandal results in fines and ban from Singapore’s regulator.

Continuing positive news on Eurozone growth.
After registering an impressive 1.7% growth in 2016, early estimates for 2017 show gross domestic product growing at 0.5% in the first quarter.

StanChart chooses Frankfurt for its post-Brexit EU hub.
Standard Chartered plans to establish a new EU subsidiary in Frankfurt, upgrading its current branch in the German financial centre in advance of Brexit.

HSBC announces first quarter results.
Adjusted for one-offs and currency moves, HSBC’s first quarter results saw pre-tax profits up 12% on the same period a year earlier, hitting $5.9bn.

Apple regains dividends leadership and hits market cap of $800bn.
After missing out to oil giant Exxon Mobile, Apple regained the ‘world’s biggest dividend payer’ status. The tech group has paid out $13.22bn in the last year, comfortably ahead of Exxon Mobil’s $12.77bn. Apple’s market capitalisation also rose above $800bn for the first time.

Standard Life and Aberdeen Asset Management reveal merger plan.
The merger prospectus for Standard Life and Aberdeen Asset Management showed the new group will be called Standard Life Aberdeen, it anticipates cutting 800 jobs and the new board will be 16 persons, 8 from each company.

Elliott loses legal action to call Akzo Nobel EGM.
Hedge fund Elliott Advisers failed in its latest attempt to pressure Akzo Nobel (the Dutch owner of Dulux paints) to enter takeover talks with US paintmaker PPG Industries. The Akzo Nobel board has rejected three bids from PPG, the most recent valuing the Dutch group at €26.9bn including debt. Elliott holds 3.25% of Akzo Nobel, has sent repeated letters to the Akzo board requesting engagement with PPG and filed a suit with Amsterdam’s Enterprise Chamber to require Akzo to call an extraordinary general meeting to consider the removal of the current chairman. The Dutch court ruled that Akzo was not required to hold the meeting.

General Electric attracts massive bids in its euro denominated bond sale.
General Electric of the US attracted bids for €22bn as it sold €8bn of euro-denominated bonds. In the fourth largest euro-denominated corporate bond deal ever, GE sold five-year, eight-year, 12-year and 20-year tranches.

Amazon’s landmarks.
Amazon reached two landmarks in May. First, it reached 20 years as a listed company. It was listed on 15th May 1997 at $16 per share. If an investor had purchased $1,000 of stock at the IPO, 20 years later they were holding stock worth $638,000! The second landmark was the Amazon share price increase that underlined the spectacular performance of the so-called FAANG-tastic five stocks – Facebook, Apple, Amazon, Netflix and Google. Amazon’s shares climbed above $1,000 for the first time and each of the five have increased in value by between 25% and 32% in 2017 so far.

Singapore’s GIC begins to crystallise a loss on UBS stake.
Singapore’s state asset manager GIC is facing a loss of more than SwFr4bn on its emergency investment in UBS 9 years ago. GIC has just sold almost half its stake by offloading 93m shares at SwFr16.10 each – the shares were purchased for around SwFr48 each.

UK finally exits from Lloyds Bank.
The UK government sold the last of its stake in Lloyds Banking Group. After bailing Lloyds out 8 years ago with £20.3bn for a 43% stake in a taxpayer rescue, Lloyds said the final outcome was a £900m gain for the UK government.

Improbable? UK virtual simulation start-up gets unicorn status.
Improbable, an unlisted UK software developer that specialises in virtual simulations attracted a $502m investment from Japan’s Softbank. The stake is non-controlling, so the company has reached a value of more than $1bn – meeting the definition of an unlisted ‘unicorn’.

How much? UK courts order £454m divorce settlement.
A billionaire oil trader was ordered by the UK courts to settle a divorce with a £454m settlement. The judge accepted the need for £39m to buy a London house and £28m for a French home, plus £5m per annum living costs.

Spotify hires advisers for NYSE listing.
Swedish music streaming group Spotify hired Morgan Stanley, Goldman Sachs and Allen & Co to advise on becoming publicly listed on the New York Stock Exchange. The group does not feel it needs to raise new money, so it is simply considering a direct listing.

Moody’s downgrades China.
Moody’s downgraded China’s rating from Aa3 to A1, mainly due to an expectation that borrowing will increase over the coming years. At the same time the rating outlook was changed from negative to stable.

US SEC facing $50m budget cut.
The US Securities and Exchange Commission (SEC) looks set to lose $50m in funding per annum as the Trump government rolls back on the Dodd-Frank regulations. The proposed budget from the White House has removed the $50m so-called ‘Reserve Fund’ that has been used by the SEC to fund technology improvements to enable it to ‘ingest, mine and use large data sets to meet its oversight mission’ that was established in the wake of the Dodd-Frank Act.

RBS reaches settlement with investor action group.
The Royal Bank of Scotland has reached an 82p per share settlement with the investor action group threatening to sue the bailed-out bank for misleading them in a £12bn rights issue during the financial crisis. Assuming all the claimants accept, RBS will pay out a total of £200m.

DB scandal results in fines and ban from Singapore’s regulator.
Singapore’s financial regulator, the Monetary Authority of Singapore, completed its review of the Malaysian corruption and embezzlement scandal known as 1MDB. It fined Credit Suisse S$700,000 (approx. $500k) and UOB S$900,000 for breaches in anti-money laundering requirements and lapses in controls. It also issued lifetime bans to a former managing director at Swiss private bank BSI in Singapore, and the manager of the Singapore branch of Zurich-based Falcon Private Bank.

Martin Mitchell

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