Shocks & Stares » RBS http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2012/02/fps-friday-fiver-33/ http://blogs.hillandknowlton.com/shocksandstares/2012/02/fps-friday-fiver-33/#comments Fri, 03 Feb 2012 17:59:33 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=506 Hello All, and welcome to our latest edition of the Financial and Professional Services Friday Fiver. Two things have happened in the UK this week – firstly, it’s been very, very cold. And secondly, corporate Britain has turned into something of a witch hunt. There’s more on that below, as well as our thoughts on Facebook, Mega mergers and a new magazine launch for our sector. Happy weekend everyone, and stay warm.

THE BUSINESS OF FRIENDSHIP…..“It is a good thing to be rich… but it is a better thing to be beloved of many friends.” Euripides

A wise quote, but of course if you’re Mark Zuckerberg you have all of the above. This week Facebook announced its much anticipated Initial Public Offering. It may not be the biggest IPO, of recent years but it’s likely to be a theme of the business pages for many weeks to come. The company is looking to tap up investors for $5bn but the investment community is divided both on the rationale for the listing, as John Gapper explains in today’s FT [recommended read] and also the long-term investment case for the company.

Whatever the merits of the decision, it can be easy to forget the wealth that start-up businesses create, particularly when they experience success on the scale of Facebook. We were warmed to hear the tale of the graffiti artist who took stock instead of cash for painting the company’s office. The value of the stock could now be worth as much as $200 million. All in a day’s work…

SICK (MEDIA) NATIONS…..This weekend sees the beginning of the RBS Six Nations. England approach the tournament as fourth favourites, humbled by their world cup exit and off the field escapades. Ireland are third favourites and will be without their talismanic skipper Brian O’Driscoll. And Wales, so often the nearly men of northern hemisphere rugby (sorry Rach), lie second in the odds, without their impressive and youthful fly half Rhys Priestland. The French once again lead the pack.

La Tribune has ditched its daily print edition

But unlike their rugby team, it seems the French print media landscape is in a more rapid decline than ours. This week saw the last ever daily print edition of La Tribune, one of the leading economic newspapers in France. It will be replaced by a weekly print edition and an active website – of course. Established in January 1985, it was read by CEOs, managers, professionals, political and institutional decisions makers for twenty-seven years.

The success of the website and the weekly edition will no doubt be closely monitored by the British print media. As in the rugby, the question is, when will England take a lead from the French? The closure of the News of the World, the Leveson inquiry and the emergence of ‘i’, ‘Britain’s fastest growing quality newspaper’ no less, suggests the long mooted change in our media landscape is a foot. Quite who will win the sweepstake however is anybody’s guess.

ECONOMY, ECONOMI, ECONOMIA…..Not all print titles seem doomed however – this week, Ed and Dave attended the launch of the ICAEW’s new magazine, ‘Economia’ (thanks for the champagne and chocolates guys, we loved it!). The inaugural edition certainly featured a grand line-up of interviews and contributors, and it will be interesting to see if the magazine can maintain the high standard it’s set itself in future editions. However, there must have been one or two nervous faces on Tuesday evening as the front cover was unveiled – perhaps not the greatest timing….

IT’S COLD OUTSIDE – ENJOY IT…..Our annual cold snap arrived with a bang this week and the forecast for the weekend is decidedly of the ‘icy-white’ variety. Then again, according to The Times’ Eureka magazine this week, we’d better enjoy the pretty white stuff while we can. Snow it seems, is in danger of becoming as rare as a snow leopard within the next 50 years or so as global warming takes a grip. While the debate over warming continues to take precedence over actual action, there are some upsides to a less snowy/icy planet, not least the opening of the Northwest Passage and access to the Arctic’s oil, gas and mineral reserves – something that a newly merged Xstrata/Glencore would undoubtedly look to get to grips with…

GOOD WEEK/BAD WEEK…..As it turns out, it’s been a good week for shareholders, and in particular, anyone with a FTSE tracker fund. As the BBC’s Hugh Pym noted a short time ago, the FTSE100 closed up this week at 5,901 – the highest the index has been since July last year. Will it last? Perhaps not, but for a brief moment at least, pension pots and stocks & shares ISAs are looking a little rosier.

On the bad week front, it’s hard to look past anyone sitting in the chief exec or chairman’s seat on a large company’s board really. The combination of Stephen Hester’s bonus backdown and (Sir) Fred Goodwin’s ‘de-robing’ have caused some commentators to speculate that Britain is now ‘closed for business’. With reporting season still in full flow, the pay gauntlet is looking increasingly long and spiky for company bosses for at least the next four weeks.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/ http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/#comments Fri, 06 May 2011 13:22:55 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=104 Yes, it’s back. After a break for the Easter holiday, some glorious weather and that dress, we return with the Financial and Professional Services team’s Friday Fiver. We also have a fresh contributor this week, our new regulatory and government expert, Melanie Worthy. Other pieces this week come from regulars Ed Jones, Ross G, Karen and myself.

Crunch time for RBS and the FSA…The Treasury Select Committee and the FSA announced this week that they’ve asked City heavyweight Sir David Walker and lawyer Bill Knight to conduct an independent review of the report the FSA is producing into the failure of RBS. They will examine whether the report fairly reflects the findings of the FSA’s investigation of RBS, as well as analysis of its own regulatory activities.

Sir David Walker - charged with reviewing the demise of RBS (image from guardian.co.uk)

Walker’s unique attributes of being both a credible City figure plus a trusted Government adviser make him an obvious choice for the role. His track record helps too – he has headed Government enquiries, such as in 2009 when he examined governance at the big UK banks.

Just as well then, as he’s going to have his work cut out. However “complex” the issues were, as the FSA cites somewhat reluctantly, there will be strong media interest and expectation for answers as to the causes of RBS’ demise; the excessive cost to the public purse from bailout; and the wider malaise that played out across the banking sector as the financial crisis ensued.  Whilst Walker and Knight tread through a minefield to avoid the legal conflicts to RBS employees, they’ll be mindful of the need to show teeth and forensic review on both sides of the regulatory fence.

Nick Clegg – Stick or Bust…Most observers of the Westminster Village Ed’s spoken to in recent months have agreed on one thing: May 5th and the outcome of the AV referendum will determine the fate of the Coalition Government. As we’ve said previously, the fates of Nick Clegg and Ed Miliband appear eerily interlinked, with success for one leading to failure for the other. It seems neither will come out of this episode particularly favourably though.

It's not been a vintage week for Nick Clegg

Judging by Chris Huhne’s recent outbursts, it would seem to look more terminal for Nick Clegg, and Ben Brogan was on to something this week when he said Nick Clegg’s body language in PMQs was ominous.

Cameron, demonstrating his exceptional political judgement, was keen to move the story on and talk up the other important work the Coalition has set out. But where can it realistically go from here? If Lords reform is offered as a carrot to the Lib Dems to carry on, it’s highly likely a similar demoralising defeat will occur on it. On the flip side, Lord Knight’s suggestion that an early election to deliver the Conservative’s a majority is intriguing, but given the barriers against this, difficulties over NHS reform and the current state of the economy, this would appear wide of the mark.

Where else can the Lib Dems look?…Given the loss of 300 council seats and a probable resounding no to AV, what will be telling in the coming days is how the Lib Dem rank and file respond to defeat. Paddy Ashdown has already launched an attack at David Cameron, and Clegg may well be hoping that this and other attacks distract party members from aiming their wrath at him.

Clearly, Clegg is going to have to secure some tangible wins for the Lib Dems in order to quell the growing frustration. With this in mind, he may seek to increase the fight for a greater say on health reforms. The Health and Social Care Bill should allow for greater private provider provision of health care, but the extent to which the Tories have wanted to pursue this has caused unease amongst many Lib Dems.

The current pause in the process of passing the Bill and now the increased chance of Lib Dems demanding changes means that private equity firms are going to be increasingly turned off due to the levels of uncertainty around private provision. If the Lib Dems decide to really dig their heels in, private equity firms could lose out on what previously looked like a sure investment.

Exchange-Traded Funds – the current big thing?…Earlier this week, we enjoyed a fantastic training session with David Yates from Finance Talking. One of things he focused on was the growth of ETFs in recent years. Financial News picked up on this point earlier this week as well, noting the recenty outflow of money from four of the five largest asset managers and into ETFs – the magazine claimed $41.4bn of new money was poured into ETFs in Q1 2011 according to Blackrock.

Not everyone seems convinced though. In today’s FT, Gillian Tett examined the boom in this market, and argued that concerns are building amongst regulators about it. While not as inherently dangerous as the pre-2007 fad for ‘CDOs’, she did note that there are some striking parallels here. Clearly, others are still a big fan of them though, as FT Alchemy notes today.

This week's Big Bite was all about the future

Learning about the future…The exciting guest for this week’s FPS Big Bite was Patrick Harris from The Futures Company. He gave us some great insights into the world of futures and left us with an interesting and thought provoking debate.  As Patrick pointed out ‘the future is all around us, it’s just not evenly distributed’. We hope that gets you all thinking as much as it did our team!

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