A Tory-DUP agreement emerged this morning though the knock-on effect on sterling was slight. The pound at 4pm this afternoon was trading -0.03% down at $1.2738 while the euro was up +0.13% at $1.1211 following some poor durable goods data from the US.
The other chunky piece of news this morning was the Italian bail-out deal for Veneto Banca and Banca Popolare Di Vicenza. The banking rescue bolstered UK bank share prices – some relief from this sector.
Shares in the UK FTSE 100 finished 22 points higher at 7,446.80 with Whitbread and BA-owner IAG taking the biggest jumps, up 2.42% and 2.09% respectively. RBS was up more than 2% to 245.60p while there were reasonable gains too for TUI and easyJet.
However miners stumbled hard with Fresnillo and Antofagasta Holdings down 3.24% and 2.59% respectively. Wolseley shares dipped more than 1%.
- UK FTSE 100 7,446.60 +0.31%
- Dow 21,404.12 +0.05%
- S&P 500 2,441,41 +0.13%
- Nasdaq 6,257.01 -0.13%
- Nikkei 225 20,153.35
- DAX 12, 818.34
- CAC 40 5,320.74 +1.04%
- Gold 1,245.20 -0.88%
- Oil WTI 42.79 -0.51%
Fund managers: be clear about fees, please
Some concern on fee transparency on the fund manager front. A ‘mystery shop’ with more than 30 leading UK wealth managers found little clarity as to on-going fund running costs. Almost half (45%) of the fund managers who responded failed to include underlying fund costs within their headline charge, said SCM Direct.
Most managers revealed just part of the transaction costs, sometimes including the commissions paid to external brokers or to themselves –but rarely the stamp duty on shares or the market maker bid/offer spreads says SCM.
When asked how would the money be invested – shares/bonds, etc – 38% of those who responded were unable to indicate how the money would be invested within seven days. “There is little evidence that paying private client managers higher fees result in better outcomes for clients,” concluded SCM.
Co-op Bank: deal for independence imminent
It was for sale but no more. The Co-op Bank says it’s still in discussions with investors to recapitalise itself, a plan which has been “substantially agreed”. However the issue of the £8bn pension liabilities is still a probable stumbling block.
The bank is in talks with US hedge funds though the total rescue deal to preserve the Co-op’s independence is likely to be in the region of £700m. In the Co-op's favour is a well-liked brand with strong links to ‘ethical’ minded customers.
The Co-op has already ruled out a deal with a Swiss investment firm and Qatari conglomerate. Previously other names linked to a possible purchase included Virgin Money and Clydesdale. “Given the advanced nature of the proposal,” the Co-op said earlier, “the board has decided to discontinue the formal sale process.”
Though shares opened strongly on Wall Street this morning shares in Arconic – the maker of the cladding used on Grenfell Tower in West London despite the fire risk – slumped more than 7'%. The US operator says it had warned that the cladding was unsuitable for use on large buildings.
Breaking news: Waymo, self-driving car unit of Alphabet (Google) has sealed a deal with Avis to handle its autonomous driving fleet. Avis shares surged more than 20% on the news.