PM update: Microsoft shares down, LSE chairman wins backing, oil up

Is the Trump-led stock market surge showing signs of fatigue? There was tech frailty on show earlier with Microsoft shares down more than -1.2% and Apple shares slipping more than -1% as a rare downgrade landed. 

Meanwhile the US tax overhaul is still pushing its way through the political system: the House of Representatives votes on it this afternoon while the Senate will probably vote on it tomorrow morning. It should be law by Friday. Until the deed is done markets will remain on edge.

Once clear, some more stock market gains could be in the offing especially if M&A activity, helped by new tax concessions, get going (lower corporate tax rates will likely support deal making).  

At 3.45pm sterling was down -0.14% at 1.3363 though the euro was up almost +0.30% against the dollar at 1.1815. Against the pound the euro was almost +0.50% higher at 0.8844. 

The FTSE 100 was up just seven points tonight at 7,544 with Shire and easyJet seeing +3.8% and +2.8% gains while Mediclinic shares sank almost -5% to 579.00p. FTSE 250 security operator Sophos Group shares rallied more than +5%.  

• UK FTSE 100 7,544 +0.09%
• DAX 13,286.36 -0.19%
• CAC 40 5,402.11 -0.34%
• Dow 24,767.36 -0.11%
• S&P 500 2,687.41 -0.10%
• Nasdaq 6,973.75 -0.03%
• Nikkei 225 22,868.00 -0.15%
• Gold 1,264.80 -0.06%
• Oil WTI 57.39 +0.37%

LSE shareholders reject TCI rebellion

Earlier today London Stock Exchange chairman Donald Brydon won a 79% majority shareholder backing providing the LSE a shot of stability. Hedge fund TCI Fund Management had been rooting for Brydon’s departure following the exit of the LSE’s former boss, Xavier Rolet. 

TCI was deeply unhappy about Rolet’s exit (not surprising given the massive share price hike the LSE saw under Rolet’s eight-and-a-half-year tenure). TCI however could not persuade sufficient institutional investors to share its frustration (it’s thought Blackrock, amongst other major shareholders, voted for Brydon).

The defeat is poignant given that TCI claimed investors had lost faith in Brydon. Not quite the case on the day but that doesn’t mean TCI’s case was poor. An extraordinary power struggle. 

"The vote,” said TCI this afternoon, “constitutes a serious rebuke of the board by shareholders....a chairman of a major FTSE 100 company is expected to command the overwhelming support of shareholders…it is therefore imperative that a search begins immediately for a new chairman as there is no justification for waiting until 2019."

The LSE gets some needed stability though the power struggle over its chairman will not likely slip quietly away: Shutterstock

EU to up ante on post-Brexit investment bank future

UK investment banks have been warned that a Brexit future still means sticking close to EU rules, the European Commission is about to warn. 

Access to the EU by UK-based investment banks will still require EU oversight. EU vetting procedures for financial centres external operating outside the EU may be upgraded in the medium term because of Brexit, meaning, very likely, close harmony with EU law.