Financiers fear ‘high impact’ event this year as Bank of England tries to calm nerves

Confidence in the UK financial system by bank executives is falling and there is a strong chance of a “high impact” event in the next 12 months.

That’s one of the conclusions from the latest Systemic Risk Survey by the Bank of England, which takes the views of top bankers every six months.

Plainly, some are jittery given recent bank failures and concerned they could spread to other lenders.

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Shares set to rise on Wall Street

US shares are set to rise this morning, after a tough day for tech businesses in New York yesterday.

Dow Jones futures are up by 0.7%, to 32825, while the S&P 500 futures have risen by 0.9% to 4037. Nasdaq futures are up by 1%, to 12856.25.

US shares started yesterday with modest gains, but tech stocks stood out in a decline after European markets closed

Government publishes “pro-innovation” AI white paper

The UK Government today published a white paper outlining its plans for AI regulation.

The Government said the plan would “help unleash the benefits of AI(…) which already contributes £3.7 billion to the UK economy”.

Science Minister Michelle Donelan said the Government would not bring in any laws to regulate AI companies for now, as it feared these could stifle innovation.

FTSE 250 gains cemented by housebuilders

London’s second tier stock index rose, lifted by property stocks after upbeat broker comment on housebuilder Bellway.

Following Bellway’s earnings earlier in the week, analysts at UBS lifted their price target on the stock to 2500p from 2190p. That helped its shares up 128p to 2169p.

After mixed data from the housing market, investors tuned into news of the first rise in the number of mortgages approved in a month since the mini-Budget last year. While 43,000 home loans went through in February, the value of mortgage lending missed forecasts of £2.4 billion, coming in at £0.7 billion.

But with a slowdown in the home market looking priced in, the positive comment on the sector stood out.

Redrow, another developer, was up 13p at 464p. Crest Nicholson was almost 5p higher at 219p.

Overall, the FTSE 250 added almost 140 points to 18,536.47.

FTSE 100 housebuilders take slowdown in mortgage lending in their stride

Shares in housebuilders held up on the FTSE 100 even after a sharp slowdown in mortgage lending in last month.

The drop in home loans in February to £0.74 billion from £2 billion in January defied economists expectations for a rise to £2.4 billion, although the number of mortgages approved rose to 43,500 from 40,500 in January, the first increase since the mini-Budget.

But after investors have been pricing in a drop in activity in the UK home market for months, big-name developers’ stock rose. Persimmon added 29p to 1229p, with Barratt Developments up 6p to 454p. London-focused builder Berkeley Group was up 43p to 4125p.

Galliford Try rises on Brent Cross contract win

Construction company Galliford Try today said it will work on a £75 million contract to create a new rental homes building at the Brent Cross Town regeneration scheme.

The property will sit on a 180-acre site where new shops, offices and homes are planned and being delivered in partnership by Barnet Council and developer Related Argent.

Shares in Galliford Try gained 4.6p, or 2.7%, to 177p after it said its building business had been appointed to the contract.

Boss Bill Hocking said the private rental and wider residential sectors are “an integral part” of the firm’s sustainable growth strategy.

Consumer credit growth at highest level since November 2018

Consumers borrowed an additional £1.4 billion in February, down from January, but the annual growth rate hit a four-year high.

Year-on-year growth in borrowing was 7.7, the highest rate since November 2018.

Credit card borrowing dropped to £600 million, but other forms of credit rose to £800 million.

Mortgage approvals were up to 43,500 in February, the first increase since the mini-Budget.

Luxury whisky lifts spirits at Artisanal

Sales of a rare £2,500 bottle of scotch have helped spirits maker Artisanal hit record revenues.

The 33-year-old whisky, called ‘Bonkers for Conkers,’ was released by the firm’s Scotch Malt Whisky Society late last year in a batch of 600 worth a combined £1.5 million.

According to the Society, the drink boasts “aromas of polished horse chestnuts, rosehip, birch branches, prunes, dates and figs” alongside “flavours of hay-smoked roe deer with blackberry and beetroot beautifully balanced by a fresh berry chantilly cake.”

CEO Andrew Dane said: “Members absolutely loved it.

“It’s the continuing trend of premiumisation – buying better is something we see in all markets but particularly with old and rare products.”

Turnover at Artisanal climbed 19% to £21.8 million in 2022 amid a 12% jump in membership of the Society to 37,000 globally.

Membership in China fell 4% amid a cancellation of Society events due to Covid restrictions, offset by a 29% leap in European members helped by an easing of post-Brexit supply chain uncertainty.

Membership in the UK, which includes a luxury club popular with city financiers in Farringdon, rose 10% to 18,000.

Artisanal posted a £2.1 million loss, down from a £2.7 million loss the year before.

The firm said its current stock of whisky sitting in casks was estimated to be worth a combined half a billion pounds when it reaches maturity. It plans to have doubled revenues between 2020 and 2024.

Artisanal Spirits shares rose 11% to 99p.

Ermotti back at UBS

UBS surprised the banking world today when it brought back Sergio Ermotti as chief executive just two weeks after it took over historic rival Credit Suisse.

Ermotti had been CEO for nine years up until 2020 and will replace the incumbent Ralph Hamers.

It is clear that the £2.5 billion CS rescue deal is behind the shake-up.

UBS said: “The Board took the decision in light of the new challenges and priorities facing UBS after the announcement of the acquisition.”

Ermotti is credited with rejigging the bank after the financial crash, in particular, UBS said he “swiftly transformed the investment bank by cutting its footprint and achieved a profound culture change within the bank which allowed it to regain the trust of clients and other stakeholders, while restoring people’s pride in working for UBS”.

Hamers said he is “of course sorry to leave UBS, but circumstances have changed in ways that none of us expected”. His deal last year to buy robo-adviser Wealthfront for $1.4 billion was ditched.

Thousands of jobs cuts are likely as UBS merges CS, which employs 5000 at Canary Wharf.

TinyBuild CEO: London still a great place to list for smaller developers

The boss of video game developer TinyBuild said the business considered a US listing, but chose London instead to avoid being compared to industry “juggernauts”, as sales of its older games helped profit rise in 2022.

Speaking as the business announced its 2022 results, CEO Alex Nichiporchik said listing in the US had initially been a “dream”, but that he feared that would lead to unhelpful comparisons to multi-billion-dollar developers of mobile games and the top console titles.

“We were looking pretty much everywhere,” he said. “One of our dreams was to list in the US.

“But we realised that we would be compared with Zynga, with Take-Two, EA, some other close-to-gaming companies that were listed.

“And then the investor base and the analysts would ask annoying questions based on that.”

The future of London as a place for tech companies to list their shares had been questioned recently, after businesses such as Arm and CRH announced plans for US listings. But Nichiporchik said the City is still well-suited for mid-cap and small-cap tech firms.

The developer of games such as SpeedRunners and Hello Neighbor reported profit of $24.4 million in 2022, up 10% as sales of its older games remained strong.

The firm also announced its first acquisition, buying Bafta-nominated NotGames for $4.2 million.