HSBC profits fall 34pc, Phoenix Group enters new deal with Standard Life Aberdeen
The FTSE 100 is expected to open eight points higher on Tuesday, having closed down 0.18% on Monday at 6,612,24.
Stocks to watch
HSBC reported a 34% slump in annual profits, but resumed dividend payments as it said it would refocus operations on China. The bank on Tuesday said pre-tax profit fell to $8.8bn from $13.3bn in the year to December 31, while adjusted profit before tax plunged 76% to $12.1bn as expected credit losses rose $6.1bn to $8.8bn due to the Covid-19 pandemic. The bank, which declared a dividend of 15 cents a share, said it would place more emphasis on wealth management in Asia, where it makes most of its profits, to lessen its exposure to record low interest rates in retail and business banking in Europe.
Phoenix Group has entered into a new binding agreement with Standard Life Aberdeen, it announced on Tuesday, which will see it sell its SLAL UK investment and platform-related products to Standard Life Aberdeen, and acquire ownership of the Standard Life brand. As a result, the client service and proposition agreement entered into at the time Phoenix purchases Standard Life Assurance (SLAL) in 2018 will be dissolved. At the same time, Phoenix said it would re-commit to a 10-year strategic asset management partnership, with Phoenix to use Aberdeen Standard Investments' expertise across a breadth of portfolio management and investment strategy areas.
Business leaders have told Boris Johnson that his roadmap for exiting the third Covid lockdown in England remains incomplete without fresh financial support for companies and workers hardest hit by the pandemic. The prime minister promised the government would “not pull the rug out” from under struggling firms and workers while restrictions remain in place during the phased relaxation of lockdown, but to the disappointment of company bosses and trade unions he deferred details of future economic support to the budget in 10 days’ time. - Guardian
Uber has been accused of trying to deter drivers from seeking compensation for missed holiday and minimum wage payments after a landmark court ruling. The taxi-hailing app may have to pay out more than £100m to more than 10,000 drivers involved in cases linked to a UK supreme court ruling on Friday that they must be classified as workers. Uber has previously argued that its 60,000 UK drivers are self-employed independent contractors with no right to holiday pay, a company pension or the national minimum wage. - Guardian
Boris Johnson's plan to reopen international travel does not go fast enough to allow a summer holiday season and could put hopes of a swift industry recovery at risk, his predecessor Theresa May has said. Mr Johnson pledged to map out a return to foreign vacations by Apr 12 and said he will reopen borders as early as May 17, allaying concerns that there would be no route to recovery for the travel sector. But Mrs May warned this simply does not give businesses and the public enough time to plan a getaway - and companies will suffer as a result. - Telegraph
IG Group is withdrawing leveraged bets on hundreds of companies as Britain’s oldest spread-betting firm scrambles to react to the day-trading mania gripping financial markets. It emerged yesterday that IG had decided to stop offering margin trading on 900 shares, including those of some British companies, and had given its customers 30 days to unwind existing positions. The company said it was pulling the leveraged products it had been offering on the stocks as part of efforts to allocate its resources in the face of spiralling demand to play the markets after the GameStop saga in America. - The Times
A group of 1,600 Londoners made more in capital gains than the entire north of England, according to a new report. Tax Justice UK, a campaign group, found that the ultra-wealthy group had made £9 billion from assets in 2019. By comparison, the entire population of the north of England made £8 billion. Tax Justice said that the figures, based on a freedom of information request to HM Revenue & Customs, underscored the need for the government to equalise capital gains and income tax rates. At present, basic rate capital gains taxpayers are charged 10 per cent, compared with 20 per cent for payers of income tax. - The Times
Wall Street stocks closed mostly lower on Monday ahead of Senate testimony from Federal Reserve chairman Jerome Powell tomorrow.
At the close, the Dow Jones Industrial Average was up 0.09% at 31,521.69, while the S&P 500 was 0.77% softer at 3,876.50 and the Nasdaq Composite saw out the session 2.46% weaker at 13,533.05.
The Dow closed 27.37 points higher on Monday after eking out a gain of less than one point in the previous session.
Market participants were paying strict attention to the 10-year Treasury yield, which jumped 14 basis points last week to 1.34%, edging towards its highest level since February 2020. The 10-year yield was up another three basis points at the end of trading on Monday at 1.35%.
Traders were also focussed on Powell, who will deliver his semi-annual testimony on the state of the US economy before the Senate Banking Committee on Tuesday, with comments on rates and inflation potentially determining the market's direction for the rest of the week.
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