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02 NEWS THURSDAY 2 MARCH 2017 CITYAM.COM FLOWER POWER Marie Curie brings its “Garden of Light” to the shadow of St Paul’s to illuminate dark times for the terminally ill THE CITY VIEW LSE-DB fiasco does not bode well for Brussels BREAKING up is never easy. For London and Frankfurt’s leading stock exchanges this week has been awkward enough, even though their sudden split occurred before they’d managed to tie the knot. Deutsche Boerse’s Carsten Kengeter is none too happy about being abandoned by his proposed merger partner. Yesterday’s passive aggressive comments about the LSE’s decision against complying with an antitrust demand from Brussels followed stories claiming that the UK side of the £21bn deal was looking for an excuse to call it all off. “It is pointless for me to speculate on what the reasons behind our merger partner’s decision were,” Kengeter said. “We regret this development. The logic of this merger is still very clear to us.” All manner of theories are doing the rounds in financial circles, blaming everyone from London’s bankers, to Xavier Rolet, to German politicians and regulators, and even rival exchange Euronext and the French government. Irrespective of the complexities of the story, one element is clear – the European Commission dropped a very sudden demand on the LSE more than four months after its competition enquiry began. At worst this was a political decision to derail the deal. At best it reflects a clumsy process carried out by technocrats removed from the realities of the marketplace. Impending Brexit complexities clearly didn’t help the deal. But while much attention has, rightly, been paid to the UK’s future political direction, the question should also be asked of the EU itself. EU hostility to London holding the combined stock exchange’s headquarters does not bode well, and neither does the EU’s inability to approve a merger that could have given the continent an exchange to rival its huge US counterparts. Many City insiders expect the ECB, post-Brexit, to pursue its campaign against euro denominated clearing taking place in London, despite the enormous economic harm this could deliver to Europe’s businesses and financial services. This would send an awful message to the world – namely that just as the US is taking a sharp protectionist turn, the EU might be prepared to follow suit. If EU leaders think they have a political imperative to “punish” the UK in Brexit negotiations they are sadly mistaken. Instead of trying to scare other member states into remaining in the bloc, the EU can only survive if it turns around its economic fortunes, becoming more open, democratic, and attractive to foreign investment and trade. Follow us on Twitter @cityam A HOST of handmade golden-yellow daffodils have made their home in London’s Paternoster Square to mark the launch of Marie Curie’s Great Daffodil Appeal 2017, raising money for the end-of-life nursing. It took public artists Greyworld 1,800 hours to create each individual flower. The installation is open for all to see day and night until 12 March, when it will tour the country. Half of UK firms report mental health problems SHRUTI TRIPATHI CHOPRA @shrutitripathi6 MORE than half of British employers (54 per cent) have been approached by staff suffering mental ill health, a new survey by the Institute of Directors (IoD) has revealed. Ninety eight per cent of business leaders surveyed said good mental health is important to the performance of their organisation. However, just 14 per cent have a formal mental health policy in place and fewer than one in five offer line management training. In a new paper titled “A little more conversation”, the IoD calls on UK businesses to set up formal mental health policies and integrate mental health awareness into line management training. The paper cited OECD statistics that showed mental health costs the UK some five per cent of GDP. The business group called on large UK firms to consider giving a non-executive board member “specific responsibility for ensuring mental health awareness and training is integrated across businesses”. It also urged the government to introduce a training scheme for small businesses. The IoD’s report comes after Prime Minister Theresa May announced an independent review into mental health in the workplace earlier this year. In a foreword to the report, Prince William wrote that the UK’s employers must “support Prince William urged firms to focus on mental health the mental as well as physical wellbeing of the 31m people at work in Britain”. Stephen Martin, director general of the IoD, said: “The time has come for mental health to get the recognition it deserves at work. Coming from a background in construction, I know the lengths companies go to protect the physical health of their staff, but their mental wellbeing has often not received enough attention." “Prevention is always better than cure, so we need to ensure businesses are supported by government to create an environment where employees feel comfortable enough to talk about their problems at an early stage. The Prime Minister deserves credit for putting mental health so far up the agenda, and removing the stigma of mental health will require joint leadership from politicians, business leaders, and practitioners.” FINANCIAL TIMES THE TIMES THE DAILY TELEGRAPH THE WALL STREET JOURNAL BRIDGEWATER SHAKE-UP SEES CO-CHIEF LEAVE Jon Rubinstein, the former Apple executive brought in as co-chief executive of Bridgewater Associates, is leaving the hedge fund after less than a year, in another burst of management turnover at the company. Ray Dalio, Bridgewater founder, told clients yesterday that he and Rubinstein “mutually agree that he is not a cultural fit” for the hedge fund, and Rubinstein will be replaced as co-chief by David McCormick, the company’s president. CANADIAN FOSSILS PUSH <strong>BACK</strong> ORIGIN OF LIFE The world’s oldest known fossils have been found in ancient Canadian rocks, WHAT THE OTHER PAPERS SAY THIS MORNING a discovery that will push back the accepted scientific timeframe for the origins of life on Earth. Remains of microbes that lived 3.8bn-4.3bn years ago were identified in eastern Canada. YACHT SHOW GROUP SAILS INTO NEW WATERS The international exhibitions and events group that hosts the Monaco Yacht Show has acquired a rival that runs the world’s biggest boat sale. Informa, the £5.5bn FTSE 100 company, has agreed to pay £106m for Yachting romotions from Active Interest Media, a private-equity owned US media firm. FOREIGN INVESTORS DUMP £7.6BN OF UK GILTS Foreign investors dumped gilts in January, raising fears for the economy during and after negotiations over Britain’s exit from the European Union. They sold a net £7.6bn worth of government bonds. AIRBUS TARGETS ‘CAR NUT’ DRAYSON FOR BOARD ROLE Airbus hopes to appoint former defence procurement and science and innovation minister Lord Paul Drayson to its board as the company best known for its airliners broadens it horizons. It announced yesterday it will nominate Lord Drayson as an independent nonexecutive for a three-year term at its annual meeting on April 12. PRESSURE ON STAGECOACH TO DEFEND RAIL FRANCHISE Perth-based Stagecoach will be under pressure to retain control of the East Midlands rail franchise after recent drops in profit as it faces off against two rival bidders. HARLEY-DAVIDSON CAUGHT IN TRUMP TRADE BATTLE President Donald Trump turned Harley- Davidson into a global trade issue in his address to Congress, saying barriers made it “very hard” for the Milwaukee motorcycle manufacturer to do business overseas. HERSHEY’S BOSS LEFT WITH BAD TASTE IN MOUTH Hershey’s new chief executive Michele Buck outlined her strategy for the chocolate giant yesterday, telling investors she will return focus to the US following the company’s bad bet on China. Buck is taking the helm at a time when some investors are losing patience with its international ops.
CITYAM.COM THURSDAY 2 MARCH 2017 NEWS 03 Record high for FTSE 100 while Dow breaks 21k JASPER JOLLY @jjpjolly STOCK indices on both sides of the Atlantic have hit more record highs, with the Dow Jones Industrial Average and FTSE 100 jumping past their previous best levels after US President Donald Trump struck a more emollient tone in his speech to Congress and investors looked to a rate rise from the Federal Reserve. London’s main index rose to close at 7,382.90 points, surpassing its previous mid-January peak, a rise of 1.64 per cent over the course of the day. The broader FTSE 250 index also gained from the dollar strength, to hit its highest all-time level and close just shy of 19,000 points. The trade-weighted dollar index rose to its highest point since early January, pushing the pound below $1.23. The S&P 500, the most widely followed benchmark by professional investors, broke through the 2,400-point mark for the first time. The Dow, meanwhile, broke the 21,000-point mark barely a month after reaching 20,000 points for the first time. It gained almost 1.5 per cent over the day, with only two of the index’s members losing ground. The Dow started 2016 at 17,425 points, dipping at the start of the year below 16,000. However, a rally since February accelerated after Donald Trump was elected US President, breaking new ground. The Trump trade which has inflated stocks in America showed no signs of abating despite the President again failing to deliver the detail on his fiscal policies investors crave – apart from repeating a pledge from his campaign to spend $1 trillion on infrastructure. In the absence of long-awaited policy detail, investor attention was caught instead by speeches from Federal Reserve officials which strongly suggested a March rate hike is a possibility. The influential head of the New York Federal Reserve, William Dudley, said in an interview that the case for tightening monetary policy has strengthened, prompting investor expectations of higher rates to rise sharply for the meeting on 15 March. Juncker suggests EU might have to scale back to just the Single Market HAYLEY KIRTON @HayleyLEK JEAN-CLAUDE Juncker yesterday suggested the EU may have scale back until it is essentially just the Single Market by 2025, as member states increasingly fail to find common ground on important policy issues. The suggestion was one of five possible scenarios put forward by the European Commission president for the future of the EU, published as the UK prepares to file its Brexit divorce papers and as the Union looks forward to celebrating its 60th anniversary. The five scenarios are listed in a white paper forming the European Commission’s contribution to the upcoming Rome Summit, which takes place later this month. If the EU were to shrink down to just the Single Market, the research claims citizens of member states might see rights they presently have guaranteed by the EU stripped back, while cross-border issues could become more difficult to address. On the plus side, such a scenario could make the EU decision-making process much simpler to understand. “It is the start of the process, not the end, and I hope that now an honest and wide-ranging debate will take place,” Juncker said. AMMAN CALLING PM met with Jordan’s King Abdullah II yesterday in Downing St PRIME Minister Theresa May and King Abdullah discussed regional trade and security issues. On Syria, they noted the importance of securing a lasting ceasefire and reiterated that political talks are essential to reaching a settlement to the conflict. Ex-deputy governor: Bank’s Brexit rate cut had scant effect JASPER JOLLY @jjpjolly THE BANK of England’s actions to cut interest rates after the referendum had little effect on the UK’s powerful economic growth, according to its former deputy governor. Sir Charlie Bean said: “It may have some small effect at the margin but I really don’t take the view that the policy package that was announced after the referendum is likely to have had that powerful an effect.” The Bank cut the bank rate in August from 0.5 per cent to 0.25 per cent and unleashed a massive round of quantitative easing in anticipation of a Brexit shock to UK growth. The Bank’s governor Mark Carney claimed the August stimulus saved 250,000 jobs from being lost in the six months after the referendum. In testimony to the Treasury select committee Bean said the difference made was minimal: “Rates are so low already that the degree of traction you get is probably pretty low.”
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