Companies, Markets and Finance
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The government made £180m less from the £2bn sale of Royal Mail than it could have, according to a report commissioned by business secretary Vince Cable. The report argues that, thanks to the high level of demand from banks and individuals, shares could have been valued up to 30p more than the flotation price of 330p. MPs have claimed taxpayers lost out by £1bn in the 2013 privatisation.
The effect of the Russian economic meltdown is being felt in the London property market as wealthy Russians, desperate to get their money out of Moscow, are panic-buying. High-end estate agent Beauchamp Estates tells the Daily Telegraph it has seen as much as a 10% rise in sales of luxury London homes to Russians. Moscow has lost control of its economy after an interest rate hike failed to stem the collapse of the rouble.
George Osborne has fired the starting pistol on the bid to reduce the government’s stake in Lloyds before the general election, says the Daily Mail. The move, which could raise more than £3bn for the Treasury, was recommended by UK Financial Investments, which manages taxpayers’ stakes in bailed-out banks. Osborne announced the plan after Lloyds passed a key Bank of England ‘stress test’.
“I don't think it will be as controversial. We're very clear at Barclays: we pay for performance and we want to pay competitively. If a business performs, we'll pay; if it doesn't, we'll pay accordingly. It'll be much less controversial." Barclays boss Antony Jenkins predicts a less divisive banking bonus season.
British people are using less energy even though the economy is growing, government statistics have shown. The BBC says that the average person in the UK is using 10% less electricity than five years ago, despite a boom in large television sets, computers, smartphones and tablets. Growing wealth usually leads to an increase in energy use - but this trend appears to have been broken by technology and government policy.
Chair of the Federal Reserve Janet Yellen says the US has little to fear from the collapse of the Russian rouble because it does very little trade and financial business with Moscow. “I see the spillover as very small,” said Yellen. She added that even if Moscow were to default, trade with Russia accounts for just 1% of US trade volume, and American banks have little exposure to Russian residents.
FTSE-100: up +0.07 to 6336.48
Dow Jones: up +1.69 to 17356.87
Dax: down -0.20 to 9544.43
Cac-40: up +0.46 to 4111.91
Nikkei: up +2.32 to 17210.05
Hang Seng: up +0.81 to 22768.51
US dollar: buys €0.81410 and £0.64280
Sterling: buys $1.55590 and €1.26650
Oil: $60.69 up +1.1