(Alliance News) - The UK Financial Conduct Authority on Tuesday said it will launch two probes this year into the provision of wholesale financial data by stock exchanges and credit ratings agencies.
The FCA said input it has received so far raised concerns that "limited competition in the markets for benchmarks and indices, credit ratings and trading data may increase costs for investors and affect investment choices."
The financial regulator said the first of the two investigations will begin this summer with a look in whether "complex contracts" for benchmarks and indices prevent switching to cheaper or better-quality alternatives.
By the end of the year, the FCA will launch a second study looking at "whether high charges for access to credit ratings data is adding costs to investors and limiting new market entrants".
The FCA said that concerns have been raised that limited competition for wholesale trading data provided by trading venues such as stock exchanges "may increase costs and have an impact on the types of assets that investment managers buy and sell".
The main provider of share trading data for the London market is the London Stock Exchange Group, though the FCA did not name LSEG in its announcement on Tuesday. LSEG shares were up 1.2% early Tuesday.
"Access to wholesale data is really important for those who want to make investment decisions. Without it, they lack the information they need to make properly informed choices," commented Sheldon Mills, executive director for Consumers & Competition at the FCA.
"Our call for input and planned market studies are intended to ensure that competition is working well, that information is available to market participants that want it, and that innovation is keeping up with market developments."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,483.90
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Hang Seng: down 0.2% at 23,703.24
Nikkei 225: closed down 0.9% at 28,222.48
S&P/ASX 200: closed down 0.8% at 7,390.10
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DJIA: closed down 162.79 points, 0.5%, at 36,068.87
S&P 500: closed down 0.1% at 4,670.29
Nasdaq Composite: closed up marginally at 14,942.83
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EUR: firm at USD1.1340 (USD1.1327)
GBP: up at USD1.3593 (USD1.3567)
USD: firm at JPY115.20 (JPY115.14)
Gold: up at USD1,809.23 per ounce (USD1,795.34)
Oil (Brent): firm at USD81.32 a barrel (USD81.26)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's key economic events still to come
1100 CET EU quarterly balance of payments
0830 CST US Fed Kansas City President Esther George speaks
0855 EST US Johnson Redbook retail sales index
1630 EST US API weekly statistical bulletin
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At least 600,000 passengers cancelled plans to fly from Heathrow in December due to the Omicron coronavirus strain and the introduction of tougher travel restrictions, the London airport said. Fears over the Covid variant meant that, from late November, all travellers arriving in the UK were required to take a pre-departure lateral flow test and self-isolate until they received a negative result from a post-arrival PCR test. This led to many people scrapping their travel plans over the festive period. The new rules were relaxed for fully-vaccinated arrivals last week after travel firms said they were ineffective due to Omicron spreading widely within the UK. A total of 19.4 million people travelled through Heathrow across the whole of last year. This was less than a quarter of the pre-pandemic level in 2019, and 12% down on 2020.
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Five million residents of a central Chinese city were confined to their homes Tuesday while another megacity shuttered all non-essential businesses, as the country battles a spate of coronavirus outbreaks including from the Omicron variant. Beijing is on high alert as it prepares to host the Winter Olympics next month, sticking to a zero-Covid strategy of targeted lockdowns, border restrictions and lengthy quarantines. Fast-spreading Omicron presents a fresh challenge, with two cases in Anyang – the newly locked-down city in Henan province – linked to a growing infection cluster in the northern metropolis of Tianjin, some 400 kilometres away.
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Kazakhstan President Kassym-Jomart Tokayev said a contingent of Russia-led forces would begin leaving the troubled Central Asian country in two days, with the pullout to take no more than 10 days. More than 2,000 troops, under the Collective Security Treaty Organization, were despatched at the peak of the crisis last week, after armed clashes between government opponents and security forces and a looting spree rendered parts of the largest city Almaty almost unrecognisable.
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BROKER RATING CHANGES
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CITIGROUP RAISES FLUTTER TO 'BUY' (SELL)
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JEFFERIES CUTS NATWEST TO 'HOLD' (BUY) - PRICE TARGET 283 (271) PENCE
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CITIGROUP CUTS CRODA INTERNATIONAL TO 'NEUTRAL' (BUY) - PRICE TARGET 9,400 (9,500) PENCE
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COMPANIES - FTSE 100
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Electrocomponents said its strong trading momentum continued into the third quarter, with its product offering delivering further market share gains. For the nine months to December 31, like-for-like revenue growth was up 28% from the same time a year ago. For the third quarter alone, sales rose 21%. Looking ahead, Electrocomponents said it was mindful that external challenges look likely to intensify in the fourth quarter as the Covid-19 Omicron variant hits labour availability across suppliers, customers and its own operations. Still, in light of the better than expected third quarter trading, Electrocomponents expects full year profit to be slightly ahead of consensus estimates.
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Dechra Pharmaceuticals said it has agreed terms with Anivive Lifesciences to acquire the worldwide rights to verdinexor, used to treat of all forms and stages of canine lymphoma in dogs. Under the terms of the agreement, Dechra will acquire the global product rights and a first right of refusal for other species along with the trademark Laverdia. "We are delighted to acquire the worldwide rights to Laverdia. Its addition to our portfolio will expand Dechra into a new, niche therapy area, while also offering veterinarians and dog owners a simple to use, effective medication for lymphoma that extends the time a family has with their pet," said CEO Ian Page.
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COMPANIES - FTSE 250
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Games Workshop said it was on the "front foot" following its half-year performance as it hailed the resilience of the Warhammer hobby, for which it makes and sells figurines. For the six months to November 28, revenue was GBP191.5 million, up 2.5% from GBP186.8 million the year before, though pretax profit was GBP88.2 million, down 3.7% from GBP91.6 million. "Our profit before tax is down GBP3.4 million; however, excluding foreign exchange movements and increased carriage costs and paying our staff more, our net core business profits are broadly in line with last year's record performance," explained Chief Executive Officer Kevin Roundtree. Games Workshop declared a dividend of 65 pence, taking the total payout so far to 165p, up from 140p paid in financial 2021. "We are pleased to confirm that we continue to trade in line with expectations and look forward to providing a further update to the market in due course," said Roundtree.
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COMPANIES - GLOBAL
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Volkswagen Group sales in China fell by 14% last year, VW China boss Stephan Wollenstein told journalists in Beijing. Wollenstein cited supply issues and a lack of semiconductors behind the development and spoke of "a pretty difficult year". The decline mainly affected the mass Volkswagen and Skoda brands, Wollenstein added. Premium brand Audi did less badly with a decline of 3.6%. Porsche was able to sell 8% more automobiles and Bentley even sold 43% more cars. The overall market had grown by 4%, he explained. Volkswagen's market share in China, which had long been at 14% or 15%, fell to 11%.
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Tuesday's shareholder meetings
Carr's Group PLC - AGM
BB Healthcare Trust PLC - GM re share allotment authority
Chelverton Growth Trust PLC - AGM
Evraz PLC - GM re coal assets demerger
Haydale Graphene Industries PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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