Measures aimed at boosting the economy by encouraging construction through less stringent planning controls and funding for homebuilding have come under fire. The Government on Thursday said it would ease requirements for housebuilders to provide affordable housing and pledged to underwrite up to £10bn of borrowing by developers and housing associations. It also made it temporarily easier for homeowners and businesses to extend their properties, and expanded the shared equity FirstBuy scheme to help first-time buyers. However, some have questioned whether the package fully addressed the issues builders and developers face, The Telegraph explains.
The fate of Glencore’s £46bn merger with Xstrata hangs in the balance on Friday, as a key shareholder is expected to vote down what was set to be mining’s biggest ever deal. City banks advising on the FTSE 100 tie-up stand to lose millions in success fees, as sovereign wealth vehicle Qatar Holding, which has built a 12% stake in Xstrata, says the terms undervalue the miner. The Qataris’ opposition means Xstrata’s shareholder vote on the deal on Friday morning is expected to block the merger. No last-ditch talks to save the deal appeared to take place between Ivan Glasenberg, chief executive of commodity giant Glencore, and the Qataris on Thursday. Qatar is curently sitting on a $741m (£465m) paper loss on its stake in Xstrata, analysts at Liberum Capital estimated, writes The Telegraph.
Global stock markets rallied sharply yesterday as the European Central Bank unveiled what some analysts called a “game-changing” plan aimed at preventing the single currency from fragmenting. Mario Draghi, the ECB’s president, defied opposition from Germany’s Bundesbank with the scheme to purchase unlimited quantities of debt issued by periphery governments that request bailouts. The idea is to address “severe distortions” in bond markets that stem from fears that the single currency is heading for a break-up, the Italian central banker said at a press conference. Jens Weidmann, the president of the Bundesbank, denounced the decision hours after the ECB’s meeting broke up, saying that the bond purchases amounted to helping governments to finance their deficits using the printing press — original sin in the world of central banking, The Times explains.
Big investment banks in Europe, including Nomura, Credit Suisse and UBS, are stepping up plans to cut jobs as they seek to adapt to a drastic slowdown in revenues and tighter regulation. Bank executives, headhunters and analysts say that the cuts are shaping up as the deepest since the start of the financial crisis after a disappointing summer dashed hopes of a business revival. One senior headhunter said many large investment banks will have “at least 20 per cent” fewer staff in capital markets and M&A advisory business in Europe by the end of the year compared with late 2011. “It [the market] has never been as bad as this. Bankers have long lost confidence in their banks but now they are also losing their self-confidence, their mojo,” a senior advisory banker said, The Financial Times says.
Britain’s motor industry celebrated a £637m boost yesterday as Jaguar Land Rover and Honda revealed major investments. Jaguar Land Rover announced a £370m injection to kick-start production of its new Range Rover, which was launched last night at a star-studded gala in London’s Richmond Park with a concert by pop star Mark Knopfler. Happily, the export-led British motor industry is the one part of the ailing British economy that is not in Dire Straits. Honda also announced a £267m investment program at its UK plant in Swindon, where hundreds of new jobs have been created to boost production. Honda said that it was the biggest single investment at its Swindon site in more than a decade. Jaguar Land Rover bosses said the firm was ‘firing on all cylinders’ and pledged a big expansion of Land Rover models and worldwide sales, The Daily Mail says.
Man Group, the world’s second-largest hedge fund, has hired former Pimco international bond chief Sudesh Mariappa to spearhead a big drive into fixed-income trading. Mr Mariappa, 51, oversaw Pimco’s $85bn global bond funds until 2010, as head of global portfolio management at the California-based group, which is now the largest bond-trading house in the world. He was responsible for building Pimco’s non-US bond business, and later for establishing the firm’s range of hedge fund products. Before joining Pimco, Mr Mariappa was part of the original Salomon Brothers bond-arbitrage team that set up Long Term Capital Management. According to a memo sent to Man staff on Thursday evening, Mr Mariappa is officially to join Man’s GLG hedge fund unit as a senior portfolio manager, The Financial Times reports.