City voices: The UK is on the cusp of being a crypto hub — but only if it’s regulated properly
Britain is on the cusp of becoming a global crypto hub. Since becoming Prime Minister, Rishi Sunak has committed to make the UK a global science and tech superpower.
Recently, he announced £100 million of investment to put together an expert taskforce to help the UK build the next generation of safe AI, alongside a White Paper to guide the use of artificial intelligence in the UK.
The Government now has a huge opportunity to make crypto a part of this initiative and must not let it slip. This is a once-in-a-generation opportunity to make Britain the best – and safest – place to run a cryptoasset business, in turn benefiting and protecting the millions of British people that invest in these assets.
US shares set decline
US shares are set to dip this morning, with Amazon among the fallers.
According to futures markets, the Dow Jones is set t fall by 0.4%, while the S&P 500 is projected to decline by 0.3% and the Nasdaq by 0.1%.
Amazon looks set to be among the fallers, with shares set to decline by about 2% after its results last night. Though its shares initially rocketed post-close on strong earnings figures, they fell back down to earth as investors panicked at the outlook for its AWS cloud computing division.
Revealed: The wealthiest Brits in tech
The UK’s tech industry reached $1 trillion in value last year, making it only the third country ever to hit this milestone after the US and China.
London on its own has created more than 20 unicorns — firms worth more than $1 billion — since 2021. That has been helped on by a string of IPOs over the past two years, including the likes of takeaway app Deliveroo and payments firm Wise.
In fintech, the capital’s speciality, London has even been able to overtake New York and San Francisco in funding, attracting around £8 billion in investment last year alone.
Those successes have built extraordinary wealth for many of the firms’ founders, as the Standard today reveals in its inaugural tech rich list.
More City mergers to come?
Joshua Maxey, co-founder of Third Bridge, believes that more acquisitions could be on the way after Deutsche Bank snapped up Numis.
“In the last week, we’ve seen two big moves in the sell-side research space,” he said, noting the merger of Redburn and Atlantic Equities. “These are signs we can expect more consolidation over the course of this year.
“These deals underline the tremendous pressure that cash equities is under at the moment, exacerbating the pain felt on the banks’ balance sheet given the dearth of deal activity.
“It would be no great surprise if we saw further consolidation outside of the big seven investment banks and for the exodus of research talent to accelerate.
“While PE and M&A activity remains slow we may see some of the smaller European research shops closing down altogether, and others snapped up by US entities responding to the expiry of the SEC’s no-action letter.”
HMV returns to iconic original Oxford Street site — after reclaiming it from an American candy shop
Music retailer HMV will return to the location of its first ever shop on Oxford Street, reclaiming the site from an American candy store.
The company said the new opening marks “the latest sign of a dramatic turnaround” since 2019 when the shop closed.
The store – close to Bond Street station – is on the site of the first HMV shop, founded in 1921. In 1995, Blur played a rooftop gig from the top of the store, while the next year it hosted the Spice Girls’ Christmas Lights switch-on.
Eurozone back to growth
The Eurozone economy returned to growth in Q1, despite surprise stagnation in Germany.
GDP across the region was up by 0.1% for the three-month period, meaning it avoided recession.
That was mostly off the back of growth in France and Italy, as Europe’s largest economy disappointed.
Shares in microchip maker Alphawave to be suspended after audit delays
Shares in the UK’s top listed semiconductor business Alphawave plunged this morning as it announced its shares would be suspended because of a delay to its audit process.
The firm published unaudited results for 2022 today, showing profit was up 44% to £56.3 million as revenue more than doubled.
However, it said accountants KPMG had to request more time to complete its audit of the results.
NatWest shares fall as lender leaves profit guidance on hold
A surge in first-quarter profit at NatWest helped by a rise in mortgage lending and low bad-loan rates added to signs of a rebound in the UK’s housing market today
The high street lender lender reported a surge of around 50% in first quarter pre-tax profit of almost £1.8 billion, beating City forecasts. Nonetheless, it shares fell 16p to 257p, in part as traders seemed disappointed it did not lift profit guidance for the full year.
Joseph Dickerson at City stockbroker Jeffries said: “Management really needed to raise the £14.8 billion 2023 revenue guide to around £15 billion.”
Sony needs a superhero as lack of blockbusters hurts profits
Profits at one of the world’s biggest movie studio owners, Sony Pictures Entertainment have been hit by a lack of global superhero blockbusters.
The film and TV arm of the Japanese giant reported income of 119.3 billion yen (£710 million) in 2022, down 44% from 217.4 billion yen (£1.28 billion) the previous year.
Sony said that 2021 had been boosted by major franchise hits such as Spider-Man: No Way Home and Venom: Let There Be Carnage. However Sony Corp is forecasting an 11% rise in sales this year on a stronger pipeline of franchise releases and revenues from its streaming service acquisition Crunchyroll.
Overall, Sony Corp sales grew to 11.54 trillion yen (£68 billion), up 16% from 9.92 trillion (£59 billion) yen in 2022. Operating income was flat at 1.2 trillion yen (£7.1 billion). The games division saw strong revenue growth with sales of 3.64 trillion yen (£22 billion) up from 2.74 billion yen (£16 billion) a year prior.
Citry comment: Deutsche’s Numis swoop is a show of faith that City sorely needs
On the face of it the timing looks odd.
London’s corporate finance markets have been moribund for a couple of years, with M&A deal volumes depressed and IPOs virtually an endangered species.
Thousands of jobs have been lost and there is tumbleweed blowing through the offices of some of the City’s biggest advisory names.
