BUSINESS WITH PERSONALITY ACCESS GRANTED SINGLE TICKET WHY THE OPEN BANKING MALDIVES IS IDEAL FOR COULD UNLEASH SOLO TRAVELLERS P18 COMPETITION P14 MONDAY 29 JULY 2019 ISSUE 3,423 CITYAM.COM FREE ON THE MARKET London Stock BORIS PLANS Exchange in talks to buy Refinitiv BILLIONS FOR HARRYBREXIT ROBERTSON October “come what may”. FIGHTLast week, it warned that leaving Michael Gove, who is now oversee- the EU without a withdrawal agree- @henrygrobertson ing no-deal preparations as head of ment could lead to a borrowing binge BORIS Johnson’s new government is the Cabinet Office, said yesterday that of £30bn a year to offset falling tax working on the assumption that planning for no deal was the govern- receipts. Britain will leave the European Union ment’s “number one priority”. Sunak said the government will hire without a deal on 31 October and is Writing in the Sunday Times, he more border force guards, invest in set to ramp up borrowing to cover the said he hoped the EU will change its new IT infrastructure and launch a costs, ministers said yesterday. mind and reopen negotiations on public information campaign, among Chancellor Sajid Javid, promoted in the deal Theresa May failed to push other measures, as part of its no-deal Wednesday’s brutal cabinet reshuffle, through the House of Commons planning. will this week reveal the govern- three times. The statement of intent from John- ment’s plans to fund no-deal meas- “But we must operate on the son’s new ministers was accompanied ures, such as hiring extra border assumption that they will not,” he by a “Boris bounce” in the polls. The security guards. There will also be a said. Gove added that “every penny PM earned the Tories a 10-point jump massive public information campaign needed for no-deal preparation will in a poll for the Mail on Sunday, and on the implications of a no-deal exit. be made available”. a six point boost in a Sunday Times JAMES WARRINGTON equity firm Blackstone to acquire the Newly installed chief secretary to Sunak said: “We can afford this… poll, seeing the party overtake Labour. markets data provider. LSE said it the Treasury, Rishi Sunak, told Sky because there’s been some very care- Yet not all Conservatives were @j_a_warrington would fund the merger with newly- News that the extra money would ful management of the economy.” impressed by the government’s will- THE LONDON Stock Exchange Group issued shares, giving Refinitiv come from the government’s “fiscal Lower borrowing and higher tax ingness to accept a disorderly Brexit (LSE) is in discussions to buy data investors a stake in the company. headroom” – the amount the UK can receipts led ex-chancellor Philip Ham- The leader of the Scottish Tories, analytics firm Refinitiv for $27bn Merger talks are said to be at an borrow and still keep debt falling as a mond to highlight the government’s Ruth Davidson, said yesterday that if (£22bn), in a blockbuster deal that advanced stage and a deal could be share of GDP, which ministers claim capacity to borrow more and still it comes to a no-deal Brexit, “I won’t could see the company take on unveiled next week. However, the is around £26bn. meet its budget targets. support it”. Davidson is far from Bloomberg. move is expected to spark a lengthy The extra borrowing is part of John- However, a no-deal exit could cost alone, with fresh reports also emerg- The exchange has confirmed it is in antitrust review. son’s efforts to fulfil his leadership more than this, according to the UK’s ing over the weekend of Hammond’s talks with Thomson Reuters and a pledge to deliver Brexit by the end of budget watchdog. strategy to thwart a no-deal scenario. consortium of funds linked to private £ CONTINUES ON P3 Delays, anger and a call for executive drug testing in Sports Direct filings ANNA MENIN Mike Ashley’s retail empire. Financial Conduct Authority (FCA) private life has been previously saved the most explosive revelation But even so, few expected the to carry out voluntary drug testing featured in the spotlight, after a for last: that Sports Direct had been @annafmenin statement to be as gloomy or as for the heads of listed companies. 2017 high court battle revealed his hit with a £605m tax bill by Belgian SHAREHOLDERS in Sports Direct unorthodox as it turned out to be. “Having such undisclosed competitive drinking antics in a authorities, including “200 per cent have come to expect the unexpected Finally released just ahead of an personal issues could lead to London pub. penalties and interest”. The firm will but even seasoned investors would early-evening press conference, the blackmail and force [chief Elsewhere in the results enter into mediation over the bill. have felt their patience tested as rambling 44-page document veers executives] and [chief financial document, the billionaire said that Following the results, one they waited – and waited – for the between stark assessments of the officers] to make decisions based on House of Fraser’s problems are investor is said to have written an retailer’s results last week. state of the billionaire’s businesses saving their own skin and “nothing short of terminal in open letter to the tycoon, seen by By the time trading closed on and attacks on financial regulators, potentially reducing shareholder nature”, and admitted his decision the Financial Times, calling for the Friday, when the delayed results the government and auditors. value,” he said. to buy the department store chain firm to increase its spending on promised at 7am had failed to One of the more intriguing The FCA declined to comment on last year might have been different corporate governance. materialise, it was clear that inclusions may have passed harried Ashley’s proposals. “if we had the gift of hindsight”. something had gone very wrong at investors by: Ashley’s call for the The colourful billionaire’s own Ashley, never short of surprises, £ A CLASH AT THE TOP: P7 FTSE 100 ▲ 7,549.06 +60.01 FTSE 250 ▲ 19,857.94 +37.59 DOW ▲ 27,192.45 +51.47 NASDAQ ▲ 8,330.21 +91.67 £/$ ▼ 1.238 -0.007 £/€ ▼ 1.112 -0.005 €/$ ▼ 1.112 -0.002 02 NEWS MONDAY 29 JULY 2019 CITYAM.COM RALLY IN RUSSIA Mass arrests as police officers use force on campaigners in brutal crackdown at Moscow opposition protest THE CITY VIEW Buybacks are vital for our economic health OLITICAL opposition to share buybacks has become so fierce in the US that it was unsurprising to hear PAlexandria Ocasio-Cortez ramp up the rhetoric at the end of last week, bizarrely describing the practice as “a huge Ponzi scheme”. The doyenne of the Democratic left was specifically referring to pharmaceutical companies that return cash to shareholders. Given the perception of Big Pharma among the US left, her choice of target was predictable. However, complaints about buybacks across the pond are not limited to AOC’s side of the spectrum; large elements of the Republican party have also decried buybacks as a Wall Street trick to further enrich wealthy shareholders at the expense of investment, economic growth and higher wages. Buybacks have soared in recent years, coming in at $223bn (£180bn) at the end MORE THAN 1,000 protesters have been arrested at a Russian rally following demonstrations against the exclusion of opposition candidates in local polls. Alexei Navalny, Russia’s outspoken opposition figure, has also been taken from jail to a hospital. His of last year according to S&P Global research – nearly double the spokesperson said yesterday that he had an allergic reaction, though local reports suggested he may have been poisoned. level of three years ago. Some of the more sophisticated arguments around buybacks may warrant attention. For example, are executive pay packets blunt and short-termist enough to excessively encourage buybacks? While the evidence is far from conclusive, it is a worthwhile question, and City A.M. has advocated simpler remuneration schemes partly to avoid LSE deal is facing probe the unintended consequences of warped incentives. However, the idea perpetuated by many senior US politicians that buybacks are some kind of unnecessary and malign practice, harming workers and the wider economy, is absurd. It is entirely reasonable for a firm to return money to shareholders when it on both sides of Atlantic judges that it does not have the power to invest the same cash in a way that would create greater returns. Buybacks allow CONTINUED FROM FRONT PAGE investors to reinvest in startups and in a range of other a leading data and analytics business Blackstone will have roughly doubled and a broad post-trade offering, well the value of its original investment in companies that genuinely require cash for expansion plans. Regulators in both the US and the EU positioned for future growth in an Refinitiv, Reuters reported, citing a A comprehensive study conducted last year by three European are likely to open probes into the evolving landscape,” LSE said in a source familiar with the matter. professors of finance rejected the claim buybacks are merger over concerns it could harm statement. Blackstone would become LSE’s competition. The EU inquiry is likely The move, first reported by the largest shareholder, while Thomson detrimental to long-term growth. The leading academic Alberto to go into a phase two investigation, Financial Times, would come less Reuters said the deal would give it a Manconi, who studied 9,000 buyback announcements, recently amid concerns it could affect the than a year after Blackstone bought a 15 per cent stake in the company.