Markets Fall as Trade War Fears Mount

Markets Fall as Trade War Fears Mount
Stock markets have fallen around the world in the wake of President Trump’s latest tariffs threat to China. The Dow Jones closed down almost 1.2% or 287 points after Asian and European markets fell sharply earlier.

Mr Trump has threatened to put tariffs on an extra $200bn (£141bn) of Chinese goods, sparking fears of a trade war. The US president said the tariffs would be imposed if China “refuses to change its practices”.

He condemned China’s “unfair practices related to the acquisition of American intellectual property and technology” and added: “Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.”

The markets reacted badly with China’s Shanghai Composite faring the worst in Asia, ending the day down 3.8%.

In Europe, Germany’s Dax index was down 1.2% by the close and France’s Cac 40 had lost 1.1%. London’s FTSE 100 ended the day at 7,603.85, a fall of 27 points or 0.36%.

In the US, the losses on the Dow thrust the index into negative territory for the year, with firms with business in China, such as Boeing, driving the index’s sixth day of declines.

The S&P 500 and Nasdaq also fell, closing down 0.4% and 0.3% respectively.

“The fear from here is a continued back and forth, escalating trade penalties on both sides with a further negative impact on growth,” Stifel Chief Economist, Lindsey Piegza said.

Away from Mr Trump’s dispute with China, Russia said it would impose tariffs on certain American goods in response to the recent tariffs placed on steel and aluminium imports by the US.

Russia’s Economy Minister, Maxim Oreshkin, said the tariffs would target goods of which the Russians already had domestic equivalents.

Microsoft Staff Demand End of Border Patrol Contract

Microsoft Staff Demand Firm Ends Border Patrol Contract
The BBC News website are reporting that An open letter signed by more than 100 Microsoft employees has called on the tech giant to stop its work with US Border Patrol.

The call comes as the Trump administration faces intense criticism over the separation of children from their families at the Mexican border. The letter, posted on an internal message board and published by the New York Times, said the employees “refuse to be complicit”.

Microsoft has said its technology was not being used for “projects related to separating children from their families at the border”.

In a statement published before the employee letter surfaced, the company said: “Microsoft is dismayed by the forcible separation of children from their families at the border. Family unification has been a fundamental tenet of American policy and law since the end of World War II.”

However, the firm does have a $19.4m (£14.7m) contract with the US Immigration, Customs and Enforcement agency, known as ICE. In January, it posted information about how its cloud computing platform, Azure, was being used to facilitate data “security and compliance”.

The post read: “We’re proud to support this work with our mission-critical cloud.”

 

New Technology & Traditional Values

New Technology & Traditional Values
The Winning Combination for Building Society Sector 

Combining new technology with traditional values is the winning formula for the building society sector, which is enjoying a healthy growth in market share this year.

That was the upbeat message from the Building Societies Association’s annual conference in Manchester, a two day gathering which more than 500 executives from the UK’s 44 building societies attended.

The latest lending and savings figures from the BSA for Q1 2018 show that the societies, which last year had a 22 per cent share of the £1.4tr UK mortgage market, were accountable for 43 per cent of its growth – and took 40 per cent of cash savings deposits – between January and March.

Industry leaders believe the increased trust consumers have in building societies over the larger banks is one of the key factors in this growth in market share, a trend which the recent TSB online banking debacle will surely have only aided.

But there is also a recognition that the sector needs to move ever quickly on the adoption of digital technology to meet the demands of the tech-savvy digital consumer preferring a responsive banking app to a passbook at the counter.

One of the keynote speakers, Nationwide Chief Executive Joe Garner, wrote in his conference blog: “We must be able to adapt to members’ changing needs, whilst retaining the essence of our heritage and our humanity…Our goal is digital convenience with a human touch, a service enabled by technology, and made meaningful by people.”

In 2015, the Nationwide committed to invest £500m into its branch network, introducing new technology such as Nationwide Now which combines market leading technology and human service.

But what about the other mutuals? How are they embracing FinTech? By being, well, innovative. They are courting the technology incubators and collaborating with the digital disruptors. Combining new technology with the popularity of local branches offering face-to-face customer service is the key.

In April the Coventry Building Society launched a recruitment drive for more than 80 head office IT roles, increasing personnel at its UK-based IT department to nearly 450 – double its size just three years ago. The positions include system delivery engineers, analysts, cloud specialists, IT security specialists and IT architects.

Meanwhile last month the Cambridge Building Society returned to its roots by launching a new city centre branch close to its original offices which opened in 1884. But following a model that worked for a relaunch of its St Ives store in 2017, the new branch offers customers digital and assisted-service technology as well as face-to-face expertise.

Andy Jukes, Head of Direct Distribution, said it “combines technology with expertise from our team members – something we know is valued by customers”.

Bank of mum and dad ninth biggest mortgage lender

And what about the financial needs of borrowers? People struggling to afford a mortgage or deposit was the subject of a recently released report by Legal & General which revealed that the ninth highest mortgage lender this year will be neither a bank nor a building society.

With £5.7bn of lending for £81bn of property purchases and an average ‘loan’ of £18,000, the bank of mum and dad is in the top ten mortgage lenders list.

The report found more than a quarter of housing transactions are dependent on financial help, with 43% of buyers aged 35 to 44 and 26% of those aged 45 to 54 relying on support from their family.

With the average age of a first time buyer having risen from 30 to 33 between 2006 and 2017 and a forecast that borrowing by people in their 20s will halve by 2030, the BSA has commissioned a study on intergenerational mortgages describing inequality between the generations as ‘a growing challenge in our society’.

Financial Services dinner

HW Global Talent Partner will be hosting an industry dinner in London in September. The informal networking event offers an excellent opportunity to make new executive and non-executive industry contacts.

Guest speaker is David Stewart, Chairman of Enra Group and Chair of the Audit and Risk Committees of M&S Bank, HSBC Private Bank (UK), and LSL Property Services plc., and former Chief Executive of Coventry Building Society. He will talk on how he managed to create a non-conflicting NED portfolio in financial services.

The event, which is aimed at helping FS executives to launch and develop their NED careers, is being held in Mayfair on Wednesday September 12th with drinks and canapes from 6.30pm. If you would like to attend please contact darceyl@hwglobalpartner.com as there are only a few remaining places.

To find out how we can help your business, or if you want to discuss executive search, interim or NED opportunities, contact MD of HW Interim and Head of the Financial Services practice John Wakeford via his LinkedIn page, email johnw@hwglobalpartner.com or call +44 (0) 113 243 2004 for an informal discussion.

Google Diversity Figures Show Little Change

Google Diversity Figures Show Little Change
The BBC are reporting that in a new report from Google has revealed that little has changed despite a commitment to increasing diversity among staff employed by the tech giant. Overall nearly 70% of Google staff were men, as has been the case since 2014. In the US almost 90% were white or Asian, 2.5% were black and 3.6% Latin American.

The figures also showed that black and Latin American employees had the highest attrition rate in 2017 – those choosing to leave.

“….despite significant effort, and some pockets of success, we need to do more to achieve our desired diversity and inclusion outcomes,” wrote Danielle Brown, diversity vice-president, in the report.

Ms Brown said the firm would increase transparency and include senior leaders in diversity-related work in order to try to drive progress.

Other figures from the report included:

  • Just over 25% of leaders were women in 2018, up nearly 5% since 2014.
  • Of the overall US staff hired in 2017, 31.2% were women, although this dropped to 24.5% for tech new recruits
  • In the US, just under 67% of leadership positions were held by white staff and 2% by black employees
  • White and Asian staff make up the vast majority of the workforce in all areas listed: tech, non-tech, leadership and overall
  • In non-tech roles the gender divide is the closest, with around 48% women and 52% men

Last year a former Google employee, James Damore, was fired after writing an internal memo arguing there were few women in top jobs at the firm because of biological differences between men and women.

“We need to stop assuming that gender gaps imply sexism,” he wrote.

While it is the first to release figures for 2018, Google’s figures are broadly in line with other big players in the tech sector, which has long struggled to broaden the diversity of its workforce.

Microsoft’s diversity figures in 2017 revealed a gender divide of 81% men and 19% women in both its leadership and tech divisions.

In leadership 66.8% were white and 2.2% black or Afro-American, in tech those figures were 53% and 2.7%.

Flexibility the Key for Firms Hiring CFOs

Flexibility the Key for Firms Hiring CFOs
Flexibility really is the key for firms based in the regions wanting to attract top finance talent. Experienced Chief Financial Officers have found themselves in increasing demand over the past decade. The modern finance leader has a broad and complex role spanning strategic insight and operational responsibilities. Changes to the regulatory environment and a highly challenging economic climate have ensured their prized technical and analytical qualities are an invaluable and irresistible addition to the boardroom.

The CFO market is therefore hugely competitive and salaries are constantly rising – with double digit wage inflation. Talented CFOs often have a number of options for their next move and as a result it can be hard to lure the best to the regions. It can be, then, extremely frustrating for a head hunter working on an executive search assignment to put forward a strong shortlist of candidates for a CFO position, only to find the client is unrealistic about the offer they are prepared to make.

Every board is looking for diversity today but many executive teams don’t truly understand that, in order to achieve it, something has to give.

If a business wants to attract the right candidate they need to make an attractive offer, which often means demonstrating flexibility in terms of the remuneration package, working arrangements, and being prepared to consider finance executives from other sectors.

If a candidate is based in London, for example, and your business is located in Leeds, Manchester or Birmingham they may not want to relocate their family – often the case when they have school aged children.

It is understandable that a finance executive will be reluctant to move their family north for a position which they may have for three or four years before potentially moving on again.

But if you allow the exec to work from home part of the week, and either commute on other days or arrange local accommodation, you could be removing the one obstacle which would prevent them from joining your board.

It may be some years away but with HS2, journey times from London to Birmingham will be down to under 50 minutes and London to Manchester under 70 minutes. It should be much easier to attract South-East based execs commuting to work for firms based in the regions. Until then, boards in the regions will need to understand the ball is firmly in the court of the talented finance leader they are trying to attract and respond accordingly.

John Wakeford is a founding director of HW Global Talent Partner. Contact him at johnw@hitchenorwakeford.com or +44 (0) 203 691 1917 for a confidential discussion.

US Arrests 74 in Global Email Scam

US Arrests 74 in Global Email Scam
The US has arrested 74 people including nearly 30 in Nigeria, as part of an effort to combat email scam artists. It said the arrests reflect a coordinated crackdown on people who convince correspondents to wire them money for fraudulent activities. The US said such scams are “prevalent” and pledged to pursue perpetrators “regardless of where they are located”.

Authorities said they have seized, recovered or disrupted more than $16m (£12m) since January. The effort, which involved local and federal law enforcement agencies, targeted scammers who trick people into transferring them money, for example by impersonating a business partner or colleague.

In one case, the US alleged that two Nigerians living in Dallas posed as a property seller when requesting a $246,000 wire transfer from a real estate attorney.

Authorities also went after “money mules” – “witting or unwitting accomplices” who receive the money from the victims and transfer it as directed by the fraudsters.

The US said arrests occurred in the US, Nigeria, Canada, Mauritius and Poland.

One man was extradited from the UK in 2016 for his role in a scheme that allegedly sought to take $2.6m. He pleaded guilty in January to wire fraud and identity theft.

FBI Director Christopher Wray, whose agency funded and coordinated the operation, said: “This operation demonstrates the FBI’s commitment to disrupt and dismantle criminal enterprises that target American citizens and their businesses.”

The FBI said people have reported losing more than $3.7bn since it started tracking the issue through its Internet Crime Complaint Center. “The devastating effects these cases have on victims and victim companies, affect not only the individual business but also the global economy,” the US said.

 

New Look Cuts Prices Amid Fall in Annual Sales

New Look Cuts Prices Amid Fall in Annual Sales
Fashion chain New Look is continuing to cut prices as it tries to turn around its business. New Look wants 80% of its clothes to sell for less than £20. The price cuts come amid falling sales. Like-for-like sales plunged by 11.7% in the financial year which ended in March, and website sales tumbled 19%.

New Look is one of many retailers this year that struck a Company Voluntary Agreement (CVA) under which a company buys time to sort out its debts. It is trying to broaden its appeal to include older customers, giving it an age target range of between 18 and 45.

Google Launches Solar Power Service in UK

Google Launches Solar Power Service in UK
Google is offering a new service, which it says could help British homeowners save money by switching to solar power. The tech giant has released an online tool called Project Sunroof, in partnership with energy supplier Eon, that estimates savings using data from Google’s Earth and Maps apps. It first launched in the US in 2015, where reviews suggested it was broadly accurate but gave some odd results.

Google is also working with German software firm Tetraeder on the project.

Project Sunroof uses machine learning to estimate how much solar potential a house has by examining the property’s features, such as its roof area and angle, and weather data, such as sun positioning.

Google claims that its models are detailed enough to assess the impact of a single tree on a home’s solar potential.

It isn’t the first tool of its kind – Ikea offers a similar service in collaboration with Solarcentury, and Tesla launched its own Solar Roof Calculator last summer. But these companies and others require homeowners to submit additional data about the shape of their roofs or their homes before getting a quote on savings.

Jonathan Marshall, head of analysis at the non-profit organisation Energy and Climate Intelligence Unit, said that Project Sunroof “lowers the barriers” for homeowners by automatically inspecting roofing data using Google Earth imagery.

“By analysing the roof shape, they will take out one of the steps that you would have to go through to get solar panels installed,” Mr Marshall told the BBC. “The speed of the process means that if you’re half-tempted by the idea, you’re more likely to go ahead with it.”

Project Sunroof first launched in the US in 2015 and then in Germany last year. It is now available in select UK regions, including Birmingham, Brighton, Liverpool, Newcastle, Reading and parts of London.

Nicole Lombardo, head of partnerships at Google, said: “We are excited to help people in the UK make more informed choices about installing solar panels on their rooftops and transition to renewable energy sources.”

The tool is another example of Google’s public commitment to green energy.

It announced in 2017 that its global operations were powered using only renewable energy sources.

Crackdown on High Interest Lending Announced by FCA

Crackdown on High Interest Lending Announced by FCA
“Rent-to-own” shops that sell appliances and furniture for small weekly payments but with a high interest rate face a price cap. However, the financial regulator will not rush to impose the same restrictions on bank overdrafts.

The Financial Conduct Authority (FCA) has spent nearly two years looking at the cost of high interest borrowing. It has now outlined a package of plans for rent-to-own, doorstep lending and catalogue shopping.

High-cost credit is used by three million people in the UK. Single-parents aged 18 to 34 are three times more likely to have a high-cost loan – such as a payday loan, doorstep loan or pawnbroking loan – than the national average.

“The proposals will benefit overdraft and high-cost credit users, rebalancing in the favour of the customer,” said FCA chief executive Andrew Bailey.

Campaigners had called for a cap on the interest and charges faced by those using high-cost credit, including overdrafts. They said that cap on the cost of payday loans, introduced in 2015, should be a template for the rest of the high-cost credit market.

About 400,000 people have outstanding debt with rent-to-own firms such as BrightHouse from which they buy household appliances, paying the money back over three years. After interest, they can end up paying many multiples of the cost price.

The FCA said it had seen cases when people had ended up paying more than £1,500 for essentials like an electric cooker that could be bought on the high street for less than £300.

“The FCA believes the harm identified in this market is sufficient in principle to consider a cap on rent-to-own prices. It will now carry out the detailed assessment of the impact that a cap could have on the rent-on-own sector and how it might be structured,” the regulator said.

Such a cap would not be in place before April 2019.

John Glen, Economic Secretary to the Treasury, said the measures would help the most vulnerable avoid being stung by “dodgy deals”. That includes people like Kenneth Murray, who says he had to buy a laptop from a rent-to-own firm business as he could not get credit from a high street electrical store.

“I had multiple debts that I was trying to juggle, and no stable source of income. I ended up taking out loans to pay loans,” he said, although he has now managed to halt this cycle.

Withings to Return after Nokia Sell Off

Withings to Return after Nokia Sell Off
The BBC news website is reporting that Nokia is to sell its health division back to the founder of Withings, a company it acquired in 2016. The Withings brand name is set to return following the sale, reversing the Finnish company’s decision to axe it.

The business was founded in 2008 and makes connected health devices such as watches and weighing scales. The sale to company founder Eric Carreel for an undisclosed sum comes after poor earnings for Nokia Health.

In a statement posted on the Nokia website Mr Carreel announced his intention to bring back the Withings brand, maintaining coverage for the company’s products.

“I will prepare the return of the Withings brand by the end of the year. I assure you, whether you have been with us for one day or throughout the years, your digital health products and services will continue to be supported,” he wrote.