Taking Stock on Thursday 28th September 2023
Taking Stock: Is a look at today's top business news & investment views plus we cover the winners, losers, the most read company news & the most followed. Today this includes:
AIM ALL Share hits a new low - is this the end of small caps?
Aside from the dash for cash crash in 2020, the last time the AIM All Share was at this level was on 18th July 2016.
TOP BUSINESS STORIES
The average rate on a five-year fixed mortgage has fallen below 6% for the first time since early July, new figures show.
On Thursday, the typical rate dropped to 5.99%, according to the financial information service Moneyfacts.
Lenders have been given some confidence to cut rates after the end of a run of 14 consecutive interest rate increases by the Bank of England.
The average two-year deal has a rate of 6.5%.
Around three-quarters of mortgage customers hold fixed-rate deals. Banking trade body UK Finance says there are about 800,000 of these deals ending in the second half of 2023, and about 1.6 million expiring next year.
Britain to ease capital rules for retail banks to boost competition
Britain's finance ministry, which is seeking to boost competition in the banking sector, on Thursday proposed legislation to ease rules that require banks to "ring-fence" their retail arms with a capital reserve.
The ministry set out a public consultation on its proposed secondary legislation to implement the recommendations made in a review conducted by a panel led by Keith Skeoch, a former investment fund boss.
The draft legislation proposes to increase the threshold at which ring-fencing applies to banks from 25 billion pounds ($30.31 billion) to 35 billion pounds.
Britain introduced the ring-fencing rule in January 2019 following the costly taxpayer bail-outs of banks during the global financial crisis over a decade ago. It aims to ensure that deposits are safe even if riskier investment banking activities, outside the ring fence, lose value.
Banks would be exempt from the ring-fencing rules if their trading assets were less than 10% of their core capital buffer, unless they are part of a globally systemic bank.
Another change would allow ring-fenced banks to set up entities outside Britain to compete with international and domestic banking groups.
UK Finance, a banking industry body, said raising the threshold and allowing ring-fenced banks to open operations abroad will enhance customer choice and improve competition.
Shares in crisis-hit Chinese property giant Evergrande have been suspended in Hong Kong amid reports its chairman has been placed under police surveillance.
It follows reports earlier this week that other current and former executives had also been detained.
Thursday's market statement did not give a reason for the trading halt.
But it marks another low for the heavily indebted property giant which defaulted in 2021, triggering China's current real estate market crisis.
In August, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.