8th July 2021
Good morning It only took 55 years but England are back in a major football final. That means millions of people will be playing (and singing) 'Three Lions (Football's Coming Home)' on repeat until at least Sunday.
London’s Wise tech triumph
UK jobs recovery not until 2023
Yesterday's market moves
FTSE 100 +0.7% 7,151 FTSE 250 +0.3% 22,970
UK markets advanced with the FTSE 100 adding 0.7% whilst the FTSE 250 gained 0.3%. Travel and leisure stocks were unsettled by spiking cases of the Delta Coronavirus variant globally. Conversely, “work from home” names, such as online retailers and food delivery companies, were relatively strong.
FINTECHLondon’s Wise tech triumph
What’s going on?Yesterday, Wise, the British fintech (formerly known as TransferWise), debuted on the London stock market with a valuation of over £8bn. It’s the largest listing in London this year and the UK’s biggest ever tech float.Shares closed up 10% at 880p.
Why is this important?
The government desperately wants to make London the place to be for companies to go from private to public. Between 2015 and 2020 less than 5% of global public market debuts were done in the capital compared to 40% in New York.The success of Wise’s listing will count as a major boost for the City after Deliveroo’s disastrous debut in March dented London’s image as a destination for tech listings.Founded in 2010, Wise is known for its cheap app-based money transfers across different currencies and has 10 million users. The company chose to do a direct listing and not the traditional route of an initial public offering (IPO).Unlike an IPO, with a direct listing the company does not raise any new cash. Instead existing shareholders sell their shares directly onto the market without the need for investment banks charging eye-watering fees.Direct listings also mean that retail investors can get involved in trading from day one without having to wait for institutional investors like big pension funds who get first dibs in an IPO.As a result of the listing the company’s founders Estonians Kristo Kaarmann and Taavet Hinrikus are both now billionaires, at least on paper.
TakeawayThere will be a sigh of relief in the government and across the City after Wise’s first day as a public company ended on a high.Wise’s direct listing was the first for the London market. This approach was made fashionable across the pond in New York by Spotify and Slack. Wise’s success could open the door for other companies to do the same.
ECONOMYUK jobs recovery not until 2023
The impact of the pandemic on UK employment could take another two years to reverse, that’s according to a new report by the economic group the OECD.The UK’s recovery is forecast to be one of the slowest of advanced economies.In the early stages of the Coronavirus, the furlough scheme cushioned the initial impact of lockdown. In April/May 2020, the scheme supported nearly one in three British workers.During the pandemic the unemployment rate has increased from 4.1% to 5.1% at the start of this year before falling to 4.7% as the economy reopened.The OECD predict that the rate will increase again in the second half of 2021 (as furlough ends) before reaching a downward trend in 2022.At the peak of the crisis, job retention schemes like furlough supported about 20% of all jobs in advanced economics, more than 10 times as many as during the global financial crisis in 2008/9; and estimates suggest that they saved up to 21 million jobs.The OECD has warned governments that withdrawing pandemic related support too soon could risk jeopordising the recovery.
Stat of the day
The Bank of Mum and Dad is the UK's 10th biggest mortgage lender
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