It came to light after the European close, the tax payer backed bank Royal Bank of Scotland (RBS) is in talks with the Abu Dhabi sovereign wealth to purchase a stake. Though these are high level talks, it has been announced that they are in preliminary stages and the deal is not imminent. The coverage of the deal has been met with mixed reviews, the average purchase price of the government share of 82% was at roughly 49.9p and the share closed at 27.75p yesterday. The treasury does need to begin re-privatising the bank, to remove the politics from the running of one the UK’s largest banks. At the moment the banks pay and spending is scrutinised in the media as it currently sits on the tax payers balance sheet. Stephen Hester has taken on a tough role of rescuing the indebted bank and returning it to profit, however his personal pay and the decision of RBS to pay bonuses has been met with damaging coverage in the media.
However I don’t believe that the government should be rushed into offloading the bank, and taking a significant loss for the bailout which cost around £45bn. Investors know what price at which the government breaks even on its bailout and that it does want to offload the bank, leaving it hands tied and a likely loss on its bailout. A treasury spokesman said: “The aim is to repair and return RBS to full health so that it is able support the UK economy in the future, and the current strategy is working to achieve that. The government’s policy has always been to return RBS to the private sector, but only when it delivers value for money for the taxpayer.” CityAM
The Federal Reserve Chairman Ben Bernanke gave markets a boost yesterday as he hinted at another round of quantitative easing (QE3) in the US. He stated that “Despite the recent improvement, the job market remains far from normal.” With interest rates expected to be held a historic lows, and further QE Gold and indices rallied.
Game group officially enters administration, and PwC the administrator announced 2,000 job losses and will close 277 stores, leaving a remaining 332 stores. This should leave the company in a stronger position to find a buyer.
David Cameron has been caught up in a political storm which has been dubbed #CamDineWithMe on Twitter. the cash for access scandal involved significant wealthy donors having private dinners in the Prime Ministers flat, the well-known figure heads of the City included:
- Michael Spencer (ICAP/City Index)
- Andrew Feldman
- David Rowland (Property Mogul)
- Michael Farmer (RK Capital Management Hedge Fund founder)
- Anthony Bamford (Chairman of JCB)
- Paul Ruddcok (Founded Lansdowne Partners)
- Michael Hintze (CQS Hedg Fund owner)
- Henry Angest (Heads up Arbuthnot)
- Ian Taylor (Oil Chief of Vitol Group)
The main person caught up in the furore is Peter Cruddas founder of CMC Markets. He has had to step down as the co-treasurer of the Tory party, as he was caught on camera stating that large donations would give individuals access to the PM and revealed these so called private dinner parties. As the government is trying to avoid scandal and seem transparent, the revelation of “cash for access” is a damaging episode for Cameron.