INVESTMENT
Some of the world’s largest private equity firms, such as Blackstone and Apollo, are pivoting away from mega buyouts and into businesses such as private credit and infrastructure investing. Thousands of dealmakers and investors gathered last week in Paris at the annual IPEM industry conference, with the focus being on how private equity firms are positioning themselves as an alternative to the traditional banking system, capable of making multibillion-dollar corporate loans. Moving into lending to companies has become more profitable as central banks have raised interest to bring down inflation.
RETAIL
Chinese-fast-fashion-giant Shein has reached sales of over £1bn in the UK, just two years after setting up in the country. Shein made £1.2bn turnover and £12.2m profit in the 16 months to 31 December 2022, according to documents filed at Companies House, but its tax bill was just £2.3m. GlobalData forecasts Shein will become one of the top 10 apparel firms in the country by market share in 2023. It has recently taken office space in the UK and the business is also in talks to buy Missguided from Mike Ashley’s Frasers Group.
ECONOMY
The UK is headed for a slowdown in growth in the second half of the year, predicts professional services firm, KPMG. Higher interest rates and policy uncertainty ahead of the 2024 general election are beginning to impact, with annual economic growth forecast to slip from 0.4% to 0.3%, a marked slowdown from the 4.1% growth rate recorded last year when the economy was recovering from the effects of the pandemic.
MEDIA
The UK press has slammed the axing of Facebook News as an “urgent threat to democracy” in a letter sent to Meta’s global affairs president, the former British PM Nick Clegg. British newspapers have attacked Meta’s decision to scrap the Facebook News service and axe funding for local journalism saying the move was both “financially damaging” for newspapers and “deeply concerning for democracy and society.” Meta revealed earlier this month that it will be dropping Facebook News, its dedicated tab for news content, in the UK, France and German markets, in early December.
ENTERTAINMENT
Disney surprised investors last week with the news that it was planning to spend £49bn on its theme parks and cruise ships over the next decade – double the amount it spent in the previous ten years – as post-pandemic trade has returned with roaring success. Merlin Entertainments, the world’s second biggest theme park operator after Disney, is opening three Legolands in China from 2025, one of which will be the biggest in the world. It also has plans to roll out new Peppa Pig theme parks in Europe and the US. Other operators, China’s fortunes DIP, Universal Studios and Chinese-owned Fantawild, also have big plans for growth after record-beating years.
MARKETS
Currency strategists at US financial services firm Wells Fargo have warned investors of the risk for the Pound Sterling (GBP) to move to 1.20 or below against the US Dollar (USD) by early 2024. Following last week’s major market developments, the main action has been a downgrading of Pound to Dollar (GBP/USD) exchange rate forecasts. TD Securities now also expects that GBP/USD will weaken to 1.21 by early 2024 and Danske Bank maintains a 6-month forecast of 1.20 with dollar strength and a fragile Pound.
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