High cost of capital raises spectre of new Big Bang

Article Abstract:

The possible referral of City corporate finance fees and commissions by the Office of Fair Trading to the Monopolies and Mergers Commission could prompt wide-reaching changes in the way in which business is carried out in the UK financial services industry. It is possible that the use of the underwritten rights issue, in which existing shareholders have a legal right to first refusal of new shares and which is a common way for companies to raise new equity capital, could be greatly weakened. This would leave small corporate finance and broking concerns vulnerable to large international investment banking and securities houses.

Laws, regulations and rules, Financial services industry, Financial services, Securities industry

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Fund shocks add to a seismic shift in financial risks

Article Abstract:

There is likely to be a slump in sales of all kinds of equity and bond investments aimed at private investors following the revelation of problems at funds managed by Morgan Grenfell Asset Management, according to some fund managers. All fund managers will probably re-assess their internal control systems, and regulations regarding fund management will be made stricter, especially in relation to investment in unlisted securities. These problems come at a time when the investment industry is already undergoing major changes.

Management, Mutual funds

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Hard times for the electricity man

Article Abstract:

It would be a great mistake to abandon the new five-year price controls on regional electricity companies, according to electricity regulator Professor Stephen Littlechild. The reaction to the price proposals has been clouded by negative publicity about dividend increases and high profit levels, which has prevented people taking a rational view, he believes. He denies any responsibility for the high profit levels which regional electricity companies have been enjoying.

Electric utilities, Finance, Interview, Littlechild, Stephen

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