Weekend Box #101: Share Buybacks, ‘Just Stop Hoyle’ & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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BILL BROWDER: ‘ACT NOW’
Financier and political activist Bill Browder, renowned for his advocacy against Russian human rights abuses, has expressed his readiness to spearhead a renewed effort in the wake of Alexei Navalny's death in an Arctic penal colony.
Browder, who has long been in the Kremlin's crosshairs since his expulsion from Russia in 2005, led a global push for the implementation of ‘Magnitsky Acts’ across various jurisdictions. These acts, named after his late lawyer Sergei Magnitsky, who died under suspicious circumstances in Russian custody, are aimed at targeting individuals involved in human rights abuses and corruption by imposing sanctions such as asset freezes and travel bans.
In the aftermath of Navalny's death, Browder emphasized the necessity of hitting Russian President Vladimir Putin where it hurts the most — his finances. Browder proposed what he suggested should be termed the ‘Navalny Act,’ seizing the approximately $300 billion in Russian central bank assets and reallocating them to Ukraine.
Browder suggested executing this before year-end, particularly with looming political changes such as a Trump presidential win. Browder's call comes amid concerns about Russia's economic resilience, underscored by recent IMF forecasts indicating robust growth compared to Western counterparts.
While EU leaders have vowed to hold Russia accountable for Navalny's death, the notion of freezing Russian assets remains contentious. Euroclear, a key player based in managing these assets in Brussels, has cautioned against such measures citing potential legal repercussions and market instability.
Despite opposition from certain European nations, Browder's proposal finds resonance, with figures like former UK foreign secretary William Hague advocating for similar measures in The Times this week.
Navalny's widow, Yulia, has vowed to continue her late husband's struggle, calling for unity among supporters to confront Putin's regime. Following her husband’s death attention has turned to the plight of Vladimir Kara-Murza, a British citizen and another prominent opposition figure currently held in a Russian jail. Audley are proud to be supporting Bill Browder’s fight for justice for Kara-Murza.
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SHARE BUYBACKS - A TROUBLE HALVED?
A big week for buybacks, as both Barclays and HSBC announced ambitious plans in conjunction with reports.
Barclays plans a £10bn share buyback/dividend scheme to reward shareholders as part of a brave restructuring strategy, which will also include layoffs and the creation of five new management divisions. This follows a weak earnings result for 2023, with a 9% decrease in pre-tax profits compared to 2022. Cutting bonuses and severing ties with the least lucrative investors mark a shift away from investment banking for the company, which is now planning on nabbing market share from rivals in advisory and equity capital markets. Remarking on the strategy, Ambrose Faulks, shareholder at Artemis Investment Management, said: “it’s all about execution now.”
Meanwhile, HSBC’s quarterly earnings report on Wednesday announced the launch of a mega share buyback deal amidst a record share plummet, thought to have been fuelled by the bank’s stake in Shanghai-based lender Bo-Com. HSBC’s 19.9% stake was forced to undergo a £2.4bn writedown in light of the ongoing Chinese real estate debt crisis.
HSBC’s Chinese stake proved to be its Achilles heel, as shares fell 8% (the largest in nearly four years) despite an optimistic announcement of a £1.6bn share buyback and record overall profits for the company. Concerns have been raised over whether a share buyback is the best tactic, given HSBC’s reliance on the state of the Chinese economy and base interest rate cuts on the horizon. Matt Britzman, equity analyst at Hargreaves Lansdown, points a finger towards the ‘question mark’ that is Mainland China.
We all like to see ambition, of course, but considering the state of their earnings and shares, we will have to see if these buyback strategies — very literally — pay off.
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‘JUST STOP HOYLE’
Yesterday the Commons descended into chaos when Speaker Sir Lindsay Hoyle broke with convention to allow a vote on a Labour motion for an "immediate humanitarian ceasefire" in Gaza. The outcome has been portrayed as a political coup for Labour Leader Sir Keir Starmer – but what does it actually mean for the ongoing conflict?
The speaker’s decision on the Labour motion prevented a vote on an SNP’s motion for an ‘immediate ceasefire.’ The crucial one-word difference in language represents a difference in positions between the twoparties on Israel’s conduct in Gaza. While the SNP motion accuses Israel of collectively punishing the Palestinian people, Labour’s amendment removes all references to this and states that “Israel cannot be expected to cease fighting if Hamas continues with violence.”
While Labour’s call for a ceasefire suggests a change in attitude to the conflict, given Starmer’s previous reluctance to do so, the amendment’s softer language on Israel may be an attempt by the party’s leadership to strike a balance and prevent any further internal turmoil surrounding the conflict. The Speaker’s decision to allow a vote on the amendment means Labour narrowly avoided a rebellion which may have seen as many as 100 of his MPs rebel and vote for the SNP motion.
Of course MPs are all very angry about this week’s events. Not about the thousands killed in Gaza, but about parliamentary protocol and the actions of the Speaker. It has become about verbal differences, party politics, and one-upmanship, all of which do not make a jot of difference to Israelis and Palestinians. For such an important issue, it all felt pointless and revealed further MPs lack of power to affect any change in Gaza as the war continues.
A SILKY SHOT IN THE ARM FOR VACCINES
‘Needle phobia’ is a surprisingly common phenomenon, affecting one in 10 people according to the NHS. The thought of being punctured in the arm by a steel probe is enough to put thousands off getting a vaccine, even during the Covid pandemic. The phobia’s impact on public health is hardly trivial.
But a novel answer to needle phobia could be close at hand. As reported in Works in Progress, Vaxess, an American life sciences company based in Cambridge, Massachusetts, has developed a skin patch as a route to administering vaccines. The patch is dotted with dozens of microneedles made of silk protein saturated with the flu vaccine. Each tiny silk ‘needle’ is just long enough to pierce the skin and enter the bloodstream.
In simple terms, it is a bit like a Nicotine patch, only smaller. A user would simply fix the patch to their arm, wait five minutes, then pull it off. The little silk needles do their thing and then dissolve without a trace a few days later. It is all entirely pain free.
The innovation brings another huge benefit. Silk works as a preservative, so the vaccine doesn’t need to be kept in a freezer like conventional jabs. That means no more expensive and costly refrigeration logistics involved in getting vaccines from manufacturing plants to GP surgeries. Readers may remember learning about the very cold temperatures the Covid Pfizer vaccine needed for storage.
This brings another possibility: mail-order vaccines. The simplicity and safety of the patch means you could ‘inoculate’ yourself at home. Vaxess hopes this will be possible by 2028, if their trials go to plan.
The Weekend Box can only see one downside: no more free lollypops at the doctor’s for being a brave boy.
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BT: BYE TO TOWER
Another iconic London building begins a new chapter, as the BT Tower ends its time as a monument to technology to be transformed into a new luxury hotel.
The £275m deal will mark the end of the famous telecommunications tower’s forty-odd years of ownership by BT, after the company’s privatisation in 1984. The Grade II-listed building is now in the hands of US-based hotel owner MCR, whose $5bn portfolio of hotels includes the TWA at John F. Kennedy International Airport, the Sheraton Times Square, and NYC’s Lexington hotel.
MCR Chief Executive Tyler Morse has promised that a future hotel in the Tower will “respect the London landmark’s rich history and open the building for everyone to enjoy.” Public access to the tower has been limited since 1971, when a bombing forced the revolving top floor’s restaurant to close; it opened its doors again for one night in 2015.
Once a literal and figurative pillar of technological advancement in Britain, this new chapter in the Tower’s story also represents a closing of the book for a period in tech history. With the notable exception of its LED screen ‘information band’, the tower has served little purpose in the more than ten years since its microwave aerials were removed. The era of innovation it represented is long in the past. There’s perhaps no better proof of this than in the fact that BT is moving the technology for relaying TV signals the Tower still houses to a cloud-based platform, as it commences the years-long vacating process for the hotel conversion to take place.
Time marches on, but for those nostalgic for what the Tower represents, it will keep its place on London’s skyline. Plus, we bet the views will be brilliant when it does eventually open.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.