1 March 2019


1 March 2019

Good morning,

Sympathy for Michael Cohen does not come naturally to me, yet it was difficult not to elicit at least a small twinge of compassion watching him humiliate himself in front of the watching world. Turning the screws on your former boss, who is also the most powerful person on the planet, to the House Oversight Committee (and then in private to the House Intelligence Committee), knowing that a stint at minimum security in Otisville penitentiary is what awaits you regardless, would take anyone to a dark place.

How he must long for the heady days following Trump’s victory, when he occupied a place at the top table. At this time, when things were going rather better for Mr. Cohen, he reportedly pitched his services to Uber, only to be politely rebuffed. With the benefit of hindsight, this can only be described as a very wise decision from the world’s largest ride-hailing firm. However, Uber is also reportedly mulling over another decision as I write, one which is nowhere near as eye-catching but might set new trends when it comes to stock market flotations.
According to the Wall Street Journal, Uber and its competitor Lyft are planning to give some of their most-active or longest-serving drivers a cash award with an option to put it toward stock in their hotly anticipated IPOs. Often a retail investor won’t get access to a company’s stock at the first opportunity and will have to wait until it begins trading on an exchange. By this stage, fortunes have often been made by the institutional investors who are always front of the queue (or… not).
As the WSJ surmises: “Uber is working out the details of a program expected to be valued in the hundreds of millions of dollars that would give a significant portion of its 3 million active drivers and couriers globally either a cash bonus or the option to use that cash to purchase shares at the IPO price…these awards will be tiered based on a sliding scale related to the driver’s length of service and number of trips or deliveries”. Furthermore, Lyft apparently intends to give its drivers who have logged at least 10,000 rides on the platform $1,000 that can be kept or used to buy the company’s IPO shares, rising to $10,000 for those with at least 20,000 rides.
Granting shares to employees through bonus schemes is not unusual, of course. However you will recall that not inconsiderable effort has been made by some companies to prove that who you and I might recognise as employees, are actually “independent contractors”. Indeed potential barriers to these plans include securities laws that have not kept up with the new reality of gig economies and which make it challenging to give private shares to said independent contractors.
In recent years, companies seeking stock market listings have rarely bothered with a retail tranche, perhaps unsurprising given the already high fees involved in an IPO. But many believe that broader participation is to be encouraged, and trends emerging from Silicon Valley are frequently influential. Of particular interest  will be how many Uber and Lyft employees choose to invest their cash award into the companies. As it stands, I’m going to predict that the majority will be more than happy to take the money and, er, drive.


In a landmark ruling, Sally Challen has had her murder conviction overturnedand will face a new trial. She had killed her husband in August 2010 after years of domestic abuse and was jailed for life in 2011. A panel of three judges ruled the original conviction as unsafe in light of new evidence that was not available at the time of her trial.
George Eustice, the agriculture, food and fisheries minister, has resigned from the UK Government in protest at the prime minister’s plan to delay the date of Brexit. His anger stems from the fact that it would be up to the EU to decide the length of the extension. He added that delaying Brexit day would be the “final humiliation of our country” by Brussels.
The new Independent Group of MPs has named Chuka Umunna as its spokesperson. Because it is not (yet) a political party, there is no leader at this stage. Other members of the group have all been delegated responsibilities, including Sarah Wollaston being accountable for “new colleagues” and Gavin Shuker as convener.


City Football Group, the holding company that owns Manchester City, has signed a ten-year kit deal with Puma, which will begin in July when the existing deal with Nike expires. According to some reports, the deal is worth as much as £650m. It extends to other CFG teams in Australia, Spain, Uruguay and China.
Eurotunnel’s legal challenge to the UK Government over the award of contracts to three shipping firms as part of its no-deal Brexit preparations gets underway today. Eurotunnel has complained that the contracts were handed out in a “secretive” way and one of the contracts has been cancelled after it was discovered that the company it was awarded to had no ships and had never run a ferry service.
Clothing company Gap has announced that it will break into two companies. One of the companies will contain Old Navy, while the other business, which does not yet have a name, will consist of Gap, Banana Republic and other brands.
Aston Martin Lagonda’s maiden set of results saw the company post annual losses of £68.2m for 2018, driven by one-off costs of £136m for its float on the London Stock Exchange last year and staff bonuses of £61.2m. Shares fell 21% off the back of the results, meaning that the company has lost over 40% of its value, nearly £2bn, since its underwhelming IPO in October 2018.
IAG, the owner of British Airways (as well as Iberia, Aer Lingus and Vueling), reported rather better results, posting a 9.5% rise in operating profit for 2018, to €3.2bn. This beat analyst estimates, although the company was not positive about growth prospects in 2019, citing rising fuel bills as a major reason.

What happened yesterday?

The S&P 500 fell for a third consecutive session, finishing the day down 0.3% and recording its longest losing streak of 2019 thus far. It still ended February 3% up overall and 11% up year-on-year. The Nasdaq Composite and Dow Jones Industrial Average were down by the same amount, as most of the world’s leading indices were impacted by the cautious comments of a senior US trade official, who said that a permanent deal to end the current impasse with China was some way off.  In Europe, the FTSE 100 ended 0.5% lower, whereas the pan-European Stoxx 600 rose by 0.12%.

Jupiter Fund Management
London Stock Exchange Group
Mail.ru Group Ltd
Robert Walters
William Hill
Revolution Bars Group
Actual Experience
AFH Financial Group
PJSC Magnitogorsk

UK Economic Announcements
(09:30) Consumer Credit
(09:30) M4 Money Supply
(09:30) Mortgage Approvals
(09:30) PMI Manufacturing
International Economic Announcements
(07:00) Import Price Index (GER)
(08:55) PMI Manufacturing (GER)
(08:55) Unemployment Rate (GER)
(09:00) PMI Manufacturing (EU)
(10:00) Unemployment Rate (EU)
(13:30) Personal Consumption Expenditures (US)
(13:30) Personal Income (US)
(13:30) Personal Spending (US)
(14:45) PMI Manufacturing (US)
(15:00) ISM Manufacturing (US)
(15:00) ISM Prices Paid (US)
(20:30) Auto Sales (US)


In The Financial Times, Tim Harford looks at whether or not happiness of a country really can be measured in the same way as more obvious metrics such as GDP. He approves of the general idea but is sceptical about whether it really is possible, not least because of the “banal conclusions” of any research into the idea – “we tend to compare ourselves to others, unemployment makes us miserable, and we hate being ill”. He believes that we need to move beyond the idea that measuring GDP is the problem and measuring happiness is the solution, looking to find a middle ground between the two.
In The Times, Philip Collins suggests that, with all the focus on whether the Labour Party is really behind a second referendum on Brexit and what will happen with a no-deal exit from the EU, many of us are missing the fact that the Conservative Party is inching towards backing a deal. He argues that Labour’s backing of a second referendum has woken up some Tory MPs and they are now more likely to support the prime minister if she can get any kind of late concessions from the EU.


111,111,111 × 111,111,111 = 12,345,678,987,654,321



House of Commons
No business scheduled
House of Lords
Animal Welfare (Service Animals) Bill - Second reading - Viscount Trenchard
Civil Partnerships, Marriages and Deaths (Registration Etc.) Bill - Report stage - Baroness Hodgson of Abinger
Anonymity (Arrested Persons) Bill [HL] - Second reading - Lord Paddick

Scottish Parliament
No business scheduled