4 April 2018


4 April 2018

Good morning,

‘Top of the charts’, scoring ‘its own number one’, dancing ‘to its own tune.’

The music puns have boogied into the limelight this morning, to mark yesterday’s stellar debut by Spotify on the New York Stock Exchange in what was a landmark day in the relatively short history of the digital music industry.

Believed to be the latest ever start for a NYSE-listed stock, shares opened at $165.90 following three hours of horse-trading among traders. Although the price dropped more than 10% over the course of the day, closing at $149.01, it makes the music streaming service one of the largest ever US listings for a tech company at a valuation of $26.5bn. That’s not bad for a company that has yet to make a profit since it was set up over a decade ago.

Indeed, it was a day of firsts after the company chose the unusual offering of a ‘direct listing’, a route to market that has never previously been undertaken on the NYSE, nor has it been as large on any other US exchange. By only selling shares already held by its investors instead of issuing new stock via the traditional method of an IPO, Spotify risked the price being volatile when trading began. However, the reward is greater as they will save far more in fees to Wall Street advisers.

So what does the future hold for the company and its co-founder, Daniel Ek? He has promised that the direct listing will in time be the platform for investors to cash in on their investments, something he would make billions from if and when he decides to redeem part of his 25.7% share.

Yesterday’s triumph may also have implications for the market and the way young technology start-ups - already awash with capital - decide to list. For companies such as Airbnb and Uber, the prospect that there is an opportunity to mirror the success of Spotify is likely to be, er, music to their ears.


A woman who shot and injured three people at YouTube’s headquarters in California before killing herself had a grudge against the company. Nasim Aghdam had previously posted material that claimed her videos had been discriminated against.

An ally of Angela Merkel has questioned Britain’s global push to isolate Moscow after Gary Aitkenhead, head of the Porton Down defence laboratory revealed he could not confirm that the Salisbury nerve agent came from Russia. The matter will be discussed later today at a session of the executive committee of the Organisation for the Prohibition of Chemical Weapons. (£)

Italy’s president Sergio Mattarella will today begin formal consultations as he attempts to end his country’s political stalemate. A month on from elections that returned a fragmented parliament in which populist forces made gains at the expense of traditional parties, Matterella will lead talks over the next two days with delegations of each major political party as he seeks to identify the person to take over as prime minister and assemble a new government.

Business & Economy

The Trump administration yesterday unveiled a list of 1,333 Chinese products that will be subject to a 25% tariff as the trade war between the world’s two largest economies continues to escalate. The list includes products such as motor cycles, cars and industrial machinery and represents imports worth more than $50bn. China has promised to retaliate further, having already introduced tariffs on $2.75 billion worth of imports from the United States.

Hornby, the model railway and Scalextric maker, has been given approval from its bank to secure a new finance deal despite a fresh decline in sales. The toymaker announced that sluggish sales in the first three months of 2018 meant it had breached the terms of its loan agreement with Barclays, but the bank was not taking any action. Its new CEO, Lyndon Davies, said it was close to agreeing a new, larger loan with another lender.

Dozens of UK businesses are in a race against time to submit their gender pay figures ahead of tonight’s midnight deadline. About 9,000 firms with more than 250 employees must publish their figures on the average difference between male and female employees. Of those submitted so far, Ryanair have the biggest gap at 71.8%.


What happened yesterday?
The FTSE 100 fell at the close of trading on what was the first working day of the week for the London market. The index fell almost 0.4% at 7,030 points after threatening to climb into positive territory at lunchtime.

The biggest faller on the day was Mediclinic 4.6%, while Micro Focus added 2.4% to stake its claim as the star performer. Sky was leading the field at midday after Rupert Murdoch's 21st Century Fox said it would sell off Sky News to Disney or ring-fence it in order to allay regulatory concerns over its proposed acquisition of the media company. Shares were up by about 2% at early afternoon trading.

Investors appear to be holding steady in the face of an escalating trade war between China and the US. Asia-Pacific equities are mixed in choppy trading and European stocks are expected to make modest gains in today’s opening trade.

Concurrent Technologies
Maxcyte (DI)
Next Fifteen Communications

Trading Announcements
Topps Tiles

UK Economic Announcements
(09:30) PMI Construction

International Economic Announcements
(09:00) Unemployment Rate (EU)
(12:00) MBA Mortgage Applications (US)
(15:00) Factory Orders (US)
(15:00) ISM Non-Manufacturing (US)
(15:30) Crude Oil Inventories (US)
(15:45) PMI Composite (US)
(15:45) PMI Services (US)

Columns of Note

Writing in the Financial Times, Martin Wolf says we are beginning to see consumption become the most important driver of demand in the Chinese economy. He says that while there is much work to be done in order to manage an overhang of bad debt, rebalancing the economy – a process that is long overdue in the country - has at least begun as the country moves away from its “excessive reliance on inefficient, debt-fuelled investment”.

On the 50th anniversary of the assassination of Martin Luther King Jr, Daniel Finkelstein says it is not just the civil rights leader’s courage and eloquence we should remember. Writing in The Times, Finkelstein says we should take lessons from King on his great ability to show restraint in the face of animosity and have what it takes to “win victory in the eternal battle between hate and love”. (£)

Did you know?

“Urchin” is just another word for hedgehog. Which is where sea urchins get their name. They are hedgehogs of the sea.

Parliamentary highlights

House of Commons

In recess until 16 April 2018

House of Lords

In recess until 16 April 2018

Scottish Parliament

In recess until 16 April 2018