The week in investor relations: The Vatican’s Inclusive Capitalism, UK firms face activism risk and Airbnb’s IPO
– Pope Francis gave his blessing to a new alliance that includes large investors, companies, unions and foundations, reported the Financial Times (paywall). Founding members of the Council for Inclusive Capitalism include the managers of around $10.5 tn in assets, companies with a combined market cap of more than $2 tn and groups representing more than 200 mn workers around the world. Members must commit to ‘measurable action’ – including signing up to the UN’s Sustainable Development Goals – in a bid to create a more equitable global economic system.
– More than 60 companies in the UK are predicted to be at risk from shareholder activists, reported MarketWatch. This is up from 54 in December 2019, according to research by Alvarez & Marsal into the activism landscape for 2021. Technology, healthcare and industrials will find themselves increasingly under attack, while consumer-focused companies will apparently continue to fall out of favor with activists.
– Airbnb finally went public on Thursday, listing on Nasdaq ‘in a year that has upended global travel,’ wrote Associated Press. In what it described as a ‘triumphant debut’, AP reported that the San Francisco-based home-sharing company saw shares close at $144.71 apiece – more than double the $68 price Airbnb had set. The long-awaited IPO saw Airbnb raise $3.7 bn in its offering, making it the biggest US listing this year. The closing price gave the company a valuation of just over $100 bn.
– In the UK, the Bank of England (BofE) said it was lifting a temporary ban on shareholder payouts by banks, but warned that dividends distributed for full-year 2020 should be capped, reported The Guardian. Banker bonuses will also be allowed to restart in the new year, after regulators determined that lenders were strong enough to weather the remainder of the Covid-19 pandemic. The decision comes almost eight months after the BofE ordered lenders to scrap nearly £8 bn ($10.5 bn) of dividend payments for the financial year 2019.
– South Korea’s financial regulator revealed plans for new rules that could see some forms of short-selling punishable with jail sentences, reported Nikkei Asia. South Korea banned all short-selling when the Covid-19 pandemic hit in a bid to stop the market sliding. Now the country is seeking to strengthen curbs against so-called ‘naked’ short-selling. The Financial Services Commission said it wants to impose jail terms of at least a year, according to Nikkei Asia. Currently fines of up to 100 mn won ($91,000) can be levied.
– Global fund managers reduced their holdings in US-listed Chinese companies such as Alibaba, NetEase and JD.com as fears grew they will be forced off US exchanges, reported Reuters. Instead, they are moving into shares of the same companies listed in Hong Kong. The risk that delisting could become a reality took a step closer last week when the Holding Foreign Companies Accountable Act was passed by both chambers of the US Congress. Reuters reports that it will ‘soon be signed into law by Trump’ after which foreign issuers in the US that decline a review of their audits for three years can be delisted.
– BlackRock said it will give its support to more shareholder resolutions on climate change and social issues in 2021, reported MarketWatch. The world’s largest asset manager has been vocal on ESG issues, with CEO and chairman Larry Fink focusing on sustainable investing in his annual letter to chief executives this year. BlackRock has, however, come under fire for actually supporting fewer environmental votes at shareholder meetings in the 12 months to June compared with the previous year, said MarketWatch, citing data from Proxy Insight.