the times | Wednesday February 16 2022 2GM 33
Business
Robert Miller
Markets in Europe and America staged
a relief rally and oil prices fell after
Russia indicated it was withdrawing
some troops from military exercises
near Ukraine.
Gold and bond prices fell as safe-
haven assets lost some of their appeal
with tensions easing slightly over
Ukraine, although Nato said it had yet
to see any evidence of de-escalation.
The price of gold was 0.7 per cent lower
at $1,854.80 an ounce and the yield on
a benchmark ten-year US Treasury
note rose three basis points to 2.026 per
cent.
In a sign of investors becoming more
open to riskier investments, bitcoin en-
joyed a recovery as the biggest crypto-
currency rose 3.4 per cent to $44,103.16.
Oil fell sharply after touching $96.48
a barrel on Monday amid signs of a
reduction in tension. Brent crude, the
international benchmark price, was
down 3.3 per cent at $93.28 a barrel in
New York last night. Oil has been
driven higher in the past week by fears
that a conflict could disrupt oil and gas
supplies or lead to severe sanctions
against Russian industry, including the
energy sector.
With fears around the potential for
travel disruption alleviated after
Russia’s announcement, travel stocks,
too, bounced back.
Investors are also watching talks
between America and Iran on reviving
Tehran’s nuclear deal with world
powers, which potentially could allow
commoditiescommodities currenciescurrencies
$
1.400
1.350
1.300
1.250$£/$
$1.3535 (+0.0020)
100
90
80
70Dow Jones
34,988.84 (+422.67)
38,000
36,000
34,000
32,0001.225
1.200
1.175
1.150£/€
€1.1916 (-0.0038) ¤world markets (Change on the day)
Gold
$1,851.50 (-11.47) $
2,000
1,800
1,600
1,400Brent crude (6pm)
$93.37 (-1.60)FTSE 100
7,608.92 (+77.33)Jan 15 25 Feb 2 10 Jan 15 25 Feb 2 10 Jan 15 25 Feb 2 10 Jan 15 25 Feb 2 10 Jan 15 25 Feb 2 10 Jan 15 25 Feb 2 108,000
7,500
7,000
6,500The Financial Conduct Authority faces
pressure to pay more compensation to
the victims of the London Capital &
Finance scandal after an independent
commissioner dismissed the watch-
dog’s approach as flawed.
In an embarrassing blow to the FCA,
the Financial Regulators Complaints
Commissioner has recommended it
changes the way it has calculated com-
pensation, withdraws its previous deci-
New embarrassment for watchdog over London Capital & Finance
Ben Martin Banking Editor sions on London Capital & Finance and
reruns the process.
Amerdeep Somal, the commissioner,
has been assessing the way the regula-
tor handled complaints from people
who lost money in the £237 million de-
bacle, which erupted in 2019 and hit
more than 14,000 small investors.
Victims were able to apply for redress
from the Financial Services Compen-
sation Scheme, which paid out
£57.6 million to 2,871 investors, while a
special government initiative has dis-
tributed £105 million to about 8,500
people. By contrast, the FCA has paid
£34,020 to four people who received
direct communication from the regula-
tor that may have led them to believe
their investment with London Capital
& Finance was safe.
The financial regulators complaints
commissioner investigates complaints
against organisations and can make
recommendations to the watchdogs.
The commissioner raised concerns
about the watchdog’s approach to com-ommendations made by the commis-
sioner. It said it had received her find-
ings and would respond.
London Capital & Finance sold toxic
minibonds before collapsing into
administration and the regulator has
faced severe criticism of the way it
supervised the company.
Somal warned that she had “signifi-
cant concerns” about the FCA’s finan-
cial services register, which the public
can use to research investment compa-
nies.pensation in a confidential preliminary
report, which was seen by The Times,
last October. The FCA was given a
chance to respond to those initial find-
ings and told the commissioner that it
stood by its redress decisions.
However, Somal has upheld her
criticisms in the final version of her
report, published yesterday. “The FCA’s
approach to compensation in the LCF
cases is unjustified and does not stand
up to scrutiny,” she said in the report.
The FCA is not obliged to follow rec-AIRBNBOil falls sharply and safe-haven assets retreat
Stocks rally
after Russia
‘pulls back’
for higher Iranian oil exports, further
depressing the price of crude.
“We went from fearing that our worst
fears would be realised to maybe there’s
a diplomatic off-ramp here after all.
That brings a lot of relief in terms of
keeping supplies on the market,” John
Kilduff, a partner at Again Capital, a
New York investment advisory firm,
said. “We can’t afford to lose a single
barrel [of output] these days.”
In London the FTSE 100 ended a
two-day losing streak by closing up
1 per cent at 7,608.92, its best day since
late January and leaving the premier
index 1.9 per cent higher since the start
of the month, despite Monday’s sharp
sell-off. The more domestically focused
FTSE 250 rose by 1.1 per cent to close at
21,852.51.
In Europe, Germany’s Dax closed up
2 per cent and the CAC 40 in Paris was
1.9 per cent higher at 6,979.97.
“There is an immediate risk in the
next few days depending on how all this
evolves,” Punit Patel, senior equity fund
manager at London & Capital, said.
“Geopolitical issues, certainly one that
includes Russia, will provide headline
risk for markets just given how sensitive
the whole situation is.”
On Wall Street the technology-biased
Nasdaq closed up 2.5 per cent at
14,139.76, its largest gain in two weeks,
while the more broadly based S&P 500,
seen as a barometer of America’s corpo-
rate health, was up 1.6 per cent at
4,471.07. The Dow Jones industrial aver-
age was ahead 1.2 per cent at 34,988.84.
Bears growl, market report, page 43Plain sailing Airbnb, the home rental agency, last night issued a better-than-expected forecast for its first-quarter revenue
and reported sales of $1.53 billion for the final three months of last year as the leisure travel sector bounced back. Page 39Glencore looks to settle investigations
Emily GosdenGlencore has set aside $1.5 billion to
cover the likely costs of resolving
bribery and corruption investigations.
The Swiss-based mining and
commodities group said that it expect-
ed to resolve investigations in America,
Britain and Brazil this year.
Analysts welcomed the disclosure,
which they said was a lower provision
than the market had expected and
could pave the way for Glencore to
move on from investigations that have
weighed on its shares for almost four
years.
The FTSE 100 company reported
record adjusted earnings on the back of
soaring prices for commodities and
another bumper performance by itstraders. It bounced back to a $5 billion
annual net profit, from a $2 billion loss
in 2020, and plans to return $4 billion to
shareholders.
Glencore is one of the world’s biggest
commodities traders and miners,
producing coal, copper, nickel, zinc and
cobalt.
It has been operating under the cloud
of bribery and corruption investiga-
tions since the US Department of
Justice launched an investigation in
2018 into its compliance with corrup-
tion and money laundering rules in
Nigeria, Venezuela and the Democratic
Republic of Congo.
It hopes to resolve this and other
investigations this year, leaving investi-
gations by Swiss and Dutch authorities
outstanding. Gary Nagle, its chief exec-utive, said that Glencore wanted to
“complete these investigations, put a
line under that and move forward”.
He admitted that there had been
“pockets of misconduct that happened
in this business historically” and
vowed: “There is no place for that in
Glencore.”
Tyler Broda, of RBC Capital Markets,
said that the $1.5 billion provision com-
pared with its $3 billion estimate and
that “with the main investigations
quantified this will likely de-risk the
company from this unknown known
which has been an overhang for the
company since 2018”.
The shares closed up by 1.2 per cent,
or almost 5p, at 427p.
Glencore trying to show the world it has
changed, pages 34-35