Many firms in Square mile got a boom in the early stages of the pandemic, receiving large fees, raising funds for businesses seeking salvation from investors.
Profits and bonuses have increased. Now they are going down, trading updates from the two investment banks today’s show.
Numis, which in particular has grown sharply recently, warned today that revenue for the first half of the year will be £ 74 million, down 36% from a record profit a year ago.
Merger activity continued to be strong, “but this was offset by declining activity in equity markets across the industry, which affected the performance of our investment banking activities”.
Peel Hunt also said that while investment banking was still ahead of revenue for the year, likely to be £ 131 million, there was a clear slowdown in the fourth quarter.
The broker, led by Stephen Fine, said: “Our chain of investment banking deals remains strong, although in the current environment there is an increased risk of execution and deadlines.”
This year, Peel shares fell 35% – today they rose 3 points to 127 points.
Stock markets have recovered from a big sell-off when the war broke out in Ukraine, but remain troubled. Bond markets are also flashing warning signs, yields are falling on long-term debt – meaning investors are worried about the future.
Russ Mold, AJ Bell’s director of investment, said: “Due to the fact that the weather has turned from blue skies to snow in a week, the markets are also feeling cold. European markets remain frozen amid concerns about financial pressures on consumers and businesses, as well as growing concerns about a slowdown in global economic activity. ”
During the night, a closely observed indicator of business sentiment shows a drop in confidence.
The Institute of Directors’ monthly index fell from -4 to -34 in March. Kitty Usher, chief economist at IoD, said economic conditions “lead many firms to postpone investment plans.”
This, in turn, could lead to lower tax payments to the Treasury, which will be another possible headache for Chancellor Rishi Sunak.
Economic nerves are coming to the city as investors worry
Source link Economic nerves are coming to the city as investors worry