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WEEKLY MARKET ROUND-UP – 26/07/21

Mind the 300-year gap

The median worker in an S&P 500 company needs to work three centuries to earn the $15.5m garnered by the average S&P CEO last year. It takes closer to 750 years for employees in consumer discretionary companies to achieve parity with their CEOs while in utilities companies, workers need only toil for a century or so, to do the same.

Credit: Quilter Investors

Salad days for wealth managers…

On Tuesday (20 Jul), shares in Switzerland’s UBS jumped close to 5% after it posted a whopping 63% jump in second-quarter profits, thanks mostly to its booming wealth management business. The news helped lead European indices higher once more after they suffered their worst sell-off of 2021 a day
previously.

On Monday (19 Jul) the STOXX 600 Index nosedived 2.3% due to anxieties over the Delta variant and slowing economic growth. Neither concern impacted UBS. It beat profit estimates by a resounding 50% to book profits of $2bn in the quarter. By far the lion’s share of the gains came from its global wealth management arm, the world’s largest, which enjoyed immense new client inflows of $25bn over the quarter.

Growth was especially strong among the US ultra-wealthy. In tandem with the rising markets of the period, this helped push wealth management assets up to $3.2trn. The bank expects its new digital platform, aimed at the mass affluent, to attract another $30bn in the next year.

Credit : l i g h t p o e t / Shutterstock.com

Robinhood plans monster IPO

Robinhood Markets, the disruptive US trading app at the centre of January’s GameStop saga – which saw Wall Street hedge funds briefly besieged by a rag-tag army of mostly US retail investors – is targeting a $35bn valuation in its forthcoming initial public offering (IPO), according to filings made on Monday (19 Jul).

Auspiciously, the company which already has 18m funded accounts, mostly from first-time investors, will list on the Nasdaq index with the trading symbol ‘HOOD’. With around 55m new shares up for grabs, priced between $38 and $42, the listing could raise up to £2.3bn.

Robinhood offers unlimited commission-free trading in stocks, options and cryptocurrencies; its revenues quadrupled thanks to the trading mania induced by January’s ‘meme stock’ phenomenon.

Stanford University roommates, Vlad Tenev and Baiju Bhatt, founded the company in 2013 and will retain around 65% of the voting rights. They and company CFO Jason Warnick will sell some 2.6m of their privately held shares and pocket the proceeds.

Credit: Siraj Ahmad / Shutterstock.com
Articles obtained from Quilter