Category: 3. Business

The London stock market risks “drifting into irrelevance” without government and regulatory reforms, ranging from tax breaks for stock market listings to looser bonus rules for directors, a lobbying group has said.

The 20 recommendation put forward by the Confederation of British Industry (CBI), which lobbies on behalf of UK businesses, suggest financial incentives, marketing campaigns and boardroom pay are central to guaranteeing the future success of the London Stock Exchange, which has been losing stock market listings and floats to foreign rivals.

“With domestic capital shifting away from UK equities, new listings having slowed … and high-growth firms often looking overseas to raise capital, the UK stands at a pivotal moment for the future of its public equity markets,” the CBI said.

The lobbying group claims that tax breaks could persuade more companies to list their shares. By making the costs of a flotation or initial public offering (IPO) tax deductible, the government would be ensuring more cash is available for reinvestment and growth, the CBI’s Revitalising UK Public Markets report said.

“IPOs are time-consuming, costly, and uncertain. The lack of tax deductibility for IPO expenses reduces the net proceeds retained by companies and may deter listings,” it said.

The London Stock Exchange was dealt another potential blow last week when it was reported that Pascal Soriot, the chief executive of AstraZeneca, had discussed shifting the stock market listing of the UK’s most valuable listed company to the US.

The report also said the UK should take advantage of uncertainty in the US, where a lack of predictable policy announcements from Donald Trump has made London a more attractive home for foreign companies’ secondary listings.

“Many Asian markets are growing faster than the UK but this presents an opportunity. London can offer companies in these regions a complementary venue for additional listings, particularly at a time when any Asian companies are becoming more cautious about extra-territorial US capital markets regulation,” the report said.

It comes days before the chancellor, Rachel Reeves, is to make her Mansion House speech and release the government’s financial services strategy, which is widely expected to suggest reforms to Isa savings rules, pension investments, and further City deregulation to increase growth and competition.

However, company rules should also be reviewed if government and regulators hope to revive the London market, the CBI report recommended. That included overhauling bonus rules for nonexecutive board members, which could encourage bosses to take more risks, it said.

Nonexecutive directors are barred from receiving share options or other types performance-related pay, under the UK corporate governance code. This is to “preserve independence and objectivity”, the CBI said. However, the lobby group said restrictions around share-based bonuses “may inadvertently encourage risk-averse board cultures”. .

The CBI said that the report was based on feedback from chairs and leaders of more than 30 listed companies, including FTSE 100 firms, as well as big investment houses and advisers.

Rupert Soames, chair of the CBI, said: “Most of the challenges facing the UK equity markets are common to other markets, including the growth of private capital, the increase in passive investment funds, and investors shifting assets to US markets.

“The opportunity now is for the UK to build on the work already done to lead the world in finding innovative solutions which will once again make London attractive to companies wishing to raise capital and list their stock, and to retail and institutional investors who wish to participate in the wealth creation owning stocks and shares provide.”

On Wednesday, the People’s Bank of China (PBOC) set the USD/CNY central rate for the trading session ahead at 7.1541 as compared to the previous day’s fix of 7.1534 and 7.1806 Reuters estimate.

For scientist Sara Mikaloff-Fletcher, the news that a methane-tracking satellite was lost in space last week left her feeling like the air had been sucked from her lungs.

It happened just days before New Zealand was due to take control of the spacecraft, known as MethaneSat, which was designed to “name and shame” the worst methane polluters in the oil and gas industry.

“It was a pretty challenging moment in my career,” says Mikaloff-Fletcher, the Wellington-based lead of New Zealand’s part of the mission. “I was anticipating until a couple of days before this news that this would be a healthy mission that would last three to five years.”

The satellite was New Zealand’s first publicly funded space mission. Yet the project had been plagued with issues and delays, and last week officials confirmed that after only 15 months in orbit the satellite had lost contact with the ground and was likely unrecoverable.

The loss of the satellite dealt a heavy blow to the country’s fledgling government-funded space sector. New Zealand initially invested NZ$29m in MethaneSat, a project led by the US non-profit Environmental Defense Fund (EDF) with other finance coming from the Bezos Earth Fund, the Audacious Project and the Valhalla Foundation.

The satellite’s primary goal was to detect methane leaks from oil and gas production worldwide. But in New Zealand, Mikaloff-Fletcher leads a complementary project to explore if the satellite could also track the release of the potent greenhouse gas from agriculture. Methane from livestock accounts for almost half of New Zealand’s greenhouse gas emissions.

The project was years in the making and some experts have criticised New Zealand’s involvement. In 2019, the government agreed to invest in the mission but the satellite’s launch was delayed until March 2024. Almost NZ$12m of the funding was used to build a mission control centre at Rocket Lab, a private space company with a launchpad on the remote east coast of New Zealand and also operating from the US.

The University of Auckland was to take over mission control last year but problems led to further delays. They included the satellite going into safe mode due to intense solar activity, and issues with operating its thrusters. The university never took control because the satellite stopped responding on 20 June. By this point New Zealand’s total investment had risen to NZ$32m, according to the New Zealand Space Agency, because of additional funding allocated to maintain capability to take over operations.

Judith Collins, minister for space in the New Zealand government, declined to comment on the loss of MethaneSat. The deputy head of the New Zealand Space Agency, Andrew Johnson, described it as “clearly a disappointing development”.

But Johnson says involvement in the mission has strengthened New Zealand’s expertise and space capability, and the mission control centre at the University of Auckland’s Te Pūnaha Ātea Space Institute will continue to be used as a training facility to position the country for future missions.

However, Richard Easther, a University of Auckland physicist who is not involved in the project, says it was a mistake for New Zealand to invest in MethaneSat. He was initially excited about the mission, but says it’s become “clear they haven’t been able to keep to schedule and deliver a functional spacecraft”.

While the mission was deploying new methane-detecting sensors, the design of the spacecraft itself was not as well defined as it should have been when New Zealand invested in it and parts of it “haven’t been tested in space”.

MethaneSat’s mission lead and chief scientist for EDF Steve Hamburg says the mission was “technologically ambitious” and the team that developed the satellite “includes some of the world’s most seasoned professionals in both public and private sector space flight”.

Johnson says the providers of the satellite’s structural and functional components, as well as the sensor, were selected before New Zealand joined the mission, but given the expertise of the professionals involved, “we had no reason to doubt their judgement.”

Jon Coifman, a spokesperson for MethaneSat, says it was unclear what caused the loss of contact, but an expert panel had been set up to investigate. The existing datasets would remain accessible “for the foreseeable future” and more data would be released over the next few months. The team remains “undeterred in our efforts to drive down methane pollution”.

“No other satellite could match the ability to detect changes in methane levels with such high resolution and high sensitivity over such wide areas,” Coifman says.

Mikaloff-Fletcher says there have been other missions that have faced similar challenges.

“A great example is Nasa’s Orbital Carbon Observatory mission, meant to deliver the most precise measurements of carbon dioxide ever made from space. It was launched in 2009 and fell into the ocean without making a single measurement,” Mikaloff-Fletcher says, though she notes further satellites were launched to achieve the mission.

She says MethaneSat did record data that will be useful in tracking agricultural emissions, and her work in the field will continue despite the setback.

Preliminary analysis shows the satellite’s observations over agricultural targets in New Zealand line up well with modelling and measurements collected by aircraft-borne instruments, suggesting “we will be able to quantify agricultural emissions in a wide range of different farming systems from existing data”.

“The satellite’s life may be shorter than hoped, but the project will go on to shed new light on agricultural emissions from the data we have.”

Leading global law firm Baker McKenzie announced today that the New York office represented The Republic of Peru (the Republic) in both a Peruvian Soles-Denominated Sovereign Bond Offering and a Registered US Dollar-Denominated Bond Offering (both offerings totaling approximately USD 5.8 billion) and a related liability management transaction for several series of outstanding bonds.

The Soles-Denominated Sovereign Bond offering involved the issuance of S/10,000,000,000 (approximately USD 2.8 billion) of 6.850% Sol-Denominated Bonos Soberanos due 2035 (the Sovereign Bonds). S/1,205,456,000 (approximately USD 334 million) of the Sovereign Bonds were delivered in the form of Global Depositary Notes.  

Concurrently with offering of Sovereign Bonds, the Republic conducted a liability management transaction in which it offered holders of four series of existing sovereign bonds the opportunity to exchange their existing bonds for the newly issued Sovereign Bonds or to tender their existing bonds for cash. The aggregate principal amount of sovereign bonds validly tendered and accepted in the exchange offers was approximately S/9.4 billion (approximately USD 2.6 billion) and the aggregate principal amount of sovereign bonds validly tendered and accepted in the cash tender offers was approximately S/2.8 billion (approximately USD 770 million). Due to significant interest in the exchange offer and cash tender offer, the actual amount of existing sovereign bonds validly tendered was subject to proration by the Republic, as a result of the tenders exceeding the maximum exchange amount and maximum purchase amount determined by the Republic.

Shortly following the conclusion of the offering of Sovereign Bonds, the Republic issued USD 1.6 billion of 5.500% US Dollar-Denominated Global Bonds Due 2036 and USD 1.4 billion of 6.200% U.S. Dollar-Denominated Global Bonds Due 2036 (the “US Dollar-Denominated Bonds”), each of which were registered with the US Securities and Exchange Commission.  

Concurrently with offering of US Dollar-Denominated Bonds, the Republic conducted a liability management transaction in which it offered (i) holders of five series of existing US dollar-denominated bonds the opportunity to exchange their existing U.S. dollar-denominated bonds for the newly issued US Dollar-Denominated Bonds or to tender their existing US dollar-denominated bonds for cash and (ii) holders of two series of existing Euro-denominated bonds the opportunity to tender their existing Euro-denominated bonds for cash. The aggregate principal amount of outstanding US dollar-denominated bonds validly tendered and accepted in the exchange offers was approximately USD 516.7 million and the aggregate principal amount of outstanding US dollar-denominated bonds validly tendered and accepted in the cash tender offers was approximately USD 433.9 million. The aggregate principal amount of outstanding Euro-denominated bonds validly tendered and accepted in the cash tender offers was approximately EUR 229.8 million.

The transactions represent an important step in the Republic extending its debt maturity profile. BNP Paribas, Citigroup, HSBC and Santander acted as the underwriters and dealer managers.
 
Transactional Practice Group partners Mike Fitzgerald, Arturo Carrillo, Joy Gallup and Steven Sandretto led the Baker McKenzie team, which also included associates Alejandra Cuadra and Diego Aznar and Tax partners Thomas May and Kia Waxman.
 
Other law firms participating in this transaction included Davis Polk & Wardwell LLP (as counsel to the underwriters and dealer managers), J&A Garrigues Perú S. Civil de R. L. (as Peruvian counsel to the Republic) and Estudio Rubio, Leguía, Normand y Asociados S. Civil de R. L. (as Peruvian counsel to the underwriters and dealer managers).

Just how safe are India’s skies?

It’s a question many are asking after June’s devastating Air India crash, which killed at least 270 people. The London-bound Boeing 787-8 Dreamliner went down less than a minute after taking off from Ahmedabad airport in western India on 12 June.

“India’s skies have always been safe – in the past and even today,” said Faiz Ahmed Kidwai, the chief of Directorate General of Civil Aviation (DGCA) – India’s aviation safety regulator – in an interview with the BBC.

“If you look at global safety metrics, such as those published by International Civil Aviation Organization (ICAO), which track the number of accidents per million flights, India consistently performs better than the world average,” he said.

“There were only two years within the 2010–2024 period where we exceeded the global average – those were the years when major accidents occurred.”

In August 2020, Air India Express Flight 1344 crashed after skidding off a rain-soaked tabletop runway in Kozhikode, killing 21 people. A decade earlier, in May 2010, Flight 812 from Dubai overshot the runway in Mangalore and plunged into a gorge, leaving 158 dead. June’s Air India crash was the third such accident in the country in 15 years.

While such major accidents remain rare, recent headlines have raised fresh concerns. From a Delhi-Srinagar flight that hit severe turbulence, to growing reports of maintenance oversights and training shortfalls, questions around aviation safety are once again in focus.

The latest involved SpiceJet, India’s fourth-largest and longest-running low-cost airline.

The Economic Times newspaper found that the aviation regulator had recently summoned the airline’s leadership after a series of alarming findings – not from routine audits, but triggered by a British aviation firm.

The newspaper reported that it began earlier this year when two of SpiceJet’s De Havilland Q400 turboprops showed premature propeller failures. The airline alerted Dowty Propellers, a GE Aerospace-led UK manufacturer, which found damage to the internal bearings of the propellers.

Each propeller has bearings with two races, or rings or tracks. In this case, the inner race was damaged. Instead of addressing the root cause, SpiceJet “reportedly kept applying more grease to the [entire] unit instead of addressing the root cause”. Frustrated by the lack of corrective action, Dowty escalated the issue directly to India’s aviation regulator, the newspaper reported.

The DGCA’s own audit in April “revealed even more deficiencies, including snag occurrences”, the report said.

Mr Kidwai told the BBC that the “turboprop propeller issue came to our attention through one of SpiceJet’s maintenance organisations”.

“We took it up with SpiceJet and we ensured they took corrective action. We also found out that the senior management was not fully aware of the situation. We took action against the various post holders who were supposed to ensure compliance with the original equipment manufacturer and other regulations. We directed SpiceJet to remove them and suspend a few of them which they did,” he said.

More recently, Reuters reported that the aviation watchdog reprimanded Air India’s budget carrier in March for delaying mandatory engine part replacements on an Airbus A320 and falsifying records to show compliance.

Air India Express told the news agency it acknowledged the error to DGCA and undertook “remedial action and preventive measures”.

Mr Kidwai told the BBC that the information in this case came through “self-reporting by the airline”.

“I would not condone it [the lapses]. But [at least] we have started getting these reports. This came from the airline. Action has been taken in this case. In our audits we have mandated our people to be more alert and see whether there is any lapse and bring it to our attention.”

In May, an IndiGo flight from Delhi to Srinagar faced severe turbulence and hail about 45 minutes after takeoff.

The Airbus A321, carrying 222 passengers, reportedly encountered extreme vertical air currents – updrafts followed by downdrafts – that dislodged overhead bins and caused nose damage. The crew declared an emergency and safely landed at Srinagar with no injuries. The regulator launched an investigation, during which two pilots were grounded.

Mr Kidwai told the BBC that the regulator had now “refined” its guidelines for pilots flying in turbulent conditions.

For instance, if there’s significant cloud cover or any weather pattern that poses a risk – and “we’ve clearly defined what constitutes such a risk” – pilots are now required to take specific action a set number of nautical miles before reaching it, he said.

“This could include diverting, going around, or taking other appropriate steps.”

Since 2020, Indian domestic carriers have reported 2,461 technical faults, according to the federal civil aviation ministry data. IndiGo accounted for over half (1,288), followed by SpiceJet with 633, and Air India and its subsidiary Air India Express with 389 cases, as of January 2025.

“Reporting of snags by airlines has gone up. This is good,” Mr Kidwai said.

“I wouldn’t say I’m pleased about it. But I do see value in the growing culture of reporting [snags]. It’s far better for every snag to be brought to the attention of the authorities than keeping quiet and operating the aircraft.”

Mr Kidwai said with the number of flights increasing, it’s important to “see whether the turnaround time for flights is adequate for [maintenance] checks or not”.

To be sure, demands on the regulator have grown: India has emerged as the third-largest passenger aviation market in the world. Yet, over the past two years, the ministry of civil aviation has faced budget cuts, reflecting a reduced financial priority for the sector.

Today, the country’s scheduled carriers operate nearly 850 aircraft – a significant increase from around 400 just a decade ago.

The number of air passengers has more than doubled since 2014–15 – from 116 million to 239 million.

The number of commercial aerodromes has also seen a substantial rise – from around 60-70 a decade ago to nearly 130-140 today.

“In total, including both scheduled and non-scheduled operators, we now have 1,288 aircraft in operation. By the end of the decade, we are projected to operate over 2,000 aircraft,” Mr Kidwai said. (Non-scheduled operators include charter airlines, private jet operators, air taxis and helicopter services.)

So had the latest Air India crash dented the reputation of air travel in India? Mr Kidwai said the data didn’t point to that.

“We looked at the data to assess whether it had any impact on domestic or international operations. There was no significant drop in traffic. At most, we observed a very marginal dip for a short period, affecting both domestic and international flights, along with a few cancellations,” he told the BBC.

“It’s natural for people to feel anxious after such incidents. But over time, as more clarity emerges and the situation is better understood, that anxiety tends to subside. Time is a great healer.”