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Look closely: London's stock market is shrinking

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Something strange is happening to London’s equity market. In a word, it is shrinking. Steadily, but surely, and over a long period of time. This threatens to have long-term financial and economic consequences for all of us.

This may surprise you since on the face of it everything looks rosy. The FTSE 100 is sitting at over 7,400, not far off its all-time high of 7,547, which it reached in May. Equity funds and investors have been making a killing in recent years – the index has more than doubled since its low point in the financial crisis in 2009. This is against a backdrop of near-zero interest rates for all that time.

Look behind the numbers and a far more troubling picture emerges. The high point for the main market of the London Stock Exchange was not three months ago but 17 years ago – in terms of total market capitalisation. This is surely the best measure of the power and strength of a capital market, rather than the rather subjective and self-selective measurement of an index.

It’s true; in August 2000, the total market capitalisation of the LSE’s main market was £5.3 trillion. Today, 17 years later, it is 26 per cent lower than that, at £3.9 trillion. This, it’s worth stressing, is in nominal terms; the decline in real terms, after adjusting for inflation, is even more precipitous.

The decline on a constant currency basis (since the pound is hardly in rude health) is practically apocalyptic. Admittedly, definitions have changed a little in the intervening years, partly due to Mifid II, but only around the margin.

London floats are falling

The fall in the number of companies listed on the market is also deeply worrying. The main market combined with Aim was at its most crowded in 2007, after a wave of listings through the early years of the century. The total reached more than 3,000 exactly 10 years ago this month.

Today, that number has fallen to around 2,030, a reduction of a third in only a decade.

As for Aim, it seems to be practically melting away before our eyes in terms of listings. Ten years ago, there were almost 1,700 companies on London’s junior market, worth a total of around £100bn. Today, that number has fallen by more than 40 per cent, and although its market value has stayed stable in nominal terms, it is hardly living up to its role as a growth market.

What is happening? The simple truth is that all the IPOs and rights issues we see each year are simply not coming anywhere close to replacing the companies that are taken over, go private or go under. Not to mention the billions in equities that have been retired in recent years through share buybacks and tender offers. We are living in an era of cheap debt, so that expensive equity is out of fashion.

Meanwhile, the relentless rise of private equity has given all companies an attractive alternative to the painful and costly process of an IPO.

There are mitigating factors. I had breakfast recently with the engaging Marcus Stuttard, head of UK primary markets at the London Stock Exchange Group (LSEG), and he explained that some of the delisted equities were investment trusts and property funds, so there was an element of double counting in the earlier figures.

Meanwhile, the shrinking of Aim has been partly deliberate, as more vigorous regulation has weeded out many of the spivs and shysters that the London market could well do without.

Attracting new listings

It is hard to blame the LSE for this long-term decline. It busts a gut trying to attract new listings, since it knows fresh equity is its lifeblood. Given the statistics above, however, is it any wonder that Xavier Rolet, the CEO of the LSEG, is wooing Saudi Aramco so hard to list in London with support from the government and the Financial Conduct Authority (FCA) to bend the rules to admit it? If he succeeds, that listing alone may be the shot in the arm to begin to reverse this long-term decline.

There are bigger forces at work here – in particular the regulatory diktats from the FCA that make it so hard for many types of investment fund, annuities for example and endowments, to be overweight in equities. Instead, it insists they are stuffed with low-yielding government debt.

In the post-financial crisis rush for security, the need to generate returns has almost been forgotten by regulators around the world.

This shrinking equities pool matters for all of us, because equities are a powerful long-term investment.

If your savings are today trapped in a bank or government debt, the chances are you are getting poorer each year as inflation outstrips the returns. Equities, by contrast, provide a long-term hedge against inflation and offer real growth, in dividends and earnings. Equities are also a democratic investment – anyone can buy a share unlike the PE funds that are closed to all but a few.

To reverse this decline, the LSE needs help, especially against the backdrop of Brexit. Help from the government and regulators to attract global businesses to list in London, knowing they have access to the deepest capital pool, against a backdrop of fair and consistent regulation.

Help also from the City’s investment community that needs to be willing to embrace new listings and recognise that equity is risk capital, that isn’t always compatible with predictable returns and box ticking governance.

Not so long ago, the City looked like it could become the world’s equities marketplace, when companies from Shanghai to Johannesburg were queueing up to list their shares on the LSE. It could still be, but we are in serious danger of letting it all slip through our fingers.


Panel named to decide the fate of Britain's top accounting watchdog

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Sir John Kingman, who has been charged with leading a landmark inquiry into Britain's chief accounting watchdog, today named an 11-person panel laden with City bigwigs.

The Financial Reporting Council (FRC) has come under pressure after a series of accounting scandals – most recently connected with the collapse of contracting giant Carillion – have rocked confidence in its ability to regulate Britain's bean counters.

Announced in April, the Kingman review will assess the FRC's governance, impact and powers "to ensure it is fit for the future".

Read more: Carillion’s demise shines a light on an auditor expectation gulf

Today's advisory group list reads as a who's who of City players. London Stock Exchange CEO Nikhil Rathi and M&G chief executive Anne Richards are included alongside chairs of National Grid, Sir Peter Gershon, and Simon Fraser from one of Britain's oldest investment houses, the F&C Investment Trust.

John Cridland, who spearheaded last year's high-profile review into the state pension age, is also included with former Accounting Standards Board chair Dame Mary Keegan – PwC's first female audit partner – selected.

Mark Burgess, the deputy global chief investment officer at one of the world's biggest investment house, Columbia Threadneedle, makes the list.

Kingman review – members of the independent advisory group

  • Lucinda Bell: Formerly CFO at British Land; Non-Executive Director and Audit Chair, Rotorkplc
  • Mark Burgess: Deputy Global Chief Investment Officer, and Chief Investment Officer EMEA, Columbia Threadneedle
  • John Cridland: Chair, Transport for the North, leading the State Pension Age review; formerly Director-General, Confederation of British Industry (CBI)
  • Dame Amelia Fawcett: Deputy Chair of Swedish investment firm Kinnevik; Non-Executive Board Member at HM Treasury, and Non-Executive Director at State Street Corporation (US); formerly Chair, Guardian Media Group
  • Amelia Fletcher: Professor of Competition Policy, University of East Anglia; Non-Executive Director, Financial Conduct Authority, Payment Systems Regulator, and Competition and Markets Authority
  • Simon Fraser: Chair of F&C Investment Trust and the Investor Forum; formerly Chief Investment Officer of Fidelity International Ltd
  • Sir Peter Gershon: Chairman, National Grid plc. Formerly Chair, Tate & Lyle plc, and Chief Executive, Office of Government Commerce
  • Teresa Graham: Chair, Salix Finance; Chair, HMRC Administrative Burdens Advisory Board; previously Deputy Chair of the government’s Better Regulation Commission (BRC), and a Partner at accounting firm Baker Tilly (now RSM)
  • Dame Mary Keegan: Former chair, Accounting Standards Board; previously PWC’s first female audit partner; founding member, International Forum on Accountancy Development, and HM Treasury’s former Managing Director for Government Financial Management
  • Nikhil Rathi: Chief Executive Officer, London Stock Exchange Plc at London Stock Exchange Group plc
  • Anne Richards: Chief Executive Officer, M&G Investments

The advisory group is charged with scrutinising and challenging Kingman's findings as well as advising on its scope and who it contacts to provide evidence.

The Kingman review is due to be completed by the end of the year.

Read more: Big Four break-up? FRC calls for more competition after Carillion disaster

 

The London Stock Exchange opening has been delayed by an hour

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The London Stock Exchange open this morning was delayed due to a "technical issue" that has now been resolved.

A London Stock Exchange Group spokesperson confirmed the opening auction had been delayed. They added: "We will provide further updates shortly."

It was then confirmed that trading would resume at 9am, and is now back in action.

Trading normally begins each weekday at 8am, but today's opening session didn't get underway until an hour after that. Traders had initially been reporting not getting the prices of any trades coming through, before the problem was confirmed by the LSE.

 

Im not getting any prices of trades coming through. Is there a Glitch with London Stock Exchange ?

— Topinfo (@TopTradersADVFN) June 7, 2018

 

Later in the afternoon, LSE issued a statement saying a technical software issue had been identified that was preventing some members from entering orders into the pre-open auction system prior to the standard market opening time of 8am.

"To preserve the integrity of the market and to ensure orderly trading, London Stock Exchange decided to delay the market open while the matter was investigated and informed market participants accordingly," the LSE said. "Following resolution of the issue, members were notified at 08:40 that trading would commence at 09:00. Trading across our markets has been operating normally since this time."

City watchdog defends controversial rules to clear way for Aramco listing

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The top financial watchdog has split the City with controversial changes to listing rules which could allow Saudi Aramco to list in London, but Financial Conduct Authority (FCA) boss Andrew Bailey insists the reforms will raise standards.

From July the regulator will create a new category with less strict requirements within its “premium” rules for firms which are majority-owned by a sovereign state, such as the giant oil producer Aramco, for which the Saudi state hopes to gain an ambitious $2 trillion valuation.

The FCA made some concessions to critics of the original plans – after a consultation process which lasted six months longer than initially planned – but Bailey told City A.M. that they will strengthen the City and actually boost standards at the firms in question.

Read more: FCA to bring in controversial new premium listing category in July

“We would want companies in the premium listing because the standards are higher,” Bailey said. “Companies want to be in it because it conveys a strong message, which is right.”

Firms will still be forced to show they are running an independent business, and must also give shareholders pre-emption rights, which allow first refusal on new share issues. Voting rights proportionate to equity held by investors must also be maintained, he added.

Yet some of the City’s most influential business groups remain unconvinced, arguing that some of the changes waterdown accountability to shareholders.

Chris Cummings, chief executive of the Investment Association, said the group, which represents the managers of trillions of pounds in investments, was disappointed by the free rein for companies to engage in related-party transactions – with, for instance, a sovereign shareholder – without prior consultation with other investors.

Read more: Former Royal Dutch Shell and GSK veteran joins Aramco board

He added that any firms in the new category should not be allowed into indices such as the FTSE 100 benchmark, which could force investment houses and pension funds to own Aramco shares. Index decisions will remain with the private providers, such as the London Stock Exchange Group’s FTSE Russell arm, the FCA says.

Stephen Martin, head of the Institute of Directors business lobby group, said the FCA had not laid out why a new listing category for sovereign-owned firms was necessary at all. He said: “If anything, we believe that listing rules should be strengthened for this category of issuer given its distinctive governance challenges and risks.”

Bailey acknowledged the “quite strong views on both sides”, but insisted that the changes the FCA made after consultation represent a “minimum, pragmatic number of changes” while also “preserving the important protections of independent voting rights”.

The regulator decided to back down on a proposal which would have allowed firms to escape independent votes on the election of independent directors, and added an obligation to report related-party transactions, albeit after the event.

Read more: That the Saudi Aramco IPO is in jeopardy should surprise no-one

The plans will apply to governments around the world looking to partially privatise their firms, but all eyes will be on the Saudi government, which has still not disclosed its preferred listing destination. The listing itself has reportedly been delayed to next year at the earliest, with New York, Hong Kong, and the Saudi Tadawul exchange thought to be among the rivals to London.

Lobbying for London has taken place at the highest levels of government, including on a visit to the Saudi capital, Riyadh, in April last year. Bailey denied that he has come under pressure from the government about the plans, which were first mooted in July last year. He has also met officials from Aramco.

“We’re an independent regulator so we’re not influenced by what the government think at all,” Bailey said, adding there was not “some sort of covert relation with the UK government on this”. Bailey said he has not spoken to ministers about the listing changes.

Neither has the decision been driven by specific trade policy, but rather a commitment to the openness of London’s markets. The government has been keen to promote the idea that the UK will remain a leading financial centre after Brexit.

“It’s not international trade policy, but it is about having a financial market in London which meets our integrity objectives,” he said. “Within that it’s open to competition.”

Read more: City watchdog seeks to reassure big investors on Saudi Aramco float

 

London Stock Exchange executes no deal contingency plans

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The London Stock Exchange is executing its contingency plans for a hard Brexit, amid growing uncertainty a deal can be struck in time.

The firm this morning reported a 21 percent rise in first-half adjusted operating profit to £480m - more than £20m ahead of consensus estimates - as its clearing, capital markets and information services businesses grew strongly.

But in a statement the company said the UK’s final exit terms were “still unclear”, noting a final agreement had to be signed off “by a number of bodies within both the UK and EU, and cannot be relied upon at this stage”.

The white paper clarified the UK’s position but there still remain “several issues to be resolved with the EU or risk a ‘no deal’ scenario”, the LSE said.

Read more: Tusk accuses British government of making threats over "no deal" Brexit

“Any of these effects of Brexit, and others the group cannot anticipate, could adversely affect the group's business, results of operations, financial condition and cash flows," it said.

“The group is executing contingency plans to maintain continuity of market function and customer service in the event of a hard Brexit. These contingency plans include incorporation of new entities in the EU27 and applications for authorisation within the EU27 for certain group businesses.”

It noted that the lack of clarity around the ultimate end state could “decrease the effectiveness, or applicability of some of these contingency plans”.

It added that the group’s key objectives were to maintain “London’s position as a global financial hub and providing continuity of stable financial infrastructure services”.

Read more: "No deal" or "Bad deal" - Six things we learned from May's Brexit speech

LSE Group appoints Marshall Bailey as LCH Group chairman

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  London Stock Exchange Group has appointed financial services veteran Marshall Bailey as chairman of its clearing business LCH Group.

The move, which is effective immediately, will see current LCH Group chairman Lex Hoogduin step down after three years in the role. 

Read more: Activist Hohn reduces stake in London Stock Exchange Group

The business has become central to debates about the impact Brexit will have on the finance industry, as LCH clears 90 per cent of Euro denominated contracts and some EU policymakers are keen for the unit to be moved into the single currency area. 

Bailey, who has 30 years of experience in the financial services sector, will also join the LSE group board as an independent non-executive director along with Citi head of regulatory and market strategy Ruth Wandhofer. 

London Stock Exchange Group chairman Donald Brydon said: "Marshall’s knowledge, gained from Board and management positions in the UK and around the world, will allow him to offer valuable commercial and regulatory insight to LCH Group and LSEG.

"Ruth’s background in regulatory and technology change within complex businesses will be of great benefit to the Group as we continue to develop our global business.

“I would like to thank Professor Lex Hoogduin for his commitment and significant contribution in his role as a Non-Executive Director of LSEG and as Chairman of LCH Group Limited over the past three years. I am pleased that the Group will continue to benefit from his experience as Chairman of LCH Ltd and LCH SA.”

Read more: Insurer D&G weighs up return to London Stock Exchange

Unilever keeps UK headquarters: Investors react

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Unilever’s awkward climbdown over its attempt to move its main listing to the Netherlands is unlikely to be the last, according to one financial expert, as investors reacted to the company’s decision to retain its London headquarters today.

Unilever this morning pulled plans to make the Netherlands its sole headquarters and quit its UK offices, after failing to persuade British shareholders that the plan would benefit them.

Read more: Unilever scraps proposals to leave London headquarters

Investors welcomed the news, having declared their intentions to vote it down at a crunch meeting later this month, with shareholders like Royal London, Legal & General Investment Management (LGIM), Brewin Dolphin and Columbia Threadneedle all having warned against the move.

Shares of Unilever plc would have been replaced by a share of Unilever NV, headquartered in Rotterdam, after the firm left its London office.

While Unilever told shareholders they would benefit from its simpler structure, investors feared they would lose out when the company behind brands like Knorr, Magnum, Marmite and Lynx fell off the FTSE 100, in line with UK rules for indexed companies moving their main listing outside the UK.

Gerard Lyons, chief economic strategist at Netwealth Investments, said the decision was a victory for UK shareholders and demonstrated the continued strength of the Square Mile’s financial services hub.

“First and foremost it’s a positive reflection on the City of London, the fact that investors wanted Unilever to remain in the FTSE 100,” he told City A.M. “It shows London is still the financial centre of Europe.”

But he warned that other dual-listed firms will feel a similar urge to unify their structures in the future, saying the setup of the FTSE makes that harder to achieve by forcing firms who move their main listing elsewhere off the FTSE indices.

Anglo-Australian mining firm BHP Billiton resisted activist investor pressure earlier this year to end its own dual-listed structure by folding its London arm into its Sydney listing, which it feared would mean the end for its presence on London’s blue-chip index.

“We should make sure we retain these dual-listed companies in the FTSE 100,” Lyons said. “Retaining them ensures the capitalisation of the major index is retained.

“One of my worries was we would lose two big companies from the index in Unilever and BHP Billiton. It’s a positive endorsement of the City [that Unilever is staying] but we cannot overlook the international competition because this issue is likely reoccur in the future.”

He pointed to Rio Tinto as a firm with a dual-listed structure that has a market cap even bigger than Unilever’s estimated £124bn, and called on the London Stock Exchange to allow firms to unify while retaining their index listing.

FTSE Russell, part of the London Stock Exchange Group, declined to comment.

Dutch tax break to be reconsidered

With UK shareholders overwhelmingly were unconvinced by Unilever’s arguments for the benefits of a simplified structure, the Dutch government said today that it would “reconsider” a tax break designed to lure foreign firms to the country.

Read more: L&G joins shareholders who will vote against Unilever leaving London

Prime Minister Mark Rutte, a former Unilever executive, will now look again at his coalition government’s proposed move to scrap a dividend tax, which he had argued would make the Netherlands a more attractive destination to businesses.

‘Ill-conceived’ voting method

Interactive Investor welcomed the news on behalf of “thousands” of its customers with “hundreds of millions” invested in Unilever would be relieved.

Head of investment Rebecca O’Keeffe added: “The backlash the company faced from institutional investors meant that the writing was on the wall and it was unlikely that Unilever could have secured the 75 per cent it needed to pass.”

She also criticised the structure of the proposed vote, calling it “the source of significant anger”.

The Majority in Number Test would have stopped retail investors with nominee holdings from participating, she claimed. “This was ill conceived and risked alienating some of their UK customers,” she said.

“Overall it appears as if common sense has prevailed this morning, but only after Unilever realised their chances of getting the required votes were slim. Their shareholder engagement on the issue has been very poor.”

‘Not compelling’

UK shareholders found “no compelling reason” to accept Unilever’s proposal, said the Investment Association, based on its members’ feedback.

“They did not believe it would be in the long-term interests of their clients, and would have resulted in many shareholders being forced to sell their shares,” a spokesperson said.

"We welcome the fact that Unilever has listened to the feedback from their shareholders and not pushed ahead with their plans. We look forward to engaging with the company on their future plans.”

Major players welcome Unilever’s shareholder surrender

Mirza Baig, global head of governance at Aviva Investors, said: “We are pleased that Unilever has listened to shareholders’ concerns and chosen to withdraw its proposal. We believe its decision to remain headquartered in the UK in addition to the Netherlands is in the best interests of its UK shareholders and UK plc.”

Read more: Royal London latest to confirm vote against Unilever Netherlands move

Guy Foster, head of research at Brewin Dolphin, said: “British savers will be reassured to see such a good company remaining part of the UK equity market. As we have always maintained, the arguments for this simplification were unconvincing."

An LGIM spokesperson added: “LGIM is pleased to see the board of Unilever responding to shareholder feedback.”

Mike Fox, head of sustainable investments at Royal London, said: “They have listened to shareholder concerns and responded in a constructive way. As a high quality company with a talented management team, we are pleased we and other UK investors can now share in the future growth of the company.

“We look forward to continued engagement with Unilever on the next steps.”

 

London Stock Exchange boosts holding in clearing house LCH

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The London Stock Exchange Group (LSE) grew revenue five per cent in the third quarter it said today as it announced a further £384m investment in clearing house LCH Group Holdings.

In the quarter to 30 September LSE’s total revenue grew to £464m while its total income expanded eight per cent compared to the same quarter last year to £522m.

Read more: Activist Hohn reduces stake in London Stock Exchange Group

The group also said it has upped its stake in LCH by acquiring a further 15.1 per cent of its shares from minority shareholders, taking its stake to over 80 per cent.

The maximum paid will be €438m (£384m) and the deal will be funded from cash and existing debt facilities.

LSE first acquired a majority stake in the business in 2013. After the previously mentioned deal completes, which is expected to be before the end of 2018, there will be 14 remaining minority shareholders.

Chief executive David Schwimmer said: "The third quarter results show continued momentum across the group, reflecting another period of operational execution and investment in the business.”

Former Goldman Sachs banker Schwimmer took the top job at LSE on 1 August after the exit of Xavier Rolet following a bruising boardroom battle.

Russ Mould of AJ Bell said: “There has been some speculation that the new CEO could chase a bigger acquisition, given he comes from an M&A background. The obvious target is Euroclear which would strengthen London Stock Exchange’s position in Europe. That wouldn’t be an easy deal to pull off given rival ICE owns 10 per cent of the business.

“You cannot rule out the possibility of ICE itself trying to have a go at merging with London Stock Exchange, or more plausible is a bid for the London Stock Exchange by US exchange operator CME.

“The latter is a bit busy at the moment dealing with Britain’s antitrust watchdog regarding its efforts to buy NEX Group, but longer term there could be merit in a tie-up with the London Stock Exchange.”

Schwimmer added: "Since I joined LSEG in August my initial impressions of the group's strengths have been reinforced as I have spent time with our businesses and met with key stakeholders.

“The group has world class assets, a strong financial position and a proven strategic approach. As today's results show, we have a great platform from which to grow and develop further opportunities as we navigate the evolving economic and regulatory landscape ahead."

Read more: London Stock Exchange executes no deal contingency plans

 


Deutsche Boerse steps up clearing battle with London

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Deutsche Boerse has stepped up its challenge to the Square Mile by expanding its clearing house partnership, as rival cities bid to replace London as Europe’s financial capital after Brexit.

The London Stock Exchange Group’s LCH is currently Europe’s hub for clearing euro-denominated derivatives - used by firms to balance risk - and has become central to the debate over the future of financial services after Britain leaves the EU.

Following the changes announced today the Frankfurt-based Eurex Clearing partnership will include repurchase or repo agreements and foreign exchange traded among banks. The more volume that users pass through the platform, the bigger the share of profit they will get.

Eurex Clearing chief executive Erik Muller said: “The extension of the partnership program further enhances choice and innovation in the marketplace.

“Market participants now can tap the full benefits of Eurex Clearing’s integrated value proposition across fixed income derivatives, Repo and FX markets.”

Euro-clearing operations have emerged as a Brexit negotiation battleground as some EU policymakers have advocated limiting euro-denominated contracts, into the single currency area.

However, industry figures have urged the EU to prevent the disruption of financial services in the event of a no-deal Brexit.

Earlier this month the Bank of England doubled down on its call to the EU to stop using clearing as a bargaining chip in a "game of high-stakes political poker" which could damage global financial stability.

Politicians urge LSE to cancel meeting with Saudis after Khashoggi killing

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Senior politicians have called on the London Stock Exchange Group (LSE) to cancel a planned meeting with Saudi officials amid the international fallout from the killing of journalist Jamal Khashoggi.

Speaking to City A.M., shadow chancellor John McDonnell and Liberal Democrat leader Vince Cable both urged the LSE to scrap an “Investing in Saudi Arabia” breakfast planned for Tuesday, which is expected to be attended by several Saudi grandees including its stock exchange chief.

The Gulf kingdom has been under growing pressure from politicians and business in recent weeks, as it scrambled to explain the disappearance and death of Khashoggi, a critic of its government, after he visited the country’s consulate in Istanbul, Turkey.

On Friday, the Financial Times reported that the FTSE Russell – owned by the LSE, which controls assets including the FTSE share index – would be hosting several Saudi officials, including Mohammed El Kuwaiz, chairman of the Saudi financial regulator and Khalid Al Hussan, chief of its stock exchange, for an “educational briefing” for potential investors.

Details of the event are limited, and there is no official description on the FTSE Russell or LSE websites.

Cable, the former business secretary, said it would “be wrong for this meeting to go ahead as planned.”

“Saudi Arabia must first answer for what has happened,” he said. “As for the UK government, they should have already suspended arms export licences to Saudi Arabia.”

McDonnell, who has called for sanctions to be placed upon the country, said “Until the issues of the role of the Saudi regime in both the barbaric attacks on Yemen and the murder of Jamal Khashoggi are resolved this is hardly the time for engaging in this activity,” 

“If we are to secure any movement from the Saudi regime we have to be firm in the message we are sending to it with regard to our intolerance of human rights abuses and abusers,” he told City A.M.

An LSE spokesperson declined to comment.

The group launched a partnership with Saudi Arabia earlier this year, with its chair Donald Brydon saying the UK was a “natural partner” to work with the country as it undertakes a high-profile programme of economic diversification under its crown prince, Mohammed Bin Salman.

Several business and political leaders, including international trade secretary Liam Fox and US treasury secretary Steve Mnuchin, pulled out of a major conference for foreign investors held in Riyadh last week, amid news of Khashoggi’s death. David Schwimmer, chief executive of the LSE, was among them.

Pressure is growing for an full inquiry in Khashoggi’s death, after Saudi Arabia repeatedly changed its story on what had happened writer, a Washington Post columnist, in its embassy earlier this month. Some European countries have called for companies to stop selling arms to Saudi Arabia until there is a full investigation.

US defence secretary Jim Mattis said today that he had called for a full, transparent investigation into the killing during a meeting with Saudi Arabia’s foreign minister at a conference in Bahrain yesterday.

“We discussed it. You know the same thing we talked about, the need for transparency, full and complete investigation,” Mattis told reporters.

“(There was) full agreement from foreign minister Jubeir, no reservations at all, he said we need to know what happened and it was very collaborative, in agreement,” Mattis added.





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