The week in investor relations: Dividend criticisms, data deal and SSGA to join Climate Action 100+
– The US moved forward with new rules that could see Chinese firms kicked off US exchanges if they fail to comply with US auditing regulations, reported the BBC. The Holding Foreign Companies Accountable Act was passed by the House of Representatives but still needs the US president’s approval. It would also require companies to disclose whether they are owned or controlled by a foreign government. The move is the latest in what the BBC calls a ‘wider push to ramp up pressure on China’ as Donald Trump’s presidency draws to an end.
– S&P Global this week agreed a ‘landmark’ acquisition of UK data provider IHS Markit for $44 bn, reported the Wall Street Journal (paywall). The all-stock deal would combine two of the largest providers of data to Wall Street, showing that ‘data is the oil of the 21st century,’ noted the Financial Times (paywall), adding that following the merger, the joint entity could be big enough to take on the dominance of Bloomberg.
– State Street Global Advisors (SSGA) became the latest signatory to Climate Action 100+ this week, announced Cyrus Taraporevala, the firm’s president and CEO, on his LinkedIn page. ‘While few predicted the havoc Covid-19 would wreak, the same cannot be said about the growing threat of climate change, which has become increasingly important to investors – and therefore a strategic focus for State Street – for the past several years,’ he said.
– Tesco, the UK’s largest supermarket chain, is to repay £585 mn ($786 mn) of business rates relief it received during the coronavirus pandemic following outcry over dividends, reported The Guardian. The supermarket chain paid out £315 mn in dividends in October. But Ken Murphy, CEO of Tesco, said the decision was not linked to a special dividend it will pay once the sale of its Asian business is complete. ‘It’s completely unconnected. That dividend has been flagged for a number of months. I think people, the market, everybody, was aware of it,’ he told Sky News.
– Unilever completed its unification plans this week, reported the Evening Standard. For the first time in its 90-year history, the FTSE 100 giant is trading under a single market cap, a single class of shares and one global pool of liquidity. It maintains its listings on the Amsterdam, London and New York stock exchanges. The move will make it easier for Unilever to acquire or sell companies, the newspaper stated.
– Electric carmaker Tesla will join the S&P 500 as a whole, following consultation with investors about how to integrate the firm into the index given its ‘hefty’ market cap, reported the FT. Tesla has gained 600 percent this year, giving it a market cap of $535 bn. In a statement on Monday, the index said it would be adding Tesla to the S&P 500 at its full float-adjusted market cap before trading opens on Monday, December 21. ‘In its decision, S&P DJI considered the wide range of responses it received, as well as – among other factors – the expected liquidity of Tesla and the market’s ability to accommodate significant trading volumes on this date,’ it said.