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Robinhood, the trading app that took the United States by storm during the pandemic lockdowns, is having another go at cracking the UK market.

The company, a key beneficiary of the craze in so-called “meme” stocks which took hold in 2020 and 2021, first announced plans for a UK launch in 2020.

On that occasion, having opened a waiting list for would-be clients in 2019 that reportedly attracted 300,000 potential customers, it shelved plans in order to concentrate on its home US market following an explosion of interest there.

More recently, in August last year, it sought to buy Ziglu, a UK-based cryptocurrency trading app, for $170m only for the deal to fall through.

It will now be hoping that it is third time lucky.

A compelling offer in a competitive market

The offer for would-be customers is pretty compelling but, with the likes of Freetrade, eToro, Trading 212 and Revolut all now offering commission-free share trading, it needs to be.

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Robinhood is offering commission-free trading of more than 6,000 US-listed stocks and ADRs (American Depository Receipts) with no foreign exchange fees and customers will be able to trade around the clock and out of hours.

Vlad Tenev, Robinhood’s co-founder and chief executive, points out that, during the recent turmoil at OpenAI, a lot of customers and market participants had been tweeting screenshots from Robinhood of the share price of Microsoft – a major investor in the AI business and which offered its ousted (and later reinstated) chief executive, Sam Altman, a job almost immediately.

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Vladimir Tenev said that, over time, the ability to trade UK and European stocks on the Robinhood would grow.

He told Sky News: “We are offering those US stocks 24 hours a day, five days a week through our 24 hour market, we became the first major broker in the US to offer round the clock trading of individual named stocks.

“That’s a capability that you won’t find elsewhere.”

He said that, over time, the ability to trade UK and European stocks on the platform would become available.

But perhaps the kicker is that the business will be offering customers an interest rate of 5% on any uninvested cash in their brokerage account.

That is something Mr Tenev clearly hopes will lure customers away not only from commission-free trading rivals – most of whom are relative upstarts in the industry – but also some sector’s established big guns such as Hargreaves Lansdown, AJ Bell and Interactive Investor, which is owned by the fund manager Abrdn.

It is also worth noting that Robinhood only offers an interest rate of that magnitude to its premium customers in the US.

The big profit question

One big question here is how Robinhood will be able to offer a proposition like this to UK customers and remain profitable.

In the US, it can offer commission-free trading by accepting payments from market-makers – the market professionals who quote two-way prices at which they will either buy or sell a security – to execute the trades made by its customers.

But this practice, known as “payment for order flow”, is not allowed in the UK.

Mr Tenev’s response is that payment for order flow now only accounts for a small portion of Robinhood’s revenues in the US – perhaps because some US regulators have been pondering about the desirability of the practice.

He said: “If you look at Robinhood’s business, actually, in the past couple of quarters, we’ve diversified it tremendously.

“More than half of our revenue comes from net interest. And that’s through a number of offerings, we collect a small spread on the cash, even though we do offer 5% interest.

“We offer stock lending, which shares interest generated by stocks, customers are holding in their account with customers, but also generates revenue for the firm. So we’ve continued to diversify. And equity is payment for order flow, which you mentioned, is right around 5% of our revenue.

“And we’ve been growing our revenues. So what we aim to do is, again, offer the best economics to our customers and make it clear to customers that they’re getting an unbelievable value proposition and experience with Robinhood.

“But of course, the business is sustainable. And we might operate at thinner margins than the incumbents. But the business still makes money. We’ve demonstrated that and we’re continuing to diversify it over time.”

Robinhood logo

Will the UK be enthusiastic about stock trading?

Another big question is whether the UK will ever be as enthusiastic about stock trading as in the US.

Even there, transaction volumes have slipped in recent months as Americans have returned to the office, sporting events – a rival attraction for those interested in punting rather than investing – have resumed and the savings built up by households during the lockdowns have been run down.

If Robinhood can get Britons buying shares actively again, it will be thanked by Jeremy Hunt, the chancellor, who recently announced plans for a possible offer of the government’s remaining shares in NatWest with the words “it’s time to get Sid investing again”, a reference to the successful “Tell Sid” advertising campaign in 1986 that persuaded more than 1.5 million people to invest in shares of British Gas when it was privatised by Margaret Thatcher’s government.

Robinhood has been criticised in the US for encouraging the “gamification” of trading. The criticism reached a peak after a 20-year old Robinhood customer killed himself in June 2020 after running up losses of $750,000 on the options market.

Mr Tenev insists Robinhood has learned from the experience. The app now includes many more educational resources aimed at helping clients invest more knowledgably and to make more informed decisions.

Regulators will be watching closely, though, to ensure that investors are not being encouraged to take reckless risks.

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Ryanair urges EU chief to ‘quit’ over air traffic strike disruption

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Ryanair urges EU chief to 'quit' over air traffic strike disruption

The boss of Ryanair has told Sky News the president of the European Commission should “quit” if she can’t stop disruption caused by repeated French air traffic control strikes.

Michael O’Leary, the group chief executive of Europe’s largest airline by passenger numbers, said in an interview with Business Live that Ursula von der Leyen had failed to get to grips, at an EU level, with interruption to overflights following several recent disputes in France.

The latest action began on Thursday and is due to conclude later today, forcing thousands of flights to be delayed and cancelled through French airspace closures.

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Mr O’Leary told presenter Darren McCaffrey that French domestic flights were given priority during ATC strikes and other nations, including Italy and Greece, had solved the problem through minimum service legislation.

He claimed that the vast majority of flights, cancelled over two days of action that began on Thursday, would have been able to operate under similar rules.

Mr O’Leary said of the EU’s role: “We continue to call on Ursula von der Leyen – why are you not protecting these overflights, why is the single market for air travel being disrupted by a tiny number of French air traffic controllers?

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File photo dated 02/09/22 of a Ryanair Boeing 737-8AS passenger airliner comes in to land at Stansted Airport in Essex. Ryanair has revealed around 63,000 of its passengers saw their flights cancelled during last week's air traffic control failure which caused widespread disruption across the industry and left thousands of passengers stranded overseas. In its August traffic update, the Irish carrier said more than 350 of its flights were cancelled on August 28 and 29 due to the air traffic contr
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Ryanair has cancelled more than 400 flights over two days due to the action in France. File pic: PA

“All we get is a shrug of their shoulders and ‘there’s nothing we can do’. We point out, there is.”

He added: “We are calling on Ursula von der Leyen, who preaches about competitiveness and reforming Europe, if you’re not willing to protect or fix overflights then quit and let somebody more effective do the job.”

The strike is estimated, by the Airlines for Europe lobby group to have led to at least 1,500 cancelled flights, leaving 300,000 travellers unable to make their journeys.

Ryanair chief executive Michael O'Leary speaks to journalists during a press conference at The Alex Hotel in Dublin. Picture date: Thursday October 3, 2024.
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Michael O’Leary believes the EU can take action on competition grounds. Pic: PA

Ryanair itself had axed more than 400 flights so far, Mr O’Leary said. Rival easyJet said on Thursday that it had cancelled 274 services over the two days.

The beginning of July marks the start of the European summer holiday season.

The French civil aviation agency DGAC had already told airlines to cancel 40% of flights covering the three main Paris airports on Friday ahead of the walkout – a dispute over staffing levels and equipment quality.

Mr O’Leary described those safety issues as “nonsense” and said twhile the controllers had a right to strike, they did not have the right to close the sky.

DGAC has warned of delays and further severe disruption heading into the weekend.

Many planes and crews will be out of position.

Mr O’Leary is not alone in expressing his frustration.

The French transport minister Philippe Tabarot has denounced the action and the reasons for it.

“The idea is to disturb as many people as possible,” he said in an interview with CNews.

Passengers are being advised that if your flight is cancelled, the airline must either give you a refund or book you on an alternative flight.

If you have booked a return flight and the outbound leg is cancelled, you can claim the full cost of the return ticket back from your airline.

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Ryanair and easyJet cancel hundreds of flights over air traffic control strike

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Ryanair and easyJet cancel hundreds of flights over air traffic control strike

Ryanair and easyJet have cancelled hundreds of flights as a French air traffic controllers strike looms.

Ryanair, Europe’s largest airline by passenger numbers, said it had axed 170 services amid a plea by French authorities for airlines to reduce flights at Paris airports by 40% on Friday.

EasyJet said it was cancelling 274 flights during the action, which is due to begin later as part of a row over staffing numbers and ageing equipment.

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The owner of British Airways, IAG, said it was planning to use larger aircraft to minimise disruption for its own passengers.

The industrial action is set to affect all flights using French airspace, leading to wider cancellations and delays across Europe and the wider world.

Ryanair said its cancellations, covering both days, would hit services to and from France, and also flights over the country to destinations such as the UK, Greece, Spain and Ireland.

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Group chief executive Michael O’Leary has campaigned for a European Union-led shake-up of air traffic control services in a bid to prevent such disruptive strikes, which have proved common in recent years.

He described the latest action as “recreational”.

Michael O'Leary. Pic: Reuters
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Michael O’Leary. Pic: Reuters

“Once again, European families are held to ransom by French air traffic controllers going on strike,” he said.

“It is not acceptable that overflights over French airspace en route to their destination are being cancelled/delayed as a result of yet another French ATC strike.

“It makes no sense and is abundantly unfair on EU passengers and families going on holidays.”

Ryanair is demanding the EU ensure that air traffic services are fully staffed for the first wave of daily departures, as well as to protect overflights during national strikes.

“These two splendid reforms would eliminate 90% of all ATC delays and cancellations, and protect EU passengers from these repeated and avoidable ATC disruptions due to yet another French ATC strike,” Mr O’Leary added.

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CBI kicks off search for successor to ‘saviour’ Soames

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CBI kicks off search for successor to 'saviour' Soames

The CBI has begun a search for a successor to Rupert Soames, its chairman, as it continues its recovery from the crisis which brought it to the brink of collapse in 2023.

Sky News has learnt that the business lobbying group’s nominations committee has engaged headhunters to assist with a hunt for its next corporate figurehead.

Mr Soames, the grandson of Sir Winston Churchill, was recruited by the CBI in late 2023 with the organisation lurching towards insolvency after an exodus of members.

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The group’s handling of a sexual misconduct scandal saw it forced to secure emergency funding from a group of banks, even as it was frozen out of meetings with government ministers.

One prominent CBI member described Mr Soames on Thursday as the group’s “saviour”.

“Without his ability to bring members back, the organisation wouldn’t exist today,” they claimed.

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Rupert Soames
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Rupert Soames. Pic: Reuters

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Mr Soames and Rain Newton-Smith, the CBI chief executive, have partly restored its influence in Whitehall, although many doubt that it will ever be able to credibly reclaim its former status as ‘the voice of British business’.

Its next chair, who is also likely to be drawn from a leading listed company boardroom, will take over from Mr Soames early next year.

Egon Zehnder International is handling the search for the CBI.

“The CBI chair’s term typically runs for two years and Rupert Soames will end his term in early 2026,” a CBI spokesperson said.

“In line with good governance, we have begun the search for a successor to ensure continuity and a smooth transition.”

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