Charlotte Street Partners

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DAILY BRIEFING

Catching rainbows

Written by Javier Maquieira, senior associate
Edited by Katie Stanton, associate partner
7 August 2020

Good morning,

Poland’s conservative president Andrzej Duda was sworn in for a second five-year term yesterday. Most opposition parliamentarians, former presidents and prime ministers didn’t attend the ceremony, but many of those who did flew the rainbow colours of the LGBTQI+ flag.
 
Speaking on the day, the incumbent president stressed the key role of family in Polish society, and the need to protect it.
 
But these comments play in to a wider, more dangerous cause: Duda’s campaign pledge to “defend children” from so-called “LGBT ideology” – a homophobic effort that invites the active demonisation of the LGBTQI+ community in Poland.
 
The Polish leader’s “family charter”, widely seen as a campaign strategy to energise the ruling Law and Justice (PiS) party’s conservative base, pledges to end what Duda sees as part of “a foreign ideology” by opposing gay marriage or adoption by gay couples, among other things.
 
Supported by state television, government officials and leaders of the Catholic church have ceaselessly compared the fight for LGBTQI+ rights in Poland to communism, Nazism, and the plague. Worryingly, the words uttered by the PiS leader, Jaroslaw Kaczynski, referring to homosexuality as a “threat to Polish identity, to our nation, to its existence and thus to the Polish state” have been reminiscent of language used by dictators of the past.
 
Without ignoring the obvious negative impacts of a state-driven anti-LGBT movement, it is important to note that Poland remains a deeply divided country, with 49% of voters and the majority of people under 50 opposing the new government.
 
As a member of the European Union, Poland is also expected to uphold the values of respect for human dignity and human rights, freedom, democracy, equality, and the rule of law. Nevertheless, it ranks as the worst country for LGBT people in the bloc, in terms of both legal situation and social climate and, together with Hungary, is one of the member states with the weakest rule of law.
 
This begs the question: how is Poland being held into account?
 
After nearly 100 Polish local governments declared themselves “free from LGBT ideology” last year – declarations lacking in any legal force, but which are symbolic in condoning violence against the LGBTQI+ community – the European parliament urged the European commission to “condemn all public acts of discrimination against LGBTI people”.
 
The commission’s response was to reject EU grants for six Polish towns, linking the decision to anti-gay declarations and charters. The move was defended by Ursula von der Leyen, the commission president, who pledged to “continue to push for a union of equality.”
 
Yet this hardly counts as a show of strength. EU institutions have made allowances amid the Covid-19 pandemic, especially when it comes to the recently agreed EU rescue package. Despite pressure from all sides of the negotiation table, EU leaders did finally bow to the demands of Hungary and Poland to relax a framework designed to make long-term budget spending by the bloc dependent on issues related to rule of law.
 
To be fair, there’s only so much EU institutions can do under unanimous voting. Human rights, however, must remain non-negotiable in Poland, Europe, and beyond.

News

Belgium, the Bahamas, and Andorra have been added to the list of countries from which travellers arriving into the UK will be required to quarantine for 14 days. Transport secretary Grant Shapps confirmed the changes, agreed by all four UK nations, will come into effect at 04:00 BST on Saturday except in Wales, where they start midnight Thursday.
 
Anti-government protesters in the city of Beirut calling for revolution and the downfall of the governing regime in Lebanon clashed with security forces yesterday. The demonstrations came as French president Emmanuel Macron toured the capital, promising a new political pact for the country away from corruption. As more bodies are expected to be retrieved in and around the affected area, there are growing calls for an independent investigation into the disaster.
 
The New York attorney general, Letitia James, announced yesterday the filing of a lawsuit to dissolve the National Rifle Association (NRA), accusing its senior leadership of violating laws governing non-profit groups by using millions from the organisation’s reserves for personal use and tax fraud. The suit, which has been filed in the New York Supreme Court, names the NRA’s chief executive and executive vice president, Wayne LaPierre, among other executives. The organisation has filed a countersuit alleging James is hampering its right to free speech.

Business and economy

The Bank of England’s latest predictions suggest the economic shock of the Covid-19 pandemic will be less severe than expected, but the bounce-back will take longer and have a lasting negative effect on jobs and growth. The Bank’s monetary policy committee voted unanimously to keep interest rates on hold at a record low of 0.1%. Governor Andrew Bailey also announced that the idea of negative interest rates has been added to the Bank’s “toolbox” of possible support measures.
 
The US president, Donald Trump, has issued two executive orders giving American firms 45 days to stop dealings with TikTok owner ByteDance and the messaging platform WeChat, describing them as threats to economic and national security. The move comes as the Financial Times reported Microsoft is in talks to buy TikTok’s entire global business, including the app’s operations in India and Europe. (£)
 
The wealth of Facebook’s founder, Mark Zuckerberg, has risen to $100bn(£76bn) after the social media company announced the launch of Instagram Reels, a new short-form video feature seen as a potential rival to TikTok. Zuckerberg joins Amazon’s Jeff Bezos and Microsoft’s founder Bill Gates in the so-called ‘Centibillionaire Club’ after Facebook shares closed up six per cent on Thursday.

Columns of note

In the Financial Times, Tony Barber notes that the fall from grace of the former king of Spain, Juan Carlos I, is just the latest chapter in the House of Bourbon’s turbulent history. Juan Carlos, who had won plaudits for the transition from dictatorship to democracy and the defeat of an attempted military coup, has damaged the monarchy’s standing, which may never regain its central place in Spanish public life, argues Barber. (£)
 
In The Herald, Catriona Stewart calls for more clarity from the Scottish government on quarantine restrictions as holidaymakers ignore government instructions and carry on as normal upon their return to Scotland.

Cartoon source : The Telegraph

Markets

What happened yesterday?

London stocks closed lower on Thursday, after the Bank of England warned the economic recovery would take longer than expected. The FTSE 100 ended the session down 1.27% at 6,026.94, while sterling was stronger against both the dollar by 0.37% at $1.3163 and the euro by 0.18% at €1.1074.
 
In the US, the S&P 500 index was up 0.6% and the Nasdaq Composite rose one per cent by close on Wall Street.
 
Gold is headed for its best week since the global financial crisis, after rising as much as 0.5% to $2,072.50 a troy ounce – another record high – before paring some of those gains to trade at $2,067.69.
 
In company news:
 
Glencore lost 8.08% after the miner scrapped its deferred $2.6bn dividend to bolster its balance sheet.
 
Serco closed 15.17% lower even as the outsourcer said interim profits rose 53% on the back of demand from governments for its services during the pandemic.
 
Meggitt fell 4.3% as the defence engineering firm insisted that its financial position is “strong” and said it was considering its options for an equity offering of up to $600m.
 
Mondi rose 3.12% as the paper and packaging group restarted paying dividends and reported a 26% decline in first-half profit.
 
ITV announced pre-tax profit for the six months to the end of June dropped to £15m from £222m, as the Covid-19 crisis caused revenue to plunge and exceptional costs to increase.
 
Aviva closed 4.64% higher after the insurer reinstated its dividend but said it would review its payout policy as half-year profit fell.

What’s happening today?

Finals
Hargreaves Lansdown
Simec Atlantis

AGMs
Alpha Real
Anglo American
Samuel Heath
Manx Financial
Palace Capital
Scapa

Int. economic announcements
(13:30) Unemployment Rate (US)
(13:30) Non-Farm Payrolls (US)
(15:00) Wholesales Inventories (US)
(20:00) Consumer Credit (US)

Source: Financial Times

did you know

Caffeine doesn’t actually give you energy, it just blocks the adenosine receptors in your brain; the ones that let you know when you’re tired.

Parliamentary highlights

House of Commons

In recess until 1 September

House of Lords 

In recess until 2 September 2020.

Scottish Parliament 

In recess until 10 August (with the exception of 30 July and 6 August 2020, on which dates business may be programmed by the bureau)

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