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News
www.fsprivatewealth.com.au Volume 10 Issue 02 | 2021
Free search is good for the free market
SLA rebrands Karren Vergara
Standard Life Aberdeen is changing its name to Abrdn in a bid to revamp the company with a modern edge. Standard Life Aberdeen plc will become Abrdn plc, the firm has announced. Abrdn, which is still pronounced “Aberdeen”, reflects a modern brand that will also be used for all the client-facing businesses globally, chief executive Stephen Bird said. “Our new brand Abrdn builds on our heritage and is modern, dynamic and, most importantly, engaging for all of our client and customer channels. “It is a highly-differentiated brand that will create unity across the business, replacing five different brand names that have each been operating independently. Our new name reflects the clarity of focus that the leadership team are bringing to the business as we seek to deliver sustainable growth,” he said. The vowel-free rebranding rollout will kick off in June 2021. The firm, which is listed on the London Stock Exchange, will also revise its stock ticker code, expected to take place prior to publishing its half-year results in August. Standard Life Aberdeen recently offloaded the Standard Life name to Phoenix Group. Standard Life Aberdeen, which has a 14% stake in Phoenix Group as part of the partnership, entered into a new binding agreement with the insurer which will see Phoenix acquire ownership of the Standard Life brand. The rebrand is part of several changes introduced by Bird since he took the top job in September 2020. The changes have trickled down to the local operations, with several redundancies and reshuffling of senior roles eventuating. fs
Elizabeth McArthur
N The quote
This suggests internet searching does not exacerbate investors’ biases - instead, it facilitates their ability to access and analyse information.
ew research from RMIT has found that suppressing internet searches creates stock market instability. The research reviewed the impact on stock markets of Google’s decision in 2010 to unexpectedly withdraw its search business from China. It found that risk of a stock market crash increases when firms can hide adverse information and when information intermediaries are less effective in assisting investor’s information processing. The study has been published in the Journal of Financial Economics. Lead researcher Gaoping Zheng, lecturer in finance at RMIT, said the study showed search results influence investor decisions, a challenge to previous thinking that they merely justified people’s existing ideas. “Until now it’s been widely thought that unrestrictive internet searches result in bias and an overvaluation of stocks but that would mean restricting
search would decrease stock market crash risk. Instead, we saw a significant jump,” Zheng said. “This suggests internet searching does not exacerbate investors’ biases instead, it facilitates their ability to access and analyse information.” She added that following Google’s recent attempt to withdraw from Australia after new regulation threatened to force it to pay news publishers, the research may have implications for Australia. “While China has alternative search engines, their results are concentrated and an identical search on Google would show vastly different results,” Zheng said. “Our research emphasises the importance of access to diverse results and if Google did decide to withdraw, it could have a destabilising impact on the economy.” Zheng said restricted searches gave firms opportunities to hide adverse news from the public. fs
Regulator frets over SPAC boom The US financial markets regulator has confirmed it has concerns around the rapid growth of Special Purpose Acquisition Companies (SPACs). US Securities and Exchange Commission acting director for the division of corporate finance John Coates said there are concerns around fees, conflicts, sponsor compensation, celebrity sponsorship and retail investors being drawn to SPACs by “baseless” hype. He said due to the sheer amount of capital pouring into SPACs, the SEC is looking carefully at filings and disclosures by SPACs and the private companies they seek to buy up. SPACs are essentially shell companies with no operations, which offer securities for cash through a conventional underwriting to fund a future acquisition of a private company. The SEC is concerned that SPACs circumvent some investor protections because they are not subject to all the same securities law liabilities as a vanilla initial public offering.
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“First, and most directly, all involved in promoting, advising, processing, and investing in SPACs should understand the limits on any alleged liability difference between SPACs and conventional IPOs. Simply put, any such asserted difference seems uncertain at best,” Coates said. “SPAC sponsors and targets and their affiliates and advisers should already be providing the public with the information material to the investment opportunities a de-SPAC represents, regardless of how the liability analyses ultimately play out. “Liability risk is an important feature of the conventional IPO process. If that risk drives choices about what information to present and how, it should not in my view be different in the de-SPAC process without clear and compelling reasons for and limits and conditions on any such difference.” He added that law makers could not have predicted the SPAC boom, so it is important that safe harbour laws are revisited to make sure investors are protected. fs
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