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Equilibrium's Finance and Investment News Roundup

In this week's finance and investment news roundup we look at how the terror attacks in France have affected Asian stocks, sales underperformance for supermarket giant Asda, ISA rate cuts implemented by NS&I, and the selling off of former Northern Rock mortgages for £13 billion.

 

Receding fallout of Paris terror attacks sees Asian stocks climb

Tuesday morning saw Asian stocks begin to climb again as the fallout felt throughout the financial world following the terror attacks in France began to recede. Investors appeared keen to make up for the losses made in the aftermath of the tragic events in the French capital last Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan experienced a 1.7% hike on Tuesday after having hit a six-week low the day before. This tumble was attributable to the risk aversion seen following the multiple attacks carried out across Paris three days earlier.

Japan's Nikkei also witnessed a 1.6% increase, while South Korea's Kospi and Shanghai stocks both rose by 1.4%, with investors apparently in agreement that the impact of the attacks on the stock market would be limited, especially in the long term. 

Asda sales 'struggling against rivals'

Asda is underperforming from a sales perspective in comparison to its main rivals, new research has suggested. According to the figures from market researcher Kantar Worldpanel, the supermarket giant's sales decreased by 3.5% over the past three months, while its market share dipped by 0.7 percentage points year on year to stand at 16.4%.

The sales drop represented the most marked tumble of any of the 'big four' supermarkets, with Tesco experiencing a 2.5% slide and Morrisons enduring a 1.7% dip. There was, however, a 1.5% sales rise for Sainsbury's.

The data suggested the reductions were partly down to the effect of deflation and the rise of discount supermarkets, with Lidl and Aldi enjoying 19% and 16.5% growth respectively. 

NS&I cuts ISA rates

Savers with National Savings and Investments (NS&I) could be impacted after the state-owned savings bank introduced lower returns on its tax-free Individual Savings Accounts (Isas). The move means that more than 400,000 people will see interest rates on their Direct Isa reduced from 1.5% to 1.25% a year.

The rates reduction is being implemented because NS&I is restricted by specific government rules to ensure it does not negatively impact the savings market and to make sure it remains fair to taxpayers. Namely, it is not permitted to attract too much cash. 

The Direct Isa cut to 1.25% was introduced on Monday and represents the lowest savings rate for the product since it was first introduced in 2008. 

Government sells £13bn of former Northern Rock mortgages

The £13 billion sale of former Northern Rock mortgages - those acquired by taxpayers during the financial crisis - is being completed by the UK government. US investment company Cerberus is buying the portfolio from UK Asset Resolution, which was set up in 2010 to act as the 'bad bank' in order to run down loans made by both Northern Rock and Bradford & Bingley.

Chancellor of the Exchequer George Osborne said of the sale: "We are now clear that taxpayers will get back more money from Northern Rock than they were forced to put in during the financial crisis."

The deal, which is seeing the mortgages offloaded for £280 million above their book value, is believed to be biggest ever sale of financial assets by any government in Europe.