Yahoo Finance FTSE 100 Live 16 February: Best day of year as index closes up 1.5%, US inflation setback
The new boss of NatWest today unveiled a £6.2 billion profits haul as the lender prepares for a major sale of its shares back to the public.
Alongside the better-than-expected results, the bank confirmed Paul Thwaite as permanent chief executive.
Elsewhere, retail sales figures provided much-needed cheer after yesterday’s GDP reading meant the UK entered recession.
FTSE 100 Live Friday
New NatWest CEO reports profits jump
Retail sales bounce back
Virgin Media posts £3.3bn loss
FTSE 100 closes up 1.5% in best day of 2024
16:35 , Daniel O'Boyle
The FTSE 100 had its best day of 2024 today, closing up 1.5% at 7,714.03.
The top risers were NatWest, up 7%, and AntoFagasta up 5.9%.
The biggest faller was Airtel Africa.
High street enjoyed a Valentine’s boost this week, says Barclays
16:19 , Daniel O'Boyle
Shoppers showed the high street some love as they celebrated Valentine’s Day this week, despite the cost-of-living squeeze, according to data from Barclays.
Transactions at florists were up by 10.4% annually on February 13, the day before Valentine’s Day, Barclays said.
Restaurant transactions on Valentine’s Day itself were up by 4.5%.
The figures were based on transactions made at businesses which accept payments using Barclays technology.
US consumer confidence rises a little more
15:14 , Daniel O'Boyle
The University of Michigan Survey of consumer confidence in the US rose a little more to 79.6 this month, coming in below expectations but well ahead of the readings for most of 2023.
The index had been close to historic lows for much of last year, despite indicators suggesting that the American economy was performing far better than it had been when sentiment was last this low. Some economists had dubbed the contrast between the survey results and the underlying data a “vibecession”.
The survey reading was the highest since 2021, but still fairly low by historical standards.
Half a million homeowners expect that they will miss mortgage payment in next six months
14:59 , Daniel O'Boyle
Almost half a million UK homeowners expect to miss a payment in the next six months amid sky-high interest rates, according to a new survey.
A survey of 2073 people commissioned by mortgage servicing platform Eligible AI found that about 4% of mortgage-holders think that they will miss a payment. Translated across the population, that suggests about half a million people in arrears.
According to the latest data from UK Finance, a little over 1% of mortgages, or 93,680, are currently in arrears. That’s up 25% year-on-year.
US producer price inflation higher than thought
14:14 , Daniel O'Boyle
US Producer Price Inflation came in ahead of expectations at 0.9% in January, after CPI was hotter-than-expected earlier this week.
The figures make it increasingly unlikely that the Fed will cut interest rates any time soon.
On a month-on-month basis, US producer prices rose by 0.3%.
Core PPI was 2.0%.
Core producer price inflation is normally lower than consumer price inflation as service costs often rise more quickly than core goods.
Post-pension freedoms record for annuity sales set last year, says ABI
14:08 , Daniel O'Boyle
Sales of retirement annuities reached a post-pension freedoms high last year, according to the Association of British Insurers (ABI).
Annuity sales soared in 2023 with a total sales value of £5.2 billion, a 46% increase compared with 2022, the association said.
This is the highest annual value since 2014, when the pension freedoms were announced which granted retirees more flexibility over how to access their retirement savings.
City Spy: Charlie Methven in a league of his own
13:42 , Daniel O'Boyle
Charlie Methven, an old Etonian corporate PR man turned football investor, briefly became famous as a David Brent-type character in Netflix’s Sunderland 'Til I Die.
Methven eventually sold his Sunderland shares, but then reappeared fronting the takeover of south London's Charlton Athletic.
City Comment: Don’t 'Tell Sid' to buy NatWest shares — Give us them for free
12:58 , Simon English
The other day Bank of England Governor Andrew Bailey was musing on why UK bank share prices are so weak.
A “puzzle”, he said. Didn’t investors realise what great value bank shares are?
A stat the governor may not know: Since the start of the year the value of shares in Barclays, Santander, Lloyds, NatWest and Close Brothers are down by a combined £10 billion.
Average energy bills set to fall by £293 from April, forecast claims
12:41 , Daniel O'Boyle
The UK’s energy prices look to have weathered disruption in the Red Sea as bills will fall significantly from the start of April, the latest forecast has claimed.
Cornwall Insight, an energy consultancy, said it expects Ofgem to cap the price of a unit of gas at 5.96p and electricity at 23.27p from April 1.
That would save the typical household around £293 per year, with average bills falling from £1,928 per year at present to £1,635 from the start of April.
FTSE 100 up 1%
11:51 , Daniel O'Boyle
The FTSE 100 is now up 1% as it continued its climb, and looks set to end the week up 100 points.
Take a look at our latest market snapshot:
Is someone making a bid for Urban Logistics?
11:46 , Daniel O'Boyle
London’s M&A mini-boom gathered pace this week after warehouse owner Tritax Big Box unwrapped a £924 million offer for rival UK Commercial Property.
That might not be the only warehouse deal in town.
Market snapshot
11:07 , Daniel O'Boyle
Take a look at the latest market snapshot with the FTSE 100 still up for the day.
NatWest shares rally after results and CEO appointment
10:27 , Graeme Evans
NatWest shares have recovered from a slow start to lead the FTSE 100 index, up 5% or 10.8p to 225.1p.
Lower impairments meant profits came in 13% higher than forecast but this was offset by a lack of guidance on the outlook for the net interest margin.
However, investors have warmed to the numbers to leave the shares back above where they started the year.
AJ Bell investment director Russ Mould said there will be relief in the government that the results contained no negative surprises ahead of this year’s expected public share offer.
He added that the appointment of interim boss Paul Thwaite provided some continuity and may reassure the market given his predecessor left not because the strategy wasn’t working but for extraneous reasons.
Mould said: “The agency which manages the state holding in NatWest had also made it very clear that stable leadership was an important prerequisite to getting any big placing in the stock away.”
China-focused shares lead FTSE 100, XP Power slides on 2024 warning
10:10 , Graeme Evans
Strong travel figures for China’s lunar new year holiday today helped to lift the Hang Seng index by 2.5% and benefited several London-listed shares.
The signs of improved consumer confidence, following a period of deflationary pressure on the world’s second largest economy, meant Glencore, Anglo American and Rio Tinto rose by 2%.
They were joined by Asia-focused lender Standard Chartered, which lifted 12.2p to 593p, while luxury goods group Burberry rose 10p to 1324p and Prudential added 11.4p to 819p.
Their contributions helped the FTSE 100 index to complete a positive week through a rise of 0.7% or 50.45 points to 7647.98.
Other popular stocks included British Gas owner Centrica and LexisNexis firm RELX as they put on 3.65p to 139.85p and 77p to 3391p respectively, buoyed by results yesterday.
The FTSE 250 index improved 110.23 points to 19,209.85, led by a jump of 4.3p to 92.2p for GKN Automotive business Dowlais after analysts at Jefferies valued the shares at 160p.
In the FTSE All-Share, XP Power lost more than a third of its value after warning that its outlook for 2024 is significantly below market expectations.
The Singapore-based maker of power controllers highlighted a downturn in IT and healthcare sales, driven by customer destocking. It expects the weakness to be relatively short lived but shares still slumped 573p to 925p.
Audioboom shares surge as it breaks listener number record
10:01 , Daniel O'Boyle
Shares in podcast network Audioboom surged by as much as 15% today as it hit a new high in listener numbers in January, even as it put more ads in its shows.
A total of 38.6 million people listened to Audioboom podcasts in January, thanks in part to new launches like Matt & Shane's Secret Podcast and The Why Files.
The numbers mark a recovery for the business, which was forced to renegotiate contracts with its podcast creators last year as revenue slumped. Audioboom had also made a “sharp increase” in the number of ads it put into each episode of its podcasts, as it attempted to get revenue growing again. The latest figures are a sign that listeners haven’t been switching off the more ad-heavy podcasts.
The shares rose by as much as 36p to 273p this morning. At their peak in 2022, they traded at 2260p, valuing the business at £350 million.
Average time to sell a home in London ‘was twice that in Scotland in 2023’
09:35 , Daniel O'Boyle
Homes in London took twice as long as properties in Scotland to sell on average last year, according to a website.
In 2023, the average sale took 34 days – from the property first being launched to the market to a sale being agreed, subject to contract – Zoopla said.
The average time to sell ranged from 20 days in Scotland to 40 days in London.
FTSE 100 lifted by stronger miners, Prudential higher
08:38 , Graeme Evans
Bumper profits of £6.2 billion today failed to ignite NatWest shares, with the size of the £300 million buyback a likely factor in the lacklustre performance.
The FTSE 100 index surged 0.8% or 58.19 points to 7655.72, fuelled by gains of more than 2% for mining giants Glencore, Anglo American and Rio Tinto.
Standard Chartered, Burberry and Prudential also improved after travel figures for China’s lunar new year offered signs of a pick-up in consumer confidence.
The FTSE 250 index rose 109.17 points to 19,208.79, with Domino’s Pizza among the stocks on the risers board after a gain of 5.8p to 357.8p.
Market snapshot: FTSE 100 higher again
08:26 , Daniel O'Boyle
The FTSE 100 rose again today and is set to finish the week up 1%, with China-exposed stocks among the top risers.
Take a look at today’s market snapshot:
Segro reports rise in rental incomes but net asset values slip as interest rates hikes knock investment demand
07:47 , Michael Hunter
Segro, one of the UK’s biggest commercial landlords, reported a rise in rental incomes today as demand for space stayed “favourable”
But the real estate investment trust’s net asset values slipped, as rising interest rates drew investors into other areas, where the returns on offer were boosted by the hikes.
The company’s net asset value per share fell by over 6% to 987p.
It said today the as the drop in asset values starts to “bottom out” and “rents continue to grow”, it expects “improved profitability.”
A combination of new space for rent and leasing vacant units as demand improves meant passing rents could rise by 50% in the next three years,
Pre-tax profit fo 2023 rose 6% to £409 million.
NatWest profits boom sets up government stake share sale
07:45 , Sion English
NatWest set itself up for a major sale of its shares back to the public today with a 20% leap in annual profits to £6.2 billion.
That should encourage Chancellor Jeremy Hunt to push ahead with a sale of the 35% of the stock the government still owns following a bailout in 2008.
Hunt has indicated a sale of that stake to the public could come as soon as June, providing a multi-billion pound boost to government coffers ahead of a general election later this year.
Virgin Media O2 in £3 billion impairment
07:44 , Simon Hunt
Virgin Media O2 has posted a £3.3 billion loss in 2023 after the firm added a huge goodwill impairment to its accounts amid soaring debt costs and tighter cash flows.
The telecoms giant has more than £8 billion in loans which are pegged against central bank central bank interest rate benchmarks such as SONIA. That has led to hundreds of millions in increased debt interest costs after interest rates increased by more than 5% over the past few years.
In a statement the company said: “We recorded a non-cash goodwill impairment of £3.1 billion primarily related to an increase in the weighted average cost of capital and the impacts of the broader macroeconomic conditions in the UK on estimated future cash flows.”
Are Retail sales figures a sign that ‘economy soon moving out of recession’?
07:43 , Daniel O'Boyle
Joe Maher, assistant economist at Capital Economics, said the latest retail sales figures could be a sign that the UK is set to escape recession quickly.
“The 3.4% month-on-month rebound in retail sales volumes in January will put an end to the retail recession and perhaps even to the wider economy recession in Q1. The strong pick up in sales suggests the worst is now behind the retail sector and falling inflation and rising wages in 2024 will provide a strong platform for recovery.
“Overall, today’s release was stronger than expected and suggests the drag from higher interest rates on consumer spending is fading fast and points to the economy soon moving out of recession. As a result, after a depressing 2023 for retailers, a better year should be in store in 2024.”
NatWest names new boss as profits jump
07:35 , Graeme Evans
NatWest has revealed better-than-expected profits alongside the appointment of current stand-in Paul Thwaite as new chief executive.
Operating profits of £6.2 billion rose by a fifth on 2022, the highest level since just before the financial crisis as the bank benefited from higher interest rates.
Thwaite announced a final dividend of 11.5p a share and a £300 million buyback, taking distributions for the year to £3.6 billion or 40p a share.
Retail sales suggest 'higher interest rates are not having dampening effect that was anticipated.'
07:26 , Daniel O'Boyle
Neil Birrell, Chief Investment Officer at Premier Miton Investors, said of the UK retail sales figures: “UK retail sales for January provided the third data point in three days on the UK economy and painted a somewhat ambiguous picture, coming in much stronger than expected.
“The consumer sector bounced back strongly after a weak Christmas period and these numbers suggest that ongoing higher interest rates are not having the dampening effect that was anticipated. The Bank of England will tread a careful path in its decision making as these numbers do not provide them with much clarity.
FTSE 100 lifted by US rebound, Nikkei 225 at new 34-year high
07:22 , Graeme Evans
The positive run for the FTSE 100 index is set to continue after Wall Street markets rallied on revived hopes of a near-term cut in US interest rates.
IG Index expects London’s top flight to add 41 points at 7638, having put on 29 points by last night’s closing bell.
Banks and energy stocks yesterday fuelled a 0.9% rise for the Dow Jones Industrial Average and 0.6% for the S&P 500 index.
The mood was helped by signs that a slower US economy will give policymakers room to cut interest rates by the summer.
A 0.8% decline in retail sales was bigger than expected and it also emerged that US industrial production fell by 0.1%, offsetting some of pressure from a hot inflation reading earlier in the week.
Tesla shares put back 6% and Meta Platforms rose 2% but other Magnificent Seven stocks struggled, including Google owner Alphabet with a 2% decline.
Asia markets are led by the Hang Seng index up 2.5%, while the Nikkei 225 rose 0.9% to set a new 34-year high within touching distance of its all-time high.
Retail sales bounce back with 3.4% growth
07:04 , Daniel O'Boyle
UK retail sales rebounded in January, rising by 3.4%.
That comes after a disappointing December in which sales fell by 3.2%.
The strong figures will boost hopes that the UK can quickly escape recession, after it was confirmed yesterday that the British economy had declined for two consecutive quarters.
Heather Bovill, Deputy Director for Surveys and Economic Indicators at the ONS, said: “After a very weak December, retail sales rebounded in January with the largest monthly rise since April 2021. This means that overall sales have now recovered to pre-December levels, although if we look at the broader picture, they are still below where they were pre-pandemic.
“Sales increased across nearly all retail sectors, and it was a particularly strong month for supermarkets. Household goods stores, sports shops and department store retailers were amongst those reporting robust trading due to January sales promotions. A fall in prices at the pump also meant a solid month for fuel sales.
“Clothing shops were the only area not to see growth this month.”
Recap: Yesterday's top stories
06:45 , Simon Hunt
Good morning from the Standard City desk.
The elusive elixir of economic growth seems as far out of reach as ever, as yesterday’s confirmation of recession shows. Anecdotally, the first six or seven weeks of the year have been tough for many retailers, suggesting that a bounce is still some way off.
It seems inexplicable then that the Government has persisted as long as it has with an anti-growth measure that it knows harms its GDP motor — London.
The figures we reported on yesterday from the New West End Company are deeply concerning.
London’s tourist scene is now as busy as its ever been — but not at the tills.
A huge “spending gap” has opened up between the number of visitors on the ground in the capital, and how much shopping they do.
The right to a VAT refund was only ever open to non-EU visitors. It was abolished on the very day that Brexit came fully into force in 2021.
So we do not know how much of a boost having it available to an extra 450 million European shoppers would have made after leaving the European Union. But the potential is huge.
A reversal would at a stroke put London back on a level playing field with its main competitors particularly and Milan, and provide a massive marketing tool to the hospitality, retail and tourism industries that do so much to power London’s economy.
Here’s a summary of our other top headlines from yesterday:
Centrica reveals British Gas profits soared 943% from £72 million to £751 million last year
Jet 2 raises its profit forecast yet again amid bumper holiday bookings
City investment bank Close Bros axes dividend amid FCA investigation of its motor insurance commissions
Relx launches £1 billion share buyback
Vodafone struggles to find a partner for its Italian operation
Housebuilder MJ Gleeson sees profits fall by more than half amid a slump in home sales.
