FTSE 100 Live: FTSE rallies to close at 7870; First Republic shares plunge to new lows amid receivership fears
NatWest shares have fallen sharply despite the state-backed lender revealing first quarter profits of £1.3 billion and low default levels.
The results came as Deutsche Bank moved to expand in the UK by striking a £410 million deal to buy City firm Numis.
Meanwhile, the FTSE 100 index is under pressure after disappointing first quarter GDP figures from Germany and the eurozone.
FTSE 100 Live Friday
Deutsche Bank buys Numis for £410 million
NatWest Q1 results send shares lower
German economy stagnates in Q1
Revealed: The wealthiest Brits in tech
Friday 28 April 2023 13:56 , Daniel O'Boyle
The UK’s tech industry reached $1 trillion in value last year, making it only the third country ever to hit this milestone after the US and China.
London on its own has created more than 20 unicorns — firms worth more than $1 billion — since 2021. That has been helped on by a string of IPOs over the past two years, including the likes of takeaway app Deliveroo and payments firm Wise.
In fintech, the capital’s speciality, London has even been able to overtake New York and San Francisco in funding, attracting around £8 billion in investment last year alone.
Those successes have built extraordinary wealth for many of the firms’ founders, as the Standard today reveals in its inaugural tech rich list.
First Republic shares plunge further amid receivership fears
Friday 28 April 2023 17:39 , Daniel O'Boyle
Shares in US regional lender First Republic Bank plunged to new lows amid fears that shareholders could be wiped out as the firm is taken into receivership.
Shares of in the company are down 35.7% to $3.98, well below previous lows and now down more than 97% in less than two months, after a CNNBC report said that the most likely outcome of government rescue talks would be the bank being placed in receivership.
The lender’s market cap is now less than $750 million.
London fintech Moneybox shelves customer crypto investing plans
Friday 28 April 2023 17:22 , Simon Hunt
‘Round-up savings app Moneybox has shelved its plans to introduce crypto products to customers as the London fintech distances itself from digital assets amid market volatility and cost-of-living pressures.
The firm, which offers app-based savings and investments services, had previously expressed enthusiasm for cryptocurrencies and boasted of plans for crypto investing options for customers following its £35 million Series D round last year, but has since put those plans on the back burner, according to a report by fintech news site AltFi.
Almost 700 jobs to be saved as AxiomDWFM buys collapsed law firm Ince Group
Friday 28 April 2023 17:16 , Daniel O'Boyle
London and Birmingham-based law firm AxiomDWFM is to rescue the legal business of the collapsed Ince Group, saving close to 700 jobs.
The Ince Group - once London’s largest listed law firm -announced that it would enter administration earlier this month. The 150-year-old company, formerly known as Gordon Dadds Group, said a lengthy auditing process, after BDO LLP determined there were “matters outstanding” with its accounts in Hong Kong, put “increasing pressure” on its cash flows.
FTSE rallies to close at 7870
Friday 28 April 2023 16:36 , Daniel O'Boyle
The FTSE 100 closed at 7870, up 0.5% from opening and more than 1% from the low it reached in the mid-morning.
While shares fell initially amid weaker-than-expected German GDP and a disappointing outlook from NatWest, they picked up after EU-wide GDP and inflation figures were published.
The top risers of the day were Prudential and Pearson, whch both published results today, while NetWest was joined by Diageo and Antofagasta on the fallers board.
Nearly half of Pearson shareholders vote against new bumper pay policy
Friday 28 April 2023 16:13 , Daniel O'Boyle
Pearson shareholders came close to rejecting a pay policy on Friday which could make the publisher’s chief executive nearly as well paid as the boss of oil giant BP.
Nearly half (46.37%) of shareholder votes were cast against the new policy, which the board says brings Pearson in line with what US companies pay their top leaders.
Under the new plan Andy Bird, who earned 8.5 million dollars in 2022 (£6.8 million), could earn more than 11 million dollars (£8.8 million) in future years.
Aldermore reason to believe in the City
Friday 28 April 2023 16:11 , Daniel O'Boyle
Aldermore Bank has inked a deal for a larger London headquarters in the City, in a move set to encourage more staff into the office post-pandemic.
The lender will take the 24th floor, comprising just over 13,100 square feet, at property giant British Land’s Broadgate Tower next to Liverpool Street station.
The specially designed workspace will also feature a business lounge and gym. Aldermore considers the space, which will open to team members in mid-May, a high-quality area suitable for better project collaboration.
PCE inflation increases Fed hike fears
Friday 28 April 2023 15:35 , Daniel O'Boyle
The US Federal Reserve’s preferred inflation gauge came in ashead of expectations at 4.6% in March, increasing the chances of more interest rate hikes.
The Core Personal Consumption Expenditures Index was up 4.6% year-on-year - ahead of the expected 4.5% - and 0.3% month-on-month.
US shares rally
Friday 28 April 2023 15:19 , Daniel O'Boyle
US shares bounced back after opening lower today.
The S&P 500 is up 0.4% to 4153.06 while the Dow Jones is also up 0.4%, to 33,955.74. The Nasdaq gained 0.3% to 12179.87.
The biggest riser of the day was Intel, despite the chip maker posting a record loss.
Heathrow calls on Khan to cut Elizabeth Line fares for its staff
Friday 28 April 2023 15:11 , Daniel O'Boyle
Heathrow bosses have appealed to Sadiq Khan to slash fares for its workers on Elizabeth Line services to the airport.
Chief executive John Holland-Kaye told the Standard that the £12.80 fare for a journey to or from Heathrow Airport that starts in, ends in or goes through Zone 1, is deterring staff from using the line.
City voices: The UK is on the cusp of being a crypto hub — but only if it’s regulated properly
Friday 28 April 2023 14:44 , Daniel O'Boyle
Britain is on the cusp of becoming a global crypto hub. Since becoming Prime Minister, Rishi Sunak has committed to make the UK a global science and tech superpower.
Recently, he announced £100 million of investment to put together an expert taskforce to help the UK build the next generation of safe AI, alongside a White Paper to guide the use of artificial intelligence in the UK.
The Government now has a huge opportunity to make crypto a part of this initiative and must not let it slip. This is a once-in-a-generation opportunity to make Britain the best - and safest - place to run a cryptoasset business, in turn benefiting and protecting the millions of British people that invest in these assets.
US shares set decline
Friday 28 April 2023 14:19 , Daniel O'Boyle
US shares are set to dip this morning, with Amazon among the fallers.
According to futures markets, the Dow Jones is set t fall by 0.4%, while the S&P 500 is projected to decline by 0.3% and the Nasdaq by 0.1%.
Amazon looks set to be among the fallers, with shares set to decline by about 2% after its results last night. Though its shares initially rocketed post-close on strong earnings figures, they fell back down to earth as investors panicked at the outlook for its AWS cloud computing division.
More City mergers to come?
Friday 28 April 2023 13:28 , Daniel O'Boyle
Joshua Maxey, co-founder of Third Bridge, believes that more acquisitions could be on the way after Deutsche Bank snapped up Numis.
“In the last week, we've seen two big moves in the sell-side research space,” he said, noting the merger of Redburn and Atlantic Equities. “These are signs we can expect more consolidation over the course of this year.
“These deals underline the tremendous pressure that cash equities is under at the moment, exacerbating the pain felt on the banks’ balance sheet given the dearth of deal activity.
“It would be no great surprise if we saw further consolidation outside of the big seven investment banks and for the exodus of research talent to accelerate.
“While PE and M&A activity remains slow we may see some of the smaller European research shops closing down altogether, and others snapped up by US entities responding to the expiry of the SEC’s no-action letter.”
HMV returns to iconic original Oxford Street site — after reclaiming it from an American candy shop
Friday 28 April 2023 12:51 , Daniel O'Boyle
Music retailer HMV will return to the location of its first ever shop on Oxford Street, reclaiming the site from an American candy store.
The company said the new opening marks “the latest sign of a dramatic turnaround” since 2019 when the shop closed.
The store - close to Bond Street station - is on the site of the first HMV shop, founded in 1921. In 1995, Blur played a rooftop gig from the top of the store, while the next year it hosted the Spice Girls’ Christmas Lights switch-on.
Eurozone back to growth
Friday 28 April 2023 12:20 , Daniel O'Boyle
The Eurozone economy returned to growth in Q1, despite surprise stagnation in Germany.
GDP across the region was up by 0.1% for the three-month period, meaning it avoided recession.
That was mostly off the back of growth in France and Italy, as Europe’s largest economy disappointed.
Shares in microchip maker Alphawave to be suspended after audit delays
Friday 28 April 2023 12:17 , Daniel O'Boyle
Shares in the UK’s top listed semiconductor business Alphawave plunged this morning as it announced its shares would be suspended because of a delay to its audit process.
The firm published unaudited results for 2022 today, showing profit was up 44% to £56.3 million as revenue more than doubled.
However, it said accountants KPMG had to request more time to complete its audit of the results.
NatWest shares fall as lender leaves profit guidance on hold
Friday 28 April 2023 11:46 , Daniel O'Boyle
A surge in first-quarter profit at NatWest helped by a rise in mortgage lending and low bad-loan rates added to signs of a rebound in the UK’s housing market today
The high street lender lender reported a surge of around 50% in first quarter pre-tax profit of almost £1.8 billion, beating City forecasts. Nonetheless, it shares fell 16p to 257p, in part as traders seemed disappointed it did not lift profit guidance for the full year.
Joseph Dickerson at City stockbroker Jeffries said: “Management really needed to raise the £14.8 billion 2023 revenue guide to around £15 billion.”
Sony needs a superhero as lack of blockbusters hurts profits
Friday 28 April 2023 11:14 , Daniel O'Boyle
Profits at one of the world’s biggest movie studio owners, Sony Pictures Entertainment have been hit by a lack of global superhero blockbusters.
The film and TV arm of the Japanese giant reported income of 119.3 billion yen (£710 million) in 2022, down 44% from 217.4 billion yen (£1.28 billion) the previous year.
Sony said that 2021 had been boosted by major franchise hits such as Spider-Man: No Way Home and Venom: Let There Be Carnage. However Sony Corp is forecasting an 11% rise in sales this year on a stronger pipeline of franchise releases and revenues from its streaming service acquisition Crunchyroll.
Overall, Sony Corp sales grew to 11.54 trillion yen (£68 billion), up 16% from 9.92 trillion (£59 billion) yen in 2022. Operating income was flat at 1.2 trillion yen (£7.1 billion). The games division saw strong revenue growth with sales of 3.64 trillion yen (£22 billion) up from 2.74 billion yen (£16 billion) a year prior.
Citry comment: Deutsche’s Numis swoop is a show of faith that City sorely needs
Friday 28 April 2023 11:11 , Daniel O'Boyle
On the face of it the timing looks odd.
London’s corporate finance markets have been moribund for a couple of years, with M&A deal volumes depressed and IPOs virtually an endangered species.
Thousands of jobs have been lost and there is tumbleweed blowing through the offices of some of the City’s biggest advisory names.
FTSE 100 lower despite Pearson and Pru boost
Friday 28 April 2023 10:31 , Graeme Evans
Reassuring updates by Prudential and Pearson today failed to prevent the FTSE 100 index from falling 34.42 points to 7797.16 as weaker financial and mining stocks weighed on the top flight.
The mood for European markets wasn’t helped by figures from the powerhouse German economy showing unchanged GDP in the first quarter, below forecasts for 0.2% growth. The figure across the eurozone was 0.1% higher, compared with hopes for 0.2%.
The Pru rose 27.5p to 1190.5p after it said new business profit in Hong Kong more than doubled in the first quarter. Despite the favourable post-lockdown trends, its shares remain broadly unchanged so far this year.
Education publishing business Pearson rose 26.4p to 881p after it revealed a stronger-than-expected start to 2023 with underlying sales growth of 6%.
FTSE 100-listed Scottish Mortgage also lifted 2% or 12p to 627.6p after stronger-than-expected results from Amazon.com.
The Baillie Gifford investment trust, whose valuation has taken a hammering in recent months, has 2.5% of its portfolio invested in Amazon alongside other holdings including Tesla, Moderna and Shopify.
Amazon shares improved 5% in regular trading on Thursday before its better-than-expected results triggered further gains in after-hours dealings.
The post-bell rally later faded, however, as a jittery Wall Street market turned its attention to slowing growth for the Amazon Web Services cloud computing platform.
Germany narrowly escapes recession as economy flatlines
Friday 28 April 2023 10:00 , Daniel O'Boyle
Germany avoided a recession by the skin of its teeth, underperforming expectations in the first quarter as its economy flatlined.
There was no growth in the German economy during the first three months of the year, despite expectations of a 0.2% increase in GDP.
Hikma ups guidance after strong generics growth
Friday 28 April 2023 09:14 , Daniel O'Boyle
Hikma Pharmaceuticals upped its guidance for the year thanks to the strength of its generics arm, but warned that ongoing events in Sudan could have an impact on its earnings.
The pharma giant said “an improving pricing environment, new business wins and a better-than-expected performance across our differentiated portfolio” mean that its generics division is set to grow by almost 20% this year, up from just over 10%.
“Hikma has had a good start to the year. Our Injectables and Branded businesses continue to perform well reflecting our diversified portfolio of products and manufacturing flexibility. We have also had a stronger than expected start in our Generics business, leading us to upgrade our guidance for the full year,” CEO Said Darwazah said. “The strength of our operations is enabling us to meet the evolving needs of our customers across our markets and we look forward to making continued progress in the year ahead.”
However, it noted that its current guidance does not take into account any potential impact from unrest in Sudan, which makes up around 2.5% of its revenue.
Shares are up 4.3% today.
Education publisher Pearson buoyed by work skills training
Friday 28 April 2023 09:07 , Daniel O'Boyle
Pearson, one of the world’s largest educational publishers, said that pushes by workers to learn new skills had helped the company beat its financial expectations in the first months of the financial year.
Boss Andy Bird said that Pearson’s enterprise-facing business, which upskills or reskills workers, had seen double-digit growth in the period.
Overall the company said that sales had risen by 6% over the period, excluding the impacts of a strategic review and a business unit that Pearson is selling.
NatWest shares slide, FTSE 100 flat
Friday 28 April 2023 08:26 , Graeme Evans
NatWest shares have been hit by heavy selling, even though the state-backed lender delivered reassauring first quarter results.
The FTSE 100-listed stock slumped 6% or 15.1p to 257.1p as the volatile performance of stocks in the banking sector continues. Lloyds also dropped 2% or 0.8p to 48p ahead of its figures on Wednesday.
Richard Hunter, head of markets at Interactive Investor, said the negative reaction to the NatWest numbers could contain an element of disappointment on customer balances and the unchanged outlook guidance.
He added that the strength and stability of the group remained attractive in the current climate, resulting in the market consensus of the shares as a “buy”.
Other blue-chip trading updates drew a more positive response, with Prudential shares up 3% or 39p to 1202p and educational publisher Pearson ahead 24p at 878.6p.
A weaker-than-expected FTSE 100 index slipped 7.62 points to 7823.96 whereas the FTSE 250 index cheered 64.09 points to 19,312.10.
Strong US session lifts FTSE 100, focus on eurozone GDP
Friday 28 April 2023 07:34 , Graeme Evans
Wall Street trading was anything but dull yesterday after US GDP missed expectations, leading tech stocks surged and the S&P 500 index finished 2% higher in its best session since early January.
The strong trading reflected relief at this week’s run of stronger-than-expected earnings updates, including Meta Platforms as the Facebook owner’s shares finished 14% higher.
A first quarter annual US GDP figure of 1.1% fuelled recession expectations but failed to deter buyers as investors focused on the possibility the figure will deter the Federal Reserve from another rate rise next week.
There was a setback after the closing bell, however, as Amazon shares lost earlier gains due to concerns about slower growth in its cloud business.
The focus now turns to this morning’s run of eurozone GDP figures, with traders hopeful that Germany’s economy can avoid a technical recession. We’ve already heard from France, where quarter-on-quarter growth of 0.2% matched expectations.
The FTSE 100 index dropped 0.3% yesterday but CMC Markets expects a rise of 23 points to 7506 at today’s opening bell.
WANdisco narrows fraud investigation down to one rogue employee
Friday 28 April 2023 07:28 , Simon Hunt
WANdisco has narrowed its investigation down to one single employee as the beleaguered tech firm seeks to establish why its revenue bookings were false.
The firm said in an update: “The evidence identified supports the initial view that the irregularities are as a result of the actions of one senior sales employee only.
“All of the purchase orders associated with the senior sales employee in question are illegitimate.”
WANdisco said it believed all purchase orders by other staff members were legitimate.
Deutsche Bank buys Numis for £410 million to up UK corporate presence
Friday 28 April 2023 07:22 , Daniel O'Boyle
Deutsche Bank is set to buy ‘mini-investment bank’ Numis for £410 million, in a deal that the German titan says will help it grow its ties with London’s top firms.
But it warned some jobs could be lost, while adding that these cuts are “not expected to be material”.
Deutsche Bank will pay 350p per Numis share, valuing the business at £410 million. Numis shares closed at 204p yesterday
NatWest’s profits up over 50% and bad debt levels hold steady
Friday 28 April 2023 07:19 , Michael Hunter
NatWest, the partially publicly owned bank, reported first quarter earnings of almost £1.3 billion today -- up over 50% -- and said that its level of bad debts were stable, while new mortgage lending grew.
Net loans to customers were up by £4.1 billion, or 2.1%, mainly due to new mortgage lending of £3.9 billion, another sign of demand for home loans heading back up after the disruption late last year from the Truss government’s mini-Budget, when hundreds of fixed-rate mortgages were pulled across the banking industry,
Customer deposits were down £4.4 billion, or 2.3%, as its customers paid more tax in the period, when bills from His Majesty’s Revenue and Customs were due in January.
It wrote off £70 million in bad loans, an impairment charge it said meant “Levels of default remain stable and at low levels across the portfolio.”
Amazon shares rise after earnings beat expectations
Friday 28 April 2023 06:59 , Simon Hunt
Amazon shares rose 11% in after-market trading after the tech giant posted first-quarter earnings that came in ahead of expectations.
Revenue for the quarter was $127.4bn, up 9% compared to the $116.4bn last year, while profits hit $3.17bn, higher than the $2.24bn City analysts had expected.
Income from its cloud computing and advertising units both beat estimates.
Amazon CEO Andy Jassy, said: “there’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy”.