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FTSE 100 Live: FTSE closes up 0.9%, SVB deal allays banking fears, Binance CEO sued by US watchdog

 (Evening Standard)
(Evening Standard)

After news of a buyer for the US arm of the collapsed Silicon Valley Bank, attention is back on financial stocks. The FTSE 100 is making gains, with financial stocks in the lead.

After pressure on Friday on shares in Deutsche Bank, leas than a week after UBS’s government-brokered rescue deal for Credit Suisse, a series of senior politicians voiced confidence in the sector, including the German Chancellor Olaf Scholz.

CMC shares plunge on late-day profit warning

16:44 , Daniel O'Boyle

Shares in trading and spread betting platform CMC Markets have plummeted after the business announced a profit warning late this afternoon.

The business announced 40 minutes before markets closed that its net operating income for the year to 31 March is now expected to fall between £280 million and £290 million, missing the midpoint of City expectations by £32 million.

CMC said the poor performance was because February and March “posed a more challenging environment with lower equity volumes and a higher proportion of lower-margin institutional trading activity”.

CMC shares were down more than 20% on the news, to 183.2p.

FTSE 100 closes at 7471

16:44 , Daniel O'Boyle

The FTSE 100 closed at 7471.77 today, gaining 66 points as fears around the banking sector eased.

The index of blue-chip London businesses recouped almost all of Friday’s losses, ending up slightly below where it had started on Friday morning.

Many of the top gainers of the day were banking shares, with Barclays up 2.5%, though companies like Ocado and 3I were also among the biggest risers.

On the other hand, new economic data from China led to a number of mining shares declining.

Binance sued by US derivatives watchdog

16:15 , Daniel O'Boyle

The US Commodity Futures Trading Commission has filed a lawsuit in US federal court against cryptocurrency exchange Binance and its CEO Changpeng Zhao.

Filed in the Northern District Court for Illinois, the lawsuit alleges Zhao and his business “disregarded applicable federal laws” by targeting US customers, “despite publicly stating its purported intent to ‘block’ or ‘restrict’ customers located in the United States”.

Bitcoin is down 4.7% today to £21,786.

Read more here

Matalan appoints new chair and CEO

15:40 , Daniel O'Boyle

Matalan has appointed former Lidl CEO Karl-Heinz Holland as its new chairman and Jo Whitfield, previously in charge of Co-op food, as CEO.

Holland was CEO of Lidl from 2008 to 2014, leaving due to "unbridgeable" differences with the board when it came to future strategy. Since 2021, he has been chair of European discount fashion business Takko Fashion, and he will continue in that role alongside his duties at Matalan.

Whitfield oversaw a business that brought in revenue of £10.8bn in 2021 at the Co-op, and was also Matalan’s head of finance from 2002 to 2008.

WPP buys second influencer marketing agency in space of a week

15:17 , Daniel O'Boyle

Advertising conglomerate WPP has acquired a second influencer marketing business in the space of a week, buying Obviously for an undisclosed sum.

Obviously - which employs 100 people and runs campaigns in which popular social media influencers promote companies such as Google, Ford and Amazon - will become part of WPP subsidiary VMLY&R.

“The creator economy has experienced huge growth in recent years, and it plays a pivotal role in shaping consumer behavior,” WPP CEO Mark Read said. The Obviously team brings an exceptional range of global influencer marketing capabilities and a world-class technology platform that will further strengthen our offer to clients.”

Last week, the ad giant bought influencer agency Goat, a business whose co-founder last year said WPP had been too slow to embrace digital advertisement, and that at least 30% of its revenue would be “literally not fit for purpose” within a few years.

US shares up, First Citizens skyrockets after SVB deal

15:04 , Daniel O'Boyle

US shares are up this morning after banking sector fears were eased by First Citizens’ Bank’s acquisition of the collapsed US arm of Silicon Valley Bank.

The S&P 500 is up 0.6% to 3995, while the Dow Jones is up 0.7% to 32,458. The Nasdaq composite, meanwhile, has risen by 0.5% so far to 11,880.

Shares in First Citizens skyrocketed following the news of the acquisition, and are currently up 42.2% to $826.31.

We can’t let saving the banks distract from the vital war on inflation

14:56 , Daniel O'Boyle

The Bank of England is faced with the sort of choice that central bankers prefer not to confront, economist Stephen King writes.

Inflation is far too perky, which warrants higher interest rates. The global financial system, however, is in an unexpected state of stress: the financial “central heating” is on the blink. Past financial upheavals might suggest the need for interest rate cuts.

There has been much talk about a repeat of 2008, the year in which Lehman Brothers failed and the global financial crisis became a hideous reality. But the comparison can only be taken so far.

Read more here

Business rates revaluation could hit smaller companies in some London areas

14:38 , Jo Hodgson

The business rates revaluation that comes in next month could create a barrier for affordable offices in some parts of London and hit smaller companies, new research suggests.

Real estate consultancy Colliers looked at how various popular office locations will be impacted by the rates revaluation, which is based on rateable values from April 2021.

It found that a number of ‘fringe’ areas popular with start-ups and small firms, some of which may find the City and West End too expensive, will see higher percentage rises than in central London.

Read more here

Wall Street shares set to open higher after SVB rescue

14:04 , Daniel O'Boyle

Shares in US-listed companies are expected to open higher when trading begins on Wall Street.

Dow Jones futures are up by 1.1% to 32657, while S&P 500 futures are up 1.2% to 4027. Nasdaq futures have gained 0.6%, to 12927.

Most of the top premarket risers have been in the banking sector, after a rescue deal was agreed for Silicon Valley Bank.. First Republic Bank - which has routinely been among the biggest movers on Wall Street in recent weeks - is set to open at $15.67, up 26.7%.

Nanoco fires back in dispute with shareholder

13:41 , Daniel O'Boyle

AIM-listed nanotechnology firm Nanoco has “emphatically” rejected allegations published by a shareholder this morning, accusing board members of making “misleading” statements.

A shareholder group led by Tariq Hamoodi, who holds a 4.23% stake in the nanotechnology business, outlined their “deep concerns” about the business in a letter that was made public today.

It alleges the Nanoco board made statements about a lawsuit with Samsung that suggested the company - which makes 10-atom-wide lights used in screens - expected a “transformational” settlement several times larger than its £65 million market cap, and called for five of the company’s six directors to resign.

However, Nanoco said its directors had “no intention” of exiting, as they were confident there was no wrongdoing.

“The directors of Nanoco have no intention of stepping down from the board and are confident that the board’s actions and statements over the period of the Samsung litigation were in line with its corporate governance duties, obligations and standards,” Nanoco said.

A brighter day — but we’re still close to the edge of panic

12:53 , Jonathan Prynn

Fifteen years down the track most of us remember the events of the global financial crisis as a frenzy of collapsing share prices, household name banks teetering on the brink of the abyss, and world leaders cobbling together vast emergency bailouts.

In truth it was a far slower burn than that, although the tumultuous climax did indeed play out at very high speed.

Events seem compressed in hindsight, but it was a full year between the first major drama of the whole saga in the UK — the notorious run on Northern Rock in September 2007 — and the denouement.

Read more here

Waitrose and Morrisons ramp up Deliveroo partnership

12:30 , Simon Hunt

Waitrose and Morrisons have ramped up their partnership with Deliveroo as the supermarket giants battle to stem their dwindling share of the grocery market.

The pair are opening two new delivery-only grocery sites in Acton and Norbury as part of the Deliveroo HOP service, to bring over 1300 products to local customers at breakneck speed.

Morrisons’ share of the grocery market fell from 9.8% to 9% over the past year, according to Kantar data, while Waitrose saw its market share decline from 5% to 4.7%.

The top three grocery items ordered on Deliveroo by Londoners are bananas, avocados, and semi-skimmed milk. South Londoners’ top ten included strawberries and raspberries, and North Londoners were more interested in getting bottled water delivered to their door.

Deliveroo HOP first launched in Vauxhall with Morrisons in September 2021 and has since expanded to include Milan, Paris, Hong Kong, and Dubai.

Deliveroo shares are down 0.5% today to 90p.

Retailers expect sales growth next month -- CBI

12:03 , Michael Hunter

According to fresh data from one of the UK’s main business advocacy groups, retailers are expecting sales to grow next month after volumes held steady in March.

While high street sales for this month stayed flat according to the Confederation of British Industry, it said they were “good for the time of year”. The CBI’s Distributive Trades data came out a week after inflation data for February unexpectedly rose and stuck in the double digits, at 10.4%.

That encouraged the Bank of England to stick with a quarter-point rate hike to 4.25%.

British Gas leads meter force-fittings

11:04 , Jonathan Prynn

Two energy suppliers, Scottish Power and British Gas, were responsible for more than half of the 94,201 forcible prepayment meter fittings last year, new figures reveal today.

Data from the Energy Security Department showed Centrica-owned British Gas obtained court warrants for 25,000 installations and Scottish Power for 24,320.

The industry suspended the practice last month pending a review by industry regulator Ofgem after an investigation uncovered how debt agents working for British Gas broke into vulnerable people’s homes to fit meters.

Aramco takes £2.9 billion stake in Chinese petrochemicals manufacturer

10:39 , Daniel O'Boyle

Saudi Arabia’s public oil company Aramco will pay £2.9 billion to take a 10% stake in Chinese petrochemicals business Rongsheng.

The Saudi energy giant - which announced profits of £161 billion earlier this month - will buy more than one billion shares of Rongsheng, which is involved mostly in polyester production.

Shares in Shenzen-listed Rongshen were up 5.9% following the announcement.

Family-run US bank rescues tech lender Silicon Valley Bank

10:26 , Daniel O'Boyle

Failed tech lender Silicon Valley Bank was taken over today by First Citizens in a deal that will cost about $20 billion but offered hope that the crisis of confidence in the global banking system could be easing.

SVB’s UK arm was sold to HSBC for £1 in a rescue bid two weeks ago, a deal that calmed tech sector nerves in this country.

This morning most of the rest of SVB, until recently a high-flying lender to many of America’s top tech start-ups, was handed to a family-controlled lender that has been around since 1898.

Read more here

Deutsche Bank shares recoup some of Friday’s steep losses

10:17 , Daniel O'Boyle

Deutsche Bank shares are up 3.3% so far today in Frankfurt, after heavy losses on Friday.

Shares in the lender were down by as much as 13% on Friday and finished down 8.5%, sparking fresh concerns about the banking sector, after the costs of insuring against a potential default skyrocketed.

However, shares partially rebounded this morning, up 3.5% to €8.84. The share price is still down 23.5% over the last month, though.

Housebuilders join banks in lending support to the FTSE 100

10:10 , Michael Hunter

As fears over the banking sector eased today, one of the sectors most exposed to the impact of any major slowdown in lending joined banks in a relief rally on London’s Stockmarket.

Housebuilders took up residence alongside mortgage providers on the FTSE 100’s leaderboard, adding their weight to overall gains.

Persimmon was up 18p at 1213p, with Barratt Developments over 5p stronger at 447p. Taylor Wimpey gained 1.4p to 117p, in a broad rally for the sector.

Cineworld shares lit up by reports of bid interest in its European and Israeli business

10:05 , Michael Hunter

Hopes for a potential buyer for parts of Cineworld helped shares in the multiplex chain to the top of the FTSE 250.

One of the biggest names to fall victim to pandemic-era lockdowns, Cineworld’s parent is in bankruptcy protection in the US. According to a report from Sky News, investment house Elliott Management is interested in snapping up the firm’s Eastern European and Israeli business.

Cineword’s UK and US theatres, which include the world famous nine-screen theatre in London’s Leicester Square is not part of the potential deal.

Shares in the company rose 0.1p, or 4.3%, to 2.49p.

Shareholders in AIM-listed Nanoco call for removal of five board members

09:54 , Daniel O'Boyle

Shareholders of high-tech manufacturing company Nanoco today published a letter calling for five of its six board members to be removed, accusing them of “repeated misleading statements”.

A shareholder group led by Tariq Hamoodi, who holds a 4.23% stake in the nanotechnology business, outlined their “deep concerns” about the business in a letter that was made public today.

The letter had originally been sent to the Nanoco board earlier this month, and the Standard understands that the business had hoped to respond after publishing its results this week. However, Hamoodi published the letter today as he felt the group had “not received an adequate response”.

It alleges the Nanoco board made statements about a lawsuit with Samsung that suggested the company - which makes 10-atom-wide lights used in screens - expected a “transformational” settlement several times larger than its £65 million market cap.

The ultimate settlement value was $150 million, but $85 million of this was for the sale of Nanoco’s IP rights. After deducting legal costs, the shareholder group claims the real proceeds from the settlement itself were “virtually nil”. Shares in AIM-listed Nanoco fell 23% when the settlement was announced.

The group also claims two minority shareholders received preferential treatment in fundraising.

As a result, it called for the removal of five board members: Nanoco’s chair, CEO and CFO plus non-executive directors Chris Batterham and Alison Fielding.

Nanoco declined to comment on the claims in the letter.

Fintech Equals set for Eurozone expansion with Oonex acquisition

09:43 , Daniel O'Boyle

London fintech Equals group today acquired Belgian payments business Oonex for £4.1 million, and announced plans to set up European HQ in Belgium.

Equals said the deal would allow it to offer card and payment services across the Eurozone for the first time.

“We are delighted to announce the acquisition of Oonex which enables us to bring our market leading products to new customers across Europe,” Equals CEO Iann Strafford-Taylor said.

“We are excited to establish our European headquarters in Belgium and to make use of the investment in technology that we have made over the past few years to rapidly deploy our global platform.”

AIM-listed Equals also announced profit of £12.1 million for 2022 this morning.

Tui heads south as tour operator’s stock stays exposed by rights issue

08:51 , Michael Hunter

Shares in Tui were the biggest single fallers on the FTSE 100, with pressure staying on the stock after it announced plans last week to sell discounted stock to repay pandemic-era aid.

The London-listed, German tour operator is offering eight new shares to investors for every three they currently hold. It is expected to raise about £1.6 billion at a discount of around 40% to the stock price before the scheme was announced.

Much of the proceeds will be used to clear Tui’s obligations under German state aid arrangements set up during Covid.

Its London-listed shares were down by a further 57p to 1322p on Monday.

Hyve expects to meet FY23 expectations as it prepares to be sold

08:28 , Daniel O'Boyle

Hyve, the events business set to be sold for £450m, today warned of “challenges in the macro-economic environment globally”, but remains confident of meeting expectations.

The business said attendance at some of its banking and tech exhibitions this year may be down, but it still expects the events to meet revenue expectations.

Hyve - which agreed a sale to Providence Equity Partners earlier this month - expects revenue for the first half of its financial year to fall between £95 million and £100 million.

“Our five-year transformation, which we completed last year and resulted in a streamlined and de-risked portfolio of market-leading events, has allowed us to start this year with purpose and momentum,” CEO Mark Shashoua said. “This has led to strong trading throughout the first six months of the year, with like-for-like customer spend tracking strongly into FY23 in line with our expectations.”

Banks top FTSE 100 after buyer for US part of Silicon Valley Bank helps soothe nerves

08:08 , Michael Hunter

London’s banks topped the leaderboard on the FTSE 100 in early trade, as nerves over the banking sector eased, helped by news of a deal to buy the US deposits of the collapsed Silicon Valley Bank.

After First Citizens of North Carolina emerged as the buyer for SVB, lenders were in demand in London on hopes that the move could help draw a line under the sense of crisis in the sector. Barclays made the best single gain up 5p, or almost 4%, at 139p. NatWest rose 6p to 264p, a rise of over 2%. Lloyds was up 1p at 47p, up 2%.

Overall, the FTSE 100 was 68 points stronger at 7473.42, up 0.9%.

Tortilla sales leap to new record after Chilango acquisition

07:41 , Simon Hunt

Sales at Tortilla jumped to hit a new record in 2022 after the burrito firm acquired London-based rival Chilango.

Revenue for the year rose 20% to £57.5 million as the firm opened 18 new stores said it was ahead of schedule on its plan to open 45 sites across the country within 5 years.

Richard Morris, CEO of Tortilla, said: “As well as our continued expansion across the UK, we further strengthened our market position in London through our strategic acquisition of eight Chilango restaurants in the first half of the year.

“We successfully converted five of these to the Tortilla brand and have refurbished the three remaining Chilango sites. All these sites are benefiting from increased footfall in London.

London’s FTSE 100 expected to rise with financials under scrutiny

07:15 , Michael Hunter

The FTSE 100 and wider European markets look set for opening gains today, with attention likely to remain on financial stocks.

After pressure on big-name lender Deutsche Bank on Friday, all eyes will be out for any further volatility in its shares and any signs of wider unease.

Ahead of the start of full trade, openning calls from CMC markets expect the FTSE 100 to rise 52 points to 7457, with similar gains expected in Paris and Frankfurt.

News broke oon Monday morning of a buyer for most of the US business of the collapsed Silicon Valley Bank. Regional bank First Citizens of North Carolina was named as the company taking on its deposits as regulators said SVB’s collapse would cost an industry-funded fund around $20 billion in losses.

Recap: Last week’s top stories

07:11 , Simon Hunt

Good morning. Here’s a summary of our top stories from last week.

  1. The Bank of England hiked interest rates to 4.25%, as it prioritises the fight against inflation over signs of stress in parts of the world financial system.

  2. Inflation rose 10.4 per cent in February up from 10.1 per cent in January in a suprise reversal of a recent downward trend.

  3. Lloyd’s of London plunged to an £800 million loss for 2022 it revealed today after big payouts relating to the war in Ukraine and Hurricane Ian in the US came alongside a drop in the value of its investment portfolio.

  4. February’s retail sales increased1.2% from January, notably stronger than the 0.2% forecast, in another sign of the resilience of the UK economy.

  5. MPs have called for a law change to ensure John Lewis remains employee-owned amid speculation execs are seeking to sell a portion to a private equity firm.

  6. Amigo Loans is set to be liquidated after the lender was unable to raise enough capital to continue trading.