Yahoo Finance FTSE 100 Live: BP in new $1.5 billion share buyback, Euro recession fears, blue-chips fade
Lloyd's of London insurance syndicate group set for rare new London Stock Exchange listing next month
Tuesday 31 October 2023 15:18 , Daniel O'Boyle
The London Stock Exchange is set to get a rare new listing, with London Innovation Underwriters Limited (LIU) set to go public via a £300 million reverse merger with special-purpose vehicle Financials Acquisition Corp (FAC) next month.
LIU, a group of of syndicates in the Lloyd’s of London insurance market, is set to trade on the London Stock Exchange’s Main Market after its merger with Finsac closes on 14 November. The firm offers public-market investors a chance to share in the gains of syndicates in the centuries-old risk market.
The plans for LIU to go public were already set out in September, but FAC has now set a date for the combination, which is set to raise £300 million.
Odey Asset Management to shut down after allegations against founder
Tuesday 31 October 2023 14:28 , Daniel O'Boyle
Scandal-hit hedge fund Odey Asset Management is to close just months after a series of sexual assault and harassment allegations against its eponymous founder.
In a short statement on its website, the investment company said it has transferred all funds to new asset managers and is being wound down.
“Odey Asset Management, including Brook Asset Management and Odey Wealth, will be closing,” it said
“Fund managers and funds have moved to new asset managers.”
City Voices: Bank of England must cut rates now
Tuesday 31 October 2023 13:58 , Daniel O'Boyle
The UK is in serious risk of entering a recession, meaning hardship and misery for millions, Ben Ramanauskas writes
On Thursday the Bank of England will announce its interest rate decision. The Monetary Policy Committee will likely be debating whether to increase Bank Rate to 5.5% or remain at 5.25%. This is the wrong debate. The MPC should instead be voting on whether or not to lower interest rates to 5% or keep them at the current rate. The right course of action would be to lower rates on Thursday.
Given that inflation is still way above the Bank’s target of 2%, it might seem odd to call for a cut to interest rates. It will certainly be a difficult call to explain to the public – and the Treasury – but it is the right one.
This is because although inflation is above target, it is actually much lower than where the Bank had expected it to be at this point. What is more, Producer Price Inflation has fallen and annual rates have turned negative which should mean lower costs continue to be passed onto consumers.
Market snapshot as shares fade
Tuesday 31 October 2023 13:33 , Daniel O'Boyle
The FTSE 100 is back to within a handful of points of where it started the day, after its early gains disappeared.
Take a look at our full market snapshot.
West End Christmas spending to hit £1.64 billion as tourists return
Tuesday 31 October 2023 13:27 , Daniel O'Boyle
Christmas spending in the West End is set to rise slightly to £1.64 billion this year as returning foreign visitors give a boost to stores and restaurants over the festive season, according to new forecasts today.
But Business group New West End Company (NWEC) said domestic expenditure would still be shackled by the cost of living squeeze, limiting the uplift on last year’s £1.55 billion.
Although this year’s figure represents a small cash increase it will mark a chunky fall in real terms after a year when inflation was running in the high single digits.
The forecast covers spending in November and December in Oxford Street, Regent Street, Bond Street and Mayfair.
More firms going bust in England and Wales than since 2009
Tuesday 31 October 2023 12:44 , Daniel O'Boyle
More businesses have gone bust in England and Wales in recent months than since 2009 amid the aftermath of the financial crisis, according to Government figures.
The construction, retail and hospitality sectors are among the hardest hit.
Company insolvencies jumped by a 10th between July and September, compared to the same period last year, new Insolvency Service data revealed.
Issa brothers complete EG Group UK sale to Asda at a discount amid $500 million debt refinancing
Tuesday 31 October 2023 12:17 , Daniel O'Boyle
EG Group has completed the sale of its UK operations to Asda at a discount on top of securing a fresh $500 million loan as the billionaire Issa brothers seek to reorganise their sprawling retail and petrol forecourt business amid high debt burdens.
The acquisition of EG Group’s UK business was agreed an enterprise value of £2.07 billion, some £230 million lower than was previously suggested. Asda said the discounted cost "reflects adjustments agreed between the two parties as they have worked through the detail of the transaction."
Proceeds from the deal will be used to partially refinance EG Group's debt set to mature in 2025, the firm said. in addition to the launch of a new $500 million term loan, due February 2028.
Issa brothers complete EG Group UK sale to Asda at a discount amid $500 million debt refinancing
Tuesday 31 October 2023 12:13 , Simon Hunt
EG Group has completed the sale of its UK operations to Asda at a discount on top of securing a fresh $500 million loan as the billionaire Issa brothers seek to reorganise their sprawling retail and petrol forecourt business amid high debt burdens.
The acquisition of EG Group’s UK business was agreed an enterprise value of £2.07 billion, some £230 million lower than was previously suggested. Asda said the discounted cost "reflects adjustments agreed between the two parties as they have worked through the detail of the transaction."
Proceeds from the deal will be used to partially refinance EG Group's debt set to mature in 2025, the firm said. in addition to the launch of a new $500 million term loan, due February 2028.
FTSE 100 climbs - market snapshot
Tuesday 31 October 2023 11:43 , Daniel O'Boyle
The FTSE 100 has started to climb after a flat start, with Rolls Royce the biggest riser.
Gilt yields, meanwhile, have fallen further away from the highs reached last week, amid slowing inflation in the Eurozone.
EU GDP 'sets stage for recession'
Tuesday 31 October 2023 11:35 , Daniel O'Boyle
The Eurozone economy shrank in the second quarter, putting the currency union on recession watch.
GDP was down by 0.1%, slightly below estimates. A second quarter of decline would put the Eurozone in recession.
Matthew Ryan, Head of Market Strategy at global financial services firm Ebury, said: “This morning’s underwhelming set of Euro Area GDP numbers sets the stage for a possible recession in the bloc in the second half of the year.
"While the 0.1% contraction in activity was only modestly below expectations, the inability of the bloc to post even modest growth is an alarming development given that the impact of ECB policy tightening and geopolitical concerns are yet to be fully reflected in the data. A technical recession later in the year, however mild, may now be rather difficult to avoid.
“The easing in Euro Area inflation in October provides a source for comfort, notably the sharp drop in the headline number, which is now below 3% for the first time in over two years. This should alleviate the squeeze on household purchasing power, and may elicit a dovish response from the European Central Bank, retrospectively supporting the bank’s call to effectively end its hiking cycle. We see it as very likely that the next move in ECB rates will be lower, with a first cut appearing probable before the end of Q2 next year. This is a bearish development for the euro, particularly given that US rates are likely to remain on hold until at least the second half of 2024.”
The slowdown continues to fuel expectations that the European Central Bank will not raise interest rates any further.
BusinessLDN calls for VAT-free shopping, TfL guarantees and rates reform in Autumn Statement wishlist
Tuesday 31 October 2023 11:12 , Daniel O'Boyle
London business advocacy group BusinessLDN has called on the Chancellor to bring back VAT-free shopping and to “keep the door open” for HS2 to be expanded to Manchester, as it focuses on what its boss calls “low-hanging fruit” in in its submissions for next month’s Autumn Statement.
The London business group has submitted 21 proposals to the Chancellor ahead of his Autumn Statement on 22 November. BusinessLDN CEO John Dickie said that these were mostly made up of proposals with a low fiscal impact that would boost efficiency, as the Government is likely to feel constrained in its ability to cut taxes or boost spending amid sky-high inflation and interest rates.
“There are some things that are very difficult unless you’re willing to spend a lot of money, but equally there’s some low-hanging fruit out there and that’s our starting point,” Dickie told the Standard.
Rolls-Royce shares jump after upgrade, Zotefoams higher
Tuesday 31 October 2023 10:22 , Graeme Evans
Rolls-Royce shares today rose 4% or 8.1p to 210.1p as analysts at Barclays shifted their recommendation to “overweight” with a target price of 270p.
The shares peaked at 233p in September, but the recovery from 77p of a year ago has stalled in recent weeks. Today’s backing for Rolls comes a month before chief executive Tufan Erginbilgic is due to disclose a strategy review along with medium-term goals for the business.
The early stages of his transformation plan have already led to bolstered 2023 results expectations, with Rolls now guiding towards operating profits of up to £1.4 billion.
The upturn for shares in today’s session helped the FTSE 100 to lift 30.29 points to 7357.68, aided by Monday’s sharp rebound for Wall Street markets.
Blue-chips up by 2% included gambling stock Entain, housebuilder Taylor Wimpey and medical devices firm Smith & Nephew.
Disappointing China manufacturing figures also failed to prevent Asia-focused bank Standard Chartered recouping some of last week’s heavy losses with a rise of 14.2p to 634.6p.
The FTSE 250 index improved 136.52 points to 17,154.11, with precision instruments firm Spectris among the top performers. Its shares lifted 3% or 102p to 3108p after forecasting profits in the top half of its guidance range.
Deliveroo rose 8p to 128.8p as the food delivery app revealed a strike price of 130p in its offer to buy £250 million of its shares.
The move representing 10.6% of its overall share capital is towards the top end of the 115p-135p indicative range. It compares with 390p in the company’s £7.9 billion stock market listing of 2021 and October’s low of 76p.
Shares in Nike partner Zotefoams have fallen since the summer but got back to winning ways today as the Croydon-based materials technology firm revealed it is supplying the US giant’s new Ultrafly trail racing shoe.
Zotefoams, whose exclusive relationship with NIke runs until the end of the decade, accelerated 5% or 15p to 294p in the FTSE All-Share.
Eurozone inflation at just 2.9%
Tuesday 31 October 2023 10:06 , Daniel O'Boyle
Inflation in the Eurozone has fallen faster than expected to a two-year low of 2.9%, bringing the rate of price rises in the currency union close to the European Central Bank’s target.
The rate was expected to fall from 4.3% in September, but the larger-than-expected fall should be good news to consumers and investors across Europe and all but guarantee that the ECB’s interest rates have peaked. It brings the rate of inflation to within one percentage pont of the 2% target.
Core CPI, which excludes energy and food was higher, at 4.2%, as energy prices had fallen since last year but this was also a decline from September. Service inflation came to 4.6%.
Mathieu Savary, Chief European Strategist at BCA Research, said: “European inflation fell below expectations. The deceleration is strong and supported by various factors such as advantageous base effects, slowing wages, muted inflationary pressures and tame inflation expectations for next year.
“While it will make the ECB comfortable, it is still too early to bet on an imminent rate cut.”
City Comment: Bankers cheer end of bonus cap -- or do they?
Tuesday 31 October 2023 09:57 , Simon English
Today is one of joy for bankers and therefore for the rest of us. What’s good for them…
After a decade in the workhouse, labouring under EU imposed rules that limited their bonuses to merely double their salary, the cap is lifted as of now.
Don’t doubt that this move will lead to an immediate jump in business optimism, economic growth, and your pension.
If the bankers can’t be paid whatever they want – even if they happened to have been bailed out by the government at some distant time in the past beyond all living memory – well, it’s like we’re living under feudal communism.
IG culls 300 as City job fears grow
Tuesday 31 October 2023 08:59 , Simon English
FRESH fears of a cull of City jobs grew today when IG Group said it would cut 10% of its workforce.
For the leading spread betting house that is 300 roles.Replicated across a City workforce of 587,000, that would mean towards 60,000jobs lost.
Some of the big banks such as Goldman Sachs have already madecuts, so may not repeat them, but the IG news caused a shiver of fear in theSquare Mile about what could be coming.
IG said the job losses would help save £50 million a year.It called the move “measures to simplify and streamline the business, better positioning it for further growth”.
Charlie Rozes, acting CEO since July, said: “We want to position IG Group as a lean fintech company and today's decisive actions ensure a strong platform forfuture growth.”
BP slides in steady FTSE 100 session, Spectris higher
Tuesday 31 October 2023 08:36 , Graeme Evans
BP shares have fallen 4% or 23.2p to 503.5p after third quarter results missed City expectations, continuing a decline from the level of 558p seen two weeks’ ago.
The update also put pressure on Shell, with shares in the Anglo-Dutch firm down 29.5p to 2657.5p ahead of its own update on Thursday.
Rolls-Royce posted the best performance in the FTSE 100, rising 4% or 7.7p to 209.7p after analysts at Barclays gave the engines giant an “overweight” recommendation and shifted their price target from 230p to 270p.
Vodafone shares failed to benefit from the sale of its operations in Spain as the mobile phone giant looks to reposition its portfolio towards growth markets. Shares gave up initial gains to stand half a penny lower at 76.3p.
The FTSE 100 index rose 7.78 points to 7335.17 and the FTSE 250 improved 103.37 points to 17,120.96.
Top performing mid-cap stocks included precision instruments firm Spectris, which rose 72.9p to 3078.9p after revealing that it is on track for annual profits in the top half of its guidance range.
French GDP growth slows
Tuesday 31 October 2023 08:06 , Daniel O'Boyle
The French economy barely eked out growth in the third quarter, as GDP ticked up by 0.1%.
That is a fall from a 0.6% growth rate in the second quarter of the year and is in line with economists’ expectations. The decline in growth was driven by a fall in exports, but demand at home was stronger.
“The details of the figures are solid, with domestic demand rebounding strongly,” Charlotte de Montpellier, senior economist for France and Switzerland at ING, said. “Nevertheless, the French economy is facing a significant economic slowdown that is likely to persist over the coming quarters.”
BP announces new $1.5 billion share buyback alongside $3.3 billion third-quarter profit
Tuesday 31 October 2023 07:27 , Michael Hunter
BP has unveiled plans for another multi-billion dollar payday for shareholders alongside quarterly profits of $3.3 billion dollars (£2.7 billion).
The headline earnings were under City forecasts of $4 billion. Shares in BP fell 24p to 503p in opening trade, a drop of over 4%, making it the biggest faller on the FTSE 100.
Nonetheless, the capital return will be welcomed by investors, but is likely to stoke more public controversy.
It comes as the oil and gas giant looks for a full-time chief executive after the sudden departure of Bernard Looney. He resigned in September for failing to fully reveal relationships with colleagues.
With many households still grappling with the cost-of-living crisis, sparked by higher fuel prices, lobbying groups were already hitting out at the capital return this morning.
BP will hand $1.5 billion to investors after the third quarter earnings, which were up from $2.6 billion in the second quarter, but down from the $8.2 billion in the third quarter of 2022, when wholesale energy markets were around their peak.
Interim CFO Kate Thomson said the company "delivered robust operating cash flow".
Campaign groups took a very different view.
Jonathan Noronha-Gant, at Global Witness, said:
"BP is still riding the wave of the energy crisis, shovelling cash to its shareholders while the UK’s poverty rates spiral. The government is allowing BP to make off with the heist of the century."
Vodafone sells Spain unit in 5 billion euro deal
Tuesday 31 October 2023 07:17 , Simon Hunt
Vodafone has sold its Spanish subsidiary to Zegona Communications in a 5 billion euro deal.
The deal comprises €4.1 billion in cash and up to €0.9 billion in the form of preference shares.
Vodafone said it will continue to provide certain services to Vodafone Spain for a total annual service charge of €110 million.
CEO Margherita Della Valle said: "My priority is to create value through growth and improved returns.
"Following the recently announced transaction in the UK, Spain is the second of our larger markets in Europe where we are taking action to improve the group's competitiveness and growth prospects."
Wall Street boost fades amid China disappointment, oil steadies
Tuesday 31 October 2023 07:15 , Graeme Evans
Concerns over China’s economy today overshadowed a strong handover from Wall Street after the Dow Jones Industrial Average posted its best session since July.
The rebound, which follows a run of poor sessions for US markets, also saw the S&P 500 index and the tech-led Nasdaq Composite improve by more than 1%.
London’s FTSE 100 index lifted 0.5% yesterday but is expected by CMC Markets to start this morning’s session down by 10 points at 7317.
The lacklustre start follows selling in Asia after the headline PMI reading for China’s manufacturing sector showed an unexpected contraction to 49.5 in October.
The figure for services also missed expectations to leave the Hang Seng index in Hong Kong down by more than 1.5% and the Shanghai Composite in negative territory.
On commodity markets, the price of Brent Crude steadied at $86.67 a barrel after yesterday’s sharp fall and gold traded at $1995 an ounce.
Recap: Yesterday's top stories
Monday 30 October 2023 22:47 , Simon Hunt
Good morning. Here's a summary of our top stories from yesterday:
New figures show the proportion of young London home buyers taking out mortgages with terms of 35 years or more has jumped from 11% to 27% since 2020
HSBC profits more than double to $7.7bn in Q3 largely thanks to higher interest rates
Cannes Lions organiser Ascential sells its digital commerce and consumer analytics arms for £1.4 billion to leave it focussed on its events business
Premier Brands buys Fuel10k breakfast brand for £34 million
Fortnums starts delivering to EU for first time since Brexit after opening huge new warehouse in Belgium
And...Rihanna’s St John’s Wood mansion sells for £27.5 million
