Yahoo Finance FTSE 100 Live: Shares fade, NatWest profits after CEO exit, AstraZeneca rises
NatWest has reported a big jump in half-year profits to £3.6 billion, days after Alison Rose stepped down as chief executive.
The lender’s results included a bad debts provision of £223 million for the six months, although arrears levels remain low.
Other companies reporting today have included AstraZeneca, British Airways owner IAG and the property portal Rightmove.
FTSE 100 Live Friday
BA owner posts record H1 profit
AstraZeneca shares rally on results
Higher rates not impacting Rightmove
Closely watch US inflation measure declines
14:27 , Daniel O'Boyle
Core PCE Price Inflation, a measure of US inflation closely watched by the Federal Reserve, declined further to just 4.1% in June, in the latest sign that prices in the world’s largest economy are coming back under control.
Headline PCE infltion fell to just 3%, the same as the official CPI measure of inflation. But perhaps more significantly, the core PCE figure, sometimes seen as the Federal Reserve’s favourite measure of inflation, was also down.
That will provide hope that the Fed will not need to lift interest rates any further to get inflation down to the 2% target.
James Knightley, chief international economist at ING, said this will boost hopes of a ‘soft landing’.
“Consumers continued to spend in respectable moderation in June while inflation data softened further and key labour cost metrics undershot expectations, boosting hopes that inflation can return to target without the need for further Fed rate hikes and a recession,” he said.
Bank of England calls in Nobel Prize winner to find out why its predictions are wrong
13:34 , Daniel O'Boyle
Nobel Prize-winning economist and former Federal Reserve chair Ben Bernanke will lead a review into the Bank of England’s forecasting processes, to review the Bank’s economic predictions, which have had a poor track record of late.
Bernanke will lead a review into the Bank’s “forecasting and related processes during times of significant uncertainty”. It will look at “the role of the forecast” and how this should inform the Monetary Policy Committee’s decisions to raise or lower interest rates.
It comes as the Bank has come under fire for its projections of the cost-of-living crisis, which Threadneedle Street’s top economists expected to ease much more quickly than it has.
Drivers have to pay up to £3,600 more for ULEZ-compliant versions of some cars
13:06 , Daniel O'Boyle
Drivers are having to pay an extra £3,600 in order to get a ULEZ-compliant model of some cars, Auto Trader revealed today as the expansion of the zone was approved.
The country’s biggest marketplace for cars compared 2015 models of many diesel cars, which are not compliant with the rules, with the 2016 cars, which are.
It found that for a Volkswagen Golf, the ULEZ compliant 2016 model can cost customers £3,601 more than the 2015 version, a 28% increase. For a Ford Focus, the premium is £2,828 and for a Nissan Qashhqai is is £2,594.
City Voices: The NatWest head that should really roll for the Farage banking farrago
11:30 , Daniel O'Boyle
“My journalist friend read out a list of names. Did I have private contact details for any of them? To be honest, I told him, there was only one I recognised, and Sir Howard Davies would not talk,” Chris Blackhurst writes.
“Yes, they were the board members of NatWest, and apart from Davies, the chairman, they were relative unknowns.
“It must say something about the major bank they were there at all.
“What qualifies them? The question has already been answered by the events preceding the departure of Dame Alison Rose, the bank’s chief executive.”
Germany narrowly exits recession
10:41 , Daniel O'Boyle
The German economy is no longer in recession, but it is not yet growing, accoring to official data.
Europe’s largest economy stagnated in the second quarter, after slight declines in Q4 of last year and Q1 of 2023. That mets the technical definition of a recession , whichis typically defined as two conseuctive quarters of decline.
The performance was worse than expected, though, as economists had predicted slight growth.
Market snapshot with shares sllghtly higher
10:38 , Daniel O'Boyle
Take a look at the key market data as the FTSE 100 edged up, with its biggest stock among the top risers.
AstraZeneca and Standard Chartered rally on results, FTSE 100 higher
10:27 , Graeme Evans
A return to form by London’s biggest stock today propped up the FTSE 100 index during a session hit by more jitters over the US rate rise outlook.
AstraZeneca shares jumped 4% or 382p to 11,082p as strong half-year results revealed that eight of its medicines delivered sales above $1 billion.
Total revenues lifted 4% to 22.3 billion dollars (£17.4 billion) even though comparisons were skewed by 2.2 billion dollars (£1.7 billion) of Covid-related sales the previous year.
As well as reiterating Astra’s full-year targets, chief executive Pascal Soriot said momentum in the company’s drugs pipeline continued with eight positive “pivotal” trials for oncology medicines so far this year.
His comments and the company’s five-fold rise in profits were taken well after the City’s lukewarm response to trial results for a blockbuster drug being jointly developed to slow the progress of lung cancer.
Shares topped 12,200p in April only to fall towards the 10,000p threshold earlier this month. Today’s rebound by a company with a valuation of £165 billion supported the FTSE 100 index amid a weaker session for other European benchmarks.
The top flight climbed 21.66 points to 7714.42, offsetting a weak handover from Wall Street after robust GDP figures fuelled speculation that the run of US interest rate rises may not be over.
Asia-focused bank Standard Chartered also impressed after half-year profits came in 13% ahead of City hopes and it pledged to spend $1 billion on buying back its shares.
The lender rose 6% or 43p to 752p, continuing the strong run from below 600p in May.
The FTSE 250 index fell 0.6% or 121.18 points to 19,152.19, led by a slump of 27% for Vanquis Banking Group after it posted a £5.5 million half-year loss.
The former Provident Financial business, which helps people who can’t get access to credit products through mainstream lenders, reported a sharp drop in its net interest margin from 21.5% to 18% as shares fell 49.2p to 131.8p.
AFC Energy shares jumped 19% after announcing a joint venture with Speedy Hire that will see the pair launch a hydrogen powered generator plant hire business.
The move, which will meet increased demand for zero emission power on UK construction sites, sent the AIM-listed shares up 2.7p to 17.4p. Speedy added 0.2p to 37p.
Another big London IPO could be on the cards
09:46 , Simon Hunt
There were renewed hopes for a revival in the London stock market today after it emerged the world’s largest producer of sodium cyanide is eyeing the capital as the destination for a planned IPO.
Draslovka, a Czech chemicals company with a turnover of around $500 million, is selecting underwriters for the listing after inviting them to pitch over the summer, according to Reuters.
London is one of the top candidates for the listing, following in the footsteps of Czech transportation business Eurowag which joined the London Stock Exchange in 2021.
A Draslovka spokesperson said: “As has been previously disclosed, Draslovka’s international growth strategy requires capital, and an IPO is being considered as one of our options. We are in continuous dialogue with our financial advisors.”
The potential listing offers a rare glimmer of hope for an otherwise tumbleweed-filled IPO market in London, which has slumped to third place in the European league table – falling behind Istanbul and Milan – according to accounting giant PwC.
Hopes were dashed last month for another big chemicals IPO in London after We Soda, the world’s largest producer of natural soda ash, aborted plans for a listing, citing “extreme investor caution in London.”
Two-year mortgage rates down again, five-year rates steady
09:39 , Daniel O'Boyle
Two-year mortgage rates declined again and five-year rates held steady in the latest sign of relief for homeowners, according to new data from Moneyfacts.
The average two-year fixed residential mortgage rate today is 6.81%, down from an average of 6.83% yesterday. The average five-year fixed rate is 6.34%, the same as yesterday.
It comes as Nationwide yesterday became the biggest lender yet to cut its prices.
Paypoint expects customers to use 10% less energy over winter as support ends
09:27 , Daniel O'Boyle
Households are set to use about 10% less energy over the winter this year as customer support ends, according to the boss of Paypoint.
The business, which allows customers to load funds onto energy prepayment meters, said £246 million worth of Energy Bills Support Scheme Vouchers had been redeemed over the winter. That still means around 18% of customers did not use their vouchers. CEO Nick Wiles says this was despite suppliers reaching out to customers “five or six times” to remind them that support was available.
Wiles told the Standard that “consumers have really budgeted their consumption of energy well” since that support ended in June, though Summer months are not the best test of behaviour going forward.
He said consumption is down around 15-20% at the moment, and is likely to be down by around 10% in the winter.
Paypoint also faces a lawsuit, filed last week, from fuel poverty charity Global 365, which argues PayPoint’s dominant market position has stopped it from creating a cheaper rival. Wiles says Global 365 “misunderstands” the energy market.
Standard Chartered leads FTSE 100, NatWest shares flat
08:34 , Graeme Evans
Standard Chartered shares have jumped 6% at the top of the FTSE 100 index, up 39.6p to 749p after the Asia-focused lender announced a £1 billion buyback programme alongside a 20% rise in first-half profits.
NatWest, meanwhile, is close to its opening mark at 240.5p after a big jump in first-half profits was offset by a slight downgrade to full-year guidance on the net interest margin.
Shares in AstraZeneca and British Airways owner IAG rose more than 2% - up 328p to 11,028p and 3.25p to 158.2p - after their half-year figures pleased the City.
The FTSE 100 index bucked expectations for a weaker start by improving 13.41 points to 7706.17, whereas the FTSE 250 index lost 87.19 points to 19,186.18.
Vanquis Banking Group, which helps people who can’t get access to credit products through mainstream lenders, slumped 28% or 50.6p to 130.4p following its interim results.
The Bradford-based group, which used to be known as Provident Financial, said it performed well in the period but investors were disappointed by the cost and margin outlook.
City wealth manager and broker WH Ireland warns it could be close to collapse as it seeks funding
08:18 , Daniel O'Boyle
City wealth manager and broker WH Ireland warned that it could collapse if it doesn’t find new funding, as it looked to raise money at a huge discount and prepared to cut jobs.
It is offering shares at just 3p each, a discount of 86.7%, in order to raise £5 million and said it is in talks with the City watchdog about a potential wind down if it cannot raise that money.
It said this was necessary as “the widely reported multi-year low level of transactional activity in the financial capital markets” had hit its broker division, while “weaker market conditions” hurt its wealth management arm, leading to a £1.1 million loss.
“In recent weeks, on the basis of the adverse current and forecast trading and resultant losses, the company has been in discussion with the FCA (including in respect of the Group’s relevant net asset and regulatory capital positions) in order to ensure that, in the absence of the injection of further capital pursuant to the placing, the company could deliver a solvent wind down for the Group, if required, in line with the company’s solvent wind down plan,” it said.
It is also cutting jobs in order to reduce its costs, while some senior managers are taking salary cuts and receiving shares in return.
BA owner returns to profit and breaks records and pledges ‘resilience’ into summer getaway
07:56 , Michael Hunter
The company behind British Airways has returned to profit and broken records for it as travellers take back to the skies.
IAG also said it expected capacity to return this year to 97% of pre-pandemic levels, with holidaymakers heading off on their first trips since Covid.
It promised to focus on “operational resilience” today, calling the “operational environment” in the UK and parts of Europe “challenging”, with the potential impact of strikes a talking point in the industry.
It reported record half-year profit €1.3 billion, (£1.1 billion) from a loss of €446 million a year earlier.
Luis Gallego, CEO, said: “Customer demand remains strong across the Group, particularly for leisure travel, with around 80% of passenger revenue for the third quarter already booked. And our airlines have put in place plans to support operations during the busy summer period.”
Rightmove ‘not materially affected’ by higher rates
07:28 , Daniel O'Boyle
Higher interest rates don’t appear to have affected Rightmove, as the property portal’s boss says the firm “isn’t materially affected” by the chaos in the mortgage market.
Soaring rates have led to a slowdown in demand to purchase homes, but Rightmove said that “agents and developers have continued to use our products to win new mandates and to drive their businesses forward”.
Profit grew to £129.5 million and the group maintained its expectations as it has not seen a major slowdown in recent months.
CEO Johan Svanstrom said “This has been another period of strong financial and strategic progress for Rightmove.
“These results clearly illustrate that Rightmove continues to be the property portal that consumers turn to first and engage with the most, and that our customers continue to use our innovative products and services to support their businesses in both slower and faster housing markets.
“Our performance against the backdrop of a challenging interest rate environment demonstrates yet again that Rightmove isn’t materially impacted by the property cycle.”
Wall Street shares struggle, Bank of Japan tweaks policy
07:23 , Graeme Evans
Wall Street shares came under pressure yesterday after a robust GDP reading fuelled speculation that the run of US interest rate rises may not be over.
The US economy accelerated in the second quarter to an annualised rate of 2.4%, which was much better than the 1.8% forecast.
The Dow Jones Industrial ended a 13-day winning streak by closing 0.7% lower and the S&P 500 index and the Nasdaq Composite both finished down 0.6%. The FANG+ index of mega cap stocks also lost ground after surrendering an initial rise of more than 2%.
CMC Markets expects the FTSE 100 index to follow Wall Street’s lead by opening 24 points lower at 7668.
Stock markets in Hong Kong and Shanghai bucked the trend by rising by more than 1% this morning, but Tokyo’s Nikkei 225 was in negative territory after the Bank of Japan left its short-term interest rate unchanged at -0.1%.
The main surprise concerned the announcement that the Bank will allow the upper limit on the 10-year yield to move from 0.5% to 1%.
Morning refresh: What you need to know to start the day
06:54 , Simon Hunt
Good morning from the City desk of the Evening Standard.
The Farage banking furore took another turn yesterday after the boss of Coutts resigned. Peter Flavel said he had “fallen below the bank’s high standards of personal service.” Farage is still demanding that the entire board of NatWest quit, a move that most in the City do not consider a serious prospect.
This morning we’re expecting interim results from NatWest -- a final look at how the bank has been performing under its former CEO, Dame Alison Rose.
Overnight, shares in chipmaker Intel rose by around 7% in after-market trading as it unexpectedly returned to profit after two quarters of consecutive losses.
Here’s a look at our other headlines from yesterday:
