Yahoo Finance FTSE 100 Live: IHG, Abrdn, Glencore post results, China exports slump, shares lower
The struggling China economy and results from Glencore, Abrdn and hotels group IHG are in focus for London traders today.
China’s imports fell 12.4% year-on-year in July, much worse than the 5% forecast amid the weakening of domestic demand.
The trade figures put pressure on Glencore shares in the FTSE 100 index after the commodities giant reported lower half-year earnings.
FTSE 100 Live Tuesday
Trade figures fuel China worries
Glencore in big earnings slump
IHG profits surge amid UK rebound
Major lenders poised to reduce some mortgage rates
15:53 , Daniel O'Boyle
Some of Britain’s biggest lenders are poised to make mortgage rate cuts from Wednesday.
Nationwide Building Society has announced reductions of up to 0.55 percentage points on its fixed mortgage products from Wednesday.
HSBC UK is also expected to make rate cuts to residential mortgages on Wednesday, although the bank has not yet given details.
And TSB is making reductions of up to 0.40 percentage points to selected five-year fixed homeowner mortgages, with rates starting from 5.44%.
Swap rates, which underpin fixed mortgage rates, have stabilised amid expectations that inflation is cooling.
Minister warns fuel firms he will ‘call out any foot-dragging’ on transparency
14:33 , Daniel O'Boyle
Energy Secretary Grant Shapps has warned fuel retailers he will “call out any foot-dragging” over the sharing of pump price data.
He made the comment as drivers were hit by the largest weekly rise in petrol prices for more than a year.
The Competition and Markets Authority (CMA) is planning to launch an interim voluntary system for retailers to publish fuel prices by the end of the month.
Mr Shapps claimed households are “not getting a fair deal on fuel and are being overcharged”.
UK data watchdog monitoring Snapchat over underage users
13:38 , Daniel O'Boyle
The UK’s data regulator is looking at Snapchat’s ability to remove underage users from its platform amid concerns raised over its safeguarding efforts for younger users.
The Information Commissioner’s Office has begin gathering information on whether the social media app’s parent, Snap, is doing enough to ensure young children have had their accounts removed from the site, according to the Reuters news agency.
At present major social media apps including Instagram, Snapchat and TikTok require users to be above the age of 13 in order to protect younger children from harmful material.
JD Sports buys remaining 40% stake in Polish business
13:04 , Daniel O'Boyle
JD Sports has continued to grow its international presence, agreeing to buy the remaining 40% stake in Marketing Investment Group S.A. , which runs its Polish business.
JD held a call option to acquire the remainder of the business from its minority shateholders.
Régis Schultz, CEO of JD, said: “Acquiring the remaining 40% stake in MIG allows us to accelerate the development of JD in Central and Eastern Europe, the strong foundations for which have been established alongside the outgoing shareholders. Increasing JD’s presence in the region through new store openings and further investment in our omnichannel capabilities is a key part of the strategic growth plan set out at our Capital Markets Day presentation. The complementary Sizeer brand provides a strong platform for the MIG business and the JD brand has evidenced strong initial traction with the consumer, which we will continue to build upon.
“We look forward to closing the transaction and continuing an exciting journey with the local management team.”
The deall is expected to close before the end of the year.
July washout helps drive down retail sales
12:49 , Daniel O'Boyle
Retail sales slowed in July as the washout weather gave consumers no reason to restock their summer wardrobes, figures show.
Total UK retail sales increased by just 1.5% – even taking into account high inflation – over the four weeks to July 29, a marked downturn from the previous July’s 2.3% growth and below the three-month average of 3.5%, according to the British Retail Consortium (BRC)- KPMG Retail Sales Monitor.
Food and drink, and items for the home were the best sellers on the high street, while the wet weather meant no need to shop for summer clothes, with all categories of clothing falling into negative sales territory in what is usually a busy month for fashion retailers.
Energy price cap ‘costing consumers money and driving inflation’
11:53 , Daniel O'Boyle
Ofgem’s energy price cap is preventing customers from accessing lower tariffs, contributing to inflation and should be abolished, according to a new report.
The cap has gone “far beyond” its original purpose of providing protection for customers to become a “de facto regulated market price”, centre-right think tank the Centre for Policy Studies (CPS) said.
For almost two years almost all tariffs have been priced at or just below the capped level, with no evidence this will change in the near future – meaning the Government is effectively setting the market price for energy and eliminating any chance of customers switching to a better deal, CPS energy and environment researcher Dillon Smith said.
Premium Bonds odds set to improve to best level in more than 15 years
11:15 , Daniel O'Boyle
Premium Bonds odds will improve to the best level seen in more than 15 years from September, savings giant NS&I (National Savings and Investments) has announced.
The odds will improve to 21,000 to one, from 22,000 to one previously – their best level since the April 2008 prize draw.
NS&I estimates that there will be 5,785,904 prizes up for grabs from September – an increase of more than 269,000 when compared with August 2023.
The estimated number of £1 million prizes in September will remain the same, at two.
FTSE 100 under pressure, Greggs and Dunelm shares support FTSE 250
10:22 , Graeme Evans
China-facing stocks came under pressure after the country’s weaker-than-expected set of trade figures.
Imports fell 12.4% in July, much worse than the 5% forecast after Beijing reported a slowing of inbound shipments of technology and machinery goods.
Exports, meanwhile, declined for a third consecutive month as the weakening global economy contributed to the biggest drop since February 2020 at 14.5%.
Hong Kong’s Hang Seng index closed almost 2% lower, even though additional measures in support of China’s pandemic recovery now appear inevitable.
UBS Global Wealth Management said: “The weak imports data is the latest piece of evidence that more stimulus is urgently needed to boost domestic confidence and spending.”
Lower stocks in London’s top flight included Asia-facing bank Standard Chartered, which declined 8.4p to 738.6p and Prudential after a fall of 11p to 1015.5p. Anglo American dipped 56.5p to 2144p in a weak session across the commodities sector.
Despite last night’s return of risk appetite for Wall Street markets, the FTSE 100 index eased 20.89 points to 7533.60. Other fallers included Rolls-Royce, which gave up 5.3p to 204.2p in a bout of profit taking after the engine maker’s recent strong run.
The FTSE 250 index lifted 16.27 points to 18,877.94, aided by support from Greggs and Dunelm after their shares rose 32p to 2564p and 19p to 1169p respectively.
TI Fluid Systems topped the risers board, surging 17% or 22.6p to 152.4p as the supplier of brake and fuel lines for global vehicle manufacturers easily beat earnings expectations.
The company, which employs 25,600 people at 104 locations across 29 countries, also pleased investors by unveiling a new progressive dividend policy.
In the FTSE All-Share, Croydon-based materials technology business Zotefoams fell 19.2p to 365.8p despite a 30% rise in profits to £7.4 million. Highlights in the six month period included an extension of its exclusive supply agreement with footwear giant Nike until the end of 2029.
Music investment fund Round Hill buys 1,200 country songs
09:32 , Daniel O'Boyle
London-listed music investment fund Round Hill Music has bought the rights to more than 1,200 songs from country musicians including Carrie Underwood, Faith Hill and Tim McGraw.
The firm will buy the remaining 50% of the rights to the music of Grammy Award-winning songwriter Craig Wiseman and his publishing company Big Loud Shirt. The songs include Underwood’s US top-10 hit ‘Before He Cheats’ and McGraw’s ‘Live Like You Were Dying’.
Round Hill, which has mainly focussed on other genres so far, said the additions would help it diversify its portfolio, of which country now makes up 11%. At the same time, it said the songs still have enough enduring appeal to fit its investment strategy.
CEO Josh Gruss said: “Craig Wiseman and his publishing company, Big Loud Shirt, have produced some of the highest profile, most recognisable and enduring Country music hits of the last three decades, bringing them firmly in line with the song profile of the company’s portfolio.”
Roundhill did not reveal the purchase price for the songs.
IWG boss warns on lack of affordable housing after surge in demand for flexible office space
09:20 , Simon Hunt
The boss of serviced offices giant IWG today blasted a lack of sound government policy on affordable housing as the firm reported a surge in demand for workspace in the suburbs.
Mark Dixon, who founded the business in 1989, told the Standard: “The affordability of London housing is not very good [and] people are fed up with the cost of travel.
“You’ll only get people back to an office in London if they live close by.
“It’s about government policy and local London policy.”
WGO, formerly known as Regus, today said it had seen an acceleration in demand for office space as major employers ditched major head offices in favour of smaller, flexible alternatives. IWG said it had signed contracts on 400 new locations in the first six months of the year in a bid to keep pace with demand.
Revenue in the first half of 2023 rose 14% to £1.5 billion, while gross profits were up 37% to £297 million.
Dixon said firms in the banking and insurance sectors have been among those most willing to shift from large head offices to smaller local outposts.
“Companies need flexibility – they don’t know what their business will look like in 5 years’ time,” he said.
Key market data
08:39 , Daniel O'Boyle
Take a look at today’s market snapshot as Abrdn and China-exposed stocks drive the FTSE 100 down.
FTSE 100 in red as Glencore shares fall, TI Fluid Systems jumps 21%
08:28 , Graeme Evans
The FTSE 100 index is down 18.76 points to 7535.73, with commodities giant Glencore and fund manager Abrdn under pressure after their half-year results.
Glencore fell 12.35p to 444.35p in a weak session for the mining sector after the latest disappointing update from China’s economy. Anglo American also lost 31.5p to 2169p and Rio Tinto eased 45.5p to 4921p.
The blue-chip fallers board was topped by Abrdn, with a decline of 5% or 12.1p to 206.4p after the Interactive Investor owner reported a retreat in assets under management to £495.7 billion.
The best performing stock in the FTSE 100 was education and coursework publisher Pearson, which lifted 2% or 18.4p to 862p. Holiday Inn owner IHG also improved 92p to 5750p on the back of its interim results.
The FTSE 250 index rose 13.49 points to 18,875.16, with the standout performer being TI Fluid Systems after a results-day rise for shares of 21% or 27.2p to 157p.
Abrdn shares slide as clients move away from equities
08:10 , Simon Hunt
Shares in Abrdn fell as much as 6% in the opening minutes of trade in London as the asset manager reported a loss of £169 million coupled with £4.4 billion in net outflows.
The firm, formerly known as Aberdeen, said the losses relate to the drop in the value of listed shares in its portfolios while it put the outflows down to clients pulling out of equities in a shift of their “asset allocation moved to debt products and cash in the rising interest rate environment.”
Abrdn warned the “outlook for global markets remains uncertain and we are taking actions to put our Investments business on a better footing.
“In the short term, additional headwinds arise from changing client demand and preferences.”
H&T plans to open more pawn shops amid high demand
07:40 , Daniel O'Boyle
Pawnbroker H&T said it has plans to open a number of new shops amid high demand for its services in the cost-of-living crisis.
Profit was up by 31% to £8.8 million. The group said the economic environment means there is “an opportunity for significant growth” going forward.
“We anticipate continued strong demand for our core pawnbroking product as the impact of inflation on the consumer increases the need for small-sum, short-term loans at a time when supply of credit is more constrained than has been the case for many years,” it said.
To taker advantage of the high demand, H&T hopes to increase its store estate from the current 273.
“We have a list of locations where we would like to open new stores,” the business said. “Further openings are planned for the remainder of the year and beyond, with the capital investment of a new store being relatively modest and an expectation that new stores will become profitable, on a run-rate basis, no later than their second year of operation.”
H&T is also increasing its online presence.
Earnings slump at mining giant Glencore amid ‘normalising’ commodity markets
07:38 , Michael Hunter
Mining and commodities multinational Glencore said today that its markets were “normalising” as it reported a slump in revenue and profits, led by a drop in energy prices.
The FTSE 100 company reported a drop of three-fifths in earnings of $6.3 billion and a a 20% slide in revenue of $107 billion.
Gary Nagle, CEO, described the performance as “healthy”, saying it came “against the backdrop of a normalisation of commodity market imbalances and volatility, primarily across the energy spectrum”.
IHG profit almost doubles as UK rebound continues
07:33 , Daniel O'Boyle
InterContinental Hotels Group’s profits rocketed 89% to $567 million (£444 million), as regions like the UK continued to grow from strong comparatives on top of the post-pandemic rebound in Asia.
Despite the UK’s earlier relaxing of the last Covid-19 restrictions meaning IHG faced a tougher comparable in the country, revenue per available room was still up 18%. That was mostly thanks to a 22% increase in London, after now-departed CFO Paul Edgecliffe-Jonhson told the Standard in February that there was “still room” for a further rebound in the capital.
The sharpest growth though, was in China, where revenue more than doubled as expected.
New CEO Elie Malouf, who took over from Keith Barr after he left for the US at the end of June, said: "I am honoured to take over as IHG’s group CEO and excited to look ahead with our talented teams and owners all around the world to an important next chapter of growth. Our teams have delivered strong results in the first half, with financial performance, hotel openings and signings all significantly above prior year comparisons.
“Travel demand is very healthy, with RevPAR improving year-on-year across all our markets and exceeding 2019 pre-pandemic peaks for four consecutive quarters. In the Americas and EMEAA regions, leisure demand has remained buoyant and business and group travel continued to strengthen, while in Greater China, demand has rebounded rapidly.”
China import figures disappoint, Wall Street rallies
07:25 , Graeme Evans
China today recorded its steepest monthly decline in imports since January as the country’s post-lockdown recovery shows more strain.
July’s year-on-year fall of 12.4% was much worse than the 5% forecast amid the weakening of domestic demand. The 14.5% slump in exports also represented the biggest drop since February 2020, a figure that compared with the expected 12.5%.
Hong Kong’s Hang Seng index fell 2% and the Shanghai Composite by 0.4% this morning, even though the trade figures will make stimulus measures by China policymakers more likely.
The fall for Asian markets came despite a robust handover from Wall Street after the S&P 500 index ended a run of four successive declines with a rise of 0.9%.
The Dow Jones Industrial Average lifted 1.2% and the Nasdaq Composite by 0.6%, with futures markets pointing to a flat start today.
The FTSE 100 index closed 9.88 points lower yesterday and is expected by CMC Markets to open today’s session down eight points at 7546.
Morning refresh: What you need to know to start the day
Monday 7 August 2023 20:26 , Simon Hunt
Good morning from the City desk of the Evening Standard.
UK house prices fell again in July, according to mortgage lender Halifax. But those falls came in at a slower pace than in the month before, in signs the market has shown resilience amid the surge in interest rates.
In the wider economy though, there were signs businesses were pushing the pause button.
Business brokerage Christie Group issued a profit warning after it complained that business owners were dithering on signing off deals amid wider uncertainty (its shares sunk 24%), while recruitment firm Page Group said it had cut hundreds of staff from its workforce as it bemoaned “lower levels of both candidate and client confidence resulting in delays in decision making,” with employers opting for temporary instead of permanent hires.
Whatever the cause of firms pushing pause, it’s hard to see how the sluggish UK economy will get some wind in its sales without a resumption in decision-making confidence.
Overnight in the US, shares in Peter Thiel-founded Palantir fell as much as 10% in after-market trading on Wall Street before recovering shortly thereafter, as the firm said its full-year revenue would fall nearer the bottom end of previous guidance. The tech giant was bullish on its prospects for capturing a surge in demand for AI products.
“The scale of the opportunity that lies ahead has increased significantly in recent months. And we intend to capture it,” CEO Alexander Karp said.
Here’s a look at some of our other headlines from yesterday:
London retailers have sounded the alarm over the “negative impact” of the so-called tourist tax at Christmas
Administrators say the buyer of failed battery plant BritishVolt have passed the deadline to make the final payment for the business.
Ship broker Clarksons says rates are “softening in some sectors due to” uncertain geo-political and global macroeconomic environment”
And a Mayfair flat once owned by playboy racing driver was sold for over £16 million in the most expensive deal of its kind so far this year.
This morning we’re expecting results from global hotels chain IHG, asset manager Abrdn and mining giant Glencore.
