Yahoo Finance FTSE 100 Live: IMF still expects 2023 UK recession; Miners boost shares as FTSE closes at 7786
London traders have returned from the long weekend in an upbeat mood, with the FTSE 100 index in positive territory.
The improvement followed yesterday’s robust session on Wall Street as US markets got the first chance to react to Friday’s stronger-than-expected US labour market report.
Attention now turns to tomorrow’s US inflation reading and the opening batch of first quarter results, with US banks Citigroup and JP Morgan reporting on Friday.
FTSE 100 Live Tuesday
CBI sacks director general Tony Danker
Dearth of floats worries City bosses
Retail and mining stocks boost FTSE 100
Companies entering administration hits highest level since March 2020
17:54 , Daniel O'Boyle
The number of companies entering administration in March rocketed to 130, the highest figure since the Covid-19 pandemic first hit, in the latest sign of inflation taking its toll on businesses.
New figures from advisory firm Kroll showed that the rise in administrations continued into March, hitting the highest level since March of 2020 when lockdowns made trading impossible for many firms.
For the first time since lockdowns ended, the figure was also above the pre-pandemic average.
FTSE closes at 7785.72
16:36 , Daniel O'Boyle
The FTSE 100 closed at its highest level in more than a month today, finishing at 7785.72
The index of London blue-chips started the first day of trading after the long weekend strongly, after strong trading on Wall Street yesterday.
The closing figure was the highest since 9 March, before the collapse of Silicon Valley Bank. The FTSE has now risen by 7.9% since hitting a low of 7210 soon after markets opened on 20 March.
Mining stocks made up most of the day’s top risers, as Gencore submitted a new proposal to acquire Canada-based Teck Resources.
Set-piece moment looms for economy from latest growth readout
15:58 , Michael Hunter
There is another major set-piece moment for the UKeconomy this week, when the latest growth readout will test the trend for a more robust performance in the face of high inflation and the cost-of-living crisis.
Gross domestic product data for February will track the size of the economy via all the goods and services produced in the month. After a stronger-than-expected expansion of 0.3% in January, the numbers will reveal if the trend for the UK to head away from recession continued.
This time around, GDP is expected to show even more modest growth – of 0.1% according to consensus forecasts – enough to keep City experts more positive than the bleaker predictions originally made for 2023.
Paddy Power owner ups US focus further as it lines up new chair
15:19 , Daniel O'Boyle
Paddy Power owner Flutter Entertainment is in advanced talks to make former Kellog’s CEO John Bryant its next chairman as it continues to shift its focus to the US, the Standard understands.
The world’s largest betting company announced in February that it was considering listing its shares in the US, joining firms like ARM and CRH in shunning London for New York. The business put the move down to the growth of its US-facing FanDuel division, which saw revenue rocket as states legalise sports betting.
The appointment of US and Australian dual citizen Bryant - who also sits on the board of London-listed caterer the Compass Group as well as manufacturer Ball Corporation and retailer Macy’s - would further signal that the US has become Flutter’s main area of focus.
US shares off to steady start after strong Monday gains
14:56 , Daniel O'Boyle
US shares have followed yesterday’s gains with a steady start today, though tech shares did not fare as welll.
The S&P 500 has gained just two points to 4110.90, while the Dow Jones is up 0.2% to 33654. The Nasdaq, on the other hand, is down 0.3% to 12053.38.
Covid-19 vaccine manufacturer Moderna was the biggest faller, with shares down by more than 5%.
IMF still expects 2023 UK recession
14:45 , Daniel O'Boyle
The International Monetary Fund (IMF) has upgraded its economic forecasts for the UK, but still expects the country to enter a recession this year.
The Washington DC-based institution now expects the UK economy to shrink by 0.3% in 2023, an improvement from its 2023 projection.
The UK is still expected to be the worst performer in the G7, but is no longer as large an outlier as it was in January, as Germany’s economy is now also projected to contract.
Miner Glencore offers “full coal exit” to Teck shareholders in new mega-merger proposal
13:28 , Daniel O'Boyle
Mining giant Glencore has submitted a new offer for Canadian rival Teck, adding a part cash alternative to give shareholders the option of a “full coal exit”.
Glencore last week proposed a $22 billion offer to buy Teck and then spin out the combined company’s coal business, which would be owned by the current shareholders of the two miners.
However, this deal was rejected.
Glencore said that “certain Teck investors may prefer a full coal exit and others may not desire thermal coal exposure”, and as a result has proposed a new offer, in which Teck shareholders would hold a 24% stake in the new metals business and $8.2 billion in cash.
It added that it would also consider a combination of cash and shares.
Government aims for full ‘5G-plus’ coverage for the UK by 2030 as part of £150 million investment
13:02 , Michael Hunter
Unreliable broadband connectivity in the UK could become a thing of the past by 2030 if government plans to update the country’s digital infrastructure work out.
The Department for Science, Innovation and Technology (DfSIT) unveiled a £150 million investment package today, which aims to get “5G-plus” by the start of the next decade. 5G-plus, also known as “standalone 5G” and is seen, by the government at least, as “the fastest, most reliable wireless coverage available” according to today’s statement.
It will help the UK take the next steps toward the so-called “internet of things”, where a range of connected devices can run online processes, improving efficiency and productivity.
DfSIT said: “From driverless vehicles, robots and drones on the factory floor to making our cities smarter, cleaner, and less congested; innovation is set to be supercharged.”
Tony Danker hits back at CBI after being fired
12:12 , Simon Hunt
Former CBI boss Tony Danker has hit back at the organisation after it moved to fire him with immediate effect this morning following allegations of misconduct.
“I was...shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed,” he said in a tweet.
“Many of the allegations against me have been distorted.”
The CBI said in a statement: “The allegations that have been made over recent weeks about the CBI have been devastating.
“While investigations continue into a number of these, it is already clear to all of us that there have been serious failings in how we have acted as an organisation. We must do better, and we must be better.”
Danker will be replaced by Rain Newton-Smith, former CBI Chief Economist and currently Managing Director, Strategy and Policy, Sustainability and ESG for Barclays.
..I was nevertheless shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed. Many of the allegations against me have been distorted, but..
— Tony Danker (@tonydanker) April 11, 2023
AI for the built world can deliver change - not just greenwash
11:59 , Daniel O'Boyle
Would you like to be shown around your dream house designed entirely by the latest generative Artificial Intelligence technology?
Buying and selling homes was one of the first industries to be disrupted by the emergence of the internet. Now the next wave - of Artificial Intelligence - looks set to transform the way we plan, design, construct and monitor all new and existing homes, office buildings and industrial warehouses etc.
While the image of a robot estate agent powered by ChatGPT may spring to mind, this is not where the most important applications of AI are today.
Central London office lettings fall with deals taking longer
10:32 , Joanna Hodgson
Central London office lettings have stalled in the first quarter of the year despite strong demand as deals take longer to get over the line, new figures reveal.
Latest research from property consultancy Savills shows 1.7 million sq ft of space was taken up in the first three months of the year.
That is below the 2.1 million sq ft of a year earlier, and also less than the equivalent pre-Covid 2019 quarter. It is 26% down on the 10-year long term average.
FTSE 100 higher as retail and mining stocks rally
10:17 , Graeme Evans
Shares in Marks & Spencer and Next have rallied during an upbeat start to the week for London stocks.
The FTSE 100 index stands 32.29 points higher at 7773.85, with miners including Glencore and Rio Tinto among others doing well after a positive end to Monday’s Wall Street session.
The renewed enthusiasm for UK-focused retail stocks followed a largely reassuring set of industry figures showing overall sales growth remained stable in March.
Next and B&Q owner Kingfisher rose by more than 2% in the FTSE 100, up 118p to 6496p and 7.1p to 252.8p respectively.
M&S shares also rallied to their highest point of the year, lifting another 4.1p to 166.7p during a strong session for the FTSE 250 index. The domestic-focused benchmark gained 0.8% or 153.39 points to 18,950.42, with kitchen supplier Howden Joinery among other stocks in demand after a rise of 17.8p to 670.4p.
The signs of UK economic resilience meant a strong session for the housebuilding sector, particularly in light of the IMF’s prediction for a return to pre-Covid low interest rates.
Taylor Wimpey gained 2.15p to 117.2p and Persimmon rose 24.9p to 1257.9p, with the latter boosted by analysts at Barclays ditching their “underweight” recommendation.
The stronger risk appetite follows Friday’s robust US labour market report, which eased recession jitters but increased the chances that the Federal Reserve will hike interest rates by another 0.25% next month.
Tomorrow’s inflation print will go some way to determining the central bank’s next move, with economists looking for a rate of 5.2% in March as last year’s surge in energy prices after Russia’s invasion of Ukraine drops out of annual comparisons.
First quarter results from US banks including Citigroup and JP Morgan are also likely to have a big bearing on market sentiment later this week.
KKR to buy 30% stake in $1.4 billion FGS
10:10 , Simon Hunt
Private equity firm KKR will buy a 30% stake in communications giant FGS Global from senior employees and major investors such as ad giant WPP.
The deal values the communications firm - formed out of a merger between Finsbury, the Glover Park Group, Hering Schuppener and Sard Verbinnen & Co - at $1.4 billion.
WPP will remain a majority shareholder in FGS.
“WPP and FGS Global have built an exceptional communications advisory firm,” KKR partner Philipp Freise said. “Stakeholder engagement is a boardroom issue and we are today establishing a powerful strategic partnership between WPP and KKR to support FGS Global as they continue on their path to building an industry-defining global business.”
City Comment
10:05 , Simon English
Today’s figures showing a dearth of new London stock market floats are plainly concerning.
Initial public offerings are deemed to be the heartbeat of the City, a sign that there’s action in the wider economy and that London retains its status as a reliable place for entrepreneurs seeking capital.
But some context here: for a start floats are down nearly everywhere. EY’s own figures show that global IPO volumes fell 45% year-on-year in 2022 (and deal values by 61%).
So while there’s irritation that the City’s listing reforms aren’t being pushed through fast enough, some of the concern is just Brits doing what we do best — talking ourselves down.
And we have short memories. Post-pandemic, floats were off the charts as cool-sounding businesses such as Darktrace and The Hut Group raised billions.
Mathew Moulding, founder of THG, later said he regretted taking his business public in London. So do we all chief — the stock is now 65p compared with an offer price of 500p.
In fact, tech floats raised £6.6 billion in 2021, most from investors now sitting on very burnt fingers and vowing that they won’t get fooled again. New floats aren’t always good.
If you look beneath the bonnet of the City, at private equity, at the insurance market, at law firms, they are all doing just fine.
Daily moves in the market and fresh stock market floats are sexy, they catch the eye. They are just a small part of what the Square Mile is about, and in the long run a bit of caution here and there always turns out to have been a good thing.
London will lose “to New York, Hong Kong and Shanghai for years to come” warn City bosses
09:59 , Simon Hunt
City figures today warned that London is in danger of becoming a stock market backwater, with big floats now almost certainly heading to rival financial centres such as New York.
There has been concern for months that London shares are unattractive, being shunned by pension funds partly due to unhelpful regulation. A lack of floats has buffeted City revenues.
Alasdair Haynes at Aquis Exchange, a campaigner for reform said: “There is plenty of money waiting in the wings to invest in aspiring and innovative companies. Conditions have to be right. The threat of recession and penal inflation are unattractive to investors. Multi-billion IPOS are likely to be the domain of New York, Hong Kong and Shanghai in the years to come.”
CBI sacks Director General Tony Danker, appoints Rain Newton-Smith
09:19 , Simon Hunt
The CBI has sacked director general Tony Danker with immediate effect following accusations of misconduct considered to be sexual harassment by a female employee.
He will be replaced by Rain Newton-Smith, former CBI Chief Economist and currently Managing Director, Strategy and Policy, Sustainability and ESG for Barclays.
It follows a string of complaints of misconduct reported at the CBI including an alleged rape and attempted sexual assault, according to reports in the Guardian.
The CBI said in a statement: “The allegations that have been made over recent weeks about the CBI have been devastating.
“While investigations continue into a number of these, it is already clear to all of us that there have been serious failings in how we have acted as an organisation. We must do better, and we must be better.”
March administrations highest since pandemic first hit
09:05 , Daniel O'Boyle
The number of companies entering administration in March hit 130, the highest figure since the Covid-19 pandemic hit.
New figures from advisory firm Kroll showed that the rise in administrations continued into March, hitting the highest level since March of 2020 when lockdowns made trading impossible for many firms.
In Q1 of 2023, meanwhile, the number of administrations hit 288, up 34% year-on-year.
Construction and manufacturing were the sectors with the most administrations in Q1.
Cineworld court fillings warn it may not be able to stay afloat through restructuring period
08:31 , Daniel O'Boyle
New Cineworld bankruptcy documents reveal that it may not remain in business long enough to make it out of Chapter 11.
Cineworld filed for Chapter 11 bankruptcy protection last year, and looked set to exit after agreeing a deal with its creditors, allowing them to take full control of the business with shareholders getting wiped out.
This set a path for the cinema chain to exit bankruptcy proceedings, which it hopes to do in the first half of this year.
Documents filed today in a Texas bankruptcy court, though, revealed that Cineworld could not guarantee that it could stay alive until the plan is complete and it can exit Chapter 11.
Strong start to week for UK shares, M&S up 3%
08:14 , Graeme Evans
The FTSE 100 index is 0.7% or 54.90 points higher at 7796.48, with UK-focused stocks at the forefront of the strong session.
Leading risers include housebuilder Persimmon after a 3% or 31.5p gain to 1264.5p, while supermarket Tesco is up 2.75p to 266.85p and Lloyds Banking Group has improved 0.7p to 49.7p.
The domestic-led FTSE 250 index added 0.65% or 124 points to 18,921.96, with Marks & Spencer among those doing well after a rise of 3% or 4.2p to 166.8p.
MJ Hudson warns its shares will soon have little value as it sells remaining business
08:09 , Daniel O'Boyle
Troubled consultancy MJ Hudson has agreed to sell “substantially all” of its remaining business after a dispute with auditors led to a collapse in its share price in recent months, and warned its shares woould soon have little to no vallue.
The group - which employed 300 people and had 18 FTSE 100 clients as of last year - will sell its data and analytics and business outsourcing divisions to the Apex Group for £40 million on a debt-free basis. It noted that the group had around £33.7 million in debt and that further funding will be required to pay its creditors.
“While there are a number of potential outcomes, given the level of creditors of the business expected at the point of final completion of the business outsourcing sale, it should be noted that it is highly unlikely that there will be a substantial, or any, amount available to shareholders following payment of all creditors and costs,” it said.
Emerging markets investment firm plans £100 million IPO
07:54 , Simon Hunt
Ashoka WhiteOak Emerging Markets Trust is planning to raise £100 million in a London IPO, the company announced today.
The UK-based investment business said it would enter into an investment management agreement with Acorn Asset Management Ltd to act as an adviser.
Ashoka say emerging market valuations are at multi-year lows relative to developed markets, with generally lower inflation, lower debt levels, and higher growth rates, while emerging markets are benefitting from several secular tailwinds versus developed markets, including increased infrastructure spending and rapid digitalisation.
Acord founder Prashant Khemka said: "We are excited by the prospect of listing AWEM on the London Stock Exchange.
“This easily accessible vehicle will provide investors exposure to Emerging Markets and the opportunity to generate significant alpha through exposure to a portfolio of great companies at relatively attractive valuations.”
Heathrow flies over 6 million people in March into a strike-hit Easter
07:49 , Michael Hunter
The Easter getaway at London’s biggest airport included one of its busiest days since before Covid, as over 6 million people flew from Heathrow in March, even as security staff went out on strike into the long weekend.
March 31 was the first day of action from 1,400 staff at the hub, but it said that over 221,000 travellers used the west London hub that day. It claimed today that “service levels were excellent” and that “strong contingency plans kept the airport running smoothly throughout the strike period” which ran until Easter Sunday. It was one of the busiest days since 2019.
The strike involved security staff at Terminal 5 and workers checking cargo across the entire airport campus. Unite says that Heathrow staff are “on poverty wages while the chief executive and senior managers enjoy huge salaries.”
There were reports of long queues at the airport and British Airways cancelled hundreds of short-haul flights. But Heathrow’s CEO, John Holland-Kaye, said today that “passengers got away smoothly on their Easter holidays”, adding: “Our security team has done a brilliant job, supported by our entire management team who have been ‘here to help’ in the terminals.”
Heathrow also said today that it was offering striking workers “a materially different proposal, adding: “We have listened to colleagues on the pay offer and have proposed changes they have asked for.” It called on Unite to put the new offer to its members.
FTSE 100 rallies, focus on US inflation
07:28 , Graeme Evans
Worries over the US economy eased a little on Friday after it emerged that non-farm payrolls rose by 236,000 in March, a bigger-than-expected figure that contributed to the unemployment rate falling back to 3.5%.
The reading also increased the chances that the US Federal Reserve will hike interest rates by another 0.25% at its policy meeting in three weeks’ time. Tomorrow’s inflation print will be another big factor in determining the central bank’s next move.
Economists are looking for the rate to fall from 6% to 5.2% in March as last year’s surge in energy prices after Russia’s invasion of Ukraine drops out of annual comparisons.
The S&P 500 index recovered from a weak start to close marginally higher last night, with IG Index forecasting that the FTSE 100 index will add around 50 points at 7800 this morning.
Hollywood Bowl rolls into 2023 with record sales
07:22 , Simon Hunt
Hollywood Bowl has rolled into 2023 with another record set of results as the UK’s largest ten-pin bowling operator saw a jump in demand.
Sales in the six months to end March climbed 10.9% to £111 million, as the firm opened two new centres with a further two set to be under construction later in the year.
CEO Stephen Burns said: "We are delighted with our record performance in the first half of the year.
“Our highly cash generative business model and insulation from cost of goods and energy inflationary pressures, leaves us well-placed to continue to expand and invest in our portfolio, both in the UK and Canada.
“We were thrilled to see so many families enjoying themselves at our centres during February half term and were pleased to welcome many more over the Easter break."
