Yahoo Finance FTSE 100 Live: China property fears hit shares, Russian Ruble falls to lowest since March 2022
Concerns over China’s debt-laden property sector today meant a downbeat start to the week for global stock markets.
Shares in Country Garden slumped in Hong Kong to a new record low after it suspended trading of 11 onshore bonds, adding to the ongoing fears about China’s economy.
In London, traders have key economic releases in their sights including inflation on Wednesday and tomorrow’s latest on wage growth.
FTSE 100 Live Monday
China property worries impact markets
Plus500 launches share buyback
YouGov mulls US listing for shares
FTSE 100 closes at 7,507.15
16:37 , Daniel O'Boyle
The FTSE 100 closed down slightly today, at 7,507.15.
The idnex of London blue-chips was 17 points below where it started the day, with Airtel Africa and B&M the biggest risers. Ocado and Entain were the biggest fallers.
City Voices: What is London’s pitch to the world?
16:04 , Daniel O'Boyle
“At its heart, growth is about people and the value they create,” Neil Carberry writes.
“That’s why London has been so successful – why can’t policy makers see that?
“At the Mansion House, the Chancellor said a strong City needs a successful economy, and a strong economy needs a successful City. Of course, he is right.
“Yet both of those factors depend on one thing – an agglomeration of people with the skills and motivation to create value in our economy and prosperity for our nation. That London is the engine of the UK’s economy isn’t what makes it one of the best cities in the world to work in. It’s that being one of the best cities to work in supports London’s economic performance.”
Inflation expected to fall sharply, but it’s unlikely to convince Bank of England to pause interest rate hikes
15:15 , Daniel O'Boyle
Inflation is expected to fall by more than an entire percentage point when July figures are published later this week, with economists predicting the rate of price rises will fall to just 6.8%.
The decline would bring inflation to its lowest rate since February 2022, the month that Russia invaded Ukraine, sparking a surge in the price of oil, natural gas and wheat that turned inflation from a cause for concern to a crisis.
Emma Wall, head of investment analysis and research at Hargreaves Lansdown, said: “Expectations this week amongst economists is that the July inflation rate, due to be published on Wednesday, will reveal a slower rate of inflation for the UK.”
Shock as fake $1 billion OpenAI investment news appears on London Stock Exchange website
14:51 , Daniel O'Boyle
A US private equity business was today shocked after a fake press release appeared on the London Stock Exchange website alleging that the firm was planning to invest $1 billion into Chat-GPT owner OpenAI.
The announcement, which appeared on the LSE’s regulatory news site, claimed that New York-based Ripplewood “would like to set up the software as a driving force in the fund” and that “in the event of a possible IPO a ChatGPT stake is a giant valuable asset…[a] bargain for investors.”
“The AI-supported investment opportunity is intended to be a user-friendly and cost-efficient solution to optimize investors’ portfolios. The market launch of the AI-supported investment option is planned for the end of 2023 if participation in OpenAI is successful,” the press release said.
Unemployment rate expected to remain at 4%
14:23 , Daniel O'Boyle
Experts are expecting the slow cooling of the jobs market to continue when the Office for National Statistics (ONS) releases new data on Tuesday morning.
The unemployment rate in the three months to the end of June is expected to remain unchanged at 4.0%, according to a consensus supplied by Pantheon Macroeconomics.
But within this there is room for a considerable slowdown in employment growth.
Ruble lowest since March 2022
12:56 , Daniel O'Boyle
The Russian Ruble has fallen to its lowest level since the immediate aftermath of the country’s invasion of Ukraine.
One dollar now buys 101 rubles, while a pound buys 129 rubles, as Russia runs repeated deficits to finance its war. The Russian economy had proved more resilient to sanctions than first expected, thanks mostly to increased trade with China. But as the war drags on, uncertainty has risen again.
Wilko administrators set Wednesday deadline for potential bidders
12:43 , Daniel O'Boyle
Bidders for crisis-stricken retailer Wilko have been given a Wednesday deadline to table offers to buy the firm.
The historic high street chain fell into administration last week, putting the future of its 400 stores and 12,500 workers in jeopardy.
It is understood that administrators from PwC have set the deadline as they quickly seek to strike a deal which could save jobs.
Alarm over sharp fall in London business growth
12:03 , Daniel O'Boyle
London’s powerhouse economy is starting to feel the impact of successive interest rate rises but remains thefastest growing in the UK, a new survey reveals today.
Output from the region’s services and manufacturing sectors grew in July but at a much slower rate than in previous months, according to the latest NatWest London PMI Business Activity Index.
The index stood at 52.3 in the month, down from 56 in June, in the third successive month of slowing activity. A reading of more than 50 indicates growth, below 50 points to contraction.
Catherine van Weenen, NatWest London and the South East Regional Board, said: “July data seems to have confirmed the trend that appeared during the second quarter, namely that the London economy has lost steam as rising interest rates take their toll on spending and activity.
Bad summer weather has dampened the London economy
11:30 , Daniel O'Boyle
It is raining again in London. No great shock there I suppose.
But we are coming towards the end of what has been a dismally dank and dreary summer by recent standards. And that matters for the capital’s economy, particularly its ever-growing outdoor hospitality scene.
During much of the pandemic Londoners were forced to eat and drink outside — and got a taste for it.
Plus500 boss: ‘We’ll be valued more’ in New York than London
11:01 , Daniel O'Boyle
The boss of stock trading app Plus500 said today that London investors’ view of his business as a finance company rather than a tech firm prompted the company to look at a US listing.
CEO David Zruia confirmed to the Standard that Plus500 was thinking of listing its shares in the US alongside London, after reports in May that the business was looking to join firms like Arm, CRH and Flutter that recently expressed plans to sell shares in New York.
“We estimate that the valuation would be higher within US exchanges,” he said. “It’s something we’ll consider when market conditions are better.”
“The main point here is that we are a technology firm but we are not valued as a tech firm. We are valued as a financial services firm which is not really accurate. In the US we can see tech companies getting much better valuations.
“I think that once, or if, we’ll be listed in the US we’ll be valued more.”
B&M shares lead FTSE 100, China-focused stocks under pressure
10:30 , Graeme Evans
B&M European Value Retail shares lead the FTSE 100 index, up 2% or 11.2p to 549p.
The rally comes after Deutsche Bank highlighted a new price target of 680p as B&M secures market share on the back of Wilko’s administration and opens more stores in the UK and France.
The shares were close to 300p last autumn but have surged by more than a quarter this year as shoppers continue to trade down due to cost of living pressures. A dividend yield of more than 6% has also boosted interest in the City.
B&M’s strong performance came in a brighter session across the retail sector as JD Sports Fashion rose 1.7p to 145p and FTSE 250-listed Marks & Spencer added 1.8p to 204.1p.
Elsewhere in London, fresh concerns over China’s debt-laden property sector meant another weak session as the FTSE 100 index drifted 10.41 points to 7513.75.
Mining giants Anglo American and Rio Tinto lost 24.5p to 2126.5p and 36p to 4690p respectively, while the fallers board also included oil giants BP and Shell.
The jitters over China’s economy were fuelled when debt-laden property firm Country Garden suspended trading of 11 onshore bonds, a move that sent its shares 18% lower to a fresh record low in Hong Kong.
The developments contributed to Asia-focused insurer Prudential trading below £10 for the first time since last autumn, down 13.5p at 995p. Other blue-chip fallers included Ocado with a decline of 2% or 16.8p to 815.4p and gambling group Entain following a retreat of 14.5p to 1298p.
The domestic-focused FTSE 250 index was broadly unchanged, up 3.79 points to 18,803.49, as attention turns to this week’s release of UK inflation and wage growth figures. Fallers included ITV with a decline of a penny to 72.8p.
Prices rise at Lok’nStore as demand stays strong, business says
10:29 , Daniel O'Boyle
Self-storage business Lok’nStore said it had increased prices by 6.8% in the last year, adding demand for its services remained “strong.”
The company said occupancy rates had remained steady as it reported on the 12 months to the end of July.
The company’s self-storage revenue rose 5.3% in the period, and when stripping out the impact of new sites and the ones that Lok’nStore sold during the period, it rose by 12.1%, the business revealed.
Shaftesbury secures £200m loan to manage other debts
09:41 , Simon Hunt
West End property investment business Shaftesbury Capital today took a new step to bear down on its heavy debt burden after securing a £200 million loan.
Shaftesbury, which owns property in Covent Garden, Carnaby, Soho and Chinatown, said the 10-year debt deal with Aviva will be used to help pay off the £576 million unsecured loan drawn April 2023 which was itself taken out to fund the repayment of secured bonds.
The firm added that its debt interest costs would be brought down from 4.2% to 3.3% as a result of the move. Aviva said it was weighing including specific sustainability-related metrics into the terms of the agreement.
Shaftesbury shares held flat.
FTSE 100 dips after markets open: Key data
09:20 , Simon Hunt
Just over an hour after markets opened in London, the FTSE 100 is down slightly. Here’s a look at your key market data:
Stelrad feels the heat of inflation
09:09 , Daniel O'Boyle
Europe’s largest radiator business today said it was feeling the heat of soaring inflation after it posted a slump in sales.
Newcastle-based Stelrad said rising consumer prices and interest rates were “supressing both new construction and renovation activities” as like-for-like revenues fell 12.7% to £157 million in the first six months of the year, while hyperinflation in Turkey contributed to a 65% slide in profits in the region.
CEO Trevor Harvey said: “I think consumer behaviour has been affected by the cost of living crisis. There has been a change in sentiment.
“[But] We have a strong track record of trading through previous downturns.”
Sales up at Made in Chelsea star’s jewellery brand
09:02 , Daniel O'Boyle
A US launch helped sales boom at Made in Chelsea star Oliver Proudlock’s jewellery brand Serge DeNimes.
Revenue was up by 20% to £2.4 million as retailers like Macy’s and Bloomingdales started stocking its rings, necklaces and bracelets in the US.
The business, which Proudlock started before his reality TV career, expects sales to hit £4 million this year and £6 million in 2024.
He said: “Growth in America has been astronomical. There has been a huge push and we have new stockists on the East and West coasts as well as Canada.”
Proudlock, who attended Eton at the same time as Prince Harry, also hailed the rise of “genderless” fashion as a big boost for his brand.
“Men are increasingly using accessories as a really powerful way to communicate and we are delighted to be at the forefront of that trend,” he said. “That truly genderless feel - where partners can share what they like to wear - has been massive for us. We’re not just a men’s brand and have increasing numbers of female customers.”
Prudential shares at £10 amid weak start for FTSE 100, Plus500 jumps 5%
08:38 , Graeme Evans
The FTSE 100 index is 18.48 points lower at 7505.68, led by Rio Tinto and Anglo American after the mining pair fell by more than 1%.
The jitters over China’s property sector meant selling pressure on Asia-focused lender Standard Chartered, which declined 8.6p to 746.6p. Burberry also lost 20p to 2232p and Prudential traded at £10 for the first since November after dropping 1% or 8.5p.
Blue-chip risers included B&M European Value Retail, which lifted 8.8p to 546.6p after Deutsche Bank raised its target price to 680p.
The FTSE 250 index slipped 25.32 points to 18,774.38, although trading app Plus500 jumped 5% or 75p to 1506p after announcing a new share buyback alongside half-year results. CMC Markets also rallied 4.8p to 133.4p.
YouGov considers US listing
08:07 , Graeme Evans
AIM-traded market research business YouGov is mulling a US stock market listing, the company’s co-founder Stephan Shakespeare has told the Financial Times.
The deliberations follow last month's transformational acquisition of the Germany-based GfK consumer panel business.
YouGov could move its primary listing to the United States or establish a secondary listing in the market, according to the FT’s report.
The company, which Shakespeare ran for two decades until this year’s switch to non-executive chair, has a stock market value of £1 billion.
Plus500 profits plunge, but firm launches another $60m byuyback
07:53 , Daniel O'Boyle
Profits plunged by 44% at trading app Plus500 as the boom in day trading appears to have come to an end, but the firm still returned an extra $60 million to shareholders with a new buyback.
Revenue slipped to $368.5 million for the first half of the year, down by 28%, as customer numbers fell after holding close to record highs last year.
But with a decline having been expected, Plus500 was able to still buy back $60 million worth of shares.
CEO David Zruia said: “Our increasingly diversified revenue streams, broadened product offering, deep customer relationships and the structural growth drivers in our end markets, mean we are able to deliver both growth and attractive shareholder returns.”
The buyback means Plus500 has now returned almost $350 million to shareholders this year, which Zruia said “demonstrates the strength of our balance sheet and the Board’s continued confidence in the group’s prospects”.
Inflation set for big fall, earnings figures also due this week
07:50 , Graeme Evans
A big week for the UK economy includes Wednesday’s July inflation reading, which is due for release a day after updates on wage growth and the rate of unemployment.
The headline inflation rate is set for another big fall from 7.9% to 6.8%, the lowest figure since February 2022 but still the highest among the G7 countries.
Core prices are likely to be much stickier at 6.8%, which compares with 6.9% in June.
In the labour market, Bank of America expects average weekly earnings to rise by as much as 0.5% to 7.4% year-on-year with the unemployment rate steady at 4%
The releases will be key to determining the Bank of England’s next policy move in September and the recent downward trend for mortgage rates.
Country Garden shares down 17%, FTSE 100 seen lower
07:15 , Graeme Evans
The Hang Seng index in Hong Kong is down more than 2%, with leading property firm Country Garden off another 17% at a fresh record low of $0.81 a share.
The latest selling comes after the debt-laden company suspended the trading of 11 onshore bonds, having last week warned that it could report a loss of up to £6 billion for the first six months of this year.
Concern over the potential for defaults in the property sector and China’s broader economic weakness has led to a recent wave of selling for stock markets in the region.
The Shanghai Composite today stood more than 0.5% lower, while the Nasdaq 225 has fallen by more than 1% in Tokyo. The weaker sentiment means another poor session for European markets after the FTSE 100 index closed 1.2% lower on Friday.
CMC Markets expects the top flight to open another 16 points lower at 7508 this morning.
SoftBank in talks to buy Vision Fund’s 25% stake in Arm: Reuters
07:13 , Simon Hunt
Japanese investment bank SoftBank is in talks to acquire the 25% stake in British chip designer Arm that it doesn’t already own ahead of a planned IPO, according to reports by the Reuters news agency.
SoftBank owns a 75% stake in Arm, with the remaining share owned by investors in its Vision fund. The sale is set to lead to a windfall for the fund’s major investors including Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala.
SoftBank is set to float Britain’s most valuable tech business on the Nasdaq stock exchange as soon as next month, attracting a valuation of up to $70 billion.
Recap: Friday’s top stories
06:42 , Simon Hunt
Good morning. Here’s a summary of our top stories from Friday:
The economy grew at just 0.2% in the second quarter but saw a better than expected 0.5% advance in June thanks to warm weather and post-Coronation bounce back.
Wet summer weather boost for Heathrow in July with passenger numbers up 29% on last year as recovery from Covid continues.
The UK arm of cinema chain Odeon cut losses in 2022 but says audiences still “significantly” below pre-pandemic levels.
NatWest became the latest high street bank to cut mortgage rates.
