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FTSE 100 Live 21 May: Inflation in focus after index closes slightly down

FTSE 100 Live (Evening Standard)
FTSE 100 Live (Evening Standard)

The FTSE 100 is close to where it started the day, despite losing almost 50 points in early trading.

The performance comes as the IMF upgraded the UK’s growth outlook following last year’s recession.

Meanwhile, AstraZeneca shares have risen after the pharma giant set a goal for $80 billion in revenue by 2030.

Recap: Yesterday's top stories

Tuesday 21 May 2024 06:48 , Simon Hunt

Good morning from the Standard City desk.

According to arch remainers, one of the many things that would go south if we left the EU was our financial services sector.

Nearly eight years on from the referendum vote, it is indeed hard to see how Brexit has been good for the Square Mile.

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It is also far from obvious that it has suffered much damage — London’s status as a financial capital is under attack, but from the Far and Middle East, not from Frankfurt — a toy town, best known for bicycles and book fairs.

A survey yesterday from EY finds that the UK has extended its lead as Europe’s main destination for investment in financial services.

The UK attracted 108 financial services projects last year, up from 76 in 2022 and well ahead of European rivals. France, in second place, secured just 39 foreign direct investment (FDI) projects in 2023.

There are challenges of course. The flotation market doesn’t really function at the moment. The stock market, despite recent rallies, remains undervalued compared with New York.

But the stock market is only one bit, albeit a high profile part, of the City. The insurance market remains rock solid. The bond market even survived Liz Truss.

As a tech hub, London is imperfect, but it beats Paris, Frankfurt and the rest by a country mile.

The City has a huge amount going for it. We should remember that more often than we do.

~

Here’s a summary of our top stories from yesterday:

  • Ryanair names Amber Rudd as non-exec director as profits soar 34% to e1.9bn. CEO Michael O’Leary calls on EU to reform air traffic control system to stem strikes.

  • Keyword Studios, maker of the computer games Skull & Bones and Avatar, "minded to accept" £2.2 billion bid from European private equity group EQT after 4 previous bids.

  • British Land dumps its 50% stake in Meadowhall Shopping Centre in Sheffield for £360m as it accelerates its move away from the mall in deal with existing co-owner Norges Bank Investment Management

  • EG Group to sell UK arm to Zuber Issa by the end of next month

  • AstraZeneca to build $1.5b manufacturing plant in Singapore

  • Profits grow to £77 million at IT services business Kainos despite “ongoing global economic uncertainty” and cutbacks from banking, insurance and payments businesses

Advanced Energy bids for London-listed XP Power

Tuesday 21 May 2024 07:31 , Daniel O'Boyle

US-based Advanced Energy has bid £486m for London-listed power control systems firm XP Power.

Advanced Energy made two lower bids last year, and revealed today it made a £19.50 per share offer for Singapore-headquartered XP. The most recent offer comes after XP shares plunged on the back of a February trading update.

Advanced Energy said: “Each of these proposals has been at a significant premium to the share price at the time of each respective proposal, but the Board of XP Power unanimously rejected each of these proposals.

“Given the lack of engagement from the Board of XP Power, Advanced Energy believes that XP Power's shareholders should be made aware of the Latest Proposal, which represents a compelling and highly attractive opportunity.”

AstraZeneca sets $80 billion revenue target

Tuesday 21 May 2024 07:53 , Daniel O'Boyle

AstraZeneca has set a target of $80 billion revenue by 2030, and operating profits around $30 billion in what its boss calls “a new era of growth”.

The pharma giant plans to launch 20 new medicines by that date. The announcement of the plan comes soon after Astra revealed it would withdraw its Covid-19 vaccine due to a lack of demand.

Pascal Soriot, Chief Executive Officer, AstraZeneca said: "Today AstraZeneca announces a new era of growth. In 2023 we delivered the ambitious $45 billion revenue goal set a decade ago. With the exciting growth of our innovative pipeline, which has the potential to transform millions of lives, we are now aiming for $80 billion by 2030.”

The business said it was targeting operating margins in a mid-30s percentage, suggesting operating profits of about $30 billion.

FTSE 100 set to slip back after cautious trade on Wall St and in Asia while traders eye inflation data

Tuesday 21 May 2024 07:55 , Michael Hunter

London’s main stock market index is expected to fall at the start of trade on Tuesday, after slips in Asia and a mixed-but-muted showing on Wall Street.

The biggest falls came for Hong Kong listed tech stocks.

Back in the City, traders were looking ahead to key inflation data due tomorrow, which could show the consumer price index falling to the brink of the Bank of England’s 2% target.

That would be likely to add to pressure on rate-setters at the Bank of England for action on interest rate, with calls for a cut as early as next month getting louder.

In the meantime, the FTSE 100 is expected to fall by around 51 points when trade gets under way at 8.00 am, according to opening calls from spread betting companies.

European stocks are also expected to slip, turning around from the previous session’s modest rises, the same pattern as in London. ,

Assura signs £250 million joint venture to bring university pension cash into investments in NHS buildings

Tuesday 21 May 2024 07:59 , Michael Hunter

Assura, the London listed property trust specialising in building facilities used by the NHS, has signed a £250 million joint venture to boost spending on new health centres and clinics.

The deal with USS, the universities pension scheme, will run for 20 years and will start with an initial agreed portfolio of seven assets (£107 million), transferred from Assura's existing portfolio at a small discount to the March 2024 valuation.

Assura will have a 20% interest in the scheme.

Grocery prices finally rising at ‘more normal levels’ again after 2023 cost-of-living shock

Tuesday 21 May 2024 08:02 , Daniel O'Boyle

Grocery prices are finally rising at “more normal levels” following last year’s record surge, as new figures today showed inflation for supermarket goods was just 2.4%.

Figures from market research firm Kantar show grocery price inflation for the four weeks to 12 May at its lowest since October 2021. The 2.4% rate of price rises, down from 2.9% in the prior four-week period, is now less than a percentage point away from the average pace in the 10 years before prices started to accelerate in 2021.

Read more here

FTSE 100 loses over 30 points in opening trade

Tuesday 21 May 2024 08:12 , Michael Hunter

London’s FTSE 100 is lower in opening trade, as a broad sell-off reaches European trade after stocks fell overnight in Asia, led by Hong Kong’s tech sector.

Amid a more cautious feel to trade on global markets, the main UK stock index was down almost 30 points at 8394.47, a drop of 0.4%.

Financial stocks were among the biggest fallers. Prudential, the insurer with a heavy presence in Asia, fell 16p to 791p. Standard Chartered, the bank, was down over 10p to 774p.

Barclays fell 2p to 215p.

AstraZeneca tops thin list of FTSE 100 risers on blockbuster drugs plan

Tuesday 21 May 2024 08:21 , Michael Hunter

AstraZeneca is making the biggest gain on the FTSE 100 in opening trade at and is one of only a handful of rises on a day of broad selling.

Stock in the £187 billion multinational was up 140p at 12224p in opening trade after it announced plans to double its revenue by 2030.

The company regularly vies with Shell for the title of the most valuable on the FTSE 100 and is currently holding the crown.

It said today that it would use new drugs to power “a new era of growth”.

SSP brings back dividend but fails to impress shareholders

Tuesday 21 May 2024 08:54 , Simon Hunt

SSP today brought back its interim dividend as the hospitality giant hailed a rebound in international travel.

The Upper Crust, Caffe Ritazza and Starbucks franchise operator declared a 1.2p interim dividend as it posted a 19% rise in sales to £1.5 billion.

SSP CEO Patrick Coveney said: “This is the first interim dividend since before Covid so it’s a reflection of the performance and confidence we have in the company.

“We’re becoming more of a global business.”

But shareholders seemed unimpressed with the firm’s profitability, with pre-tax profits sinking to just £13 million and the continental European arm of the business swinging to a £10.7 million loss.

The stock fell more than 8% to 190p in mid-morning trading.

(James Manning/PA) (PA Archive)
(James Manning/PA) (PA Archive)

B&Q owner warns on slower housing demand as it posts sales drop

Tuesday 21 May 2024 09:13 , Simon Hunt

Kingfisher today warned of the knock-on effects of slower housing demand as the B&Q and Screwfix owner posted a drop in revenues.

The firm said sales of “big ticket” purchases fell by more than 6% in the first quarter as consumer confidence remained under pressure, while revenues across its France division, which includes stores Castorama and Brico Depot, fell by 5.1%. Overall turnover dipped just under 1% to £3.3 billion.

“We remain cautious due to the lag between housing demand home improvement demand,” the firm said.

Adam Vettese, analyst at eToro said Kingfisher “reaped the benefits of consumers stuck at home with a few extra pounds in their pocket and now we have the opposite in that people are returning to the office and feeling the pinch.” Shares fell 1% to 261p.

Bitcoin stands out as 'uncertain' markets wait for signal on rates and watch Middle East politics

Tuesday 21 May 2024 10:04 , Michael Hunter

The best-known crypto currency Bitcoin, is the stand-out gainer of morning trade during European hours, striding higher as stocks drift.

Shares are lower as investors wait for signals from US policy makers on the timing of the first US rate cut of the current monetary policy cycle.

And inflation data for the UK due tomorrow will also feed into expectations for the same move in London.

The consumer price index is expected to fall to the brink of the Bank of England’s official 2% target tomorrow.

NHS landlord Assura in joint venture with university pension scheme

Tuesday 21 May 2024 10:14 , Daniel O'Boyle

NHS landlord Assura today announced a joint venture with the £75 billion university pension scheme USS to acquire more community healthcare buildings.

The FTSE 250 property firm will hold a 20% stake in the joint venture, with USS holding the other 80%. Assura said the venture could be worth £250 million in three years, and £400 million in the long-term.

Alex Turner, Head of Property at USS, said: “As a long term investor, we believe that investing in important UK infrastructure and paying our members pensions are strongly aligned as these kinds of assets can provide inflation-linked income over many years.”

Avon protection hails record order book amid renewed chemical weapons threat

Tuesday 21 May 2024 10:27 , Daniel O'Boyle

Military equipment firm Avon Protection’s order book hit a record high, as its boss said the business and defence industry as a whole had seen a “complete change” in perception since Russia’s invasion of Ukraine.

Avon, which makes helmets and gas masks, saw its order book surge to $199 million. Profit rose to $8.8 million.

CEO Jos Sclater said reports of Russia using chemical weapons in Ukraine has raised awareness of its products like gas masks.

He said: “We are seeing a growing awareness of the importance of high-quality protection against chemical warfare and head injury. In particular, Russia's deployment of chemical weapons in Ukraine has highlighted the need for effective respiratory protection.”

The business has been listed in London for more than 80 years. Despite the majority of its revenue coming from the US, Sclater says there’s no plans to change its listing. He added that there’s been a “complete change” in the perception of defence stocks.

 (Avon Protection)
(Avon Protection)

XP Power shares soar as Advanced Energy Industries takes £571 million bid direct to investors

Tuesday 21 May 2024 10:31 , Michael Hunter

The £100 billion exodus from London’s stock market took another twist today, with another upped bid for XP Power from Advanced Energy Industries.

And the determined New York suitor piled the pressure onto its target, with a direct appeal to XP’s investors.

After the fresh increase the offer reached £571 million. Priced at 1950p per share, this fourth bid trumps its predecessors with an eye-catching premium of over 80% based on XP’s 30-day trading average.

XP rejected the latest  bid, calling the offers “highly conditional” and opportunistic” saying it “fundamentally undervalues the Company and its prospects”.

XP’s shares soared by almost 50% to 1732p, adding 568p this morning.

That has stoked fear that the City is having trouble properly valuing its listed companies, not least due to the sheer size of the premiums on offer.

Commentators have called it “the great fire sale of London” and some of the biggest firms in the UK, including energy giant Shell, have been linked with a potential move to New York.

Advanced Energy is listed on the Nasdaq exchange on the other side of the Atlantic. It said today that its latest bid for XP “represents a compelling and highly attractive opportunity”.

The US firm announced the latest bid directly to XP’s shareholders itself, due to what it called “the lack of engagement from the Board of XP Power”.

XP, which is based in Singapore and has UK offices outside Reading . It makes components used in power conversion, including for the lithography machines that make computer chips.

'Momentous' inflation data will give big clue on interest rate cut timing

Tuesday 21 May 2024 12:14 , Daniel O'Boyle

The fate of an early summer interest rate cut may be defined this week, by hotly anticipated inflation data that will reveal how close the rate of rising prices is to the Bank of England’s official 2% target.

Mortgage holders, house hunters, City experts and millions of other borrowers and savers are waiting for clues on the timing of the first rate cut of the post-Covid era.

Read more here

THG investor calls for removal of chairman Lord Allen

Tuesday 21 May 2024 12:56 , Daniel O'Boyle

An activist investor in THG has demanded the removal of its chairman, Lord Charles Allen, as it continues pushing for a shake-up of the Manchester-based retail group.

Shareholder Kelso said on Tuesday that it will vote against Lord Allen’s reinstatement at its upcoming meeting, criticising a “lack of action and clarity” from bosses on how they will boost THG’s share price.

Lord Allen, the former boss of ITV, was named chairman in 2022 with the task of overhauling THG’s structure, amid concerns that chief executive Matthew Moulding had too much control over the business.

Read more here

Economy set for ‘soft landing’ as IMF upgrades UK growth forecasts

Tuesday 21 May 2024 12:58 , Daniel O'Boyle

The UK economy is set for a “soft landing” as it grows faster than previously expected following recession last year, according to the International Monetary Fund (IMF).

However, the global financial agency stressed that ambitious structural reforms to improve living standards “are urgently needed” ahead of a general election later this year.

It also cautioned against any pre-election tax cuts and indicated Government could bring in more funds from taxes linked to carbon usage or road vehicles.

Read more here

Nasdaq-listed Cazoo has collapsed. Did London dodge a bullet?

Tuesday 21 May 2024 13:25 , Simon Hunt

"We’re not just repeating what’s been done in the industry,” the president of British EV company Arrival said ahead of its £10 billion float via a SPAC on the Nasdaq in 2021.

“We’ve rethought how the industry should work.”

The ailing UK car dealership industry was “ripe for disruption,” Cazoo founder Alex Chesterman said ahead of the firm’s own Nasdaq SPAC float a few months later, as he listed off a host of problems with decades-old rivals.

Read more here

UK running out of options for offshore energy ‘just transition’ – report

Tuesday 21 May 2024 14:25 , Daniel O'Boyle

The UK will fail to achieve a “just and fair” transition by 2030 unless there is urgent alignment across the political spectrum to sustain offshore energy industry jobs and investment, a study has found.

Experts at Robert Gordon University analysed more than 6,560 pathways for the industry between now and 2030, concluding that political decisions rather than market forces will influence the size of the workforce.

Of the thousands of scenarios analysed, less than 0.3% could be considered a “just and fair” transition, their report found.

Read more here

Another steady day on Wall Street

Tuesday 21 May 2024 14:37 , Daniel O'Boyle

Shares on Wall Street are steady again today, remaining near record highs.

The S&P 500 is down five points at 5,303.49, while the Dow Jones is down just three points at 39,803.54. The Nasdaq is a little lower, down 0.2% to 16,754.54.

Big risers include Dollar General and Eli Lilly. Fallers include Equifax and Walgreens Boots Alliance.

Climate protesters accuse Shell chairman of ‘greenwashing’ at AGM

Tuesday 21 May 2024 14:39

Shell’s chairman was accused of greenwashing as he addressed shareholders at the oil giant’s annual general meeting (AGM).

Sir Andrew MacKenzie was interrupted by protesters as he opened the gathering at the InterContinental London – The O2 hotel on Tuesday.

Dozens of people stood up and began performing a rendition of the Dolly Parton song Jolene, singing “Shell kills, Shell kills, Shell kills, Shell kills”.

Read more here

Stripe opens City of London office to step up UK expansion

Tuesday 21 May 2024 16:13 , Daniel O'Boyle

Stripe Inc. is opening a new office in the City of London as it looks expand its UK operations and roll out lending to small businesses.

The new location will house 250 staffers from engineering, sales, partnerships, financial compliance, and operations, John Collison, Stripe’s president and co-founder, said in an interview.

“When you zoom out, it’s just the largest city for us in terms of businesses starting with us,” Collison said. “We’re still expanding quite a bit. We may need a new office later.” The firm has about 30 open roles in the capital, he added.

Read more here

Inflation headlines tomorrow's schedule

Tuesday 21 May 2024 21:11 , Daniel O'Boyle

Inflation will be the main order of business tomorrow, as the City waits to find out if the rate of price rises has fallen to the Bank of England’s 2% target

Here’s the full schedule:

Results

British Land

SSE

M&S

Severn Trent

M&B

 

Trading updates

Close Bros

Kier

 

Economics

7am – UK inflation, ONS public sector finances

7pm – Federal Reserve minutes