Yahoo Finance FTSE 100 Live: Jeremy Hunt warns on UK economy, Arm dips below IPO price, Next seals FatFace deal
Bestway ups stake in Sainsbury's
Friday 13 October 2023 17:02 , Simon Hunt
Bestway has upped its stake in Sainsbury’s yet again, company filings released this afternoon show.
The Costcutter owner now controls just under 5% of the company’s share capital, which it has gradually built up after it bought a 3.45% stake in the company for just under £200 million in January.
Bestway, which is one of the largest family-owned businesses in the UK with annual sales of over £4 billion, has denied speculation that it is weighing a takeover of the UK’s second-largest supermarket.
The company is owned by Pakistani-born British billionaire businessman and former bus conductor, Mohammed Anwar Pervez.
FTSE 100 closes lower
Friday 13 October 2023 16:47 , Simon Hunt
The FTSE 100 has closed down 45 points to just under 7,600 at the end of the day’s trading session in London, though it remains up around 1.4% on last week’s close.
By far the worst performer on the index today was St James’s Place, whose shares have tanked more than 20% after the Financial Times reported that the company is under pressure from regulators to overhaul its fee structure.
The UK’s largest wealth manager said today that it is continuing to work on a review of its charging model and had yet to come to a final decision.
Here’s a look at your key market data:
Arm dips below IPO price amid uncertain future
Friday 13 October 2023 16:21 , Simon Hunt
Arm has dipped below its IPO price for the second time as the Cambridge-based chipmaker gets off to a bumpy start during its first few weeks trading on the Nasdaq.
The firm, which designs chips used in most of the world’s major smartphones, is trading at just over $50 per share, below the $51 flotation price and well under the $64 it peaked at in mid-September.
Earlier this week, smartphone maker Samsung posted a 13% slump in sales amid a continued slump in the global chip market.
Yesterday, it emerged that employees at Arm’s Chinese subsidiary quit to start a chip design house with local government backing, adding to uncertainty in the British firm’s biggest market.
Next seals FatFace deal
Friday 13 October 2023 15:21 , Simon Hunt
Fashion retailer next has sealed a deal to acquire FatFace for a total equity value of £115.2 million, the firm announced this afternoon.
Next said the deal would be combination of cash and shares, adding that FatFace CEO Will Crumbie will continue to lead the business.
In the year to 27 May, FatFace hit total sales of £282 million with pre-tax profits of £19.5 million. Next said the deal would not materially impact its own pre-tax profits.
The acquisition marks the latest in a string of deal by Next. Last month, the firm increased its holding in the fashion brand Reiss from 51% to 72%.
Natural gas futures up 50% in week
Friday 13 October 2023 15:06 , Simon Hunt
UK natural gas futures have risen by around 50% in the week following the attack on Israel by Hamas.
A decision by Israel to halt supply at a gas field as well as a suspected sabotage of a gas pipeline in Finland have raised market concerns about the reliability of supplies to central Europe.
Analysts from the International Energy Agency said: “While gas prices decreased in the first three quarters of 2023, uncertainty and risks remain for the coming winter in the Northern Hemisphere. Steep demand reductions in Europe and some Asian markets helped reduce strains, but supplies remain tight.
“The increase in LNG supply was not enough to offset the sharp declines in deliveries of pipeline gas from Russia to Europe. As such, the risk of price volatility, particularly in the event of a cold winter, is cause for concern. Europe’s gas storage sites entered the winter heating season at 96% capacity. However, this is no guarantee of stable prices throughout the season, particularly in the event of exceptionally cold weather.”
Stocks edge higher in New York
Friday 13 October 2023 14:51 , Simon Hunt
A few minutes into the start of the day’s trading session on Wall Street, stocks are making gains.
Here’s a look at your key markets data.
Jeremy Hunt issues bleak warning on UK economy at IMF conference
Friday 13 October 2023 14:39 , Simon Hunt
Jeremy Hunt today issued a bleak warning about the health of the economy saying that a recent deterioration in the public finances would force him to make “difficult decisions” in next month’s Autumn Statement.
The Chancellor said that borrowing is likely to be £20 to £30 billion higher than forecast in the Budget in March making it even less likely that he will have wiggle room for any tax cuts.
He was speaking at the annual meeting of the International Monetary Fund in Marrakech Governor of the Bank of England, Andrew Bailey, also said that interest rates were likely to stay high.
The Chancellor said: “The fiscal position has worsened since the spring and I will have to take difficult decisions in the autumn statement.
“The main reason things are more challenging is because interest rate projections for all economies have gone up. The UK is not immune to those changes. We are likely to see an increase in debt interest payments of £20bn-30bn and that’s a huge challenge.”
City Comment: The wait for FCA ruling on Equifax has been too long
Friday 13 October 2023 12:24 , Simon Hunt
It is encouraging to see the Financial Conduct Authority throwing its weight around over a major cyber breach.
This morning it slapped an £11.16 million fine on credit reference agency Equifax for allowing hackers to access the personal data of almost 14 million British consumers in one of the worst ever incidents of its kind. But goodness don’t the wheels of justice turn slowly in the City?
It is now fully six years since the “entirely preventable” cyber attack was uncovered. In America a settlement deal with the Federal Trade Commission was agreed as long ago as 2019.
The UK data compromised included names, dates of birth, phone numbers, Equifax membership login details, partially exposed credit card details, and residential addresses. The breach was at Equifax’s US parent, to which UK data was sent in what the company described as “outsourcing”.
Equifax does not emerge well from the damning conclusions of the FCA’s investigations. It did not even find out that UK customer data had been accessed until six weeks after the hack. When it did finally fess up, public statements by Equifax “gave an inaccurate impression of the number of consumers affected” and complaints were “mishandled”.
As the FCA said today in its ruling, when an authorised firm becomes aware of a data breach, “it is essential it promptly notifies affected individuals in a way which is fair, clear and not misleading and implements fair complaints handling procedures.”
The FCA began its investigation in 2017 and it is of course right that the regulator ran the rule over what was a major and complex breach as thoroughly as it could, given the resources available. But six years really is a very long time to wait.
BP and BAE shares continue to rally, St James’s Place down 14%
Friday 13 October 2023 10:34 , Graeme Evans
Shares in St James’s Place today fell 14% amid reports the wealth manager is under pressure to overhaul its fee structure.
The slide of 118p to 703.6p came as the FT said regulators are talking to the company over compliance with the UK's new consumer duty standard.
St James’s Place confirmed today that a review of its fee and charging models is ongoing as it looks to “ensure value for clients”.
Today’s FT report said it is considering the removal of early withdrawal charges for new customers by mid-2025, as well as the simplification of fees for some advisory and administrative services.
The UK’s largest wealth manager previously announced in July plans to cut charges for some clients, a move that was followed by a 30% fall for shares.
Today’s slide came during a lacklustre session for the London market, with the FTSE 100 index down 18.67 points to 7626.11.
On the risers board, a jump in Brent Crude to $88.57 a barrel meant a further gain of 11.4p to 547.5p for BP. The shares are up by more than 5% over the week.
The flight to defence stock BAE Systems also continued as shares added another 24.5p to 1093p, compared with 980.6p on Monday morning.
The FTSE 250 index fell 125.07 points to 17,710.62, with emerging markets fund manager Ashmore down 7% or 12.5p to 172.1p after it said assets under management fell $4.2 billion for the quarter to 30 September.
Chief executive Mark Coombs said: “After three quarters of positive returns, such a period of consolidation within a longer recovery cycle is normal, and there continue to be positive fundamental trends in emerging markets.”
In the FTSE All-Share, defence industry supplier Avon Protection rose 9.2p to 678.2p after revealing that its order book had grown 10% on a year earlier.
Shares are up 11% this week but remain a third lower in the past year. Chief executive Jos Sclater said the company, which supplies helmets and respiratory products to customers including the US Army, is now seeing a more reliable financial performance.
Wall Street poised for billions in profits
Friday 13 October 2023 09:20 , Simon English
WALL Street bank giants today kicked off the latest reporting season with the figures likely to give a painful demonstration of the gap between the present status of New York and London as financial centres.
They are due to report profits of billions that should translate to high tax revenues for the US government – and tasty bonuses for New York bankers.
JP Morgan is expected to report record third quarter profits of $4 a share, $11.5 billion, on revenue of nearly $40 billion.
JPM, led by Jamie Dimon, perhaps the most powerful banker in the world, has been a leading voice in getting bankers back into offices.
Citigroup, led by Britain’s Jane Fraser, the first woman to lead a major US bank, is likely have equally stellar returns of perhaps $2.5 billion in profit.
That will put a harsh light on the UK banks who have missed out on large flotations and seen a dearth of activity put City jobs at serious risk.
One trader complained that given the outbreak of fighting in Israel, the only busy bankers this week were the oil desk.
St James’s Place down 10% and Ashmore falls 6%, FTSE 100 steady
Friday 13 October 2023 08:42 , Graeme Evans
Shares in St James’s Place are down 10% after the Financial Times reported that the company is under pressure from regulators to overhaul its fee structure.
The UK’s largest wealth manager, which said today that it is continuing to work on a review of its charging model, fell 78p to 740.6p and Hargreaves Lansdown lost 31.6p to 737.8p.
The FTSE 100 index held firm, up 6.96 points to 7651.74, as investors continued their flight to energy stocks in the wake of this week’s rise in oil prices.
BP shares rose 2% or 9.7p to 545.8p and are up 5% over the week as investors have also welcomed the detail of a strategy briefing given in Denver on Wednesday.
The FTSE 250 index is down 49.03 points to 17,786.66, with emerging markets fund manager Ashmore down 6% or 11.3p to 173.3p following its latest trading update.
Assets under management fell $4.2 billion for the quarter to 30 September, comprising negative investment performance of $1.3 billion and net outflows of $2.9 billion.
Loungers to open record number of sites as demand rebounds
Friday 13 October 2023 07:57 , Simon Hunt
Bar and restaurant group Loungers is preparing for a record number of new site openings as it cheers a rebound in demand.
The firm said it had opened sixteen new venues in the six months to October and planned a further 17 within the next six months, creating 1,000 new jobs.
Loungers posted sales growth over the period of 7.7% on last year and 25% on pre-pandemic levels.
Nick Collins, CEO, said: "I am delighted with our strong trading performance across both the mature estate and our new openings. With a great pipeline of further openings in front of us I have never felt more optimistic about our prospects.”
Loungers shares rose 4% to 195p.
CMA clears Microsoft Activision merger
Friday 13 October 2023 07:26 , Simon Hunt
Microsoft’s long-running battle with the Competition and Markets Authority finally came to an end today as the regulator said it would be clearing its blockbuster merger with Call of Duty maker Activision.
The CMA rejected an earlier merger proposal by Microsoft, citing concerns about competition in the cloud gaming market. Microsoft subsequently brought a new deal to the table, which would see Activision’s cloud gaming managed by a third party, Ubisoft.
The CMA said of the revised proposal: “The new deal will stop Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers.
“It will allow Ubisoft to offer Activision’s content under any business model, including through multigame subscription services. It will also help to ensure that cloud gaming providers will be able to use non-Windows operating systems for Activision content, reducing costs and increasing efficiency.”
Activision said: “The CMA’s official approval is great news for our future with Microsoft, and we look forward to becoming part of the Xbox Team.”
Asia markets lower, US banking results in focus
Friday 13 October 2023 07:20 , Graeme Evans
Quarterly results from banking giants JPMorgan Chase, Citi and Wells Fargo will provide insight into the health of the US economy later today.
Their updates come with investors still jittery over the outlook for interest rates after yesterday’s inflation print of 3.7% came in slightly higher than expected.
The S&P 500 index and the Nasdaq Composite closed down by 0.6% last night, although futures markets are pointing to a steady start later.
The FTSE 100 index was the strongest of the leading European benchmarks in yesterday’s session, adding 0.3% to 7645 thanks to the support of oil giant BP.
The top flight is expected to open slightly lower this morning after China’s latest inflation and trade data showed the economy continuing to struggle for momentum.
The Hang Seng index in Hong Kong put back yesterday’s big rise with a fall of more than 2%, while the Nikkei 225 also found negative territory.
Recap: Yesterday’s top stories
Thursday 12 October 2023 21:46 , Simon Hunt
Good morning from the City desk of the Evening Standard.
Rishi Sunak’s promise to halve inflation is now under threat. That’s the view of former Standard City editor Chris Blackhurst, who wrote in yesterday’s paper that if conflict in Israel spreads, it could affect the global oil flow, pushing energy prices up sharply in the process.
The IMF fears the UK is not well-equipped to shake off persistently high inflation. The US and euorozone countries are all in stronger shape. Why? Alas, for Sunak it’s Britain’s exposure to global energy prices — precisely the prices that are now likely to rise due to the Israel-Hamas war.
Here’s a summary of our top headlines from yesterday:
GDP inches forward 0.2% boosted by lack of strikes in August, but underlying picture remains weak
Former Barclays CEO Jes Staley has been fined £1.8m for misleading watchdog over Epstein links
Wagamama owner Restaurant Group sold to US private equity giant Apollo in £701 million deal
Easyjet storms back with record second half profits of at least £850 million and orders 157 more jets
CMA investigates BBC, ITV and major production companies such as Hat-Trick over suspected “breaches of competition law.”
FRC fines KPMG and audit partners £20 million over Carillion breaches in “textbook case study in failure”
Hotel Chocolat makes a second year of losses but says current trading is “encouraging”
And...how an Infosys dividend helped Rishi Sunak’s wife earn more than all 197 labour MPs combined
Bestway ups stake in Sainsbury’s again
Friday 13 October 2023 12:43 , Simon Hunt
Bestway has once again increased its stake in Sainsbury’s to 4.99% from 4.44%.
The Costcutter owner has been gradually building a stake in the supermarket since it acquired £193 million worth of shares at the beginning of the year.
Bestway, which is owned by Pakistani-born British billionaire businessman Mohammed Anwar Pervez, has so far denied that it is planning a takeover.
