Yahoo Finance FTSE 100 Live: Index climbs, Oil giants and Metro Bank shares under pressure, Imperial Brands in £1bn buyback
Pressure on shares of oil majors BP and Shell continued today after yesterday’s big fall in the Brent Crude price.
The oil benchmark’s 5% retreat came in a volatile week for markets on speculation that interest rate expectations will stay higher for longer.
In today’s developments, shares in Imperial Brands rebounded on plans for a £1.1 billion buyback while Metro Bank was hit by heavy selling.
FTSE 100 Live Thursday
Cloud market referred for CMA probe
Metro Bank shares fall sharply
Imperial Brands in £1.1bn buyback
FTSE closes at 7,451.54
Thursday 5 October 2023 16:37 , Daniel O'Boyle
The FTSE 100 regained some of yesterday’s losses today, closing up 0.5% at 7,453.75.
London’s top flight started the day flat, dragged down by oil stocks, but eventually gained some momentum as the global bond rout continued to ease.
Imperial Brands and Tesco were the main risers, while JD Sports was the top faller.
City Voices: Did the North even want HS2 in the first place?
Thursday 5 October 2023 15:55 , Daniel O'Boyle
Who is this talking? “The difficult thing with HS2 is the chopping and changing. You can’t build infrastructure on this scale in this way. But we argue that it’s not the right solution for Manchester anyway. We should have north-south and east-west links but if you pinned me to a wall, I would prioritise cross-northern travel. Liverpool and Manchester pioneered rail travel in the 19th century and we don’t have functional rail travel between the two cities in the 21st century!”
It was Andy Burnham, the mayor of Greater Manchester, in an interview with Robert Crampton of the Times, published on February 11, 2023. So eight months ago, Burnham said, “it’s not the right solution for Manchester anyway… if you pinned me to a wall, I would prioritise cross-northern travel.”
Southern Water and Thames Water ‘standout poor performers’ driving complaints
Thursday 5 October 2023 15:04 , Daniel O'Boyle
Southern Water and Thames Water were the “standout poor performers” driving customer complaints over the past year, a watchdog has reported.
The Consumer Council for Water (CCW) said the more than 20 million people served by Thames Water and Southern Water were being “let down” by the two firms’ “failure to understand and deal with the causes of high levels of complaints from their customers”.
CCW said the industry’s overall performance was skewed by the number of complaints made by households to Thames Water and Southern Water.
The Telegraph has drawn a glittering array of bidders. But which will win?
Thursday 5 October 2023 14:40 , Daniel O'Boyle
In July this year, Howard Barclay told a court that prospective buyers of the Telegraph Media Group regarded the UK newspaper publisher as “a distressed asset” and it was “not going to be an easy asset to sell”.
He was testifying in a legal battle over the settlement between his uncle, Sir Frederick Barclay, and Sir Frederick’s ex-wife Lady Hiroko following their divorce. Lady Hiroko had yet to receive the money.
That, claimed Sir Frederick, was because he found it hard to lay his hands on the cash. Sir Frederick’s assets could not be accessed without the help of Howard and his brother Adrian, sons of Sir Frederick’s late twin brother, David. Included in those assets was Sir Frederick’s claim to part of the Telegraph group.
Citi reviewing 250 jobs in London as part of global overhaul
Thursday 5 October 2023 14:08 , Daniel O'Boyle
US banking giant Citi has told staff that it is reviewing around 250 jobs in London, with a plan to “eliminate” those that do not fit.
The company said that some of the jobs will be kept, others changed or new roles created, but it warned in an internal memo that “some colleagues may be leaving the firm”.
It is part of what is being billed as the biggest reorganisation for the banking giant in decades, and is one step along the route that will be taken in London.
US jobless claims below estimates
Thursday 5 October 2023 13:52 , Daniel O'Boyle
US jobless claims came in a little below expectations, reinforcing the Federal Reserve’s plans to keep interest rates higher for longer.
Tom Hopkins, Portfolio Manager at BRI Wealth Management, said: “Initial Jobless Claims in the United States increased to 207,000 in the week ending September 30th, an increase of 2000 from the previous week and marginally below consensus expectations of 210,000.
“The data continues to add to evidence that the US labour market remains at historically tight levels. This will also add resilience to the Federal Reserve’s aggressive tightening cycle and supports the narrative of ‘higher for longer’ interest rates. Unless we see a material weakening in the US labour market and economy, it could add potential for another rate hike in November.”
US shares to slip
Thursday 5 October 2023 13:47 , Daniel O'Boyle
US shares are set to slip a little further when trading starts on Wall Street.
Dow Jones futures are down 0.3% to 33,243.00. S&P 500 futures are also down 0.3%, to 4,285.75. Nasdaq futures are down 0.2%, to 14,890.75.
Big premarket fallers include Tesla rival Rivian.
Deichmann expands shoe shop footprint in the UK market
Thursday 5 October 2023 13:27 , Daniel O'Boyle
Europe’s largest shoe retailer, Deichmann, plans to open on more UK high streets it emerged after the chain revealed a huge jump in sales.
The Germany-headquartered company, which operates in 31 countries, has already opened six fresh UK branches so far this year, taking the store portfolio here to 130. Before the end of 2023 it will unveil another London shop and refit its Woolwich and Ilford sites.
The update came after the firm, privately owned by the Deichmann family, filed accounts that show UK turnover jumped 42.8% to £121.8 million last year.
Thursday 5 October 2023 12:44 , Daniel O'Boyle
The FTSE 100 has found some momentum after a shaky start this morning, and is now up 0.6% to 7,455.8.
The idnex of London blue-chips is still down almost 2% for the week, however.
Tesco is the day’s top riser, building upon its results-day gains yesterday. Imperial Brands follows after its share buyback eased concerns about the proposed lifetime smoking ban for those currently aged 14 or under.
Five in six CEOs mull tying pay or promotions to days spent in the office
Thursday 5 October 2023 11:56 , Daniel O'Boyle
Most chief executives think the five-day office week will return in the next three years, and five in six are thinking about linking promotions, pay or other benefits to office attendance, according to a major survey conducted by professional services giant KMPG.
The annual KPMG CEO survey of 1,300 CEOs found that 64% of bosses globally, or 63% in the UK, expect that office working will see a “full return” by 2026.
That could be sped along by the fact that the vast majority are considering incentives for those who come in. 87% of CEOs globally, and 83% in the UK, are “likely” to link financial rewards and promotion opportunities to a return to in-office working practices.
Construction sector contracts after bad month for housebuilders
Thursday 5 October 2023 11:20 , Daniel O'Boyle
The UK’s construction sector contracted heavily last month as the housebuilding sector had one of its worst months since 2009, an influential survey has suggested.
Companies said that projects to build homes were being cut back as demand weakens and the cost of borrowing rises.
“Output levels declined across the UK construction sector for the first time in three months during September and the latest downturn marked the worst overall performance since the early stages of the pandemic,” said Tim Moore, economics director at S&P Global Market Intelligence.
Tesco and Royal Mail shares jump, FTSE 250 outperforms
Thursday 5 October 2023 10:33 , Graeme Evans
Shares in Royal Mail owner International Distributions Services today jumped 9% or 22.1p to 263.7p, aided by Goldman Sachs giving the delivery firm a “buy” rating and improved target price of 369p.
The widely-held stock had languished below 200p in June, but the end of industrial action and signs of resilience in the UK economy have fuelled an upturn in confidence.
Despite today’s improvement, the shares are still short of the 330p flotation price at the end of October 2013 and 630p peak seen during pandemic lockdowns in April 2020.
IDS was one of several beneficiaries of favourable City comment today, with Tesco the leading FTSE 100 stock after banks including Barclays and UBS sweetened their “buy” ratings in the wake of yesterday’s results.
Shares jumped 3% or 8.9p to 279.6p but analysts at Jefferies think there’s much further to go after giving the supermarket giant a 350p target price.
Fellow retailers Frasers Group and B&M also fared well in a session when the FTSE 100 index steadied after recent volatility to stand 14.04 higher at 7426.49.
The main drag came from BP and Shell, down another 5.15p to 494.3p and 21p to 2500.5p respectively in response to yesterday’s 5% price slump for Brent Crude.
The UK-focused FTSE 250 outperformed the top flight with a rise of 126.54 points to 17,619.44, led by building ventilation products business Volution after a 9.6% hike in annual dividend to 8p a share.
The company, whose shares surged in the pandemic due to an increased awareness of air quality to health, jumped 34.8p to 371.4p after it also reported a 6.8% rise in annual profits to £65.1 million.
About 70% of revenues are focused on the refurbishment and improvement market, which is typically more resilient than new build markets in tough economic times.
The AIM-listed shares of pawnbroker and jewellery retailer Ramsdens Holdings jumped 7% or 12.5p to 202.5p as it revealed a record performance in the year to 30 September. It said profits will be more than £10 million, up from £8.4 million the previous year.
Bond markets steady after recent surge in yields
Thursday 5 October 2023 10:04 , Daniel O'Boyle
Bond markets steadied today as investors adjusted to the idea that interest rates will stay, as the US Fed has said, “higher for longer”.
This week gilt yields rocketed to levels not seen for decades raising fears about UK government borrowing costs in particular.
The 10 year US Treasury bond was today yielding 4.75%. But in the UK a 10-year gilt was up again, at 4.63%, though this was still below the highs reached yesterday.
National Grid performance ‘in line’ with trading expectations
Thursday 5 October 2023 09:16 , Daniel O'Boyle
National Grid has told shareholders it has performed “in line” with expectations for the past six months.
The electricity and gas distribution firm, however, added that it expects a greater contribution to its earnings per share in the new half-year.
The London-listed company said it met its financial guidance over the first six months of its financial year, to September 30.
Oil stocks limit FTSE 100 recovery, Royal Mail owner up 4.5%
Thursday 5 October 2023 08:46 , Graeme Evans
Pressure on oil stocks BP and Shell has limited the upside of an improved session for London’s FTSE 100 index, which is 13.98 points higher at 7426.43.
BP shares fell 3% yesterday and are down another 6.75p to 492.7p after a 5% slide in the price of Brent Crude over the past 24 hours. Shell retreated 26.5p to 2495p.
Other popular stocks on the fallers board included GSK and insurer Aviva after their shares declined 1%.
Tesco led the risers board with a post-results gain of 5.3p to 276p and Imperial Brands rebounded 24p to 1604p after announcing plans for a £1.1 billion buyback of shares.
Reckitt Benckiser also added 82p to 5826p after analysts at JPMorgan placed the consumer goods group on “positive catalyst watch”.
The FTSE 250 index improved 57.17 points to 17,550.07, led by a rise of 7% or 22.8p to 359.4p for ventilation business Volution after its annual results included a 9.6% dividend hike. Royal Mail owner IDS also jumped 4.5% or 10.9p to 252.5p.
More trouble at Metro Bank
Thursday 5 October 2023 08:42 , Daniel O'Boyle
METRO Bank shares crashed 25% this morning as the City digested the latest blow to the lender – a plan to raise £600 million to show up its shaky finances.
The company had promised to change the face of banking when it launched in the UK in 2010, with new branches and a consumer friendly face.
It worked at first, until an accounting error saw it miscategorise loans that saw CEO Craig Donaldson ousted.
Metro has asked Morgan Stanley to work on a capital raising deal for £250 million in fresh equity and £350 million in debt.
The bank said: “As previously stated, Metro Bank continues to consider how best to optimise its capital resources to allow it to take advantage of the deposit and asset origination platform that has been built.”
Ofcom refers UK cloud market to CMA for investigation
Thursday 5 October 2023 08:42 , Simon Hunt
Media watchdog Ofcom has referred its study into the cloud market to the competition regulator after it uncovered features that could limit competition.
Ofcom said it was concerned about high egress fees charged by cloud providers as well as interoperability barriers that have been artificially raised to make it difficult to switch providers. As much as 80% of the cloud market is dominated by two providers, Amazon and Microsoft, Ofcom said.
Fergal Farragher, Ofcom's Director responsible for the market study, said: “The cloud is the foundation of our digital economy and has transformed the way companies run and grow their businesses.
“Some UK businesses have told us they’re concerned about it being too difficult to switch or mix and match cloud provider, and it’s not clear that competition is working well.”
Imperial Brands ups investor payout by £1.1 billion a day after Sunak smoking ban announcement
Thursday 5 October 2023 07:58 , Michael Hunter
Imperial Brands, announced plans to pay £1.1 billion more to investors just hours after Rishi Sunak pledged to ban smoking by raising the age limit on cigarettes by one year every year.
The policy means children aged 14 or under at the moment will never legally be able to buy tobacco.
The maker of Lambert & Butler and Winston cigarettes did not make any reference to the ban in its trading update this morning,
But it announced a £1.1 billion capital return via a share buyback in 2024, up 10% from 2023. It said trading was in line with expectations, helped by “strong tobacco pricing,”
Unite Students boss to exit
Thursday 5 October 2023 07:44 , Daniel O'Boyle
Unite Students boss Richard Smith has become the latest FTSE 100 boss to exit, after seven years in charge.
Smith will leave on 31 December, “to pursue his personal interest in supporting the education and development of young people, including understanding issues that affect mental health”.
He leaves the student landlord in strong shape, with its properties all but full for 2023-24. Unite has repeatedly said the exit of many HMO landlords from the sector means there is limited supply of student housing, which has led to its properties filling up more quickly than usual.
Today, Unite said it expects to see rental income grow by at least 5% next year, following the strong demand this year.
Joe Lister, currently Unite’s chief financial officer, will take over as CEO. Investment director Michael Burt will become CFO.
Richard Huntingford, Chair of Unite, said: "On behalf of the Board, I would like to extend our sincere thanks to Richard and acknowledge his significant achievements over the last eight years as CEO. He has been a driving force behind our successful strategy of aligning to the best universities where demand is highest and building Unite into a purpose-led, responsible business.
“As a result, we have seen significant and stable growth and are today an established provider of choice for the UK higher education sector with over 60 valuable university partnerships.”
FTSE 100 seen higher, Brent Crude at $86 a barrel
Thursday 5 October 2023 07:19 , Graeme Evans
A recovery for US markets should mean the FTSE 100 index finds positive territory this morning after the blue-chip benchmark’s fall of 0.8% yesterday.
Wall Street’s stronger session came after weaker-than-expected private sector employment figures eased concerns about the potential for higher US interest rates.
The Nasdaq Composite closed 1.3% higher and the S&P 500 index rose by 0.8% as traders responded to a stabilisation of the 10-year bond yield after this week’s surge to a post-2007 high.
The US turnaround means a potential end to this week’s poor run for the FTSE 100 index, which CMC Markets expects will open 32 points at 7444.
London’s top flight underperformed European markets yesterday after a fall in commodity prices weighed on the benchmark’s large number of energy and mining stocks.
Brent Crude today traded at $86.42, having fallen by 5% yesterday when figures showing weak US demand contributed to oil’s worst session of the year.
Recap: Yesterday’s top stories
Wednesday 4 October 2023 22:19 , Simon Hunt
Good morning. Here’s a summary of our top stories from yesterday:
Tesco says food inflation continues to fall and sales surge 8.4% in the first half as hard pressed shoppers opt for dining in deals over takeaways
Online used car dealership Motorway sees losses more than triple in 2022 to £42.5 million as firm discovers £1.3 million ‘error’ in its 2021 accounts, as Vertu motors eyes acquisitions after profits rise
Spirent Communications shares slide after profit warning on weak telecoms market
Richard Caring’s Ivy restaurant empire sees “strong trading” with £300 million sales up 50% and pre-tax profits of £29 million.
Gilt yields expected to spike again and shares fall after latest bout of US political turbulence
And...Krispy Kreme and Dr Marten open flagships on Oxford St in fresh signs of revival
