FTSE 100 Live: Index finally ends losing streak as it closes at 7270, UK public borrowing below expectations

 (Evening Standard)
(Evening Standard)

A rally for global markets has ensured London’s leading share index broke a seven-day run of consecutive declines, its longest losing streak since 2019.

Gains by Wall Street tech stocks and a rebound for the Hang Seng index have improved the mood after a poor August so far.

Mining giant BHP and FTSE 250-listed engineering consultancy Wood Group have filed results, while there’s the latest on the plans by Arm Holdings for the biggest IPO of 2023.

FTSE 100 Live Tuesday

  • Microsoft in new Activision merger proposal

  • BHP makes big dividend cut

  • Arm files for hotly anticipated US IPO

Closing market snapshot as FTSE ends day ahead

Tuesday 22 August 2023 16:53 , Daniel O'Boyle

Take a look at our end-of-day market snapshot as the FTSE 100 rose for the first time since 17 August.

FTSE losing streak ends

Tuesday 22 August 2023 16:39 , Daniel O'Boyle

The FTSE 100’s losing streak has come to an end after seven days, as the London blue-chip index closed at 7,270.76.

London’s top flight lost 40 points in the mid-afternoon, still leaving it close to its lowest close of 2023 and almost 350 points below where it stood to start on 18 August, but still remained in positive territory.

Fresnillo and RS Group were among the top risers, while RS Group and Ocado were among the fallers.

Delivery firm Oja collapses as staff and suppliers left unpaid

Tuesday 22 August 2023 16:25 , Daniel O'Boyle

A London delivery firm that had Chelsea striker Raheem Sterling as an investor has fallen into administration after staff and suppliers were left unpaid.

The firm released a statement late last night stating that it had regrettably” suspended operations “due to funding constraints” with the last deliveries made on 30 July.

The Canning town based business, which specialised in African and Caribbean groceries, appears to have been struggling for some time

Court records obtained by the Standard show that since March, Oja has faced eight different legal claims for unpaid money totalling over £50,000.

Read more here

FTSE loses much of its gains, but still set to end losing streak

Tuesday 22 August 2023 15:40 , Daniel O'Boyle

The FTSE 100 has lost more than half of today’s gains, but it is still set to finish in positive territory for the first time in almost two weeks.

US market snapshot as shares rise

Tuesday 22 August 2023 14:51 , Daniel O'Boyle

Take a look at our US snapshot, after a strong start with megacap tech firms like Nvidia and Tesla among the biggest risers.

13 million households not switching heating on when cold, watchdog warns

Tuesday 22 August 2023 14:44 , Daniel O'Boyle

Millions of UK households are at risk of becoming ill because they are not switching on their heating when it is cold, a watchdog has warned.

A Which? survey of 4,000 people found high energy bills had led to almost nine in 10 households (85%) trying to cut back on their energy usage, while nearly half (46%) said they had not turned their heating on when it was cold last winter.

Health experts warn that maintaining cold temperatures in homes in winter can place people at higher risk of developing respiratory and cardiovascular diseases like asthma attacks, infections, heart disease and strokes.

Read more here

Pub industry seeks licensing changes after football fans left waiting for beer

Tuesday 22 August 2023 13:57 , Daniel O'Boyle

The pub industry has called for changes to licensing rules for “national moments” such as Sunday’s Women’s World Cup final after many customers had to wait until the second half of the match between England and Spain to be served.

Millions of people across England went to their local pub to watch the match, with early indications suggesting trading was up by between 14% and 28%, the British Beer and Pub Association (BBPA) said.

However the BBPA said the increases were achieved despite pubs facing major restrictions on when they could serve alcohol at the start or even during the game, with many having to wait until the second half to be able to start serving a beer to their customers.

Read more here

The City needs an energy boost after losing Arm

Tuesday 22 August 2023 13:37 , Daniel O'Boyle

Arm Holdings is arguably the most important company created in Britain in the past half a century. Yet it is far from a household name.

Arm emerged in the early 1990s from the wreckage of Acorn Computers, once rather fancifully described as the “British Apple.”

But while Acorn has long been largely forgotten by all except hardcore computer geeks, Arm lives on... and thrives as a world leader in one of the modern world’s most important industries.

Its semiconductor chips are said to be in around 95% of all smartphones worldwide. Its technology is also found is a huge proportion of other everyday electronic devices from digital TVs to drones. It is a true national champion.

Read more here

London fintech Zopa returns to P2P lending as losses narrow

Tuesday 22 August 2023 12:55 , Daniel O'Boyle

Zopa has quietly re-entered the peer-to-peer lending market where it originally made its name after ditching its P2P subsidiary last year, the Standard can reveal.

The London fintech said it had acquired a £41 million loan portfolio in March from an investor in its former P2P lending business for a cash fee of £38 million.

Zopa, which began operations as the first peer-to-peer lender in 2005, decided to exit the market at the end of 2021 after the UK financial watchdog began a crackdown on lenders, citing concerns over a gap in protections for customers taking out finance products through loan-based crowdfunding. The firm sold its P2P subsidiary in February 2022 and it was subsequently renamed to Plata Finance.

Read more here

London fintech Zopa returns to P2P lending as losses narrow

Tuesday 22 August 2023 12:40 , Simon Hunt

Zopa has quietly re-entered the peer-to-peer lending market where it originally made its name after ditching its P2P subsidiary last year, the Standard can reveal.

The London fintech said it had acquired a £41 million loan portfolio from an investor in its former P2P lending business for a cash fee of £38 million.

Zopa, which began operations as the first peer-to-peer lender in 2005, decided to exit the market at the end of 2021 after the UK financial watchdog began a crackdown on lenders, citing concerns over a gap in protections for customers taking out finance products through loan-based crowdfunding. The firm sold its P2P subsidiary in February 2022 and it was subsequently renamed to Plata Finance.

read more here

Getir to cut more than 2,500 jobs

Tuesday 22 August 2023 12:15 , Simon Hunt

Getir is to slash as many as 2,500 jobs worldwide as it seeks to pare back losses in a range of European markets.

The Turkish delivery firm, which also owns the Gorrilas delivery brand, is seeking to reduce its workforce by 10%, with its workforce in Germany expected to bear the brunt of the job losses, according to a report by Bloomberg News.

Getir recently shut operations in France, Italy, Portugal and Spain but today vowed to continue to operate in the UK, US, Germany, Holland and Turkey. Howver, Turkey is the only country in which the business has managed to turn a profit, according to Bloomberg.

The firm was worth as much as $11.8 billion after a funding round in March 2022, but saw its value shink to just $6.5 billion when it sought fresh cash earlier this year after soaring inflation and a normalising of the hospitality sector returned after the coronavirus pandemic.

read more here


Market snapshot as shares climb higher

Tuesday 22 August 2023 10:53 , Daniel O'Boyle

Shares have continued to rise this morning, with the FTSE back above 7300, increasing hopes that the index’s losing streak is set to end today.

Take a look at all our key market data.

Improved supply of vehicles helps car seller Lookers

Tuesday 22 August 2023 10:49 , Daniel O'Boyle

Car seller Lookers said it had benefited from an improved supply of vehicles as it sold nearly 3,000 more new cars in the opening half of the year.

The company said the used car market had grown for 11 consecutive months now, as it said it made more than £1.1 billion in revenue from selling new vehicles in the six months to the end of June.

That was an increase of more than £130 million compared with the same period a year earlier.

It sold 37,743 new cars in the period, up from 35,064.

“There have been 11 consecutive months of growth in the new car market as production constraints continue to ease across the industry following the supply chain shortages that were prevalent in recent years,” the business said.

Read more here

FTSE 100 rallies, Cake Box shares higher as price pressures ease

Tuesday 22 August 2023 10:31 , Graeme Evans

Mining giant BHP’s big dividend cut today ensured China fears stayed close to the surface despite a much improved session for European markets.

The FTSE 100 index added 33.85 points to 7291.67, a welcome upturn after seven straight losses caused by speculation over the peak for global interest rates and a focus on China’s debt-laden property sector.

BHP boss Mike Henry told investors today that commodity demand has remained relatively robust in China and India but that much will depend on the effectiveness of recent policy measures announced by Beijing.

His company reported a 37% fall in profits to $13.4 billion as significantly lower prices in key commodities offset increased copper, iron ore and nickel sales volumes.

BHP announced a dividend of $80 cents a share for payment next month, bringing the total for the year to 170 cents (132.92p). This compares with 325 cents the year before, but is still the third largest in the company’s history.

The Australian miner, which trades through a standard London listing after giving up blue-chip status in 2022, fell 9p to 2193p. This was in contrast to rivals as Glencore shares rallied 6.55p to 426.5p and Anglo American improved 27.8p to 1997.8p.

RS Group led the FTSE 100 index, rising 3% or 26.2p to 726.8p in a fightback for the industrial components supplier following Friday’s three-year low.

Demand has been fuelled by yesterday’s disclosure that chief executive Simon Pryce last week spent £100,000 increasing his stake at a price of 688p.

The shares were above 1,250p in November 2021 but have fallen back due to economic headwinds and destocking by customers in the electronics sector. On the fallers board, BP shares weakened 1.9p to 476.4p and consumer goods firm Unilever dropped 19p to 3950p.

The FTSE 250 index, meanwhile, outpaced its blue-chip counterpart by adding 0.6% or 100.49 points to 17,999.48.

On AIM, Cake Box shareholders at the company’s AGM in London were in celebratory mood after shares jumped 8p to 158p.

This was after the retailer said like-for-like sales rose 6.8% for the 17 weeks to 30 July, while it has also benefited from a fall in fresh cream prices in recent months.

Media Watch: ‘Don’t do a Rose’

Tuesday 22 August 2023 10:24 , Daniel O'Boyle

“Up flashed a picture of a well-known businesswoman,” Chris Blackhurst writes.

“The room fell silent, faces tensed, heads shook. They all knew who she was. Indeed, she was the reason why we were here.

“She was Dame Alison Rose, until recently the CEO of NatWest. Widely regarded as an excellent boss, a fine banker, a superb representative of an industry that has not exactly been covered in glory these past years, Rose went because she said too much.

“More specifically, she was perceived as having crossed the line in banking confidentiality by discussing the financial affairs of Nigel Farage, the ex-Ukip leader and client of NatWest’s Coutts subsidiary, at a dinner with Simon Jack, the BBC’s business editor.”

Read the full Media Watch column here

Pay for top bosses jumps 16% as wider wages behind inflation – think tank

Tuesday 22 August 2023 09:23 , Daniel O'Boyle

The bosses of Britain’s biggest companies saw their pay surge by 16% last year as most workers saw their pay packets outstripped by inflation, according to new research.

The High Pay Centre said chief executive officers for firms on the FTSE 100 – the index of the UK’s largest publicly listed companies – had an average pay rise of around £500,000 in 2022.

Unions said the data shows that Britain has become “a land of grotesque extremes”.

Median pay for a FTSE 100 CEO increased from £3.38 million in 2021 to £3.91 million in 2022, the High Pay Centre said.

Read more here

FTSE 100 makes steady progress, BHP shares lower

Tuesday 22 August 2023 08:36 , Graeme Evans

A strong session by Wall Street tech stocks and this morning’s sharp rebound by the Hang Seng index have underpinned a better performance for London shares today.

The FTSE 100 index is 10.94 points higher at 7268.76, while the FTSE 250 index has improved 97.26 points at 17,996.25.

Components supplier RS Group is the leading blue-chip stock with a rise of 3% or 20p to 720.4p, with prepared food supplier Bakkavor the pick of the FTSE 250 with a gain of 2.4p to 101p.

BHP shares are 18.5p lower at 2183.5p following annual results, whereas Anglo American shares have rallied 18.6p to 1988.6p.

In Asia, the Hang Seng index was more than 1% higher after being in negative territory earlier in the day.

Market snapshot as stocks edge up

Tuesday 22 August 2023 08:27 , Daniel O'Boyle

Take a look at the latest market snapshot as stocks tick up this morning, sparking hope that the FTSE’s losing streak will end afer early gains disappeared yesterday.

Top risers include RS Group, IMI and Ocado.

John Wood Group upgrades guidance

Tuesday 22 August 2023 08:09 , Daniel O'Boyle

Engineering giant John Wood Group took a step towards reassuring investors after rejecting a £1.7 billion takeover offer, as the firm upgraded its profit guidance on the back of strong results.

The group said that a number of large oil and gas and chemicals projects led it to believe full-year profit will be ahead of previous expectations, while revenue will come to £6 billion.

Wood was the subject of a takeover over from private equity firm Apollo Global earlier this year, but talks collapsed after Wood rejected a number of bids.

Shares are up 4% to 159p, but still down more than 30% compared to four months ago  when investors were hopeful of a buyout..

CEO Ken Gilmartin said: “When we announced our growth strategy in November last year, we set out a plan for Wood to deliver on its significant potential, and I am delighted that our results show the clear progress we are making.

“We have made a good start to the year, delivering growth in revenue, EBITDA, headcount and our pipeline, all while furthering our inspiring culture, as evidenced by our highest-ever employee net promoter score”

Arm files for hotly anticipated US IPO

Tuesday 22 August 2023 07:56 , Daniel O'Boyle

Softbank-owned Chip giant Arm filed for the biggest IPO of 2023 overnight in the US, likely seeking a valuation of between $60 billion and $70 billion.

Cambridge-based Arm revealed plans to IPO in New York, snubbing London, in March.

In its filing, Arm focused on the growing AI industry as a key use case for its chips.

“As the world moves increasingly towards AI- and ML-enabled computing, Arm will be central to this transition,” it said. “Arm CPUs already run AI and ML workloads in billions of devices, including smartphones, cameras, digital TVs, cars and cloud data centers. The CPU is vital in all AI systems, whether it is handling the AI workload entirely or in combination with a co-processor, such as a GPU or an NPU.

“ In the emerging area of large language models, generative AI and autonomous driving, there will be a heightened emphasis on the low power acceleration of these algorithms.

“ In our latest ISA, CPUs, and GPUs, we have added new functionality and instructions to accelerate future AI and ML algorithms. We are working with leading companies such as Alphabet, Cruise LLC, Mercedes-Benz, Meta and NVIDIA to deploy Arm technology to run AI workloads.”

Pricing will be announced at a later date, but it is expected to lead to a valuation between $60 billion and $70 billion.

BHP reports earnings slide, awaits China policy response

Tuesday 22 August 2023 07:53 , Graeme Evans

Australia’s BHP, which until recently was a major constituent of the FTSE 100 index, today reported a big drop in profits for the year to 30 June.

Revenues at the mining giant decreased by 17% or $11.3 billion to $53.8 billion (£42.1 billion) due to significantly lower prices in key commodities. The fall came despite increased copper, iron ore and nickel sales volumes, alongside favourable exchange rates.

BHP said its effective management of the impact of inflation on costs limited the fall in underlying profit to 37% at $13.4 billion (£10.5 billion).

A final dividend of $80 cents (62.55p) a share worth $4.1 billion (£3.2 billion) is due to be paid on 28 September, representing a 59% payout ratio to earnings. This brought the total for the year to 170 cents (132.92p), down from 325 cents the year before but still the third largest sum in the company’s history.

Over the past three years, BHP said it had returned more than $40 billion (£31.2 billion) to shareholders.

Chief executive Mike Henry said commodity demand has remained relatively robust in China and India even as developed world economies have slowed substantially.

He added: “In the near term, China’s trajectory is contingent on the effectiveness of recent policy measures. We expect buoyant growth in India with strong construction activity underpinning an expansion in steelmaking capacity.

“More broadly, there is increased recognition of the importance of critical minerals and strategies across the globe to incentivise investment in supply and demand, which provides opportunities and challenges.”

'Chancellor will struggle to unveil tax cuts’

Tuesday 22 August 2023 07:34 , Daniel O'Boyle

Ruth Gregory, deputy chief UK economist at capital economics, says the UK’s public borrowing figures “do not change the big picture” regarding tax and spending, with the Chancellor still remaining constrained.

“July’s public finances figures continued the recent run of better-than-expected news on the fiscal position,” she said. “But with interest rates still rising and a mild recession on its way, we continue to think the Chancellor will struggle to unveil a large package of permanent tax cuts in the Autumn Statement while still adhering to his fiscal rules.

“There are two reasons to be cautious. First, if we are right in expecting the economy to weaken later this year, tax receipts will probably disappoint. While the OBR’s forecasts are based on GDP growth of 0.2% and 2.1% in 2023/24 and 2024/25 respectively, we expect growth of just 0.1% and 0.8%.

“Second, the increase in market rate expectations and rise in longer-dated gilt yields since March will probably add something like £18bn to the OBR’s forecast for debt interest spending by 2027/28.

“As a result, we still think the Chancellor will have little room to unveil large-scale permanent tax cuts and/or spending rises in the Autumn Statement without jeopardising his fiscal rules.”

Nvidia shares lead Nasdaq 1.6% higher, FTSE 100 seen flat

Tuesday 22 August 2023 07:22 , Graeme Evans

Nvidia shares jumped 8% last night as investors positioned themselves for a potential repeat of the semiconductor giant’s record-breaking first quarter performance when it posts interim results tomorrow.

The surge on hopes that Nvidia has reaped further benefit from a massive shift in AI spending meant a rise of 1.6% for the Nasdaq Composite, whereas the Dow Jones Industrial Average lost 0.1% and the S&P 500 index improved 0.7%.

Nvidia, which is due to post its results after the closing bell on Wednesday, made the semiconductor industry’s largest increase to guidance for a single quarter when it last reported figures earlier this year. Its shares are up by more than 200% so far in 2023.

The FTSE 100 index, meanwhile, lost its initial gains to close slightly lower last night, representing its seventh consecutive session in the red. CMC Markets expects London’s top flight to open six points higher at 7264 this morning.

It was a similar story in today’s session for Asia-based investors as China markets saw further uncertain trading patterns.

The Hang Seng index, which has fallen into bear market territory after seven consecutive declines, is 0.6% higher after being in negative territory earlier in the day.

Microsoft submits fresh Activision merger proposal after CMA rejection

Tuesday 22 August 2023 07:19 , Simon Hunt

Microsoft has submitted a new version of its blockbuster Activision deal after a previous proposal was rejected by the Competition and Markets Authority.

Under the new deal, Microsoft will not acquire the cloud streaming rights to all current and future Activision games released during the next 15 years.

Microsoft said the restructured deal would address concerns set out by the CMA. In particular, the transaction is intended to provide an independent third-party content supplier, Ubisoft, with the ability to supply Activision’s gaming content to all cloud gaming service providers.

The CMA said it will begin a new investigation and the statutory deadline for a decision is 18 October 2023.

Sarah Cardell, Chief Executive of the CMA, said: “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments.

“Our goal has not changed – any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”

read more here

The takeover of the maker of Call Of Duty, World Of Warcraft and Candy Crush would be one of the biggest ever in the technology industry (Tim Ireland/PA) (PA Archive)
The takeover of the maker of Call Of Duty, World Of Warcraft and Candy Crush would be one of the biggest ever in the technology industry (Tim Ireland/PA) (PA Archive)

UK July budget deficit comes to £4.3 billion

Tuesday 22 August 2023 07:05 , Daniel O'Boyle

The UK’s budget deficit in July was £4.3 billion, a significant decline from recent months but still the fifth-highest July borrowing figure in history.

The figure was less than the expected £5.0 billion.

For the tax year to date, public borrowing has come to £56.6 billion, which is £11.3 billion less than forecasted by the OBR, suggesting the Government may have more room for spending increases or tax cuts than expected.

Public sector net debt came to £2,578.9 billion, representing 98.9% of GDP having recently crossed the 100% mark.

Recap: Yesterday’s top stories

Tuesday 22 August 2023 06:45 , Simon Hunt

Good morning. Here’s a summary of our headlines from yesterday: