FTSE 100 Live: Blue-chips close up almost 150 points, Arm Nasdaq shares above $60, ECB rate hike, THG tumbles

 (Evening Standard)
(Evening Standard)

London’s FTSE 100 made some major progress today, driven higher by demand for mining companies after upbeat broker comment on one of the market’s biggest sectors.

The gains started modest, but built as the day went on and hit a new gear as the European Central Bank singalled it may have hiked rates for the last time this cycle.

Anglo American made the best single gain of the morning, up almost 8% to 2266p, after JP Morgan lifted its price target on the stock to 2900p from 2650p.

Rio Tinto was also among the big risers, after the same analysts lifted their rating on the stock to “neutral” from “underweight”.

And oil companies added their weight to the overall rally, helped by higher crude prices. BP was up over 15p to 524p, moving on from the sudden departure of its chief executive, Bernard Looney. Shell was up 60p at 2548p, after the Brent crude price looked established above $90 a barrel — up another 0.8% at $92.62 — supported by Saudi Arabia and Russia’s plans to extend output cuts to the end of the year.

Breaking the positive trend though was Matt Moulding’s THG, which lost more than 21% after a revenue downgrade.

Elsewhere, the European Central Bank raised its interest rates again.

The ECB’s UK counterpart, the Bank of England, next votes on interest rates a week today.

And there are be plenty of eyes on Arm’s shares, which start trading on the Nasdaq after its $51-a-share IPO.

Arm shares climb further

17:31 , Daniel O'Boyle

Arm shares have risen further today in the year’s most hotly anticipated IPO.

George Sweeney DipFA, Deputy Editor at the personal finance comparison site, finder.com, said: “A surprisingly strong start to trading for Arm has seen its share price break the $60 mark, substantially above what most analysts predicted.”

“This could be partly due to the fact that the IPO became oversubscribed, providing leverage to demand a higher price. Even so, Owners of Arm (SoftBank) had been pushing for an even higher valuation after it paid $16bn to acquire 25% of Arm from one of its own venture capital funds, Vision Fund.“Although this is an exciting opportunity to invest in a chipmaker in its early stages, it will be a tough challenge for Arm to grow and keep pace with the more well-established global players. As an example, Nvidia grew 127% in their first year of trading back in 1999 and is now a much larger business than Arm. Retail investors should also be alert to the risk of Arm’s stock price falling back after this initial flurry of interest.”

Arm opens at $56.10

17:10 , Daniel O'Boyle

Arm shares opened $5 above their IPO price, though lower than what some analysts had predicted at the time of the offering, at $56.10.

The shares started trading on the Nasdaq today in an offering that values the Cambridge-based chipmaker at more than $50 billion..

Arm had notoriously snubbed London in choosing to list on the Nasdaq.

End-of-day market snapshot

16:53 , Daniel O'Boyle

Take a look at all our key market data after a big day of gains

FTSE 100 closes up 2%

16:38 , Daniel O'Boyle

The FTSE 100 closed at 7,673.08, up 2%, as miners led the upward march.

Anglo American finished up more than 8%, while Rio Tinto and Glencore both gained more than 4%.

On a shortened fallers board, Entain and Smith & Nephew broke with the wider market trend.

Market data as FTSE soars

16:27 , Daniel O'Boyle

Take a look at today’s market data with the FTSE now up by more than 2%

One of Australia’s richest men apologises after calling for job losses

16:06 , Daniel O'Boyle

One of Australia’s richest men Tim Gurner has apologised after claiming that unemployment should rise “40 to 50 per cent” to lower “arrogance” among workers.

The Melbourne-based property developer and CEO of Gurner Group told the Australian Financial Review Property Summit that “we need to see pain in the economy”.

He added: “We need to remind people that they work for the employer, not the other way around.

“There has been a systematic change where employees feel the employer is extremely lucky to have them as opposed to the other way around.

“We’ve got to kill that attitude and that has to come through hurting the economy.”

Read more here

Chick-fil-A to launch in UK in 2025 in renewed attempt to crack market

14:41 , Daniel O'Boyle

US fast-food giant Chick-fil-A is set to launch in the UK in a renewed attempt to enter the market, a few years after its debut pop-up in Reading closed amid a row over the group’s historical ties to anti-gay beliefs.

The first restaurants will open in early 2025, marking the first permanent store outside North America.

The 55-year-old family-owned business runs more than 2,800 restaurants across the US, Canada and Puerto Rico, and is popular for its original Chick-fil-A chicken sandwich.

It is aiming to open five restaurants in the UK in the first two years of launch, creating between 80 and 120 jobs per branch. It is understood the locations of the restaurants are still being decided.

Read more here

Goodbye WFH: Staff at City banks are under pressure to return to the office

14:04 , Daniel O'Boyle

The City boss was fuming about the lack of staff in his expensive office on Friday. “You can make money and not turn up. You can turn up and not make money,” he said. “You can’t not turn up and not make any money.”

That’s what he would say to staff if HR would let him — they are going to get the message fairly clearly anyway. That view is running strong in the Square Mile. Banks are less likely to ask Covid-traumatised staff, how are you? Now it’s more: get in and crack on.

A few things are playing into this shift. There’s a general back-to-school feel, a desire that this year is different from the last.

Read more here

ECB hikes rates again

13:17 , Daniel O'Boyle

The European Central Bank has raised interest rates again, as policymakers feel the battle with inflation is still not over.

The Bank was expected to raise rates, but it was far from seen as a certainty.

ECB interest rates call imminent

13:08 , Daniel O'Boyle

The European Central Bank is set to announce its latest interest rates decision, with another hike expected but far from certain.

Markets are pricing in around a 65% chance of another quarter-point rate rise. If the ECB does then hike Eurozone interest rates, it is likely to be for the last time, markets believe.

With the decision to come, a pound currently buys €1.1629.

 (AFP via Getty Images)
(AFP via Getty Images)

John Lewis says cost of shoplifting jumps £12m due to organised crime

13:05 , Daniel O'Boyle

The John Lewis Partnership (JLP) said it is facing a £12 million jump in the cost of shoplifting as bosses at the retail giant blamed a surge in organised crime.

Dame Sharon White, chairwoman of the department store owner, told reporters that the recent spate in shoplifting at stores was driven by “crime groups” rather than thefts linked to the soaring cost of living.

The boss said she met with Sir Mark Rowley, commissioner of the Metropolitan Police, earlier this week to discuss shoplifting.

The retailer called on the Government to change legislation in the England and Wales to make it a criminal offence to abuse shopworkers, in line with current rules in Scotland.

Read more here

Profits crumble for housebuilder MJ Gleeson as first-time buyer demand falls

12:23 , Daniel O'Boyle

Housebuilder MJ Gleeson has reported sliding profits and fewer homes sold as it blamed a drop in demand in the market on higher interest rates, the former chancellor’s “disastrous” mini-budget, and the end of the Help to Buy scheme.

The Sheffield-based firm, which sells more affordable new build homes, said it has been a year “characterised by volatility” but that the mortgage market has begun to steady.

The builder sold 1,723 homes over the year to the end of June, down nearly 14% compared to the 2,000 sold the previous year.

Reservations for new homes – an important indicator of demand in the market – also slowed to a lower rate over the summer months, compared to the same period last year.

Read more here

Wilko: Full list of stores closing on Thursday

11:16 , Daniel O'Boyle

Wilko will shut a further 28 stores after the end of trading on Thursday as the collapsed retailer continues with the closure of all its stores.

The high street chain, which entered administration last month, started its first phase of closures by shutting 24 shops on Tuesday.

All of Wilko’s 400 shops will close by early October, according to administrators from PwC.

Read more here

Brooks Macdonald ups divi for 18th year running

10:08 , Simon English

FINANCIAL advice group Brooks Macdonald saw funds under management rise by more than £1 billion to £16.8 billion this year and chief executive Andrew Shepherd says more and more people will rely on his services.

“We have an ability in financial advice to shoot ourselves in the foot,” he said. “Over many years we have given the public reason to not trust us.”

The mis-selling scandals such as pension transfers are now in the past, he insists, with regulation much tighter.

Profit for the year fell from £34.5 million to £30.3 million, but the AIM listed group felt able to increase its dividend to 75p from 71p, the 18th successive rise.

While there are “short-term macroeconomic headwinds” the longer-term future looks bright, says the group.

It will continue to “review potential acquisition targets”. The shares slipped 45p to 1885p, which values the business at £310 million.

Staff bonuses at risk at John Lewis

09:56 , Simon English

The John Lewis Partnership fell to another big loss of £59 million for the half-year as Dame Sharon White admitted her “transformation” plan will take two years longer to execute than previously claimed.

That seems highly likely to take a toll on the staff annual bonus at least this year and probably next, though the group insists no decision has yet been taken.

The employee-owned business blamed inflation and the need for greater investment for pushing back its goals.

“The cost-of-living crunch means the plan will take longer,” said White, brought in as chairman to revolutionise a company critics say has fallen behind the times.

The annual bonus to partners fell to zero in March this year after a full year loss of £230 million. White said then that “inflation hit us like a hurricane” as JLP plunged to only its second ever full year loss in its 160-year history.

The modernisation plan will now take until 2027/28 rather than 2025/26 to complete and those investments will “take precedence” over payouts to staff.

The move not to pay a staff bonus this year was only the second time that has happened since 1953..

White spoke of a “productivity deficit” and “the most competitive retail market ever” as she warned of a “long road ahead”.

The loss of £59 million is down from £99 million a year ago. The group hopes to be profitable for the entire year and notes it makes most of its money in the last three months of the year.

JLP insists its brands are strong – it claims 600,000 new customers to 21.4 million.

Waitrose sales rose 4% to £3.7 billion. A slow down in dining out has helped those sales as has a new £5 lunchtime meal deal.

Read more here

Profits plunge at M&C

09:56 , Simon English

New clients including Unilever, Channel 4 and JP Morgan failed to stem a near halving of profits at M&C Saatchi for the six months to June.

The famed ad group saw profits down from £16 million to £8.8 million as CEO Moray MacLennan prepares to depart.

Zillah Byng-Thorne is now executive chairman.

Revenue fell from £129 million to £120 million as clients pulled back on technology spending.

Byng-Thorne said: “The second half of the year is about growth, execution, and efficiency. Whilst some economic headwinds are likely to continue, we are focused on what we can control: continued connectivity of our business, elevating our highest-margin businesses in resilient segments, underpinned by tight cost management.”

M&C was founded in 1995 by David Kershaw, Bill Muirhead and Jeremy Sinclair along with the brothers Maurice (now Lord) Saatchi and his brother Charles.

Kershaw, Muirhead and Sinclair have all recently bought shares in the business in a sign of confidence in its future.

The stock fell 5p to 125p today.

Arm poised to price at top end of range

09:39 , Simon Hunt

Shares in British chip designer Arm are poised to begin trading in New York today at $51 per share, implying a market capitalisation of $52 billion.

The share price, which comes in at the top end of the price range guidance, remains significantly below the $60-70 billion market cap that Arm owner SoftBank had mooted earlier in the year.

But the tech firm could have been priced higher after its share offering was oversubscribed by a factor of 12, while some projections see the stock rising to as much as $62 in signs SoftBank is taking a cautious approach.

James Ashton, author of The Everything Blueprint, which chronicles the history of Arm, said: “You would imagine with 28 banks on the ticket this company would sell well.”

“Any upward revision on the price would suggest that CEO Renee Haas’s growth story is getting through. People get excited by Arms 1,000+ tech partners…you need that foundational base on which to sell other things.”

Arm’s customers are set to closely watch how the chip designer’s strategy might change when it becomes public.

Charles Sturman, chair of the Semiconductor Leadership Group, said the firm’s future growth could depend on how it works its new shareholders as a listed company.

“The important thing for Arm is it has to remain neutral,” he said.

“The major shareholders are going to be some of Arm’s major customers. Other companies are going to be put off if they perceive Arm is prioritising a customer that has shares in it.”


THG loses its £1 billion market cap crown as shares slide 17%

08:52 , Simon Hunt

Shares in online retailer THG slid 17% to 72p after markets opened this morning, causing the firm’s market cap to below £1 billion.

Revenue for the first six months of the year fell 9% to £969 million while pre-tax losses jumped 25% to £133 million.

London stocks make gains with miners in the lead after upbeat broker comment

08:34 , Michael Hunter

London’s FTSE 100 stayed positive in early trade, with global resource stocks at the top of the leaderboard after positive broker comment on the sector from City experts.

Anglo American made the best single gain of the morning, up 49p to 2149p a gain of over 2% after JP Morgan lifted its price target on the stock to 2900p from 2650p. Rio Tinto was in second place, up 103p to 5088p after the same analysts lifted their rating on the stock to “neutral” from “underweight”.

Overall, the main UK stock index gained over 17 points overall to 7,543.47. Big names from the mining sector appeared across the leaderboard, with Glecore up 5p to 437p and Antofagasta up 13p to 1449p.

Advertising group WPP was the biggest single faller, down 15p to 755p, a drop of 2%, after its profits halved.

Market snapshot as shares start higher

08:22 , Daniel O'Boyle

Take a look at today’s market data as the FTSE 100 rose after opening.

Hipgnosis Songs Fund sells $465 million worth of music rights

07:55 , Daniel O'Boyle

Listed music catalogue investor Hipgnosis Songs Fund has sold $465 million worth of music rights, for artists such as Shakira, Barry Manilow and the Kaiser Chiefs, to an unlisted entity aso controlled by Hipgnosis as it hopes to correct a share price slide.

Hipgnosis chair Andrew Sutch said the board had long felt the fund’s share price didn’t reflect the value of the songs it owns.

“As a Board, we have been clear for some time that the company’s share price does not fully reflect the value of Hipgnosis Songs Fund’s portfolio,” he said. “Having consulted with many of our largest shareholders, considered a wide range of options and taken independent advice we are confident the proposals set out today provide a compelling opportunity to deliver immediate shareholder value whilst protecting our ability to deliver superior returns over the medium term.”

The fund will return $180 million of the proceeds to shareholders and pay down $250 million in debt.

 (Getty Images for MTV)
(Getty Images for MTV)

THG sales slide as losses widen

07:49 , Simon Hunt

Sales slid at digital commerce firm THG and losses widened further as the firm battled weak consumer demand.

Revenue for the first six months of the year fell 9% to £969 million while pre-tax losses jumped 25% to £133 million.

The increased loss was not mentioned in CityAM, now owned by THG, which instead discussed cashflow at the business.

Matthew Moulding, CEO of THG, said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months.

“Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit.”

FTSE 100 set for opening gains with attention back on housebuiders

07:24 , Michael Hunter

London’s FTSE 100 is expected to make modest opening gains, with futures contracts in the main UK stock index pointing to an opening gain of around 30 points.

Attention is back on housebuilders after government rule changes designed to make the planning process easier were defeated in the House of Lords. The proposals led to a sharp rally in the sector when they were first introduced. After a rebound during the previous session, the delay to the changes may influence trade today.

Inflation and interest rates are also back on investors’ radar screens, with an interest rate call due in the euro area from the European Central Bank. The next Bank of England vote on UK rates is not due until next week.

Trading in Arm, the chip designer, will begin in New York today, and will be closely watched in London, the high-tech firm’s former home.

There are also updates due from spread betting firm IG, travel ticket seller Trainline and online retailer THG.

Morning refresh: What you need to know to start the day

Wednesday 13 September 2023 23:35 , Simon Hunt

Good morning from the City desk of the Evening Standard.

Trading of shares in British chip designer Arm begins today. City eyes will be closely watching stock price moves for the most hotly anticipated tech IPO of the year following the firm’s decision to close its order book early after being oversubscribed by a factor of ten.

Owner SoftBank had been eyeing a valuation of $60-70 billion for it earlier this year, before setting Arm’s IPO price at $47-51 a share last week, giving it a significantly lower market value of $54.5 billion. But it now looks set to price at the top end of that range or higher still.

Here’s a look at what investors are weighing up.

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