Yahoo Finance FTSE 100 Live: Pound hits $1.25, late-day slump means FTSE closes down 0.5%, Virgin Orbit bankruptcy
Bank of England rate-setter warns inflation may get too low
17:57 , Daniel O'Boyle
Bank of England Monetary Policy Committee member Silvana Tenreyro has warned inflation is likely to get too low absent further action, despite the drastic pace of price rises at the moment.
The Consumer Price Index for February said inflation was 10.4%, but in a speech today Tenreyro — one of the nine economists who set UK interest rates — noted the possibility of it falling below the 2% target next year.
The Bank aims to keep inflation at around 2%, a rate which economists believe ensures a level of certainty over prices while also keeping the economy stimulated.
Winnning streak ends as late-day slump leaves FTSE down 0.5%
16:39 , Daniel O'Boyle
The FTSE 100 finished at 7634.52 today, ending its six-day run of gains.
While the index of blue-chip London companies started strong with a rise to 7723, those early gains quickly wore off, leaving it only slightly ahead of where it started the day.
Still, the FTSE remained positive until US markets opened, at which point it lost around 50 points.
Apollo to submit final £1.66bn bid for John Wood Group
16:24 , Daniel O'Boyle
Private equity fund Apollo Global Management is set to make a final bid of £1.66 billion for engineering business the John Wood Group, after it rejected a number of lower offers.
In the latest “possible offer”, Apollo will pay 240p per share of the John Wood Group.
“Apollo believes that the final proposal would provide a compelling opportunity for Wood's shareholders to monetise their holdings in Wood for cash at a highly attractive valuation which is also at a significant premium to its recent and undisturbed share price, eliminating the inevitable execution risk and uncertainty associated with delivering Wood's refreshed strategy,” the New York-listed firm said.
JPMorgan Chase boss: banking crisis is ‘not yet over’
16:02 , Daniel O'Boyle
JPMorgan Chase chief executive Jamie Dimon said the current banking crisis is “not yet over”, as he took aim at the US Federal Reserve’s role in the collapse of Silicon Valley Bank.
However, he also noted that the sector is still a long way away from the events of the Global Financial Crisis.
In his annual letter to shareholders, Dimon noted that the timing of the US banking behemoth’s report this year comes soon after the financial sector was shaken by the collapses of Silicon Valley Bank and Credit Suisse.
The City needs a fresh champion like Nigel Lawson
15:45 , Jonathan Prynn
Whether you agreed or disagreed with him, there was no denying that Nigel Lawson was a “big beast” of British politics in a way that few of his successors came close to matching — with the arguable exceptions of Gordon Brown and George Osborne.
He was one of the few Cabinet ministers with the self-confidence to stand up to Margaret Thatcher and his Budgets were genuinely dramatic Parliamentary set-pieces compared with today’s insipid pre-briefed statements.
The mark he left on London is immense. The Big Bang reforms of 1986 revolutionised the way the City did business and ended once and for all the era of long lunches and the restrictive practices that threatened to turn the Stock Exchange into a quaint backwater on the world stage.
FTSE swings into red as US shares dip
15:25 , Daniel O'Boyle
The FTSE 100 has entered negative territory for the day, while US shares are also off to a slow start.
The FTSE fell soon after markets open and is now down 0.2% to 7655.
Meanwhile, the S&P 500 is down by 0.2% to 4,118 and the Dow Jones down 0.3% to 33514. The Nasdaq is also down 0.2%, to 12160.
The SVB affair was a near-miss for UK tech: what do we know now?
14:44 , Daniel O'Boyle
The tech landscape gave a collective shudder last month as Silicon Valley Bank (SVB) was taken in hand by US regulators. America’s 16th largest bank had tried to plug a $2.5 billion gap in its books with a capital raise, but when news spread that the institution was looking for cash it quickly ran dry of another precious commodity – confidence.
SVB’s share price plummeted by 60 per cent while customers and investors came down with a severe case of the jitters. The result of all this? Account holders pulled funds, and two days after it announced the deficit, SVB became a former bank.
This side of the Atlantic, HSBC gallantly swooped in and bought SVB’s UK division for £1. The search for a new owner here was apparently dubbed ‘Project Yeti’, and prime minister Rishi Sunak and Bank of England boss Andrew Bailey are understood to have been scrambling for a backup plan in case the scheme failed.
This episode was a near miss for some 3,000 UK customers of the fallen institution who would have seen funds vanish without intervention.
But what happens next?
First quarter London office sales slump as mini-budget continues to hurt property market
13:55 , Daniel O'Boyle
Investor spend on London offices plunged by more than 60% in the first three months of the year new figures reveal, as volatility following September’s disastrous mini-budget continues to hurt the property market.
Preliminary data from property agent JLL shows £2.1 billion of central London offices were transacted in the first quarter, of which £1.4 billion was done in the City and the remainder in the West End.
That was down 63% from the same period in 2022, although the company pointed out that was a tough comparative given the strong demand then, with the large return to offices post-pandemic driving up volumes.
Dogecoin surges after Elon Musk changes Twitter icon
13:13 , Daniel O'Boyle
The price of Dogecoin has skyrocketed in recent hours after billionaire Elon Musk confused Twitter users by changing the app’s logo to a picture of a dog.
Dogecoin prices jumped over 30% to 7.9p when the dog graphic representing the coin popped up across the social media app, helping the market cap of the curious cryptocurrency to top $14 billion for the first time in months.
However, that gain in value pales in comparison to the 83% drop it has seen since its peak in May 2021, when it was worth 46p.
TikTok fined £12.7 million by UK watchdog for mishandling children’s data
11:52 , Daniel O'Boyle
TikTok has been fined £12.7 million by a UK watchdog for mishandling children’s data.
The Information Commissioner’s office said an estimated one million under 13s were inappropriately granted access to the platform, with TikTok collecting and using their personal data. That means that their data may have been used to track them and profile them, potentially delivering harmful, inappropriate content at their very next scroll.
UK information Commissioner John Edwards said: “There are laws in place to make sure our children are as safe in the digital world as they are in the physical world. TikTok did not abide by those laws.
Glencore bolsters FTSE with as traders take second look at £18bn coal-mining swoop
11:30 , Graeme Evans
Glencore shares helped to keep the FTSE 100 index in positive territory today as traders took another look at the mining giant’s plan for a huge coal industry merger deal.
The shares recovered 5.35p to 457.85p near the top of London’s risers board, having slid 3% yesterday on surprise plans for an £18 billion swoop on Canada’s Teck Resources.
The proposal by the commodities giant, which would be followed by an immediate demerger of the pair’s combined coal operations, was rejected by New York-listed Teck. Traders are now awaiting the next move by Glencore, but even if the plan falls through the development has highlighted the potential value of the company’s thermal coal assets.
Glencore operates about 26 coal mines across Australia, Colombia and South Africa, alongside its production of metals including copper, cobalt, zinc and nickel.
UBS, which has a price target of 560p, said today that it viewed the Teck proposal positively given the potential for cost savings and other synergies.
The bank added: “We believe Glencore remains well positioned versus peers due to its commodity mix, superior cash generation and growth/restructuring optionality.”
The recovery by Glencore helped the FTSE 100 index to climb 13.48 points to 7686.48 in a session when other commodity-focused stocks struggled to maintain recent momentum.
Shell and BP shares were slightly lower, having surged by 4% yesterday due to a jump in the Brent Crude price to $85 a barrel after the surprise output cut by the OPEC+ alliance.
The FTSE 250 index added 60.84 points to 18,940.25, led by a rise of 4% or 22p to 615p for biomass power station business Drax after analysts at Liberum retained their “buy” recommendation with a 940p price target.
Digital 9 Infrastructure, an investor in data centres, subsea fibre and wireless networks, rallied 1.8p to 63.2p as it said it was not aware of any factors causing the recent fall in its stock market valuation.
On AIM, shares in pawnbroking and jewellery retail business Ramsdens Holdings rallied 4% or 8.5p to 226p following a stronger-than-expected trading update.
Rathbones CEO expects more City mergers
11:00 , Daniel O'Boyle
The CEO of Rathbones said the City is “ripe for consolidation” as his firm agreed a deal to combine with Investec’s UK Wealth and Investment arm, creating the UK’s biggest wealth manager.
aul Stockton said the deal was driven less by short-term market conditions like the collapse of Credit Suisse, and more by factors such as high inflation, which he expects to lead to more mergers.
“We’re all finding strategic challenges and the opportunity to benefit from scale on the revenue line as well as the cost line,” he said. “On whether market instability has driven this deal I don’t think so, I think it’s been driven by growth.
“As a business model over the next five years we will be subject to an inflationary environment and inevitably that’s going to drive consolidation.
“It’s a development in an industry that is ripe for consolidation and we are very excited to be at the forefront of it.”
Bank of England takes action against exposure limit breaches for first time
10:30 , Daniel O'Boyle
The Prudential Regulation Authority of the Bank of England has taken action against a bank for breaking its rules about having too large exposure to one company or sector for the first time.
Wyelands Bank - which is being wound down - would hae been handed an £8.5 million fine, mostly due to issues related to its exposure to Gupta Family Group Alliance.
However, the PRA said it did not impose the fine because Wylelands has “very limited financial resources”.
“The PRA expects firms to establish and maintain effective governance and risk
management controls at all times,” PRA chief executive Sam Woods said. “This is particularly important where a firm engages in complex transactions or where a significant proportion of its business is introduced by its wider group.
“Wyelands’ wide-ranging and serious failings resulted in the PRA taking swift supervisory action to minimise the risk to depositors and issuing today’s strong censure.”
Pound strongest in nine months
09:46 , Daniel O'Boyle
The pound has risen to its strongest level against the dollar in nine months, as it approaches $1.25.
One pound hit $1.2475 today - the highest figure since June of 2022, after gaining 1.2% today. It is up against all major currencies, gaining 0.5% against the euro and 0.7% against the yen.
The pound has gained almost 17% since last year’s mini-Budget sient its value plummeting towards dollar parity.
Quantexa becomes UK’s newest unicorn with $129 million funding round
09:41 , Daniel O'Boyle
Data science firm Quantexa has become the UK’s latest tech unicorn after raising $129 million at a $1.8 billion valuation.
The funding round was led by GIC and also included Warburg Pincus, Dawn Capital, British Patient Capital, Evolution Equity Partners, HSBC, BNY Mellon, ABN AMRO Ventures, and AlbionVC.
“After closing our Series D investment round, Quantexa has been on a transformational journey, accelerating the growth of our global software business and firmly establishing our leadership position in the emerging Decision Intelligence category,” Quantexa CEO Vishal Marria said. “In a challenging market we have doubled our ARR, our user base, and continue to penetrate new markets and industries.
“This infusion of capital will fuel further innovation, diversification, and expansion, and opens exciting options for our future.”
FTSE starts with modest gains
08:55 , Daniel O'Boyle
The FTSE 100 has started the day with modest gains as investors hope it extends its winning streak to a seventh day.
The index of blue-chip London firms rose by more than 50 points after opening, before a dip to 7688, up 15 points from yesterday’s close.
Miner Glencore has been the top riser, after its shares fell yesterday as a $23 billion mega-merger proposal was rebuffed by Canadian rival Teck.
Investment businesses Abrdn and St James’s place are also among the top risers following the £839 million merger of Rathbones and Investec’s UK wealth and investment arm.
Rathbones CEO: ‘too early’ to talk about job cuts, but change is inevtiable
08:48 , Daniel O'Boyle
Rathbones CEO Paul Stockton said it was too early to talk about whether his company’s acquisition of Investec’s UK wealth and investment arm would lead to job cuts in the City, but also noted that some sort of personnel change with a deal like this was inevitable.
“This deal is about growth opportunities and there is an awful lot of talent in this organisation we want to work with,” he said.
“Inevitably when you have an organisations coming together with similar size and business, there will be changes to make, but it’s way too early to be talking about details like that.”
Massive insurance writedown hits Saga bottom line
08:10 , Daniel O'Boyle
Self-described “superbrand for older people” Saga returned to profit on an underlying basis in 20222, but its overall bottom line was hit by a £269 million writedown of its insurance business because of tighter regulations.
Revenue jumped by 54% to £581.1 million, thanks mostly to the return of travel, with revenue at Saga’s travel business growing tenfold.
This helped the group report underlying profit of £31.5 million, compared to a £6.7 million loss a year earlier.
However, Saga’s accounts also included a £269 million impairment cost for its insurance business. The group said that new regulations from City watchdog the FCA, plus a “highly competitive environment,” made it difficult to make a profit.
As a result, Saga switched strategy on car insurance to a lower-margin approach. Because of the reduced profitability from this strategy, it conducted a review and wrote down the insurance business by £269 million.
In order to repay its bond obligations, Saga agreed a facility to borrow £50 million from its chairman, Sir Roger de Haan.
FTSE 100 seen higher after strong US session
07:41 , Graeme Evans
The FTSE 100 index is set to continue its strong run of recent days, with CMC Markets expecting London’s top flight to open 20 points higher at 7693.
Yesterday’s session was dominated by stocks from the energy sector as BP and Shell rose 4% on the back of Brent Crude’s surge towards $85 a barrel.
Banking stocks also did well as the surprise move by OPEC+ to cut output raised expectations that interest rates will need to stay high to combat inflation pressures.
US markets were higher yesterday as the Dow Jones Industrial Average rose 1% and the S&P 500 by 0.4%.
Virgin Orbit files for bankrupcy
07:35 , Simon Hunt
Virgin Orbit has filed for bankruptcy after the beleaguered satellite launch business was unable to attract enough funding to secure its future.
The company said in a statement: “As of December 31, 2022, we have not generated positive cash flows from our operations or generated sufficient revenues to provide sufficient cash flows to enable us to finance our operations, and may not be able to raise sufficient capital to do so.”
Last week, the firm, which was launched by billionaire Richard Branson, abruptly sacked 85% of its workforce, amounting to nearly 700 employees as a result of what it called its “inability to secure meaningful funding.”
“We have no choice but to implement immediate, dramatic and extremely painful changes,” Virgin Orbit chief executive Dan Hart told employees, according to CNBC.
WANdisco renews deal with BMW
07:20 , Simon Hunt
WANdisco has said it has renewed its contract with BMW as the struggling tech business seeks to shore up its client base amid an internal investigation into fraud.
BMW, which has been a WANdisco customer since 2016, has agreed to a continued multi-year license engagement with WANdisco and accompanying support service.
Combined with a deal with automative circuit maker Maxim Integrated, the agreements are set to be worth £1 million.
WANdisco said: “BMW Group has been a WANdisco customer since 2016. WANdisco technology is a critical part of BMW’s software engineering infrastructure, relied upon by its globally distributed development teams.”
It comes just a day after the firm’s CEO and CFO abruptly quit the board. WANdisco continues to be suspended from the London Stock Exchange.
Rathbones to merge with Investec’s UK wealth arm in £839 million deal
07:18 , Daniel O'Boyle
City wealth manager Rathbones is set to combine with Investec’s UK wealth and investment arm, creating a firm that would manage around £100 billion worth of funds.
Rathbones will issue new shares which will be offered in exchange for shares in the Investec wealth and investment division, meaning the Investec Group will hold a 41% stake in the enlarged Rathbones. This suggests a value of £839 million for the Investec wealth business.
The new business would be the UK’s biggest discretionary wealth manager.
“The combination of Investec W&I UK and Rathbones brings together two businesses which have a long-standing heritage in UK wealth management and closely aligned cultures,” Investec CEO Fani Titi said. “The strategic fit of the two businesses is compelling with complementary strengths and capabilities to enhance the overall proposition for clients.
“This will be supported by the strategic partnership which offers attractive growth and collaboration opportunities for both groups. The transaction represents a real step-change and long-term opportunity for our UK wealth strategy, underscores our commitment to the UK wealth management market and enhances our UK business as a whole."
