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- Blue-chip index recovers to 7,999
- Gold falls from ATH as bitcoin rallies
- Revolut valuation surges
2.49pm: Inchcap says London ‘a great place to list shares’ despite UK retail exit
FTSE 250-listed car dealership Inchcape’s chief financial officer Adrian Lewis reaffirmed the company’s commitment to its London listing despite agreeing to sell its UK retail business to a US competitor.
“We are very happy with our listing in London. Just because we don’t have a UK retail operation does not mean we should be listed elsewhere,” said Lewis in comments published in the Evening Standard.
“The London stock market is a great place to list shares. We get investors that understand distribution and understand our markets,” he added.
Inchcape announced the £346 million disposal of its UK retail operations to Group 1 Automotive UK, a wholly-owned subsidiary of Group 1 Automotive, earlier today.
Inchcape’s board said today that it has “concluded it is the right time for a new owner to take this business forward”.
Lewis’ comments serve as a relief to the Square Mile, which has been reeling from dozens of delistings and take-private deals of small-cap and large-cap British businesses.
Inchcape’s shares surged around 5% after announcing the sale.
2.15pm: US retail sales outperform in March
Retail Sales in the US increased 4% year-on-year in March, following an upwardly revised 2.1% gain in February.
Month on month, retail sales surged 0.7%, more than doubling forecasts of 0.3%.
Non-store retail, forecourt, home improvement and food and drink sales contributed to the beat, partially offset by weak clothing, electronics, general merchandise, auto and furniture sales.
2.02pm: Stocks recover, footsie back in the green
The London stock market has staged a latter-day recovery, with the FTSE 100 surging into the green after trading in the red all day.
Footsie is only a couple of points off reclaiming the 8,000 mark, thanks to a market rebound in anticipation of Wall Street opening higher when trading commences across the pond.
Aerospace and engineering groups led the risers, with BAE Systems, Melrose, IMI and Weir all posting solid gains.
1.56pm: Samsung overtakes Apple
A quick update on big-cap news outside of London- Samsung has overtaken Apple as the world’s leading mobile phone maker.
It follows a slump in iPhone sales in the past three months. Around 50.1 million iPhones were shipped in the first three months of the year, against 55.4 million units in the same period last year, according to market researcher IDC.
As a result, Samsung has a 20.8% market share and Apple 17.3%, though there were big gains for Chinese phone makers.
According to the data, total global market deliveries rose by 7.8% to 289.4 million units.
“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC.
“While Apple has been super resilient and seen a lot of growth in shipments and share over the last few years, it will be a challenge for it to maintain the pace of growth and the peak share it saw in 2023.
“As the market recovers further in 2024, IDC expects Android to grow much faster than Apple.”
Apple shares have underperformed in 2024, with age-old rival Microsoft overtaking it as America’s most-valuable company.
Returning to London and the FTSE 100 index has pushed into the green after trading lower for most of the day. The index was last seen five points higher at 7,999.
1.34pm: Reject Nationwide takeover, KBW implores Virgin Money shareholders
“We want more,” demands KBW. Analysts at the Stifel subsidiary were referring to Nationwide’s 218p (plus a 2p divi) per share surprise cash offer for Virgin Money at a £2.8 billion valuation.
“We believe that this offer is inadequate for what is the leading quoted UK challenger bank,” analysts said of the offer that was first advanced in March.
KBW acknowledged the enticing 38% premium to Virgin Money’s valuation at the time of advancing the offer, but added that it’s only an 11% premium to analysts’ pre-bid consensus target price.
Nationwide may struggle to get the deal over the finishing line regardless, amid a # against the merger.
Analysts at KBW suggested a 250p per share valuation on Virgin Money’s stock is no unreasonable
“We believe that the current offer fails to reflect the unique opportunity offered by VMUK, and believe that the strategic and financial logic of the transaction applies to a number of other potential acquirers within our coverage,” they said, singling out Barclays.
“With that in mind we would recommend VMUK shareholders vote against the current offer at the general meeting, due at some point after April,” said KBW.
1.08pm: US markets to open higher as Goldman Sachs beats estimates
Futures contracts have US stocks tipped to open higher today after Wall Street ended last week on a bum note due to lacklustre performances from Big Bank stocks.
However, things could turn in the right direction today as Goldman Sachs smashed expectations for first-quarter revenues and earnings, with its trading teams delivering record numbers.
Net revenues of $14.21 billion came in 16% higher than a year ago and up 26% against the fourth quarter of last year, also well above the $12.92 billion consensus forecast, per LSEG data.
“Our first quarter results reflect the strength of our world-class and interconnected franchises and the earnings power of Goldman Sachs,” remarked chief executive David Solomon.
The Dow Jones Industrial Average is up half a percentage point in the pre-market, as is the tech-focused Nasdaq 100.
The wider S&P 500 index is expected to add 28 points to 5,152.
Meanwhile on the UK markets, the FTSE 100 has staged a recovery from intraday lows and was trading just a handful of points lower at 7,993 as of 1pm.
12.40pm: Blue chips stage a recovery
The FTSE 100 pared back some morning losses in early-afternoon trades, with the blue-chip index bouncing from an intraday low of 7,953 back to 7,976 at the time of writing.
Footsie still remains 19 points lower, dragged down by a selloff of oil supermajor stocks BP and Shell after Brent crude oil prices fell below $90 a barrel due to mounting tensions between Iran and Israel.
12.27pm: Revolut valuation priced high by Schroders
UK fintech group Revolut has had its implied valuation increased by 45% to $25.7 billion (£20.6 billion) by minor shareholder Schroders, Bloomberg has reported.
A fund managed by Schroders wrote up its stake in the unlisted British payment disruptor from £5.44 million to £7.88 million.
Though only a minor stakeholder, it is a shot of good news as Revolut aims to reclaim its peak $33 billion valuation achieved in a major funding round in 2021.
The Schroders fund said Revolut had made “solid progress” on its expansion plans despite higher interest rates impacting high-growth companies in the past two years.
In March, Revolut boss Francesca Carlesi left the door open for a debut on the London Stock Exchange, though no concrete plans have been announced.
Per the latest Companies House filings, Revolut generated £744 million worth of revenues in the year ending 31 December 2022 on an 82% gross profit margin. Losses before tax exceeded £23 million.
11.43am: Foxtons (LSE:FOXT) seeking a buyer
Foxtons (LSE:FOXT) Group plc shares added 1.5% today following weekend reports that it had asked adviser Rothschild to find a potential buyer after pressure from activist investors.
The London-based estate agent has been told to put itself up for sale by Canadian group Converium Capital and UK investor Milkwood, both of which own around 5% of the group.
According to the Sunday Times, Milkwood boss Rhys Sommerton believes a sale is the only way to “extract fair value” for the business.
The group’s pre-tax profits fell 34% to £7.9 million in the year to December 2023 after substantial one-off charges.
Though shares have bounced 40% higher these past 12 months, shareholders have lost almost 90% of their investments since the group’s 2013 IPO.
Back to the blue chips, the FTSE 100 remains 36 points lower at 7,959, largely due to a sell off of oil stocks after Brent crude prices fell below US$90 a barrel.
11.10am: Bitcoin supported by Hong Kong spot-bitcoin ETF approvals
Hong Kong’s securities regulator has followed the US Securities and Exchange Commission’s lead by approving spot-bitcoin exchange-traded funds on the Stock Exchange of Hong Kong.
The SEC’s approval in January preceded over $12 billion of net cash inflows into newly launched ETF products from the likes of BlackRock, VanEck, Fidelity and Grayscale.
These approvals have supported bitcoin’s 57% year-to-date rally.
British watchdog the Financial Conduct Authority also moved to approve bitcoin ETNs (exchange-traded notes) in March.
Tim Bevan, chief executive at ETC Group, said: “Hong Kong approving spot ETFs soon after the announcement of the LSE reiterates the global ripple effect of the spot ETF approvals in the US.
“This is further confirmation that bitcoin is now an established investable asset amongst the traditional finance community globally and will create further demand pressure over time.”
Bevan said that bitcoin may continue to see some short-term volatility around the upcoming Halving events, but “we expect to see target price revisions for 2025 well in excess of $100k”.
The BTC/USD pair is up 1.5% to $66,643 at the time of writing, having added 2.7% on Sunday.
10.47am: Analysts warn on oil prices
Brent crude oil prices fell below $90 a barrel on Monday in response to heightened Middle East tensions after Iran launched missile strikes on Israel.
But City analysts have warned that any short-term retraction on prices could be short lived and Brent crude – which serves as a benchmark for global oil prices – could surge above $100.
“Money managers have been upping their long positions on US crude futures and options lately in anticipation of a possible threat to supply,” said Vitoria Scholar, head of investments at interactive investor. “There are worries about disruptions through the Strait of Hormuz in particular which sees around 20% of global oil pass through the waterway.”
It adds a layer of risk to the UK economy, with potentially higher oil prices threatening the Bank of England’s progress in bringing down inflation.
Scholar said: “Higher oil has the potential to push up prices across various parts of the economy again, not just in terms of petrol pump prices, but also in other industries like transportation, manufacturing, and food production.”
Oil and gas stocks were down across the board on Monday, with British supermajors Shell and BP at the top of the fallers list. This has contributed to a 33-point dip on the FTSE 100 index to 7,961.
9.52am: Mitie launches £50mln buyback programme
FTSE 250-listed outsourcer Mitie Group PLC (LSE:MTO) has launched a £50 million share buyback programme after posting record annual revenues of £4.5 billion.
Operating profit for the year tallied around £200 million, representing a 4.5% margin.
Net debt, however, nearly doubled as the group dedicated £65 million to seven bolt-on acquisitions in the period.
Mitie strengthened its position in the fire and security market through the acquisitions of RHI Industrials and GBE Converge and enhanced its mechanical and electric presence through the acquisition of JCA Engineering.
The group has commenced the buyback immediately, with portion of the repurchased shares going to an employee sharesave scheme.
Mitie shares rocketed 7.5% higher to 120p in early trades.
9.39am: Recruitment firm Pagegroup shares plummet
FTSE 250 member and one of Britain’s largest recruitment firms PageGroup PLC (LSE:PAGE)’s shares dipped around 5% on Monday following a first-quarter trading update.
As expected, Pagegroup saw a year-on-year decline in operating profits across all major jurisdictions.
Group gross profit of £219.7 million represented a 12.8% decline versus the first quarter in 2023, with the UK market seeing the largest fall.
“While we anticipate a period of low confidence levels, based on our current outlook, we intend to hold fee earner headcount broadly at existing levels to ensure we are well placed to take advantage of opportunities as sentiment and confidence improve,” said chief executive Nicholas Kirk.
“We have a highly diversified and adaptable business model, a strong balance sheet and our cost base is under continuous review and can be adjusted rapidly to match market conditions.”
Shares were swapping for 461.6p at the time of writing, while the FTSE 100 was 31 points lower at 7,964.
9.15am: Ashmore Group (LSE:ASHM)’s assets under management decline
Ashmore Group (LSE:ASHM) plc’s assets under management (AUM) fell by $2.1 billion (£1.7 billion) in the third quarter of its financial year, marking a 4% sequential decrease.
In a trading update, the FTSE 250-listed emerging markets asset manager stated: “Against a backdrop of more subdued markets following the strong end to 2023, net outflows were predominantly driven by institutional clients continuing to reduce risk.”
Ashmore noted that hard currency markets performed relatively well over the period, driven by spread compression in high-yield markets, while equities also delivered positive returns.
Chief executive Mark Coombs added: “Emerging Markets delivered a mixed performance over the quarter as stronger than expected economic data pushed back expectations of rate cuts by the US Fed.
“Looking beyond the short-term, macroeconomic stability in emerging countries underpins superior GDP growth compared with the developed world, and many central banks continue to cut rates in response to lower inflation.”
Shares were off 3.2% at 181.9p at the time of writing.
8.58am: The morning so far
The FTSE 100 index fell by half a percentage point when markets opened on Monday, bringing the tantalisingly close all-time high nearly brushed on Friday further out of grasp.
Mining and natural resources stocks were among the biggest fallers due to a scaling back on Brent Crude and spot gold prices.
Fresnillo PLC (LSE:FRES) was the biggest faller in the opening hour, though Shell and BP were not far behind.
Chemicals group Croda and Bill Ackman’s Pershing Square were also seen lower.
easyJet plc was among the top FTSE 100 risers in early trades, as were insurance firm Beazley and manufacturing group Melrose.
Elsewhere in company news, Inchcape PLC (LSE:INCH) has announced the disposal of its UK Retail operations for a cash consideration of approximately £346 million.
US rival Group 1 Automotive is on the other side of the deal table. FTSE 250-listed Inchscape shares rallied over 3% on the news,
Andrew Cosslett is stepping down as chair of FTSE 100-listed B&Q owner Kingfisher plc after seven years in the role, having decided not to stand for reelection at the company’s annual general meeting on 20 June. Shares held steady at 248.8p.
FTSE 250-listed recruitment firm PageGroup PLC (LSE:PAGE) was sent over 5% lower after posting a 12.8% year-on-year revenue decline in a trading update.
There are no macroeconomic announcements in store for the UK today, though later we will have retail sales data from the US.
The blue-chip index was last seen 34 points lower at 7,960.
8.30am: FTSE 100 trading lower
The FTSE 100 opened lower when markets opened on Monday, with the blue-chip index trading 35 points lower at 7,960 at the time of writing.
Natural resources stocks are weighing heavily on the index, with BP, Fresnillo Group and Shell among the biggest fallers.
This is due to lower oil prices falling following Iran’s recent drone strikes on Israel, heaping further volatility on Middle East tensions. Gold is also off its all-time highs.
8.15am: Cosslett to step down as Kingfisher chair
Andrew Cosslett is stepping down as chair of the FTSE 100-listed company after seven years in the role, having decided not to stand for reelection at the company’s annual general meeting on 20 June.
Cosslett will be succeeded by Claudia Arney, who has served as an independent non-executive director of Kingfisher since November 2018. Arney also chairs Kingfisher’s remuneration committee.
“It has been a privilege to serve as Kingfisher’s chair over the last seven years. During this time we have changed and strengthened our leadership team, put in place a more effective business strategy, managed the pandemic and worked hard to further the company’s reputation as a champion for responsible business,” said Cosslett.
Senior independent director Catherine Bradley added: “On behalf of the board, I would like to thank Andy for his outstanding leadership and extensive contributions. He has overseen an important period of change for the Company, including the launch of the ‘Powered by Kingfisher’ strategy, laying the foundation for the Company’s future success.
“We wish him the very best for the future.”
8.07am: Bitcoin stages dramatic recovery
Bitcoin (BTC) staged a dramatic recovery over the weekend. The benchmark cryptocurrency plummeted by nearly 15% between Friday and Saturday in one of the worst crypto selloffs in over a year.
Bitcoin’s nosedive coincided with a wave of Iranian missile attacks in Israeli territory, which further escalated tensions in the Middle East.
This may have spooked bitcoin and other risk-on assets, though Sunday offered a respite for bitcoin bulls as the BTC/USD pair shot up from below $61,000 to over $65,500.
Further gains this morning have brought bitcoin back to $66,374 at the time of writing, marking a 9.5% rebound from the floor.
It suggests confidence among the bulls to buy into any dip in bitcoin’s price, supporting spot prices in the near term.
Back to stocks, the FTSE 100 is currently trading 20 points lower at 7,975.
7.43am: Gold moves lower as dollar strengthens
Gold has come off last week’s all-time highs, having fallen a quarter of a percentage point in today’s Asia trading window.
The precious metal smashed past $2,400 an ounce on Friday, peaking at US$2,417 per ounce.
Its US dollar denominator has since strengthened on the back of what Ipek Ozkardeskaya, senior analyst at Swissquote Bank, today called “a severe deterioration in Federal Reserve rate cut expectations” following strong jobs and inflation data.
At the time of writing, gold was priced at US$2,358.49 an ounce.
7.31am: Inchcape exits UK retail operations
Inchcape PLC (LSE:INCH) has announced the disposal of its UK Retail operations to Group 1 Automotive UK Limited, a wholly-owned subsidiary of Group 1 Automotive, for a cash consideration of approximately £346 million.
Larger rival AutoNation was initially tipped as a potential buyer.
Inchcape’s board said today that it has “concluded it is the right time for a new owner to take this business forward”.
Duncan Tait, group chief executive of Inchcape, said: “As we continue to deliver on our strategic ambition of becoming the leading global distribution partner to our OEM partners worldwide, this transaction represents a significant step along that journey.
“Our UK Retail business is a high-quality business, with an experienced and high-performing management team, and has been an important part of the group’s growth.
“With our active international expansion into higher value distribution activities, the strategic importance of the UK retail operations has become limited.”
Inchcape shareholders are expected to net £100 million through a share buyback programme funded by the disposal, with the remaining funds earmarked for future growth initiatives.
The deal is expected to close in the fourth quarter of 2024.
7.10am: Stocks to move lower
The FTSE 100 index is expected to pare back some of the 80-plus points of gains made last week.
Blue-chip stocks neared record highs on Friday, though slightly missed the mark in late trading, dipping below 8,000.
Mining and natural resources companies led the charge thanks to record gold and six-month-high oil prices.
Commodities prices will remain closely eyed in the week ahead, especially if UK inflation numbers on Wednesday deliver an upside surprise thus reinforcing gold’s inflation-hedging properties.
On the company news front, attention today turns to fund manager Ashmore Group (LSE:ASHM)’s net flows.
UBS forecasts US$900 million of outflows in the quarter while consensus forecasts outflows are for US$1 billion.
There are no major macroeconomic events on the UK calendar, though the latest US retail sales print is due later in the day.
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