China’s central bank has injected cash into the financial system for the ninth consecutive day as concerns around the country’s property market deepen.
The People’s Bank of China pumped in 100bn yuan ($15.5bn ) of cash with 14-day reverse repurchase agreements, resulting in a net injection of 40bn yuan.
The move marks efforts by policy makers in Beijing to ensure there is sufficient liquidity ahead of quarterly regulatory checks and a one-week holiday at the start of October.
But the injection is also expected to allay fears of a contagion stemming from Evergrande’s debt problems.
Earlier today a state-owned company stepped in to buy a $1.5bn stake in a regional bank from Evergrande, which is at risk of collapse as it struggles to pay down its $300bn debt pile.
01:54 PM
Wall Street rebounds
Wall Street stocks have lifted on opening in New York, recovering from the prior session’s rout as Treasury bond yields retreated.
The Dow Jones Industrial Average rose 0.1pc while the S&P 500 advanced 0.3pc and the tech-heavy Nasdaq was up 0.5pc.
The market shrugged off concerns that the US government is just 19 days away from running out of money and careering into a historic default on its debt – considered one of the world’s safest assets.
Lawmakers must reach an agreement on funding the government this week to prevent a shutdown.
01:45 PM
China considers hiking power prices for factories
The Chinese government is considering increasing power prices for industrial consumers to help ease a growing supply crunch.
Bloomberg has more details:
The rate hikes for factories to textile mills could come in the form of higher flat fees, or in rates that are linked to the price of coal, according to people familiar with the details of the plan.
The government has also discussed raising rates for residential users if the industrial increases aren’t enough to solve the crisis, said the people, who asked not to be identified because the information isn’t public. The plans may still be changed and are subject to final approval, the people said.
The National Development and Reform Commission said today it will let power prices reasonably reflect changes in demand, supply and costs, while the country will increase coal imports “moderately” and urge power plants to boost stockpiles before winter.
China is facing power crisis for two main reasons.
Some provinces have ordered industrial cuts in order to meet the year’s emissions and energy goals after the country’s planning agency warned that 20 regions had exceeded energy use and pollution targets after manufacturing rebounded from the pandemic.
However other regions are wrestling with actual electricity shortages as rocketing coal and natural gas costs cause generators to slow output amid high demand.
01:35 PM
Meet Amazon’s Astro, the £1,000 robot designed to detect intruders
01:28 PM
Dawn raid in £1.5m housing investment probe
The UK’s Serious Fraud Office carried out dawn raids this morning, after a six month covert investigation into two Bradford companies, Alpha and Green Park.
The SFO said it suspects the Alpha-branded companies of fraudulently misleading investors into purchasing leaseholds for student accommodation in Leicestershire, Lancashire, Staffordshire and West Yorkshire.
The Green Park-branded companies are suspected to be part of a similar scheme to sell leaseholds for holiday accommodation in Devon, it added. celveland uk
The SFO said today that Alpha and Green Park branded companies sold investments into leasehold units between 2014 and 2019, promising investors 8-10pc returns on their investment over the first 10 years.
Over 1,500 investors from 50 countries invested approximately £150m into the leasehold schemes but they stopped receiving promised returns in 2018, the SFO said.
Meanwhile, the directors of the companies are alleged to have made around £20m.
01:19 PM
Frasers Group boss in line for £100m bonus
Shareholders in Mike Ashley’s Frasers Group have approved a new pay deal that could hand incoming chief executive Michael Murray a £100m bonus.
Mr Murray, who is the fiance of Mr Ashley’s daughter, will receive the bonus if the company’s shares reach £15, roughly double its current share price, for a consecutive 30-day period at any point over the next four years.
The incoming boss, who is currently the company’s head of elevation, will receive the cash boost on top of his £1m annual salary.
The deal could also hand Frasers’ finance director Chris Wootton a bonus of £9m if certain requirements are met.
Frasers, which owns brands including Sports Direct, House of Frasers and Flannels, said that just over 15pc of shareholder votes were cast against the pay deal.
However, it easily passed the 50pc threshold needed.
Influential advisory groups Pirc and Glass Lewis had advised shareholders to vote against the remuneration plan, highlighting “excessive payouts” at the company.
01:08 PM
Oil slips as US stockpiles rise
Oil has slipped from three-year highs, after a US industry report pointed to a rise in crude stockpiles.
The report cooled a rally that pushed benchmark Brent above $80 a barrel yesterday.
US Stockpiles expanded last week, including crude at the key storage hub of Cushing, Oklahoma.
The American Petroleum Institute reported a 4.13m-barrel weekly gain in US crude stocks, according to Bloomberg. If confirmed, this would be the first increase in eight weeks.
Brent futures slid 0.8pc below $79, while West Texas Intermediate also dropped 0.7pc.
“The oil market is coming under further pressure this morning after the API reported an unexpected uptick in U.S. oil stocks last week,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates.
“The latest price pullback suggests pockets of worry are still present across the oil market.”
01:00 PM
Tempest jet project signs international contracts
BAE Systems said Tempest, the British-led project to build a new fighter jet, will sign international contracts with partners Italy and Sweden by the end of this year and talks were ongoing with Japan about joining.
Reuters has more details:
BAE Systems’ director of Future Combat Air Systems Michael Christie said he expected contracts with the two partners on the concept and assessment phase to be signed by the end of 2021.
Talks with Japan ranged from the country joining the programme as a partner to collaborating on technology, he said.
“There’s a lot of commonality between the UK and Japan in terms of what they’re trying to achieve in this sphere…that’s an ongoing area and one that we are actively pursuing,” Christie told Reuters in an interview today.
Read more about Tempest here:
12:38 PM
OPEC+ to resist calls for more oil
OPEC+ is likely to stick to an existing agreement to add 400,000 barrels per day (bpd) to its output, despite oil soaring to three-year highs yesterday, according to Bloomberg.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, agreed to the increase in July so it could phase out 5.8m bpd in pandemic cuts.
Now reports suggest that the alliance will stick to that agreement when it meets next week, even as it comes under pressure for more supply.
“So far we will keep the plan to increase by 400,000 bpd,” one of the sources told Bloomberg.
Brent oil rose to a three-year high above $80 a barrel yesterday, boosted strong demand as surging natural gas prices prompt a rush for alternative fuels.
Today, oil has fallen back slightly, by 0.5pc to $78.72.
12:24 PM
Rolls Royce will stop selling combustible engines by 2030
Rolls-Royce said today it will stop selling cars with combustible engines in nine-years, as the company shifts to an electric future.
Chief executive Torsten Müller-Ötvös described the news as the most important decision in the history of the brand since Charles Rolls and Henry Royce agreed they would build cars together in 1904.
The first of the company’s all-electric portfolio, the Spectre sedan, will arrive by the fourth quarter of 2023.
“With this new product, we set out our credentials for the full electrification of our entire product portfolio by 2030,” Müller-Ötvös said.
“By then, Rolls-Royce will no longer be in the business of producing or selling any internal combustion engine products.”
Few details of the Spectre have been released, including of its price.
Rolls Royce shares, which are up 25pc in the past month, added another 1pc on Wednesday.
12:11 PM
UK power prices surge to September record
Power prices this month were almost three times higher than any other September in the past decade, after an unusual drop in wind levels left the UK exposed to soaring natural gas and carbon prices, reports Morgan Meaker.
The UK’s day ahead electricity prices surged to a record £424.61 per megawatt-hour in an auction for September 15 – the day a critical interconnector to France was knocked out by a fire.
The average price this month – £189.12 – is higher than anything the N2EX exchange has recorded since it started collecting data in 2010.
Traders expect prices to surge even higher in October, with the contract for next month expected to change hands at as much as £220.
12:10 PM
Return to office helps Franco Manca owner top expectations
A return of commuters to offices is beginning to spur sales at city centre pizza chains and train station bakery kiosks, dispelling fears that a shift towards flexible working could permanently hit footfall, writes Hannah Boland.
The owner of Franco Manca, Fulham Shore, said revenues at its restaurants in the West End and in city centres were just 3pc below 2019 levels in the three weeks to September 26.
These sites still continued to lag the rest of the group, where revenues were around a third higher than pre-pandemic levels in that same period. However, it marks a significant improvement amid concerns earlier this year that footfall may never return given the shift within organisations to more flexible working.
Fulham Shore said: “Over the next 12 months we expect footfall in these office-centric sites to increase and to therefore return to trading in line with the group’s average performance.”
It said growth would be accelerated once tourists started to return to the UK in a “meaningful way”.
Fulham Shore, which also owns The Real Greek brand, said it was trading ahead of its expectations, sending shares 2.7pc higher.
12:01 PM
Chinese developer Fantasia battles property crisis
Chinese developer Fantasia is struggling to avoid falling deeper into distress, as the crisis hitting debt-riddled Evergrande threatens to spread further through the country’s property sector.
Bloomberg has more details:
The Shenzhen-headquartered firm has had a dramatic few days. Just this week, it’s suffered credit rating downgrades further into junk territory, refuted a report that money for a privately placed bond hadn’t been transferred and seen market indications for some of its bonds maturing in several years drop to deeply distressed levels.
China’s lower-rated developers are facing increasingly tough conditions, after borrowing costs surged amid fears of an Evergrande failure. Strict rules on leverage mean companies need to reduce debt, while measures to cool the housing market are damping sales.
11:58 AM
Bloomberg to back British data start-up
Financial news giant Bloomberg is in talks to back a British data start-up that tracks real time consumer spending data.
Bloomberg is in advanced talks to lead a multi million pound funding round for Fable Data, according to Sky. Fable was set up in 2017.
According to the report, Bloomberg is expected to commit £2m out of £3.5m raised in total and the deal is likely to be completed by the end of the year.
Bloomberg’s investment in Fable reflects increased interest from news brands in data and analytics. Last month News Corp said it would buy Oil Price Information Service, which provides real-time data for fuel prices.
11:44 AM
Dollar rises to 2021 highs despite US shutdown threat
The dollar jumped to a 2021 peak today even as arguing in Washington over the US debt ceiling threatened to plunge the government into a shutdown.
The dollar index – which measures the US currency against a basket of rivals – rose for the fourth consecutive trading day on Wednesday, up 0.3pc to 93.990, its highest level since last November.
The safe have currency has strengthened in recent days as traders focus on fears of a global slowdown, a rise in energy prices and higher US Treasury yields. Concerns are also rising that the Federal Reserve will hike interest rates.
But it has shrugged off concerns that the US could be heading towards an historic default on its debt amid an impasse in Congress over raising the debt limit.
Republicans on Tuesday blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling US credit default, with federal funding due to expire on Thursday and borrowing authority on around Oct 18.
Marshall Gittler, head of investment research at BDSwiss, said: “It’s a sign perhaps of the confidence that people have in the US that even as the US government barrels toward a cliff like a car with a drunken driver who’s being beaten up by his even more drunk passenger, the dollar can strengthen.”
Read more on this story: Is the US going to run out of money?
11:30 AM
Next calls for immigration policy to solve shortages
The boss of retailer Next has advocated an immigration policy that will solve a shortage of seasonal warehouse workers.
Lord Simon Wolfson said on Wednesday that hiking wages will not solve the shortage:
The big issue isn’t the cost actually, the big issue is just availability. We don’t think that the solution to that is increasing costs (wages) although inevitably there will be some. The issue is just the availability of people who want to do that work.
Lord Wolfson has also criticised the Government’s handling of the lorry driver shortage, saying it was “widely predicted”, as the retailer’s warning of higher prices reinforced fears of stagflation.
11:22 AM
Fuel crisis: UK launches reserve tanker fleet
The government will deploy its reserve tanker fleet later today to help increase deliveries of fuel to forecourts across the country.
Business Secretary Kwasi Kwarteng said the trucks will be driven by civilians. Earlier he said troops will be deployed to help tackle the crisis “within days”.
I can confirm the government’s Reserve Tanker Fleet will be on the road this afternoon to boost deliveries of fuel to forecourts across Britain.
The trucks are driven by civilians and will provide additional logistical capacity to the fuel industry (1/2)
— Kwasi Kwarteng (@KwasiKwarteng) September 29, 2021
11:18 AM
Evergrande sells $1.5bn bank stake to state-owned firm
China has stepped in to help Evergrande by buying a $1.5bn stake in a regional bank from the debt-riddled property developer.
Evergrande has agreed to sell as 20pc stake in Shengjing Bank to the local Shenyang, according to a statement to the Hong Kong stock exchange.
Under the terms of the agreement, the bank has demanded that the proceeds of the deal go towards settling Evergrande’s debts to the lender.
This suggests the sale will do little to help Evergrande pay its massive debts to bond holders and homebuyers.
The intervention illustrates how authorities are taking steps to minimise fallout to the banking system from the worsening liquidity crisis at Evergrande as they try to avoid a bailout.
Billionaire owner Hui Ka Yan is coming under increasing pressure to spin off and sell assets to pay down the group’s $300bn mountain of debt.
11:04 AM
US stock futures recover from yesterday’s rout
US stock futures are pointing to a rebound this morning in New York, after Tuesday’s surging bond yields contributed to one of Wall Street’s worst day in months.
The rally in bond yields was sparked by comments from the US Federal Reserve last week that signalled the central bank could tighten monetary policy in the coming months.
However markets staged a recovery on Wednesday, as the yield on the benchmark 10-year Treasury note slipped back to 1.499pc from yesterday’s 1.534pc.
Nasdaq futures have lifted 0.9pc, after the tech-heavy index suffered its sharpest sell off since March. Heavyweight tech stocks – Amazon, Facebook, Microsoft, Apple and Google-parent Alphabet – also recovered, rising between 1pc and 1.3pc in premarket trading.
Tech stocks are particularly sensitive to bond yields because their value is often based on future profits. Futures tied to the Dow rose 0.6pc while S&P 500 futures were up 0.7pc.
10:50 AM
Where did all our petrol stations go?
The threats facing forecourts follow decades of decline and consolidation as stations seek to reinvent themselves, writes Rachel Millard.
It brought the total number of petrol stations from 37,500 in 1970 to 8,591 at the end of 2014, according to the UK Petroleum Industry Association. About 176 closed each year in the decade to 2014.
The trend then levelled off to 8,380 forecourts with a net loss of only five during 2020.
While the pattern of falling pump numbers has been repeated across Europe, the UK still has thousands fewer stations than Italy, Germany, Spain and France.
10:45 AM
Money round-up
Here are the latest stories from The Telegraph’s Money team:
10:41 AM
Foxton cuts bonuses for senior management in half
Shares of Foxtons have lifted 1.6pc after the estate agent said it would cut bonuses for senior management in half, writes Morgan Meaker.
Foxtons said it would cut bonuses by 50pc after shareholders criticised the generosity of the rewards scheme soon after the business received £6.9m in Government pandemic support.
That support is yet to be repaid. In April, just under 40pc of investors voted against a bonus for Foxtons chief executive Nic Budden, which totalled just under £1m – including £389,000 in cash and shares worth £569,000.
Foxtons said: “The performance of the business in 2020 met the conditions set out in the remuneration framework for the payment of bonuses but, considering the circumstances, the committee exercised its discretion by reducing this award by 50pc.
“The committee has consulted with its larger shareholders to understand their views… it was clear that a significant proportion of shareholders did not agree with the decision to pay bonuses to executive directors under the bonus banking plan, because the company had benefited from Government support.”
Pay policies at Foxtons will be reviewed in the next year, the company said.
10:37 AM
Healthcare firm Cera to create 5,000 new UK jobs
Cera, a British healthcare-at-home provider, has announced plans to create 5,000 new jobs in the UK.
The company, which was founded less than five years ago, said it had reached its initial target of filling 10,000 jobs by the end of 2021.
The majority of the new roles will be in healthcare services such as professional carers and nurses, but Cera is also hiring professionals in roles across operations, technology, finance and data to help boost its growth.
Cera is also offering £500 joining bonuses to help incentivise professional carers to join.
Dr Ben Maruthappu, Cera co-founder and chief executive, said:
At the start of the pandemic, we set out to solve two of the most pressing issues facing the UK. Firstly, we wanted to reduce pressures placed on the NHS due to the pandemic by bringing more talent into the Care sector and, secondly, we wanted to offer jobs to thousands of people to help counter the unemployment crisis, allowing them to retrain and gain fulfilling careers in healthcare.
We’re enormously proud of the role we’ve been able to play thus far. However, this is just the beginning – in the short-term we plan to grow Cera further, and bring an additional 5,000 new professionals into the health and social care sector during a period of unprecedented pressure.
10:31 AM
Fuel crisis: Troops to be deployed ‘within days’
British soldiers will be deployed to help tackle the UK fuel crisis within days, Business Secretary Kwasi Kwarteng has said, despite assurances from Boris Johnson that the situation was stabilising.
Mr Kwarteng told broadcasters: “We’ve decided to do that, and I think in the next couple of days, people will see some soldiers driving the tanker fleet.”
The government previously said it was putting troops on standby and providing specialised training so that soldiers could be deployed to help mitigate supply chain issues caused by a shortage of HGV drivers.
In his first public comments on the crisis, the Prime Minister last night said the situation was starting to improve, as he urged drivers to fill up in the “normal way”.
10:24 AM
Royal Mail slides 6pc after broker downgrade
Royal Mail is leading the FTSE fallers today after UBS downgraded the stock to “sell” from “buy”.
The postal group dropped 5.8pc to 541p, accelerating losses that began last week when it warned of lower parcel sales and rising costs.
While Royal Mail has benefited from a boom in e-ecommerce during the pandemic, it is still battling to reverse its history of under-investment.
10:16 AM
Yu Group shrugs off energy crisis
Electricity supplier Yu Group has shrugged off the on-going energy crisis, with bosses of the Nottingham-based business expressing confidence in the “group’s hedging strategy and positioning”, reports Morgan Meaker.
Bobby Kalar, chief executive, said: “Our hedging strategy is solid and in line with our risk policies
“The recent gas price and industry turbulence have had no material impact on the group to date due to our robust hedging policy. We continue to explore acquisition opportunities that sit in our sweet spot and will further accelerate our growth strategy.”
However, the company did warn costs would increase under “industry mutualisation” rules, which spread the cost of failed energy companies across other firms in the sector.
The utility group said its revenue grew 43pc in the six months to June 2021, compared to the same period last year. Pre-tax profit totalled £920,000, following last year’s loss of £1.7m.
Shares lifted 2.2pc.
10:12 AM
Upper Crust owner SSP slides as it warns of slower recovery
Shares in Upper Crust owner SSP slid 4.8pc after the company warned its pace of recovery from the pandemic would be slower than expected in 2022.
While the retailer said it was benefiting from increased passenger numbers, in the latest week revenue remained just 53pc of 2019 levels.
SSP said domestic and leisure travel, which accounts for 60pc of its revenue, was recovery at a faster rate than international and business travel.
It reiterated forecasts that revenue and profit margin will return to pre-Covid levels by 2024. However, it warned of a “slightly slower” recovery in sales during the 2022 financial year due to ongoing uncertainty.
10:00 AM
UK set to oust China’s CGN from nuclear power plant project
China’s state-owned nuclear power giant CGN is reportedly set to be pushed out of the planned Sizewell C nuclear power plant in Suffolk, writes Rachel Millard.
The company currently owns a 20pc development phase stake in the EDF project with an option to participate in the construction phase.
But the Government is concerned about Chinese involvement in critical national infrastructure, and last year banned China’s Huawei from the 5G mobile phone network.
Ministers are close to striking a deal under which the Government would take CGN’s stake in the project before selling it on to investors, either through a stock market float or direct sale, the Financial Times reported.
CGN’s stake in Sizewell C was part of a deal struck in 2015 under which it is also building Hinkley Point C with EDF in Somerset, and would eventually build its own power plant, Bradwell in Essex.
Bradwell is now considered unlikely to go ahead.
Nuclear power provides about 20pc of the UK’s annual power, but most plants are set to shut down due to age within the decade. Hinkley Point C is the only new station currently being built.
09:54 AM
Pandemic widens losses at party-wear brand Quiz
Shares of British party-wear company Quiz have plummeted 27pc this morning, after the fashion brand revealed its annual losses more than trebled compared to the previous year, writes Morgan Meaker.
The company’s pre-tax losses widened to £9.6m, following a year when lockdowns shuttered stores and wiped out demand for occasion wear.
Revenues also fell off a cliff; down 66pc with online sales failing to compensate for store closures.
Tarak Ramzan, founder and chief executive, said the company was reducing the size of its store estate, decreasing costs and maintaining “very tight cash management.”
Quiz closed 17 underperforming stores as part of a drive to cut costs, shrinking its estate to 61 shops in the UK and seven in Ireland.
Bosses added that sales have been improving since coronavirus restrictions were lifted, making £30.6m of sales in the five months to August 31. Shares are currently trading at 18.1p – far below 2018 highs of 201.5p
09:50 AM
Expert reaction: Consumer borrowing inches up in August
Thomas Pugh, economist at RSM UK, warns that a small rise in consumer borrowing in August is unlikely to boost consumer spending.
The latest money and credit figures provide a little encouragement that consumer spending picked up in August. But credit growth was still well below its pre-crisis average. Given the weak retail sales data released last week the small rise in borrowing won’t be enough to ease mounting concerns that the economic recovery is running out of steam.
Consumers borrowed £0.4bn in consumer credit in August, the second largest amount since the pandemic began. This was split equally between credit cards and other forms of finance, such as loans and car finance. But it was still well below the average of £1.2bn a month of consumer credit which was borrowed before the pandemic.
Of course, this could be because consumers are using savings to fund spending that they would have previously funded with borrowing. But households added another £9bn of cash to their holdings in August, which suggests they aren’t running savings down. At the same time, the effective rate on new personal loans rose to almost 6pc, the highest since March 2020, which may discourage additional borrowing […]
Overall, today’s data paint a picture of subdued borrowing for spending by consumers, which doesn’t suggest that consumer spending drove a massive rebound in GDP growth in August after the meagre 0.1pc month-on-month rise in July. And with energy price hikes, tax rises and higher fuel costs all eating into household’s disposable income, consumer spending may be about 1pc lower in 2022 than we had previously thought.
09:47 AM
Sterling falls to nine-month low
Sterling dropped to its lowest level since January against the dollar this morning, sustaining much of its losses from yesterday.
The pound fell 0.2pc to $1.35 – its lowest since Jan 11. Against the euro it was trading flat, near a two-month low at 86.4p.
The risk-sensitive pound has struggled against the backdrop of a global sell-off in stocks as investors brace for interest rate hikes from central banks, most notably the Federal Reserve.
ING strategists Francesco Pesole and Chris Turner said: “GBP sensitivity to global risk sentiment has continued to rise, and yesterday’s sell-off in equities saw the pound underperforming the G10 commodity FX [foreign exchange] segment.
“Such downside pressure on GBP, however, does not appear to be also linked to any re-pricing in the BoE rate expectations, which have remained broadly unchanged after the BoE meeting last week.”
09:38 AM
SSE Renewables expands into Japan
SSE’s renewables business has expanded into Japan after launching a joint venture with Pacifico Energy to develop offshore wind projects in the country.
SSE will acquire Pacifico’s wind development platform by taking an 80pc stake worth $208m.
The newly-formed joint venture will have 10GW worth of early-stage development projects in its portfolio.
Jim Smith, managing director of SSE Renewables, said:
We want to help realise Japan’s renewables ambitions and be a significant part of their offshore wind plans during the decades ahead, and we’re looking forward to working with the new team, as well as with local communities and other stakeholders to realise the benefits of the offshore wind industry.
This is an exciting period for SSE as it continues to grow and deliver its low-carbon electricity infrastructure strategy, including a trebling of our renewables output by 2030.
09:27 AM
Spanish inflation hits 13-year high
Inflation in Spain has surged to its highest rate of growth in 13 years as rising energy costs push up prices around the eurozone.
Consumer prices rose 4pc in September from a year earlier, more than the 3.6pc median forecast of economists in a Bloomberg survey.
Oscar Arce, the Bank of Spain’s chief economist, said inflation is expected to peak in November and later ease back to the target of 2pc.
The figures come ahead of inflation data from Germany, France and Italy, which are all set to report in the coming days.
European Central Bank President Christine Lagarde insisted on Tuesday that there is no sign that the surge in prices is becoming “broad-based” across the economy.
09:13 AM
Peel Hunt rises after £112m London float
Peel Hunt rose 2.4pc as it began trading on the London Stock Exchange this morning following a two-decade hiatus.
The broker raised £112m in a placing ahead of its listing on London’s Aim index after the company’s own business benefitted from a frenzy of stock market floats.
Peel Hunt priced its initial public offering at 228p per share, valuing the company at £280m. Its shares were trading at 233.5p after markets opened.
Peel Hunt, founded in 1989 by Charlie Peel and Chris Hunt, raised £40m from the offering to set up an office in Europe, invest in technology and fund regulatory and working capital needs.
The company was briefly listed on Aim from February 2000 until Belgian financial group KBC Bank NV bought it at the end of that year. A decade later a consortium of staff and external investors carried out a buyout.
09:05 AM
Expert reaction: UK mortgage approvals fall
Tomer Aboody, director of property lender MT Finance, says:
Although mortgage approvals were slightly down in August, they are still above pre-pandemic times. The strength of the market further demonstrates buyer confidence, as well as a desire to take advantage of the low interest rate environment. This is further demonstrated by the remortgage market, where borrowers are keen to switch to a cheap fixed-rate mortgage and make the most of lenders’ appetite to lend.
The upwards trajectory of the market is set to continue for the foreseeable future while borrowing remains cheap, even though the stamp duty holiday is about to end.
Mark Harris, chief executive of mortgage broker SPF Private Clients, says:
August proved to be quieter for the housing market compared with the relative frenzy of previous months, with many people putting their property searches on hold and going on holiday.
Mortgage rates continue to fall as lenders, awash with cash, compete for business, which should help support the market into the autumn. Indeed, we are finding that September is proving to be a record-breaking month with plenty going on as buyers continue to search for more space, both inside and out.
09:02 AM
UK mortgage approvals ease in August
UK mortgage approvals slipped for the third consecutive month in August in a further sign that the housing market is returning to normal after a pandemic-induced boom.
Banks and building societies authorised 74,453 home loans compared with 75,100 in July, according to data from the Bank of England.
That was slightly stronger than the 73,000 figure economists had expected. Unsecured lending to consumers rose marginally.
The fall in mortgage approvals partly reflects the scaling back of the stamp duty holiday, though they are still above pre-pandemic levels, suggesting healthy underlying demand.
08:56 AM
FTSE 100 rises
The FTSE 100 has pushed higher this morning thanks to gains for major banking stocks and retailer Next.
The blue-chip index is up 0.7pc at 7,078 points. Next is leading the risers, gaining 2.7pc after raising its profit outlook for the fourth time in six months.
AstraZeneca is up 2.2pc after the pharmaceutical firm said it will acquire the remainder of Caelum in a deal worth up to $500m.
Banking stocks HSBC rose 1.5pc, while Investec, Natwest and Lloyds all provided a lift for the FTSE.
08:47 AM
AstraZeneca to buy rare disease specialist Caelum for $500m
AstraZeneca is set to take full control of rare disease specialist Caelum in a deal worth up to $500m.
The takeover follows the British pharmaceutical firm’s $39bn takeover of Alexion Pharmaceuticals earlier this year. Alexion had taken a minority stake in Jersey-based Caelum in 2019.
AstraZeneca will pay $150m to buy the remaining stake it does not already own in Caelum and further payments of up to $350m.
Following the acquisition, the company said it would accelerate Caelum’s late-stage trial of its drug candidate to treat AL amyloidosis, a rare, life-threatening disease that damages the heart and kidneys.
Shares in AstraZeneca rose 2.2pc following the announcement.
08:35 AM
Morrisons auction to be decided over five bidding rounds
Here’s more on the Morrisons takeover auction coming this weekend:
The Takeover Panel has said there will be up to five rounds of the auction taking place on Saturday.
If the auction procedure has not concluded in the first round (which it will if no increased bid is made in the first round), there will be up to three further rounds, in which an offeror will be eligible to make a bid only if the other offeror made an increased bid in the immediately preceding round. If the auction procedure has not concluded after these three further rounds (which it will if no increased bid is made in a round), there will be a fifth and final round, in which both offerors may make an increased bid.
If the bidding goes to a fifth round, Fortress must make bids ending in an even number, and CD&R must make bids ending in an odd number.
Saturday’s auction will bring the $9.5bn battle for the supermarket giant to an end, with CD&R’s existing 285p a share offer the current leading bid. Fortress, which entered the race in July, has made bids of 252p and 270p per share.
08:12 AM
Lord Wolfson urges action over ‘skills crisis’
Next’s boss Lord Simon Wolfson has had a pop at the Government’s handling of the lorry driver shortage, saying it was “widely predicted”, as the retailer’s warning of higher prices reinforced fears of stagflation.
Lord Wolfson said:
The HGV crisis was foreseen, and widely predicted for many months. For the sake of the wider UK economy, we hope that the Government will take a more decisive approach to the looming skills crisis in warehouses, restaurants, hotels, care homes, and many seasonal industries. A demand led approach to ensuring the country has the skills it needs is now vital.
Next’s shares remain higher after the retailer predicted profit will hit £800m this year – its fourth forecast upgrade in a row. But its prediction that prices will rise by 2.5pc going into the first half of next year are the latest indication of the threat of stagflation – where inflation increases without significant economic expansion.
07:53 AM
Morrisons auction ‘scheduled for Saturday’
The US private equity giants gunning for Morrisons will stage their final battle this weekend, according to The Times’ retail editor Ashley Armstrong:
Breaking: The shoot-out auction between CD&R and Fortress consortium to take control of Morrisons is slated for this Saturday 2 October. Takeover Panel says bids will have to be in cash and maximum of 5 rounds.
— Ashley Armstrong (@AArmstrong_says) September 29, 2021
CD&R and Fortress are locked in a bidding war for the retailer that is set to be decided in a takeover auction. Morrisons’ shares rose 1.3pc in morning trading to 295.7p, far above CD&R’s current 285p leading offer – reflecting shareholders’ confidence the auction will result in a much higher price.
07:46 AM
Next shares jump despite shortages alert
Next shares have hit a record high on the back of its impressive half-year results, despite the clothing chain warning that Britain’s supply chain crisis is pushing up prices.
Prices rose by around 2pc in the first half over supply chain shortages and a spike in shipping costs, and the high street bellwether warned prices would rise another 2.5pc in the first half of next year.
Next said the price inflation “is more than we would like, but we believe, not enough to materially restrain sales”. It said the largest increases were focused on its homeware division. It expects a whopping 6pc inflation in homeware prices early next year, while fashion prices are set to rise by 1pc.
The retailer added:
We anticipate cost price inflation to rumble on through most of next year, albeit at levels that are not overly worrying. So perhaps inflation will be rather less temporary than official guidance might suggest, but certainly not as concerning as some of the more excited reports we read.
Staff shortages are also affecting the retailer, especially in its warehouses and logistics, which it warned could affect Christmas deliveries.
However, Next’s shares jumped as high as £84.04 in early trading, or 3.6pc, and remain 2.7pc higher after it hiked its full-year profit guidance for the fourth time in six months, now expecting to hit £800m. It also said trading has been 20pc higher in the last two months than the same period before the pandemic hit.
Interactive Investor’s head of markets, Richard Hunter, said:
The expected reduction in online sales as stores reopened across the country has not yet meaningfully materialised, while full-price sales have turbocharged numbers against a backdrop of pent-up demand.
Inevitably, Next is at pains to point out that challenges remain. The longer term issue of whether heightened pandemic online sales are here to stay is as yet unknown. The wider issue of cost inflation could also impact margins, while the group is also experiencing the difficulties arising from supply chain blockages in terms of stock, with staff shortages running into the peak season also a possibility.
Even so, trading since these half-year numbers, which run to the end of July, has continued to explode, with full-price sales 20% ahead of 2019 levels and significantly in excess of the 6pc previously guided.
07:15 AM
‘Hugely impressive results’
Richard Lim, CEO of research firm Retail Economics, said:
These are hugely impressive results for a retailer that’s managed to expertly navigate through these choppy waters. The battle for consumers’ attention is increasingly being fought online and their heavy investment in digital marketing is paying dividends.
They have capitalised on the shift towards digital while leveraging the value of their store estate to support a much more complex customer journey.
Their partnership model (Total Platform) is also helping to reach out to new shoppers allowing them to form new relationships.
hile it’s still in its infancy, there is an enormous opportunity to form new partners as online competition intensifies and margins come under greater pressure across the industry.
07:09 AM
Next hikes profit guidance yet again
British high street bellwether Next has raised its profit outlook for the fourth time in six months as it hailed strong trading since the end of lockdown.
Shoppers pushed its first half pre-tax profit up 5.9pc to £347m compared to the same period before the pandemic struck.
Meanwhile full-price sales grew 8.8pc compared to two years ago, and by 20pc over the past two months.
That helped the clothing chain push up its full-year profit before tax guidance to £800m, £36m higher than its previous forecast of £764m.
“Sales in retail stores have done better than planned, while online sales have fallen back less than we expected,” the retailer said.
“It appears that the wider economy has not suffered the long term damage many feared, for the moment at least. And, in particular, employment has held up well. The positive sales trend has continued through August into the second half, despite significant stock shortages caused by Covid disruption to international supply chains.”
Shares grew close to 4pc as the market opened.
06:57 AM
Slowdown fears infect global markets
The US and Europe’s stock market turmoil continued unabated in Asia overnight.
While China’s Hang Seng managed to climb 0.7pc despite the risk of embattled property developer Evergrande, Japan’s Nikkei sank 2.1pc, leaving Asian shares set for their worst quarter since the coronavirus pandemic hit.
Fears about economic growth in China combined with fears of a global slowdown and a strong dollar combined to push markets lower.
At the same time, China is grappling with a power crunch that has impacted economic output there. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.84pc and was heading for a 9.4pc decline for the third quarter, its worst quarterly performance since the first three months of 2020, when markets globally were roiled by the initial spread of Covid-19.
The pound’s plunge over inflation fears saved the FTSE 100 from tumbling as badly as its European and US counterparts.
Doubts are re-emerging over the global recovery at a time when the US Federal Reserve is set to taper stimulus and the administration of President Joe Biden is stuck in contentious debt ceiling negotiations that could lead to a government shutdown.
The FTSE is set to open flat today after a 0.5pc drop yesterday, compared to over 2pc declines among its peers.
06:21 AM
Retailers warn more price hikes are ‘inevitable’ over driver shortage
Good morning.
British households are facing a tough winter as cost pressures created by a shortage of delivery drivers and red tape at the borders mean further price rises are now “inevitable”, retail bosses have warned, Tim Wallace writes.
The British Retail Consortium (BRC) said that there were “clear signs” the haulier shortage combined with rising transport costs and commodity costs were starting to filter through to shop prices.
Food price inflation returned in September for the first time in six months, according to the BRC, in an early sign that supply problems are starting to bite.
Goods including DIY and gardening equipment, furniture and electricals are all rising particularly steeply.
Overall shop prices rose 0.1pc between August and September, but are still down compared with the same month a year ago.
Helen Dickinson, chief executive of the BRC, said: “It is inevitable that prices will continue to rise. Supply chains have been put to the test recently, with CO2 and HGV shortages.
“Government needs to find a long-term solution to the HGV driver shortage by expanding the size and scope of the new visa scheme for drivers from abroad so they can fill the gaps while new British drivers are trained.
“Without this, these additional burdens to what is already a precarious trading environment, will affect the British consumer and the prices they pay for the goods they want and need.”
Currently 5,000 foreign lorry drivers are permitted to work in the UK under the temporary visa scheme introduced by the Government this week.
The HGV crisis has already had a critical knock-on effect at petrol stations across the UK, as a lack of drivers combined with panic buying causes pumps at forecourts to run dry.
Prices rose above 135p per litre this week, up from 113p a year ago and the highest level since September 2013.
Diesel is up at almost 138p, the highest level since early 2014.
According to a Recruitment and Employment Confederation (REC) survey, almost six in every 10 businesses are suffering a shortage of candidates for job vacancies.
For those seeking permanent staff, 13pc have a shortage of drivers, with 17pc of companies in need of temporary workers
Neil Carberry, chief executive of the REC, said the solution to resolving the driver shortage was more complex than simply loosening visa rules.
He said: “Yes we need a visa system which is responsive to the needs of the economy, but the answers to this are in policies which will take a long-time to come to fruition.”
This should include “addressing youth unemployment by giving opportunities for jobs we’re seeing with shortages”, he added.
5 things to start your day
1) Pound tumbles on inflation surge and US debt crisis Sterling slides and FTSE 250 falls 2pc after cost of government borrowing hits 1pc for the first time since March 2020 on rate rise fears.
2) Stelios loses his grip on easyJet after 26 years Sir Stelios and his family no longer can no longer veto key decisions by the airline’s board after his stake falls to 15.3pc
3) Euan Blair worth £160m after his firm’s record investment Multiverse valued at almost £650m after US investors plough $130m into company in record for UK ‘ed tech’.
4) BT faces court case for landline overcharging Telecoms giant faces the prospect of paying £500 to more than 2m customers if it loses a class action lawsuit.
5) Wise shares fall after founder fined over UK tax violation Kristo Kaarman says he is now devoting more time to ‘keeping his personal administration in order’.
What happened overnight
Asia stocks declined Wednesday as rising bond yields stoked fears about inflation and as China Evergrande Group’s debt crisis intensified.
MSCI Inc.’s gauge of Asian stocks had the biggest drop in almost six weeks – and is headed for its first quarterly slide in six. Japan fell as two candidates took part in a runoff vote for leader of the ruling party. China slid on the deepening debt crisis at China Evergrande Group.
US futures rose after the S&P 500 fell the most since May with concerns over the debt-ceiling impasse in Washington adding to investor angst. The Nasdaq 100 tumbled the most since March as technology shares fared worse amid rising Treasury yields. European contracts climbed. Treasuries stabilised after the yield on the 30-year note jumped almost 10 basis points. Oil retreated and the dollar slipped.
Coming up today
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Corporate: Ashmore, Genus (Full year); Berkeley (Trading update)
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Economics: Services PMI (UK), retail sales (EU), unemployment rate (US), services and composite PMI (EU, US)
