Ryanair is to begin paying regular dividends after announcing a bigger-than-expected rise in half-year profits today.
The landmark move by the Dublin-based carrier helped lift the London-listed shares of rivals easyJet and Wizz Air.
Elsewhere, the boost from peak interest rate hopes began to fade today in a session when investors heard from Prudential and Scottish Mortgage Investment Trust.
FTSE flat at close of session
Monday 6 November 2023 16:48 , Simon Hunt
At the close of the day's trading session, the FTSE 100 has finished broadly unchanged.
However, oil prices have started the week tentatively bullish with crude futures trading in the green across early European trading, with Brent crude up 1.4%.
Analysts from ARJ Capital said:. "While prices have softened from the highs initially seen on news of the conflict between Israel and Hamas, the ongoing risk of escalation is keeping prices underpinned around current levels. Fears of a wider Middle East conflict developing out of the war have so far fallen flat, leading to fall back in crude prices.
"However, with Israel also engaging Hezbollah along its Northern border with Lebanon, risks of a wider conflict emerging cannot be ignored. In light of this, oil prices remain subject to bullish risks though, if the conflict continues as it (contained with Gaza), choppy trading is likely to continue with a ceasefire looking highly unlikely."
Here's a look at your key market data:
BoE lays out plans to regulate stablecoins
Monday 6 November 2023 16:14 , Simon Hunt
The Bank of England and the Financial Conduct Authority have unveiled plans to regulate stablecoins in the latest sign of the government’s attempt to lure crypto companies to the UK.
The proposals, which only apply to sterling-denominated coins, aim to “protect consumers, prevent money laundering with a robust set of rules and to safeguard financial stability” including a requirement that issuers back stablecoins with deposits at the Bank of England instead of using a commercial bank.
To operate in the UK, stablecoins, a form of digital asset pegged to a fiat currency such as the pound, must also identify a “payment system operator”, responsible for assessing risks arising from the different parts of the payment chain.
Wallet providers, with which users digitally store their stablecoins, would be required to allow customers to redeem stablecoins at ‘par value’ at all times, meaning the value of the coins must never deviate from the fiat currencies they are pegged to.
City comment: Unsettling times for Selfridges
Monday 6 November 2023 15:12 , Simon Hunt
Gazing into Selfridges’ spectacular Christmas window displays you would not think anything was awry at the 114-year-old West End landmark.
This year the theme is “Showtime!” gushingly described as “a theatrical extravaganza loaded with festive drama and delight, inspired by the glamour of the stage”. Trading is said to be strong with sales at the Christmas shop up 50% on last year.
Behind the scenes however there is a less than festive mood in the boardroom at 400 Oxford Street. After almost 20 years of stable and skilful stewardship under the ownership of the Weston family, the future for Selfridges suddenly looks uncertain.
One of two shareholders that acquired the department store last year, Austrian property company Signa Holding, is caught in the throes of a debt
and leadership crisis that is likely to put its 50% holding “in play”. Signa looks in deep trouble...
US stocks make gains
Monday 6 November 2023 14:49
Stocks made gains in the opening minutes of trade on Wall Street as investors bet no further Fed rate rises were on the cards.
The S&P 500 opened higher by 5.93 points, or 0.14%, while the Nasdaq gained 35.80 points, or 0.27% after the opening bell.
Shares in Tesla rose as much as 2% on reports that the carmaker was planning to build a new affordable 25,000-euro vehicle at a plant in Germany.
Oil is the big mover on Middle East tension as wider markets stay steady
Monday 6 November 2023 13:47 , Simon Hunt
The sense of uneasy calm lingered on global markets today, with major stock markets staying steady, with attention trained on the conflict in the Middle East.
European stock indices were cooler than their Asian peers and futures trade pointed to a modest 5-point gain for the S&P 500, New York’s broad share index.
Earnings reports and the outlook for US interest rates and the jobs market are in focus for US traders alongside geopolitics.
David Morrison, senior market analyst at Trade Nation, said: “The probability of another rise at the December meeting fell below 10% on Friday, following a weaker-than-expected Non-Farm Payroll report. This also helped equities, as any loosening of the tight jobs market reduces the danger of inflationary wage demands..”
Here’s a snapshot of the main assets in London in mid-session trade.
FTSE 100 treads water as fall for industrial stocks offsets flight for airlines
Monday 6 November 2023 12:47 , Michael Hunter
London's main stock market index was steady in afternoon trade, with a rally for airlines after record numbers for Ryanair offset by weakness among industrial stocks.
Overall, the FTSE 100 held flat at 7418.04.
The upbeat update from the Irish budget airline booked its great rival easyJet into top slot on the leaderboard, up 20p to 411p. Travel operator Tui also headed north, up over 3p to 451p.
At the start of a week with economic growth data due, industrial stocks were on the back foot.
Croda International, the chemicals maker, dropped 133p to 4425p and and outsourcer Bunzl dropped 57p to 2864p. They were both among the bigger fallers.
Watchdog says sorry to Alison Rose
Monday 6 November 2023 12:34 , Simon English
A top watchdog today issued a fulsome apology to recentlydeparted NatWest boss Dame Alison Rose over the Nigel Farage bank affair.
Rose stood down from the bank, still owned partly by the government, in a row about privacy breaches.
She told a BBC journalist that Farage was being “debanked” from NatWest owned Coutts with some confusion over whether this was a financial matter or down to Farage’s politics.
Today the Information Commission’s Office clarified that its own inquiries centred on NatWest, not on the CEO, and that its earlier remarks should not have been made.
“Our comments gave the impression that we had investigated the actions of Alison Rose, the former CEO of Natwest Group,” the watchdog said in a statement. “This was incorrect. We confirm that we did not investigate MsRose’s actions, given that Natwest was the data controller under investigation.
“We accept that it would have been appropriate in the specific circumstances for us to have given Ms Rose an opportunity to comment on any findings in relation to her role and regret not doing so.”
That may help Rose as she fights to keep a pay-off worth at least £2.4 million. Farage called this potential deal a “sick joke”.
The ICO added: “Finally, we apologise to Ms Rose for suggesting that we had made a finding that she breached the UK GDPR in respect of Mr Farage when we had not investigated her. Our investigation did not find that Ms Rose breached data protection law and we regret that our statement gave the impression that she did.”
Rose was seen to have done a good job at NatWest, bank still recovering from the financial crisis of 2007 and the gung-ho leadership of Fred Goodwin. He expanded what was then called Royal Bank of Scotland at a frantic base. The bank was at one point, briefly, the biggest in the world.
British Steel to shut blast furnaces with up to 2,000 jobs at risk – report
Monday 6 November 2023 12:06 , Simon Hunt
British Steel is planning to close down the blast furnaces at its Scunthorpe plant, with the loss of up to 2,000 jobs, according to reports.
The company, which is owned by Chinese firm Jingye, wants to replace them with two electric arc versions which can run on zero-carbon electricity, according to the BBC.
It would build one new electric arc furnace in Scunthorpe, with another at its Teesside plant.
However, the greener alternative furnaces require fewer workers and the move is therefore expected to result in a significant restructuring.
The reports said unions predict the move could ultimately lead to the loss of 1,500 to 2,000 jobs, predominantly at Scunthorpe.
British Steel employs around 4,500 people across the UK.
Melrose jumps on new jet deal
Monday 6 November 2023 11:39 , Simon English
MELROSE today signed a new 30-year $5 billion (£4 billion) deal with GE Aerospace to make parts of jet engines.
That widens a deal already in place and covers new technology insertion, aftermarket repair of engine structures, and production of fan cases for a range of GE engines.
Simon Peckham, the departing Melrose CEO, said:
“This agreement illustrates the unique breadth and quality of our business across the aerospace engines industry and its position as a technology leader.”
Melrose was built up through a series of acquisitions but has now decided to focus on aersospace.
The shares jumped 20p to 510p on today’s news. The company will update the City on how it is trading on November 16.
Retail stocks under pressure, FTSE 250 falls back
Monday 6 November 2023 10:18 , Graeme Evans
Retail stocks are struggling ahead of this week's updates from high street heavyweights Marks & Spencer and Primark.
M&S retreated 2.9p to 219.6p as one of the worst performers in the FTSE 100, followed by B&Q owner Kingfisher and discount chain B&M European Value Retail.
Associated British Foods, whose portfolio includes Primark and the grocery brands Twinings, Kingsmill and Patak’s, lost 6p to 2118p on the eve of tomorrow’s full-year results.
M&S is due in the spotlight the next day, with City analysts forecasting a big jump in half-year profits to around £270 million after the resurgent retailer upgraded guidance in a surprise August update.
Shares topped 235p a few weeks ago, but progress has stalled amid worries that customers are increasingly feeling the pinch and that unusually warm weather has impacted demand for autumn ranges.
In a tough session for the sector, Next shares weakened 64p to 7266p after RBC analysts trimmed their target price by 300p to 7700p.
M&S joint venture partner Ocado bucked the trend as the technology-focused grocery stock put on another 6.2p to 548.4p to continue the recovery from last week’s 462.7p.
The FTSE 100 index fell 2.81 points to 7414.92, reflecting the support of energy stocks BP and Shell after Saudi Arabia and Russia continued their voluntary oil output cuts to keep the price of Brent Crude near $86 a barrel.
Other blue-chip frontrunners included gambling stock Entain, which lifted 19.6p to 939.2p after analysts at Jefferies upgraded their price target to 1335p.
Prudential shares fell 6.2p to 893.2p, keeping the Asia-focused insurer more than a fifth lower in the year, after third quarter figures showed a 37% rise in new business profits.
Chief executive Anil Wadhwani said consumer demand in Asia remained resilient but that regulatory changes had led to some disruption in sales in mainland China.
The UK-focused FTSE 250 index failed to build on last week’s 6.6% jump, with a retreat for interest rate-sensitive property and housebuilding stocks contributing to a decline of 94.81 points at 17,889.03.
Stocks down by 2% or more included Persimmon, while Royal Mail owner International Distributions Services lost 3% or 6.6p to 248.4p.
Car registrations up 20% in 2023 -- SMMT
Monday 6 November 2023 09:20 , Simon Hunt
Year to date car registrations in the UK climbed almost 20% on 2022 in signs the country’s car market was making a strong recovery in the wake of the Covid pandemic.
Some 153,529 cars were registered in October, according to SMMT figures, up 14.3% on October last year, while 1.6 million new cars have been registered so far in 2023.
Registrations for diesel cars declined 15.6%, while petrol car numbers rose 12.9% and battery electric vehicles rose 34.2%.
Richard Peberdy, UK Head of Automotive for KPMG, said: “Whilst the cost of living crisis and higher interest rates are inevitably curtailing some car purchases and leading other consumers to switch to cheaper brands and models, overall the UK car market continues to weather the storm.
“The prospect of tariffs on electric vehicles moving across the Channel is another cloud closing in on the horizon however. Higher costs would threaten market competitiveness at a time when lower pricing is key to increasing EV adoption.”
Ocado recovery continues, FTSE 250 retreats after strong run
Monday 6 November 2023 08:43 , Graeme Evans
Prudential shares have posted the biggest fall in the FTSE 100 index, down 16.6p to 882.8p after the Asia-focused insurer’s third quarter update.
Ocado headed in the opposite direction, with the technology-focused stock adding another 25.4p to 567.6p to continue the recovery from last week’s 462.7p.
The FTSE 100 index added 7.62 points to 7425.35 but the FTSE 250 index retreated after last week’s 6.6% jump to stand 56.67 points lower at 17,927.17.
Property stocks lost their momentum from before the weekend, with shopping centre business Hammerson among those down by 2%.
Royal Mail owner International Distributions Services also fell 4% or 11p to 244p, but airlines easyJet and Wizz Air rose by more than 2% after today’s better-than-expected Ryanair results and dividend announcement.
Hipgnosis shares sink after more dividend cancellations
Monday 6 November 2023 08:33 , Simon Hunt
Shares in Hipgnosis have fallen more than 6% after the song management business said it would cancel more dividends.
The firm said it would not be paying any further dividends for the rest of the financial year, which ends in March. That would mean it has now cancelled three scheduled dividends, on the basis that they are normally paid quarterly. The first of these was cancelled last month.
Hipgnosis said it needed the extra cash to meet performance payments on its catalogue acquisitions, which came in higher than expected.
FTSE 100 up slightly after markets open
Monday 6 November 2023 08:18 , Simon Hunt
A few minutes into the day's trading session in London, the FTSE 100 has nudged up slightly.
Here's a look at your key market data:
Ryanair dividend boost after record summer
Monday 6 November 2023 07:46 , Graeme Evans
Ryanair is to begin paying dividends after reporting a 59% rise in half-year profits to a better-than-expected 2.18 billion euros (£1.9 billion).
Aided by record levels of summer traffic and higher fares, the Dublin-based carrier lifted revenues 30% to 8.58 billion euros (£7.4 billion). It operated three new bases and 194 additional routes in the period.
The strong performance helped overcome significantly higher fuel costs, up 29% to 2.8 billion euros (£2.4 billion).
Ryanair’s maiden regular dividend of 400 million euros (£346.7 million) is equivalent to 35 cents a share, paid equally through an interim and final dividend of 200 million euros (£173.5 million) due in February and September respectively.
Under the group’s new dividend policy, Ryanair plans to return approximately 25% of the previous year’s profit haul.
With third quarter average fares expected to be up by a 'mid teens percentage', Ryanair increased guidance on full-year profits to a range of 1.85 billion euros and 2.05 billion (£1.6 billion-£1.78 billion).
Boohoo accused of unethical practices in fresh BBC investigation
Monday 6 November 2023 07:30 , Simon Hunt
Fashion giant Boohoo has been accused of failing to live up to its ethical commitments following a fresh investigation by the BBC.
The investigation found the firm sought to impose price cuts on deals with suppliers after they had already been agreed, as well as slashing lead times in contracts and cutting the fees paid to suppliers for each week supplies were delivered late.
The BBC said the findings show Boohoo had "broken promises to make its clothes fairly and ethically".
Boohoo said most of its suppliers have worked with the company for many years and "that would not be possible if the work was not profitable".
Asia shares match Wall Street strength, FTSE 100 seen flat
Monday 6 November 2023 07:17 , Graeme Evans
Asia markets have tracked the stronger performance of Wall Street after monthly jobs figures released on Friday fuelled hopes of a peak for US interest rates.
The non-farm payrolls reading of 150,000 was softer than expected after the previous month’s 297,000, giving the Federal Reserve room to continue its pause on rate rises.
The S&P 500 index rose by 0.9% and the Nasdaq Composite by 1.4%, a boost that has helped the Hang Seng index up by more than 1.5% and the Nikkei 225 by 2%.
The FTSE 100 index underperformed on Friday due to the impact of lower oil prices on heavyweight energy stocks, whereas the FTSE 250 index lifted 1.2% to complete its best week of the year after a rise of 6.6%.
The S&P 500 finished last week up 5.9%, but futures markets are pointing to a flat session later today. According to CMC Markets, the FTSE 100 is set to open five points lower at 7412.
Recap: Friday's top stories
Sunday 5 November 2023 22:12 , Simon Hunt
Good morning. Here's a summary of our top stories from Friday:
Stockbrokers that sell shares to the general public are raking in around £1.3 billion a year from paying zero or derisory rates of interest on the cash those investors hold on account.
Sam Bankman-Fried, the founder of now-bankrupt crypto exchange FTX, faces 110 year jail sentence after being found guilty on all counts of defrauding his customers in Manhattan federal court. Sentencing March 28.
Rain on the high street: October footfall down 5% as shoppers stay home
London-listed NFT firm LookingGlass Labs says revenues in 2023 tumbled as a result of the general decrease in the cryptocurrency and NFT marketplace
And...our most-read piece over the weekend: Pocketing 40% of the interest from client’s cash is not fair and should be illegal