Powell renewed at the Fed, KKR’s Telecom Italia move lifts stocks, Hochschild Mining dives
A $12 billion takeover move in the telecoms sector ensured European markets traded higher today, despite continued worries over the recent surge in Covid-19 cases on the continent.
Buy-out group KKR’s interest in Telecom Italia ignited other shares in the sector, with BT and Vodafone among the London-listed stocks trading higher.
Brent crude also recovered, having fallen to an eight-week low at the weekend amid the threat to winter demand from further Covid-19 restrictions.
FTSE 100 Live Monday
LV= boss defends Bain sale
Bulb Energy collapses
KKR makes $12bn approach for Telecom Italia
Hochschild shares halve as Peru targets mine closures
Pod Point boosted by Boris Johnson EV charging announcement
FTSE ends higher on flip-flop day
Monday 22 November 2021 17:51 , Oscar Williams-Grut
The FTSE 100 has managed a positive close, despite stocks oscillating throughout the day.
Danni Hewson at AJ Bell said: “US investors clearly think it’s a case of better the devil you know and have responded to news that Jerome Powell’s been nominated for a second term as Fed chair by raising the roof.”
London’s blue chip index closed up 32 points at 7255, led higher by Chilean miner Antofagasta.
Vodafone and BT both closed solidly higher — up 3.2% and 2.5% respectively — amid speculation they could be private equity takeover targets. That followed a $12 billion bid for Telecom Italia from KKR over the weekend.
BHP ended up 3.1% after agreeing to merge its petroleum business with Woodside. The deal is forecast to unlock $400 million in cost savings and synergies.
Polymetal International sunk 4.1% at the other end of the index. And the sell-off for Darktrace continued: the cyber security company lost 3.5% despite announcing a new client win. Darktrace said it had signed a deal with “one of the world’s largest investment management firms, based in the US” which has “the potential to deliver well in excess of $1million in revenue over several years.”
That’s all from us on the blog today. Join us again tomorrow.
The chef following his pasta heart
Monday 22 November 2021 17:22 , Simon English
For the casual chef, pasta is a thing we can do ourselves. No professional needed. If we go out for a meal, pasta is not what we order – we can get that at home.
Andrew Macleod is trying to change that with Emilia’s Crafted Pasta, restaurants in St Katharine Docks, Aldgate and a third coming in Canary Wharf next year.
Padella in Borough Market is part of the same move, to make pasta, if not a delicacy, then at least food worthy of proper respect.
Macloed, just 30, sets it up like this: “People want to go out for a steak, or a pizza. They don’t want to go for pasta.. Essentially these dishes we are about to eat it would take you hours to do at home. In the same way that Honest Burgers came and said, we want to show people what a burger is. We want to do pasta as good as it can be done.”
read more here
US stocks, dollar higher as Jerome Powell gets a second term at the Fed
Monday 22 November 2021 15:42 , Oscar Williams-Grut
US stock markets have opened higher and the dollar has strengthened after President Joe Biden nominated Jerome Powell for a second term as chair of the Federal Reserve.
The White House said in a statement: “Chair Powell has provided steady leadership during an unprecedently challenging period, including the biggest economic downturn in modern history and attacks on the independence of the Federal Reserve.”
The President has “full confidence” in Powell’s “steady, independent, and effective leadership,” a spokesperson said.
The S&P 500 is up 0.9% in New York, while the Dow is 0.7% higher and the Nasdaq is up 0.8%. The dollar has strengthened 0.4% against the pound, with sterling now buying $1.3404.
Olivier Konzeoue, FX Sales Trader at Saxo Markets, said: “The decision to re-appoint Jerome Powell also removes uncertainty with his current term ending in February 2022. If there had been delays, this may have caused significant market anxiety but with Powell back in the driving seat, we expect to see minimal market impact.”
Neil Wilson at Markets.com said: “Markets like the continuity – we know what we are getting with Powell, the market is confident in his leadership, and Brainard will be an effective deputy and mouthpiece in a similar fashion to the outgoing Clarida.
“Markets also probably like the fact that the decision to keep a Trump appointee helps to depoliticize the role of Fed chair.”
FTSE flat in afternoon trade
Monday 22 November 2021 14:20 , Oscar Williams-Grut
The FTSE 100 is more or less flat in afternoon trade, down 4 points at 7220.
Chilean miner Antofagasta is top of the index, up 5.3%. It is being buoyed by troubles for rival miners in Peru which is likely to disrupt commodity supplies elsewhere.
Telecoms businesses continue to rally on takeover speculation after KKR made a $12 billion bid for Telecom Italia. BT and Vodafone are both up 2%.
At the other end of the index is Polymetal International, down 4%.
The top stories elsewhere:
– Bulb has become the largest UK domestic energy company to collapse due to soaring natural gas prices
– Insurer LV= has launched another bid to defend its struggling sale to Bain amid opposition from some members
– Boris Johnson has unveiled plans to force housebuilders to include electric vehicle charging points in all new builds
Bulb falls into administration
Monday 22 November 2021 12:50 , Oscar Williams-Grut
Bulb has become the biggest energy provider to fall into administration in the energy crisis.
Bulb said: “We’ve decided to support Bulb being placed into special administration, which means it will continue to operate with no interruption of service or supply to members. If you’re a Bulb member, please don’t worry as your energy supply is secure and all credit balances are protected.”
Challenger energy provider Bulb was founded in 2015 but has grown rapidly to become Britain’s seventh largest heating provider, with 1.7 million customers. Bulb began hunting for emergency investment in mid-September.
Read the full story.
Nightcap inks deal for London firm Barrio Familia
Monday 22 November 2021 12:30 , Joanna Bourke
Nightcap, the bars business founded by former Dragons’ Den judge Sarah Willingham, has unveiled a £4.9 million deal to buy London firm Barrio Familia.
The purchase will see Nightcap become the operator of an additional five venues, most of which are Latin American-inspired tequila-led cocktail bars. The buyer thinks there is a “significant UK roll out opportunity”.
AIM-listed Nightcap said the purchase will mean results in the year to July 2022 will be significantly ahead of City expectations.
BT, M&S, Royal Mail shares higher
Monday 22 November 2021 10:43 , Graeme Evans
Europe’s major telecom stocks have dialled up big gains after one of the world’s biggest private equity firms reignited takeover interest in the sector.
Buy-out group KKR’s weekend approach to the board of Telecom Italia is worth $12 billion (£8.9 billion), a 45% premium on Friday’s level following two profit warnings in the past three months.
The prospect of more big private equity deals ensured European markets started the week on the front foot, despite jitters over more Covid-19 restrictions.
The FTSE 100 index climbed 22.83 points to 7246.46, driven by telecom shares after KKR’s move for Italy’s biggest phone company.
BT Group, which has been seen as a potential target for French billionaire Patrick Drahi, rose 3% or 4.8p to 165.45p and Vodafone added 2.12p to 115.74p.
Royal Mail shares led the blue-chip risers board after its recent pledge to return £400 million to shareholders helped the delivery firm’s shares add another 4% or 21.5p to 520p. They have now improved 16% in the past week.
Private equity speculation also gave another lift for Marks & Spencer shares after the Sunday Times reported that Apollo had been circling the retailer in recent weeks.
Apollo had regarded M&S as a bargain, but that was before a 24% jump for shares in the wake of two strong trading updates and several broker upgrades.
The stock today lifted another 7.5p to 248.3p, up 3% for its highest level since May 2019. The performance helped the FTSE 250 index improve 17.55 points to 23,509.79.
Frontier Developments, the Cambridge-based video games developer, lost more than a third of its value on AIM after it reported lower-than-expected PC sales for its newly-released sequel to Jurassic World Evolution.
The company blamed a crowded release schedule, but investors are worried that life is harder for gaming firms after their pandemic boost. Shares were 923p lower at 1572p.
LV boss defends Bain sale as Royal London circles
Monday 22 November 2021 10:40 , Oscar Williams-Grut
The boss of LV= today attacked the “fog of disinformation” surrounding the mutual insurer’s planned sale to Bain Capital, as he fights to win approval for the controversial deal.
Mark Hartigan told the Standard: “We’ve got to lift the fog on some of the disinformation that’s out there.”
The comment came as LV published new details on the process that led to the proposed £530 million sale to Bain Capital. LV is facing a wall of opposition and rival bidder Royal London is said to be preparing a counter offer in case the Bain transaction collapses.
The deal, struck last year, has been attacked by the press and politicians including former Tory Deputy Prime Minister Lord Hestletine. Critics say LV’s 1.2 million members are getting a raw deal with a payout of just £100.
Opponents also object to LV’s loss of mutual status and worry about private equity ownership.
Read the full story.
Hochschild Mining halves in value as Peru pledges mine closures
Monday 22 November 2021 10:31 , Simon Freeman
Metals miner Hochshild’s market value almost halved today as Peru’s socialist government moved to accelerate mine closures amid political turmoil and environmental protests.
The FTSE 250-listed group called the ruling “illegal” and insisted its mines operate under the highest standards. It came after Peru’s PM Mirtha Vasquez signalled that four mines in the Ayacucho region – including two run by Hochschild – would be closed “as soon as possible”.
Peru has been riven by turmoil since former union activist Pedro Castillo took power in July with a pledge to raise taxes to fund reforms. Mines across the country have been blockaded and firebombed.
Anglo American, Glencore and BHP also operate in the country.
Shares in Hochschild tumbled by 57% to 70p as markets opened, before trading down 41% down at 99.75p
Full story here
Pod Point jumps on Boris’s EV charging pledge
Monday 22 November 2021 10:25 , Oscar Williams-Grut
Shares in recently listed Pod Point have jumped this morning after the news overnight that the government will make housebuilders install electric vehicle charging points in all new homes from now on.
Prime Minister Boris Johnson has just announced the plans at the annual Confederation of British Industry (CBI) conference, which kicks off today. The EV mandate is part of efforts to ban new petrol and diesel cars in the UK from 2030 as part the country’s net zero plans.
Pod Point, founded in 2009, installs and runs electric vehicle charging infrastructure across the UK. Pod Point has installed over 89,000 home charge points and 13,000 commercial units, many of them through partnerships with companies like Barratt Homes, Lidl, and Tesco.
Shares are up 5% to 254.3p.
Confidence to develop new London offices picks up
Monday 22 November 2021 09:45 , Joanna Bourke
The volume of new starts on London office construction sites and appetite for speculative development has risen, new research suggests.
According to Deloitte’s London office crane survey, new starts increased by 10% from the previous study in May, to 3.4 million square feet between April and September.
That is well above the long-term average of 2.4 million square feet.
Read more HERE.
Everyman shares climb, profits to come in ahead of forecasts at cinema chain
Monday 22 November 2021 08:47 , Joanna Bourke
Everyman Media Group has forecast higher profits, with the upmarket cinema chain seeing good customer “appetite” to watch films on the big screen.
The AIM-listed firm, which has 35 venues and is known for its sofa seating and wine menus, said admissions since its last update in September are ahead of forecasts.
The company, which is led by Alex Scrimgeour, said: “Looking beyond the current financial year, early indications suggest the appetite for cinema remains strong and we are optimistic for the outlook of the sector.”
The shares increased 7.95p, or 5.6%, to 149.95p.
Read more HERE.
Telecom stocks lead FTSE higher
Monday 22 November 2021 08:40 , Graeme Evans
Shares in BT Group and Vodafone are more than 2% higher during a positive start to the week for the FTSE 100 Index.
The surge for the telecoms sector comes after buy-out giant KKR made a $12 billion approach for Telecom Italia.
Victoria Scholar, head of investment at Interactive Investor, said: “The offer signals a broader appeal to deep-pocketed US private equity giants of the European telecoms sector.”
Other stocks on the risers board include British Airways owner IAG and engines giant Rolls-Royce as they put back some of the losses seen on Friday.
The FTSE 100 index rose 24.09 points to 7247.66, having fallen over the past week.
Marks & Spencer shares was up another 3% in the FTSE 250 index after the Sunday Times reported that private equity giant Apollo had been circling the retailer prior to its recent share price recovery. Shares today lifted 7.5p to 248.3p.
Monday 22 November 2021 07:40 , Graeme Evans
Brent crude oil is below $79 a barrel as Europe’s deteriorating Covid-19 situation continues to reduce the demand outlook for fuel.
As well as the prospect of tighter Covid restrictions, prices have come under pressure after Japan’s prime minister Fumio Kishida said he is considering the release of strategic oil reserves.
His comments at the weekend follow a request by the Biden administration for major oil consuming nations to release some of their stockpiles in a move to curb high prices.
Brent closed last week below $80 a barrel for the first time in seven weeks and was 0.25% cheaper at $78.70 a barrel today. West Texas oil fell sharply overnight by almost 4% to $76.10 a barrel.
Michael Hewson of CMC Markets said: “While the slide in oil prices is a welcome development in terms of concerns over higher inflation, the collateral damage from tighter restrictions won’t do much in terms of alleviating supply chain disruption.
“The one upside to temporary lower demand is it allows the opportunity for inventories to recover.”
The FTSE 100 index, which fell 0.4% on Friday following Austria’s announcement of new lockdown measures, is expected to open 12 points higher at 7,235 today.
The week ahead includes the minutes from the most recent meetings of policymakers at central banks in the US and Europe, while on the corporate front in London there are results from caterer Compass and challenger bank Virgin Money.
US markets will be closed on Thursday for the Thanksgiving holiday.