FTSE 100 Live: Share rebound continues, US GDP revised down, Allianz still predicts UK recession

·16 min read
 (Evening Standard)
(Evening Standard)

London’s FTSE 100 got off to a steady start into a session likely to be defined by numbers for the US economy, with the final reading for GDP data expected to be revised higher.

The main UK stock index added around 14 points in opening trade, modestly extending its three-session rising streak. Energy provider SSE upped its profit forecasts.

Welcome to powerhouse London, the model for inclusive start-ups

Thursday 30 March 2023 17:01 , Daniel O'Boyle

“London,” declares Saul Klein, one of Europe’s most successful investors and entrepreneurs who has backed firms including Wise, Nanopore and Zoopla, “is still one of the top three places in the world to access the capital, customers, and talent to innovate.”

Among headlines of tech apocalypse and political gloom, Klein shrugs off talk of the capital’s demise.

“We have the infrastructure and we’re a place where founders can get advice, funding, and support.” But entrepreneurs, Klein asserts, must look beyond the success of their own businesses.

Read more here

Highest FTSE close since 14 March

Thursday 30 March 2023 16:39 , Daniel O'Boyle

The FTSE 100 finished the day at its highest level since 14 March, as confidence around the banking sector continues to return.

The index of London blue-chips finished at 7620.43, up by 0.7% today. That figure is also up 2.7% since the start of the week.

The FTSE appeared on course for its highest close in almost three weeks when it hit 7638, but it dipped slightly after revised US GDP and inflation figures were published..

Ocado - which has regularly spent time among the biggest movers this year - was the top riser of the day, up by 9.7%. It was a tougher day for pension provider Phoenix Group, though, with shares down 3.7%.

The City remains at risk of losing its competitive edge

Thursday 30 March 2023 16:21 , Daniel O'Boyle

Few would dispute that the City of London has enjoyed a remarkable golden era since the Big Bang reforms of the Eighties triggered a revolution that made the capital the undisputed number one international financial centre. But is that reign coming to an end?

A new survey today from the Square Mile’s own governing body and local authority the City of London Corporation shows New York drawing level in the global rankings.

Perhaps more worrying, other major rival cities, such as Singapore, Frankfurst and Paris, are gaining ground on London.

Read more here

London hiring approaches lowest level since 2020, but employers remain hopeful

Thursday 30 March 2023 16:10 , Daniel O'Boyle

Hiring in London for March declined at close to the fastest rate since 2020, but employers are becoming more optimistic about their hiring outlook over the next year.

According to the KPMG and REC London labour-market pulse check, the capital’s rating fell to 42.2, the second-lowest figure since 2020. A score above 50 represents an improved hiring outlook when compared to the prior month, and below 50 means the outlook is negative.

The London outlook was the worst for any region in the UK, and compared with the nationwide figure of 46.3.

Read more here

Ofwat launches crackdown on excessive bonuses for water company bosses

Thursday 30 March 2023 15:45 , Daniel O'Boyle

The water regulator Ofwat has unveiled plans for a crackdown on excessive bonuses for bosses of suppliers that pump pollution into rivers or provide a poor service to customers.

In new plans published today Ofwat said when “the regulator’s expectations have not been met” companies will be barred from passing on the cost of boardroom bonuses through the bills they charge.

The move follows an outcry over the level of executive pay in the industry at a time of heightened public concern about their impact on the environment.

Read more here

Will Wikipedia be written by AI? Founder Jimmy Wales is thinking about it

Thursday 30 March 2023 15:18 , Daniel O'Boyle

By now, even those of us who live under a rock have become familiar with ChatGPT, the AI-powered chatbot that can find us the answer to almost every question under the sun. It seems to be able to effortlessly write reports, compose letters or even poetry — for any subject its asked about, it dutifully complies and does so at breakneck speed. It has even been known to declare its love for the users that interact with it.

The technology, developed by OpenAI — which execs at Microsoft have found so impressive, they’ve bought a $10 billion stake in — scours the net to piece together a vast corpus of human-made literature, and draws on this to find users the answers to users’ questions it thinks are most plausible. In this respect, as one journalist put it, the software is little more than a ‘spicy autocorrect.’

But now imagine the roles are reversed. Instead of AI bots drawing on a body of human writing, imagine that in the future, most of the material we humans will read about will be written by AI. Such a move could send shockwaves through the world of publishing, newsgathering and social media, and it could be just around the corner. It’s a future that Wikipedia founder Jimmy Wales is already spending a lot of time thinking about, as he weighs up how the world’s biggest online encyclopaedia will evolve in the years to come.

Read more here

London offices face extra £1.32bn bill from business rates revaluation

Thursday 30 March 2023 14:40 , Daniel O'Boyle

London’s huge office sector faces a £1.3 billion extra business rates burden over the next three years, according to research published.

The warning comes after Chancellor Jeremy Hunt refused to order major reform of business rates in this month’s Budget and ahead of a revaluation at the start of April.

The 2023 revaluation is based on rateable values from April 2021 and reflects rental growth since the last revaluation.

Read more here

Wall Street stocks keep on course for opening gains after run of economic data

Thursday 30 March 2023 13:32 , Michael Hunter

A series of US economic readouts has just been released, and as investors look through the numbers just under an hour away from the start of full Wall Street trade, the S&P 500 remains on course for gains.

The broad New York stock index will open up by around 24 points at 4081 according to futures trade.

Here are the details:

  • Inflation: Core PCE data for the fourth quarter hit 4.4%. The Federal Reserve’s preferred measure of inflation was expected to be 4.3%, down from 4.7% last time.

  • Growth: quarter-on-quarter GDP expanded by 2.6%, just under the 2.7% expected and the previous reading of 3.2%.

  • Jobs: initial unemployment claims last week were 198,000; narrowly above the 196,000 forecast and last week’s 191,000

Zound acquires Marshall Amps as family control ends after 60 years

Thursday 30 March 2023 13:11 , Daniel O'Boyle

The Marshall family’s controlling interest in its iconic guitar amplifier company is set to come to an end after 60 years as family members have signed a deal to hand it over to Stockholm-based Zound Industries.

Under the terms of the deal, Zound will acquire Marshall Amplification, while Marshall family will hold a 24% stake in newly formed joint entity known as Marshall Group.

The amplifier, which was developed in the family’s drum shop in 1962, grew to become among the most recognised music brands in the world, popular with the likes of rock giants Jimi Hendrix, Eric Clapton and Paul McCartney.

Read more here

FTSE 100 rally picks up speed in broad gain for London’s main stock index

Thursday 30 March 2023 12:03 , Michael Hunter

The FTSE 100’s recovery rally picked up speed in its fourth consecutive session, as confidence continued to flow back into the market on relief that conditions in the international banking sector remained sound.

London’s main stock index was up almost 70 points in mid-session trade at 7632.91, a rise of 0.9%.

The gain was also broad with only 16 constituents not making gains and the biggest falls coming for stocks trading without further rights to declared dividend payments.

Ocado made the best single gain, with the e-commerce tech provider and online grocer up 34p to 513p. Property stocks made more progress, with Land Securities up 22p to 619p.

Investors were waiting for US economic growth and inflation data that looked likely to define sentiment. Before it came out, US markets were expected to rise in opening New York trade, with the S&P 500 called up by around 22 points to 4079.50 by futures trade.

Ocean Harvest Technology to launch London IPO

Thursday 30 March 2023 11:26 , Daniel O'Boyle

Seaweed farming business Ocean Harvest Technology announced that it will list on the AIM with an IPO that would value the business at £20.1 million.

The business is set to float on 4 April.

It will place 37.5 million shares, at 16p per share, raising £6 million, which it expects to use to grow its marketing and sales teams.

Allianz Research: UK will still enter recession this year

Thursday 30 March 2023 10:19 , Daniel O'Boyle

Allianz Research still expects a UK recession in 2023, though it now expects the decline to be milder than previously thought.

A number of organisations such as the Bank of England and OBR recently announced that they no longer expect the UK to enter a recession this year.

However, in a new report, Allianz expects the UK economy to decline by 0.3% in 2023, including two consecutive quarters of contraction. That’s despite the fact that the Eurozone is no longer expected to enter recession, growing by 0.3% instead.

Still, the projected recession would be among the mildest on record, and is an improvement from the 0.9% dip in GDP that was projected in Allianz’ last report in December.

Allianz expects inflation for the year to be 6.5%, again more pessimistic than the OBR’s projections.

Anglo Asian pivots to copper as it eyes energy transition opportunity

Thursday 30 March 2023 09:43 , Simon Hunt

Anglo Asian shares have got a lift this morning after the London-listed firm unveiled its plans to capitalise on the green energy transition by putting copper at the core of its growth strategy.

The business said it plans to ramp up copper production from 10,300 to 36,000 tonnes a year by 2028 to make the metal its principal product.

Anglo Vice President Stephen Westhead told the Standard: “Copper is central to the development of wind power, solar energy and electric vehicles, which use as much as 82 kilos of copper each.

“The compound annual growth rate of demand for copper has been suggested to be up 16%.”

Anglo Asian shares rose 5% to 122p

The Government wants to ensure that the UK’s power sector is decarbonised by the middle of the next decade (Tom Leese/PA) (PA Wire)
The Government wants to ensure that the UK’s power sector is decarbonised by the middle of the next decade (Tom Leese/PA) (PA Wire)

Time Out’s failed London market plan cost £1 million

Thursday 30 March 2023 09:24 , Daniel O'Boyle

Media and food business Time Out said its failed plans to build a food market in Spitalfields cost £1 million.

The media business - which operates markets in Lisbon, Miami, New York, Boston, Chicago, Montreal and Dubai - had planned to create a venue with 12 permanent kitchens on Commercial Street in Spitalfields.

But following a six-year-long dispute over planning permission, it scrapped those plans, blaming the Tower Hamlets Council’s choice to defer its planning decision after rejecting an earlier application.

Time Out’s half-year report today reveals the plans cost more than £1 million.

London-based Ascentia on course for listing its digital business in New York

Thursday 30 March 2023 08:58 , Michael Hunter

Ascentia, the London-based events organiser and e-commerce consultancy, said today it was “making progress” with plans to set up a US listing for its digital business.

The company plans to keep its London listing for its events business, but the intended move to New York shows the growing appeal to technology companies of a listing over the Atlantic.

Duncan Painter, CEO, said: “We are taking these actions from a position of strength and will keep you appraised of our progress over the coming months.”

Its shares added 4p to 246p after it reported record revenue of £524.4 million, up by £175 million, or 50%.

Windfall taxes hold back shares in Ithaca Energy

Thursday 30 March 2023 08:53 , Michael Hunter

Ithaca  Energy, the north sea oil explorer, revealed the impact of windfall taxes on the sector today.

Its shares fell 5p to 150p after it hit out at windfall taxes in the sector as its annual profit before tax soared to $2.2 billion (£1.8 billion) from $763 million a year earlier.

But after levies were taken out, net income after tax was $463 million, up from $416 million.

Gilad Myerson, executive chairman, said the oil and gas industry had “experienced significant fiscal instability with the introduction and subsequent revision of the Energy Profit Levy in 2022,” adding:

“In its revised form, the Energy Profit Levy, and the fiscal uncertainty it has created, brings material and negative unintended consequences for financing capacity, [joint venture] partner alignment, and the free cash flow generation required to support continued investment. We continue to look towards the UK government to create an economic environment that encourages investment in the UK North Sea.”

FTSE 100’s rally enters fourth day as utilities power the advance

Thursday 30 March 2023 08:15 , Michael Hunter

Raised profit guidance from utility SSE helped set the FTSE 100 on course for a fourth consecutive day of gains, in a session that is likely to be defined by US data due out later.

London’s main stock index rose by 14 points to 7578.20, a gain of 0.2%.

After it pointed to higher profits, SSE’s stock gained 45p to 1781p.

Real estate stocks also rose in opening trade, supporting the overall gains. British Land was up 8p at 382p. Segro was 15p higher at 748p.

After their recent recovery run, som banks eased back. Standard Chartered slipped nearly 2p to 602p. HSBC was down 0.1p at 554p. Insurers fell by bigger margins. Aviva was down 16p to 405p. Phoenix Group fell 21p to 546p.

H&M: Russia exit cost £300m

Thursday 30 March 2023 07:56 , Daniel O'Boyle

H&M’s exit from Russia last year cost the fast fashion retailer almost £300 million.

The Sweden-based company announced today that its profit for 2022 was down 56.5% to SEK6.22 billion (£484.6 million), though this was better than analysts’ excpectations, with a loss predicted.

This drop, it said, was partly due to a number of one-off items, as sales increased. This included H&M’s decision to close its 172 shops in Russia and three in Belarus after the invasion of Ukraine.

“The consequences of our decision also had a significant negative impact on our results, since Russia was an important and profitable market for us,” CEO Helena Helmersson said.

In total, closing down its Russian operations cost H&M SEK3.7 billion.

SSE ups profit guidance

Thursday 30 March 2023 07:26 , Daniel O'Boyle

Energy supplier SSE has raised its profit guidance for the year to 31 March, expecting profits of £1.7 billion from a year where high energy costs hit many households.

The Scotland-based company now expects earnings of 160p per share, which would mean around £1.74 billion in total, up from 150p per share.

The supplier previously raised its forecast in January, from 120p per share.

“As we progress our ambitious Net Zero Acceleration Programme, we are investing more than we make in profits into the infrastructure society needs for a more secure, affordable and clean energy system,” finance director Gregor Alexander said. “Our balanced business model has performed well in a volatile year, helping to ensure security of supply.”

Moonpig hails record Mother’s day and confirms guidance

Thursday 30 March 2023 07:22 , Simon Hunt

Moonpig has hailed a record Mother’s day sales as the online card business confirmed its guidance for the year ahead.

Moonpig shares slumped in recent months amid fears of a reversal of the firm’s fate following its rocketing sales during the pandemic. But the company today said it expected revenues of £320 million for the year, well ahead of pre-pandemic levels.

Nickyl Raithatha, Moonpig CEO, said: “ We are excited to return to revenue growth in the year ahead, underpinned by continued investments in our technology, marketing and operational capabilities. As the clear online leader in greetings cards, Moonpig Group is well positioned to benefit from the long-term structural market shift to online.”

FTSE 100 set to tick higher as attention turns to US data

Thursday 30 March 2023 07:20 , Michael Hunter

With numbers due out later in the day on the US economy, London’s FTSE 100 is on course for a steady start to a session likely to be shaped across the Atlantic.

The size of the world’s biggest economy in the fourth quarter is expected to be marginally revised higher to 2.8% from 2.7%. Inflation data is also due, which will play into the outlook for interest rate rises from the Federal Reserve. The Core PCE reading, the Federal Reserve’s preferred price rises tracker, is expected to stay steady at 4.3%.

According to spread betting firm CMC Markets, the FTSE 100 will add 2 points to 7,566

Recap: Yesterday’s top stories

Thursday 30 March 2023 06:52 , Simon Hunt

Good morning. Here’s a summary of our top stories from yesterday:

  1. Confidence in the UK financial system by bank executives is falling and there is a strong chance of a “high impact” event in the next 12 months.

  2. Swiss bank UBS has reappointed its former boss to lead the takeover of Credit Suisse after it rescued the beleaguered rival lender. Sergio P. Ermotti will replace Ralph Hamers as group chief executive as the bank faces the “urgent and challenging” task of merging the two global banking giants.

  3. Next again showed why it is the king of the high street with a leap in profits that defy the consumer slowdown and leave it set for more acquisitions of rivals.

Today we’re expecting:

  • Supermarket Income Reit interim results

  • AO World trading update

  • Moonpig trading update

  • US GDP

  • US initial jobless claims