|
London’s blue chip index outperformed its peers in Paris and Frankfurt at Monday midday, despite HSBC shares trading lower after an adverse court ruling; meanwhile the mood was cautiously optimistic due to a potential US-China trade agreement this week. The FTSE 100 index was up 7.71 points, 0.1%, at 9,653.33. The FTSE 250 was up 15.11 points, 0.1%, at 22,544.13, and the AIM All-Share was down 0.58 points, 0.1%, at 776.48. The Cboe UK 100 was up 0.1% at 964.29, the Cboe UK 250 was 0.1% higher at 19,623.25, and the Cboe Small Companies was down 0.1% at 17,709.13. In European equities on Monday, the CAC 40 in Paris and DAX 40 in Frankfurt were down 0.1%. ‘Optimism about the potential for a US-China trade agreement was helping to create a cautiously positive mood in markets at the start of the week,’ said AJ Bell analyst Russ Mould. ‘In the UK market, the mining sector moved higher, bar the precious metal contingent who were hit by lower gold prices, although negative news for index heavyweight HSBC acted as a drag on the FTSE 100.’ Meanwhile, a Chinese delegation will head to Brussels in the coming weeks for talks on export curbs Beijing has imposed on rare earths, European Council President Antonio Costa said on Monday. China, the world’s top producer of rare minerals crucial to the auto, electronics and defence industries, announced earlier this month new measures to limit their export. The move has sent ripples across the world, prompting US President Trump to threaten 100% tariffs on imports from China. Costa said he discussed the issue in a meeting with Chinese Prime Minister Li Qiang on the sidelines of an Association of Southeast Asian Nations, ASEAN, summit in Malaysia. The top European official told reporters that ‘we are very concerned about the trade relationship with China,’ particularly the export controls on critical raw materials. Investors are closely watching developments coming out of US President Donald Trump’s Asia visit, with the prospect of a deal with China supporting global stocks, but weighing on the gold price. Speaking on Air Force One, Trump said he was hopeful of a deal when he sees Xi Jinping on Thursday in South Korea. ‘I have a lot of respect for President Xi and we are going to I think... come away with a deal,’ Trump told reporters en route from Malaysia, where comments from US and Chinese trade negotiators raised hopes of an accord. Sterling was at $1.3340 at midday on Monday, up from $1.3301 at the London equities close on Friday. The euro was higher at $1.1638 at midday from $1.1631 on Friday. Against the yen, the dollar was slightly lower at JP¥152.78 versus JP¥152.79. Stocks in New York were called to open higher. The Dow Jones Industrial Average was called up 0.5%, the S&P 500 index 0.8% higher, and the Nasdaq Composite up 1.3%. The yield on the 10-year US Treasury widened to 4.03% on Monday from 4.00% on Friday. The yield on the 30-year was at 4.61%, extended from 4.58% on Friday. In London, HSBC fell 1.1% as it said it will set aside $1.1 billion after an adverse court ruling related to the Bernard Madoff investment fraud. The FTSE 100 listing said the Luxembourg Court of Cassation denied HSBC Securities Services Luxembourg’s appeal in respect of Herald Fund’s securities restitution claim, but accepted HSSL’s appeal of Herald’s cash restitution claim. In a 2009 lawsuit relating to the Madoff fraud, HSSL was defending a claim brought by Herald Fund for the restitution of securities and cash. HSSL said it will now pursue a second appeal before the Luxembourg Court of Appeal. HSBC said it will recognise a $1.1 billion provision in its third quarter results, due on Tuesday, with a 15 basis point impact on its CET1 capital ratio. Madoff, who died in a North Carolina prison in 2021, admitted to defrauding thousands of investors of around $65 billion dollars through a ponzi scheme. ‘[Chief Executive Officer] Georges Elhedery’s restructuring plan for HSBC has, for the most part, been well received since he took charge just over 12 months ago,’ noted AJ Bell analyst Russ Mould. ‘However, this latest setback, following on from a poorly received decision to put buybacks on the back burner as HSBC puts cash towards buying out minority investors in Hong Kong lender Hang Seng bank, does put the chief executive under a bit of pressure.’ On the FTSE 250 index, Goodwin shares jumped 31% as it announced a special dividend and said it expects its annual profit to double. The engineering and manufacturing company said that for the year to April 30, it expects to report pretax trading profit of £71 million, doubling from £35.5 million the year prior. Goodwin said its order book currently stands at £365 million. It added that it has ‘enhanced visibility’ on defence and nuclear work that is not yet reflected in the order book. ‘The group does not ordinarily provide forward guidance and does not intend to change this long-standing policy. However, given the high increase in pre-tax profitability for the year ending April 2026, on this occasion, it was thought appropriate to do so, as it is correspondingly being matched with a similar improvement in cash flow,’ Goodwin said. Goodwin announced a 532p per share special dividend, as it looks to ‘acknowledge and reward shareholders for their long-term commitment and support’ and ‘bearing in mind the imminent’ UK government budget announcement on November 26. Shares in Greencore were down 2.4% after the UK competition regulator said Greencore and Bakkavor need to offer remedies to obtain clearance for their proposed merger. The Competition & Market Authority said the Phase 1 investigation found that Greencore’s acquisition of Bakkavor ‘may be expected to result in a substantial lessening of competition within a market or markets’ in the UK. Bakkavor shares were up 0.4%. The CMA said it is considering whether to accept an undertaking from the pair. If no undertaking is offered or accepted, the regulator will refer the merger to a full Phase 2 inquiry. Greencore and Bakkavor on Monday said they are ‘pleased’ by the CMA announcement, highlighting that no competition concerns were raised in relation to 99% of the revenue of the combined group. They noted the area of concern is the supply of own-label chilled sauces. Greencore said it has the opportunity to put forward remedies, saying the pair will ‘work constructively’ with the CMA to achieve approval in time for its previously guided early 2026 completion. Shares in Anemoi International more than doubled as it proposed the acquisition of Trasna Solutions Technologies via a reverse takeover. Ireland-based Trasna specialises in semiconductor and mobile Internet of Things solutions. The acquisition for up to £150 million is payable entirely via the issue of new shares in Anemoi at 2 pence each, a rounded book value per share as at the end of June. Following the takeover, the consideration shares will represent about 95% of the share capital of the enlarged group. After the planned takeover, Anemoi plans to change its name to Trasna Technologies. Further, Anemoi will seek re-admission and trading of its shares on London’s Main Market. On the AIM market, Bioventix shares were 19% lower. The London-based biotechnology company said turnover fell 3.6% to £13.1 million in the 12 months to the end of June from £13.6 million a year prior. Pretax profit fell 4.8% to £10.1 million from £10.6 million. The company declared a second interim dividend of 80p per share, down 8.0% from 87p a year ago, to give a total dividend for the year of 150p per share, compared to 155p in financial 2024. ‘This year has been particularly noteworthy as our historic core business has faced some challenges in downstream markets, particularly in China,’ the company noted. Bioventix said it expects a ‘modest decline’ in revenue during the next financial year due to ‘a number of headwinds remaining within the historic core business’. Petrofac said it has applied to the High Court of England & Wales to appoint administrators. It noted that this is a targeted administration of the group’s ultimate holding company only. The energy infrastructure company said its operations will continue to trade. Options for alternative restructuring and M&A solutions are being ‘actively explored’ with key creditors, including noteholders who are supporting the firm with continued forbearance arrangements while it explores alternative options. Petrofac said it retains the support of revolving credit facility and term loan lenders who continue to extend maturities on a rolling basis. ‘When appointed, administrators will work alongside executive management to preserve value, operational capability and ongoing delivery across the group’s operating and trading entities,’ Petrofac added. The company’s shares have been suspended since May, due to the delayed release of its 2024 results. Gold was lower at $4,024.90 an ounce early on Monday from $4,125.47 late Friday. Brent oil was trading lower at $65.06 a barrel from $66.56. The global economic calendar is quiet for the rest of Monday at the start of a busy week which includes central bank meetings and results from third quarter earnings season. Copyright 2025 Alliance News Ltd. All Rights Reserved.
|
