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7:00am: Blue-chips set for modest gains
Good morning and the blue chips in London are expected to make steady progress on Monday although ongoing tensions in the Middle East may limit gains.
Spread betting companies are calling the FTSE 100 up by around 6 points after closing up 43.04 points at 7,494.58 on Friday.
Crude prices surged to as high as $89 a barrel on Monday over concerns that Hamas’s attack on Israel will increase tension across the Middle East and affect output from leading oil producers.
Ipek Ozkardeskaya at Swissquote Bank said: “It is difficult to predict the extent of the price action on geopolitical shocks. The fact that the US and Iran are pulled into the turmoil hints that tensions may further escalate.”
“From a price perspective, the $90pb level is expected to shelter decent offers in US crude, as escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession, and temper appetite for oil. It’s too early to call.”
Back in London and Metro Bank has struck a financing deal with investors after a weekend of negotiations that should give the UK challenger bank some breathing space and fill a capital hole that had prompted talks with regulators.
The package agreed with investors and announced on Sunday night includes a £325 million capital raise, split between £150 million of fresh equity from Metro’s largest shareholders and £175 million of new debt from bondholders.
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7:25am: Volex sees no material hit from cyber attack
We start with news that Volex PLC has become the latest company to be hit by a cyber attack, although it doesn’t expect a “material” financial hit.
The integrated manufacturer of critical power and data transmission products said that the incident had resulted in unauthorised access to certain IT systems and data, at some of the group’s international sites.
Volex said at this stage “any financial impact resulting from the incident is not expected to be material.”
It said it had taken immediate steps to stop the unauthorised access to its systems and data and has engaged specialist, third party consultants to investigate the nature and extent of the incident, and to implement the incident response plan.
Volex said the actions taken to date have ensured that all sites remain operational, with minimal disruption to global production levels, and it continues to trade with its customers and suppliers.
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7:44am: Metro Bank strikes financing deal
A bit more on Metro Bank Holdings PLC which has secured a financial package with investors following intense weekend negotiations, providing the UK-based challenger bank with much-needed capital and averting regulatory concerns.
Announced on Sunday, the deal comprises a £325 million capital raise, divided between £150 million in new equity from Metro’s largest shareholders and £175 million in fresh debt from bondholders.
Colombian billionaire Jaime Gilinski Bacal, Metro’s biggest shareholder, is slated to contribute £102 million to the new equity, positioning him to become the bank’s majority shareholder.
Financing arrangement also includes £600 million in debt refinancing, requiring Metro’s Tier 2 bondholders to accept a 40-45% haircut on their investments.
7:42am: Croda slahes profit guidance
It could be a rocky morning for investors in Croda International PLC which has slashed profit guidance after reporting continuing de-stocking by customers had depressed sales.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment.
This has continued to depress sales volumes meaning overall performance for the period was therefore weaker than originally anticipated.
In Consumer Care, sales volumes in the Beauty Care business were lower than expected in July and August with North America not recovering from quarter two.
But there has been an improvement in September and the firm expects this to continue through the remainder of the year, albeit from a lower base.
Second half operating profit margin is expected to be lower than the first half year due to the negative leverage impact of low volumes and adverse business mix.
In Life Sciences, sales have weakened further in crop protection and improvement is now expected to commence in the first half of next year.
Industrial Specialties continues to be hit by weak industrial demand globally and is not expected to be profitable in the second half of the year.
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7:59am: GSK inks Chinese deal for shingles vaccine
GSK PLC has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
There is also the potential to extend the partnership, should the companies agree.
Luke Miels, chief commercial officer, GSK, said the deal includes the option to extend the collaboration to include the RSV vaccine, Arexvy.
Zhifei will have exclusive rights to import and distribute Shingrix in China from January 1.
The pharmaceutical company described Zhifei as the largest vaccine company by revenue in China and said the partnership will significantly extend the availability of Shingrix.
A bit more on Metro Bank Holdings PLC (LSE:MTRO) which has secured a financial package with investors following intense weekend negotiations, providing the UK-based challenger bank with much-needed capital and averting regulatory concerns.
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8:15am: Oil majors keep blue-chips in the green
The FTSE 100 opened higher as the ongoing tensions in the Middle East pushed oil prices higher, supporting shares in oil majors, BP and Shell.
At 8:15am, London’s blue-chip index was up 11.31 points, 0.2%, at 7,505.89 while the FTSE 250 fell 20.16 points, 0.1%, at 17,712.16.
Oil prices jumped following the attack by Hamas on Israel with Brent crude up 3.5% to $87.48/barrel.
Susannah Streeter head of money and markets, Hargreaves Lansdown said: “’The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.”
“With the Israeli government warning of a long and difficult war, there are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region,” she added.
The spike in prices saw BP rise 2.5% and Shell jump 2.7% underpinning the FTSE.
But it was not such a bright start for shares in Croda which slumped 10% after it warned profits would be much lower than expected.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment.
Metro Bank Holdings PLC rallied 15% after it announced a financing deal to shore up its finances.
But Shore Capital’s Gary Greenwood said: “This is a very painful rescue for Metro Bank’s existing equity and debt holders and one which could not have been achieved without the support of its current largest shareholder, Spaldy.”
Volex fell 4.6% after warning it had been hit by a cyber attack.
The group said it would see a “material” hit to finances but nonetheless the news has left the market nervous.
Elsewhere, Next PLC was dwon 1.3% as JPMorgan placed the retailer on negative catalyst watch warning the warm weather in September and October may have hit sales.
GSK PLC (LSE:GSK, NYSE:GSK) has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
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- FTSE 100 up 11 points at 7,506
- Oil prices jumps after attack on Israel
- Croda slumps on profit warning
Metro Bank Holdings PLC (LSE:MTRO) rallied 15% after it announced a financing deal to shore up its finances.
Elsewhere, Next PLC (LSE:NXT) was dwon 1.3% as JPMorgan placed the retailer on negative catalyst watch warning the warm weather in September and October may have hit sales.
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8:54am: BAE Systems rises, airlines rocked by events in Israel
The FTSE 100 has lost its early gains to trade little changed, down 1 point at 7,493.
Defence contractor BAE Systems is the top risers, up 4.5%, following the events in attacks in Israel on Saturday, while the rising oil price continue to support BP and Shell.
But the oil price spike, and tensions in the Middle East, is not such good news for British Airways’ parent IAG, which is down 5.1%, on concerns of higher costs and lower demand for flights.
Easyjet PLC fell 5.5% and Wizz Air Holdings PLC tumbled 7.0%.
The events in Israel also hit Energean which fell 10% – the firm’s flagship production & development assets are the multi-tcf Karish, Karish North and Tanin fields, offshore Israel.
GSK is up 0.8% after signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
Concerns that the warm weather in the UK will hit retailers sales has seen falls for Next, JD Sports Fashion, M&S and AB Foods – the owner of Primark.
GSK PLC (LSE:GSK, NYSE:GSK) has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
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But the oil price spike, and tensions in the Middle East, is not such good news for British Airways’ parent IAG, which is down 5.1%, on concerns of higher costs while a raft of flights have also been cancelled.
Easyjet PLC fell 5.5% and Wizz Air Holdings PLC (AIM:WIZZ) tumbled 7.0%.
GSK PLC (LSE:GSK, NYSE:GSK) (GSK PLC (LSE:GSK, NYSE:GSK), GSK PLC (LSE:GSK, NYSE:GSK)) has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
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9:21am: HSBC buys Citi’s Chinese retail wealth arm
HSBC Holdings PLC has agreed to buy Citigroup Inc’s retail wealth management portfolio in mainland China.
The portfolio comprises about $3.6 billion in assets and deposits from wealth customers across 11 major cities, HSBC said in a statement.
Terms of the transaction weren’t disclosed and the deal is expected to close in the first half of 2024, Citi said.
HSBC to acquire Citi’s retail wealth management business in China.https://t.co/cIhNBUnAJM
— Nikkei Asia (@NikkeiAsia) October 9, 2023
HSBC said it will integrate the business into Bank China’s Wealth & Personal Banking Operations.
It plans to extend offers to in-scope employees who are supporting the business in China.
The FTSE 100 listed firm said the acquisition forms part of its organic and inorganic efforts to "scale up its capabilities and deepen coverage" of mainland China wealth customers.
"These include the acquisition of the remaining 50% stake in HSBC Life China for full ownership, the launch of Global Private Banking across six cities in mainland China, and the ongoing buildout of a team of more than 1,400 Pinnacle mobile wealth planners," HSBC explained.
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9:48am: Metro Bank deal provides breathing space
AJ Bell’s Russ Mould said Metro Bank’s financing deal averts another crisis “for now.”
He said it was important on two counts.
First, it avoids any panic and a run on the bank, something that could have feasibly happened if it had not raised a significant amount of cash over the weekend to shore up its balance sheet.
Second, it provides breathing space for the company to conclude talks on asset sales.
“The fundraising now removes a lot of the risks, yet existing shareholders who do not participate in the equity raise will suffer significant dilution. Bondholders also get a big haircut,” he pointed out.
“Metro Bank needs to find a way to keep its clientele happy and still win new business, which is going to be a tough job,” he thinks.
He believes it is time for a radical rethink of how the company operates.
“A high-cost base is unsustainable, so something has to change. If not, Metro Bank might find itself gobbled up by a bigger company whose first job will be to shut down its expensive branch network,” he added.
Shares are up 23% to 55.60p.
HSBC Holdings PLC (LSE:HSBA) has agreed to buy Citigroup Inc’s retail wealth management portfolio in mainland China.
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AJ Bell’s Russ Mould said Metro Bank’s financing deal averts another crisis “for now.”
After a weekend of swirling takeover speculation and nervousness Metro Bank seals £925m rescue deal. But equity investors and bondholders take another heavy hit. Bank of England says it welcomes move to stabilise the challenger bank|via @thetimeshttps://t.co/BP0oP4wv7J
— Ashley Armstrong (@AArmstrong_says) October 9, 2023
“>
- FTSE 100 up 27 points at 7,521
- Oil price jumps after attack on Israel
- Croda slumps on profit warning
9:48am: Metro Bank deal provides breathing space
AJ Bell’s Russ Mould said Metro Bank’s financing deal averts another crisis “for now.”
He said it was important on two counts.
First, it avoids any panic and a run on the bank, something that could have feasibly happened if it had not raised a significant amount of cash over the weekend to shore up its balance sheet.
Second, it provides breathing space for the company to conclude talks on asset sales.
After a weekend of swirling takeover speculation and nervousness Metro Bank seals £925m rescue deal. But equity investors and bondholders take another heavy hit. Bank of England says it welcomes move to stabilise the challenger bank|via @thetimeshttps://t.co/BP0oP4wv7J
— Ashley Armstrong (@AArmstrong_says) October 9, 2023
“The fundraising now removes a lot of the risks, yet existing shareholders who do not participate in the equity raise will suffer significant dilution. Bondholders also get a big haircut,” he pointed out.
“Metro Bank needs to find a way to keep its clientele happy and still win new business, which is going to be a tough job,” he thinks.
He believes it is time for a radical rethink of how the company operates.
“A high-cost base is unsustainable, so something has to change. If not, Metro Bank might find itself gobbled up by a bigger company whose first job will be to shut down its expensive branch network,” he added.
Shares are up 23% to 55.60p.
9:21am: HSBC buys Citi’s Chinese retail wealth arm
HSBC Holdings PLC (LSE:HSBA) has agreed to buy Citigroup Inc’s retail wealth management portfolio in mainland China.
The portfolio comprises about $3.6 billion in assets and deposits from wealth customers across 11 major cities, HSBC said in a statement.
Terms of the transaction weren’t disclosed and the deal is expected to close in the first half of 2024, Citi said.
HSBC to acquire Citi’s retail wealth management business in China.https://t.co/cIhNBUnAJM
— Nikkei Asia (@NikkeiAsia) October 9, 2023
HSBC said it will integrate the business into Bank China’s Wealth & Personal Banking Operations.
It plans to extend offers to in-scope employees who are supporting the business in China.
The FTSE 100 listed firm said the acquisition forms part of its organic and inorganic efforts to “scale up its capabilities and deepen coverage” of mainland China wealth customers.
“These include the acquisition of the remaining 50% stake in HSBC Life China for full ownership, the launch of Global Private Banking across six cities in mainland China, and the ongoing buildout of a team of more than 1,400 Pinnacle mobile wealth planners,” HSBC explained.
8:54am: BAE Systems rises, airlines rocked by events in Israel
The FTSE 100 has lost its early gains to trade little changed, down 1 point at 7,493.
Defence contractor BAE Systems is the top risers, up 4.5%, following the events in attacks in Israel on Saturday, while the rising oil price continue to support BP and Shell.
But the oil price spike, and tensions in the Middle East, is not such good news for British Airways’ parent IAG, which is down 5.1%, on concerns of higher costs while a raft of flights have also been cancelled.
Easyjet PLC fell 5.5% and Wizz Air Holdings PLC (AIM:WIZZ) tumbled 7.0%.
The events in Israel also hit Energean which fell 10% – the firm’s flagship production & development assets are the multi-tcf Karish, Karish North and Tanin fields, offshore Israel.
GSK is up 0.8% after signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
Concerns that the warm weather in the UK will hit retailers sales has seen falls for Next, JD Sports Fashion, M&S and AB Foods – the owner of Primark.
8:15am: Oil majors keep blue-chips in the green
The FTSE 100 opened higher as the ongoing tensions in the Middle East pushed oil prices higher, supporting shares in oil majors, BP and Shell.
At 8:15am, London’s blue-chip index was up 11.31 points, 0.2%, at 7,505.89 while the FTSE 250 fell 20.16 points, 0.1%, at 17,712.16.
Oil prices jumped following the attack by Hamas on Israel with Brent crude up 3.5% to $87.48/barrel.
Susannah Streeter head of money and markets, Hargreaves Lansdown said: “’The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.”
“With the Israeli government warning of a long and difficult war, there are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region,” she added.
The spike in prices saw BP rise 2.5% and Shell jump 2.7% underpinning the FTSE.
But it was not such a bright start for shares in Croda which slumped 10% after it warned profits would be much lower than expected.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment.
Metro Bank Holdings PLC (LSE:MTRO) rallied 15% after it announced a financing deal to shore up its finances.
But Shore Capital’s Gary Greenwood said: “This is a very painful rescue for Metro Bank’s existing equity and debt holders and one which could not have been achieved without the support of its current largest shareholder, Spaldy.”
Volex fell 4.6% after warning it had been hit by a cyber attack.
The group said it would see a “material” hit to finances but nonetheless the news has left the market nervous.
Elsewhere, Next PLC (LSE:NXT) was dwon 1.3% as JPMorgan placed the retailer on negative catalyst watch warning the warm weather in September and October may have hit sales.
7:59am: GSK inks Chinese deal for shingles vaccine
GSK PLC (LSE:GSK, NYSE:GSK) (GSK PLC (LSE:GSK, NYSE:GSK), GSK PLC (LSE:GSK, NYSE:GSK)) has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
There is also the potential to extend the partnership, should the companies agree.
Luke Miels, chief commercial officer, GSK, said the deal includes the option to extend the collaboration to include the RSV vaccine, Arexvy.
Zhifei will have exclusive rights to import and distribute Shingrix in China from January 1.
The pharmaceutical company described Zhifei as the largest vaccine company by revenue in China and said the partnership will significantly extend the availability of Shingrix.
7:44am: Metro Bank strikes financing deal
A bit more on Metro Bank Holdings PLC (LSE:MTRO) which has secured a financial package with investors following intense weekend negotiations, providing the UK-based challenger bank with much-needed capital and averting regulatory concerns.
Announced on Sunday, the deal comprises a £325 million capital raise, divided between £150 million in new equity from Metro’s largest shareholders and £175 million in fresh debt from bondholders.
Colombian billionaire Jaime Gilinski Bacal, Metro’s biggest shareholder, is slated to contribute £102 million to the new equity, positioning him to become the bank’s majority shareholder.
Financing arrangement also includes £600 million in debt refinancing, requiring Metro’s Tier 2 bondholders to accept a 40-45% haircut on their investments.
7:42am: Croda slahes profit guidance
It could be a rocky morning for investors in Croda International PLC which has slashed profit guidance after reporting continuing de-stocking by customers had depressed sales.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment.
This has continued to depress sales volumes meaning overall performance for the period was therefore weaker than originally anticipated.
In Consumer Care, sales volumes in the Beauty Care business were lower than expected in July and August with North America not recovering from quarter two.
But there has been an improvement in September and the firm expects this to continue through the remainder of the year, albeit from a lower base.
Second half operating profit margin is expected to be lower than the first half year due to the negative leverage impact of low volumes and adverse business mix.
In Life Sciences, sales have weakened further in crop protection and improvement is now expected to commence in the first half of next year.
Industrial Specialties continues to be hit by weak industrial demand globally and is not expected to be profitable in the second half of the year.
7:25am: Volex sees no material hit from cyber attack
We start with news that Volex PLC has become the latest company to be hit by a cyber attack, although it doesn’t expect a “material” financial hit.
The integrated manufacturer of critical power and data transmission products said that the incident had resulted in unauthorised access to certain IT systems and data, at some of the group’s international sites.
Volex said at this stage “any financial impact resulting from the incident is not expected to be material.”
It said it had taken immediate steps to stop the unauthorised access to its systems and data and has engaged specialist, third party consultants to investigate the nature and extent of the incident, and to implement the incident response plan.
Volex said the actions taken to date have ensured that all sites remain operational, with minimal disruption to global production levels, and it continues to trade with its customers and suppliers.
7:00am: Blue-chips set for modest gains
Good morning and the blue chips in London are expected to make steady progress on Monday although ongoing tensions in the Middle East may limit gains.
Spread betting companies are calling the FTSE 100 up by around 6 points after closing up 43.04 points at 7,494.58 on Friday.
Crude prices surged to as high as $89 a barrel on Monday over concerns that Hamas’s attack on Israel will increase tension across the Middle East and affect output from leading oil producers.
Ipek Ozkardeskaya at Swissquote Bank said: “It is difficult to predict the extent of the price action on geopolitical shocks. The fact that the US and Iran are pulled into the turmoil hints that tensions may further escalate.”
“From a price perspective, the $90pb level is expected to shelter decent offers in US crude, as escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession, and temper appetite for oil. It’s too early to call.”
Back in London and Metro Bank has struck a financing deal with investors after a weekend of negotiations that should give the UK challenger bank some breathing space and fill a capital hole that had prompted talks with regulators.
The package agreed with investors and announced on Sunday night includes a £325 million capital raise, split between £150 million of fresh equity from Metro’s largest shareholders and £175 million of new debt from bondholders.