FTSE 100 Live: Sainsbury’s rallies after Morrisons auction, Evergrande and OPEC to test market resolve – Evening Standard

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evelopments in China’s Evergrande crisis and a meeting of OPEC oil ministers are the main focus for investors after last week’s inflation-driven volatility.

Trading in shares of indebted property firm Evergrande have been suspended in Hong Kong pending a “major transaction”, while the OPEC+ alliance is under pressure to boost production quotas in an effort to peg back a Brent crude currently at almost $80 a barrel.

Traders are also focused on the fall-out from Saturday’s £7 billion auction of supermarket Morrisons, including where defeated consortium Fortress might target its cash after missing out to private equity giant Clayton, Dubilier & Rice. Sainsbury’s shares were 2% higher today.

Live updates

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GoCardless taps JPMorgan for fundraising, fueling IPO speculation

GoCardless has tapped up JPMorgan to lead a fund-raising process that will likely see the firm reach unicorn status, the Standard can reveal.

JPMorgan is understood to be in the early stages of working on a funding round for the 10-year-old business. A source in the market suggested GoCardless could be seeking around £200 million. The company last raised money in December 2020 when investors including Bain Capital put in $95 million. GoCardless was valued at $970 million in the deal. New funding would likely see the business become a unicorn — a private tech firm worth over $1 billion.

JPMorgan and GoCardless declined to comment.

GoCardless is one of London’s earliest fintech success stories. The company helps businesses accept direct debits online, as well as offering broader payment services. Its original niche was serving small businesses once thought of by banks as unprofitable in the direct debit market.

Today it works with the likes of The Guardian newspaper, challenger energy supplier Bulb and TripAdvisor. It processes around $20 billion of payments for 65,000 customers around the world each year and has offices in New York, San Francisco, Paris, Munich, and Melbourne.

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Rishi reaction: small firms warn tax rises are hurting

RISHI Sunak won backing from lobby groups for big business today as he set out his vision for the UK economy.

But small firms say his tax rises are risk to economic recovery.

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FTSE flat at lunchtime

The FTSE is broadly flat this lunchtime. The index is up 5 points to 7032.

The potential partnership, reported by the Sunday Telegraph, steps up competition against BT’s infrastructure arm Openreach as it spends £15 billion on upgrading 25 million homes and businesses from copper phone networks.

Analysts at UBS said BT Openreach could lose more than £600 million of “very high margin revenue” under a cable wholesale/fibre joint venture between Sky and Virgin Media 02.

Sky is the largest external customer for BT Openreach, with UBS estimating it spends as much as £760 million a year on broadband wholesale fees for six million subscribers.

BT Group shares are down 5%.

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Central London office spend bounces back

Investor appetite for central London office buildings has bounced back to surpass pre-Covid levels, with nearly £3 billion spent over the last quarter, figures show.

Investors spent close to £3bn on central London offices in Q3

/ PA Wire

Preliminary data from property agent JLL, compiled for the Evening Standard, shows around £1.5 billion and £1.4 billion was spent respectively on City and West End office buildings in the three months to September 30.

Read the full story HERE.

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Next boss calls for more immigration

“There is a workable solution to managing the UK’s need for overseas skills; but it requires us to avoid the descent into the bitterness that seems to accompany any debate involving Brexit,” the Tory peer writes.

“To move forward, Whitehall must be under no illusion: labour shortages are a real problem… raising nominal wages can only result in a Seventies-style inflationary spiral.

“The answer is to create a demand-led system, that allows the needs of our economy to pull in the talent we really need. For example, why not allow businesses to sponsor as many work visas as they need, with two vital caveats: firstly all overseas workers must receive the same pay as their UK colleagues and secondly, businesses must pay a percentage (say seven per cent) of overseas workers’ wages to the Government as a visa tax.”

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Sainsbury’s, Tesco, and Ocado stock jumps on takeover speculation

Shares in British supermarkets surged today amid speculation that they could be targets for private equity bids.

Sainsbury’s jumped by 13.8p — or 4.8% — to top the FTSE 100. Tesco was the second biggest riser with a gain of 1.6% and Ocado was just behind, up 1%.

Momentum in the sector follows the conclusion of the bidding war for Morrisons over the weekend. Private equity firm CD&R won out with a 287p-a-share bid in an auction on Saturday. The offer values Morrisons at £9.8 billion including debt. CD&R saw off competition from a consortium led by Fortress.

US investor Fortress has been left with significant dry powder to spend and Joshua Pack at the firm has fuelled speculation that Fortress could return for another bid elsewhere in the sector.

“The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value,” Pack said in a statement.

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Airline shares take off as budget giants report rising passenger numbers and amber list scrapped

The updates came as the Government replaced multiple Covid list categories for countries to a single “red list”, making travel simpler and cheaper for many.

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BT under pressure

BT shares have slumped 7% – dealing another blow to long-suffering retail investors – after it was reported that Sky is working on a deal to co-invest in Virgin Media O2’s full-fibre broadband roll-out plan.

The potential partnership, reported by the Sunday Telegraph, steps up competition against BT’s infrastructure arm Openreach as it spends £15 billion on upgrading 25 million homes and businesses from copper phone networks.

Analysts at UBS said BT Openreach could lose more than £600 million of “very high margin revenue” under a cable wholesale/fibre joint venture between Sky and Virgin Media 02.

Sky is the largest external customer for BT Openreach, with UBS estimating that it spends as much as £760 million a year on broadband wholesale fees for six million subscribers.

BT Group shares doubled between last October and June, but have since fallen sharply from above 200p to the 148.40p seen today after dropping another 10.45p.

The shares were comfortably the biggest faller in the FTSE 100 index, which rose 2.6 points to 7,029.67 as traders sat on the sidelines ahead of key developments on China’s Evergrande debt crisis and today’s meeting of the OPEC+ alliance.

Evergrande’s shares were suspended in Hong Kong overnight, ahead of what Chinese media say is a deal for the property giant to sell a half-stake in its property management unit to Hopson Development for more than $5 billion.

Brent crude, meanwhile, was close to $80 a barrel amid pressure for OPEC to bolster its existing production targets in order to balance the global oil market.

The biggest gains in the FTSE 100 came from the supermarket sector as Sainsbury’s rose 5% and Tesco 2% on speculation about where defeated consortium Fortress might target next after losing out in Saturday’s Morrisons auction.

The FTSE 250 index was 105.34 points lower at 22,870.43, despite Marks & Spencer being among the stocks higher after lifting 3.55p to 185.15p. There was also a gain of 5% or 65p to 1,445p for Plus500 after a profits upgrade by the contracts-for-difference trading house.

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French Connection sold in £29m deal

FRENCH Connection, the storied UK fashion house that briefly captured the nations hearts, was sold today in a £29 million deal.

That is far less than the business was once worth when its controversial FCUK logos were seen everywhere.

Founder Stephen Marks has been looking for a sale for sometime in the face of declining revenues, a trend made only worse by the pandemic.

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Clean and green: the water free carwash from Dropless

Have you ever considered how bad washing your car is for the environment?

Me neither, until just now.

The business making me think about it is called Dropless, which wants to wash your vehicle without using any water. At all.

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