FTSE 100 Live: FTSE up for sixth straight day; $23bn mining mega-merger proposal rejected; oil prices surge
The price of Brent Crude today surged to near $85 a barrel after Opec+ oil producers announced a surprise output cut of more than one million barrels a day.
Brent futures surged by as much as 7% at one point, having fallen every month this year due to concerns over the demand outlook.
The move by the oil cartel drew criticism from the White House amid fears that higher fuel costs will mean inflation takes longer to fall back from recent highs.
FTSE 100 Live Monday
Oil price surges as OPEC+ cuts output
City firms hit by deals weakness
Cineworld reveals debt restructuring
Glencore CEO still confident of mega-merger prospects
17:31 , Daniel O'Boyle
Glencore chief executive Gary Nagle is confident that any disagreements with Teck can be worked out, after the Teck board rejected a $23 billion proposal for the two miners to merge.
Earllier today,, Teck’s board revealed it rejected an approach from Glencore. Glencore had offered 7.78 of its own shares for every share in Teck,, and also said it planned to spin off the two miners’ newly combined coal business.
“What we proposed to Teck is incredibly compelling both financially and non-financially,” Nagle said. “This is a very compelling merger.
“We’ve read the response, we believe that some of the issues they have raised are not real issues. We believe that by sitting round the table, we can explain how value can be created by merging these two companies together.”
However, he also said Glencore will not include a cash element in any updated offer.
“What we are submitting is a true merger offer,” he said. “Once you start to include cash, it becomes a takeover.”
FTSE gains for sixth straight day to finish at 7673
16:52 , Daniel O'Boyle
The FTSE 100 closed ahead of where it started for the sixth straight day, ending at 7673.
The index of blue-chip companies has now gained 6.5% since an initial fall last Monday morning, as it edges back towards to the highs it achieved in February.
The FTSE hit a high of 7696 today before dipping in the last hour.
Oil supermajors BP and Shell were the big gainers as crude prices surged following OPE’s announcement of a cut in production.
On the other hand, Glencore was the big faller as its $23 billion bid to acquire Teck Resources was rejected.
One in seven homes sold in London fetched more than £1 million last year
16:47 , Daniel O'Boyle
A record one in seven homes sold in London last year fetched more than £1 million new research reveals today.
An analysis of Land Registry data shows 14.1 per cent of residential sales in the capital were for seven figures or more in 2022, compared with 12.4 per cent in 2021, 12.3 per cent in 2020 and just 10.2 per cent in 2019.
The survey carried out by banking and advisory firm Investec Wealth & Investment showed Wandsworth accounted for more £1 million plus sales than any other borough, almost 11 per cent of the total, followed by Kensington & Chelsea, Westminster and Richmond.
Glencore’s $23 billion mining mega-merger offer rejected
15:51 , Daniel O'Boyle
Mining giant Glencore submitted a proposal to merge with Canada-based rival Teck Resources, which Teck has rejected.
Glencore would pay 7.78 of its own shares for every share in Teck, valuing the Canadian business at $23 billion. The combined entity’s coal business would have then been spun off.
The board of Teck, however, unanimously rejected the deal.
“The Board is not contemplating a sale of the company at this time,” Teck chair Sheila Murray said. “We believe that our planned separation creates a greater spectrum of opportunities to maximize value for Teck shareholders.”
Elon Musk loses another $4 billion after Tesla deliveries fall short
14:40 , Simon Hunt
Elon Musk has seen his wealth drop by another $4 billion today when Tesla shares dropped by more than 5% after its delivery numbers fell short of market expectations.
Deliveries of Tesla vehicles in the first three months of 2023 rose to a new high of 423,000, the electric carmaker announced overnight, a jump of 36% on a year ago.
That has led its billionaire boss Elon Musk to set a new production target for the company of two million deliveries this year, up 52% from 2022.
But quarter-on-quarter growth was more modest at 4%, indicating the firm is experiencing tougher competition in the market after it slashed prices of top models.
Nasdaq futures fall after OPEC cut focuses inflation fears
13:47 , Simon Hunt
Nasdaq and S&P futures are falling in the minutes leading up to the opening bell in New York as news of a cut in oil production by OPEC intensified fears of continued inflationary pressure.
Nasdaq futures were down 0.64% while the S&P was down 0.1%.
Neil Wilson, Chief market analyst at Finalto, said: “OPEC is getting a bit panicky about demand this year and is trying to create a psychological floor at $80.
“It suggests OPEC thinks the Fed is heading for a hard landing – the banking ‘crisis’ is the catalyst for this move and OPEC wants to get ahead of it. We look to see whether the market unwinds this gap, or whether China demand picks up enough to push the market back towards $100.
“Because of who is making the cuts it looks like this will be a real supply cut. Momentum in the global economy is the unknown.”
Separately, shares in Tesla are among the worst-performing pre-market, down over 2% after the carmker posted first-quarter delivery volumes that fell short of analyst estimates.
AI firm C3 ditches Paris HQ for London in boost to capital’s tech credentials
12:10 , Simon Hunt
The UK’s ambitions to become a global hub for artificial intelligence got a boost today as billion-dollar American tech company C3 AI is to move its European base from Paris to London, the Standard can reveal.
C3, which uses AI to support the digital transformation of businesses, is set to ramp up recruitment of top tech talent in the capital to add to its existing team based in Finsbury square.
The firm said the relocation reflects its ambitions to seize on growth opportunities in the UK including developing digital healthcare services and boosting Britain’s energy supply.
C3 CEO Thomas Siebel said: “We have a great future here in London, and this move is a demonstration of our belief that the UK is at the forefront of technological innovation, and a key step to achieving our ambitious 2023 targets.
“The move welcomes the opportunity to attract the UK and Europe’s finest talent and will further establish C3 AI’s presence and brand in the United Kingdom.”
“We need to be better,” Peabody CEO says as merger closes
12:00 , Daniel O'Boyle
The CEO of London and home counties social housing provider Peabody admitted the association has not been good enough and outlined a plan to improve as its merger with fellow provider Catalyst closed.
Peabody has come under fire in recent years for issues such as neglect, mould and buildings falling into disrepair. Last year, the trust apologised after a tenant’s body was found in her flat two and a half years after her death.
Today, the provider said its merger with Catalyst - announced last year - was complete, and outlined a new strategy going forward.
This strategy, CEO Ian McDermott said, was required because the quality of Peabody’s services had not been up to scratch in the past.
“Today we are setting out our absolute commitment to our residents. We know we need to improve and have detailed plans to do so,” he said. “We need to be better at getting the basics right, get closer to our communities, and continue to invest in safety, services and a sustainable Peabody.
“Our increased scale will help us do that. By combining a new locally focused operating model with better technology and data driven services, we're determined to boost resident satisfaction for the long-term.”
TfL picks Barratt as partner on large new housing development in Acton
11:06 , Joanna Hodgson
Barratt, the UK’s largest housebuilder, has beefed up its pipeline of work after being selected as Transport for London’s partner on a £365 million residential development by Bollo Lane in Acton.
TTL Properties (TTLP), the commercial property company owned by the capital’s transport authority, has appointed Barratt London as its joint venture partner on the site where up to 900 homes, of which half will be affordable housing, are planned. Nearly 200 flats will be for rent.
NatWest share sale delay, again
10:15 , Simon English
THE Treasury gave itself another two years to complete its planned sale of stock in NatWest Group today, in light of the plunge in global banking shares that has come amid fears of another financial crash.
NatWest, then RBS, was bailed out in 2008 as it was deemed “too big to fail”. UK Government Investment (UKGI), which manages the stake, has been selling off shares to the market drip by drip. It still owns more than 41% of the business.
It had originally planned to sell another 15% of the shares by 11 August 2023, but now says it will aim to complete that deal by 11 August 2025. That is second time the deadline has been extended.
“Shares may not be sold under the trading plan below a price per share that UKGI and HM Treasury determine represents fair value and delivers value for money for the taxpayer throughout the term of the trading plan,” said a statement today.
NatWest shares rose 4.2p to 267.8p, which compares to bail out price of 502p a share.
The government completed its sale of Lloyd Bank back into private ownership in 2017. Lloyds, which rescued HBOS during the crisis, was in less difficulty than RBS. Excluding finance costs, the government made a profit on the Lloyds shares.
BP shares 4% higher, banks add to FTSE 100 progress
10:07 , Graeme Evans
Energy stocks surged today as wrong-footed traders ripped up oil price forecasts following the move by OPEC+ to slash crude output.
The market had expected OPEC+ to hold output steady, whereas Saudi Arabia and other major producers opted for a voluntary cut of 1.1 million barrels a day from next month.
The decision, which follows the weakest first quarter for oil prices since the start of 2020, sent Brent Crude up by as much as 7% to $85 a barrel at one point.
It also caused a rethink over the outlook for inflation and interest rates, with UBS Wealth Management today forecasting that Brent Crude will be back at $100 by June.
The developments gave a surprise boost to valuations across the energy sector, with BP and Shell up 4% or 22.2p and 93.5p to 533p and 2402p respectively.
Their progress and gains for banking stocks on the possibility of interest rates staying higher for longer meant the FTSE 100 index posted a bigger-than-expected rise of 0.7% or 52.84 points to 7684.58.
However, the raised outlook for jet fuel prices meant British Airways owner IAG lost 2% or 2.9p to 148p and easyJet surrendered some of its recent progress by slipping 5p to 513.4p.
The UK-focused FTSE 250 index crept 12.21 points higher at 18,940.51, led by improvements of 5% for Tullow Oil, Harbour Energy and oil services firm Hunting.
Cyber security firm NCC was hit by more selling, dropping another 7.2p to 95p after HSBC slashed its price target following last week’s profit warning.
City slowdown hits brokers large and small
09:56 , Simon English
THREE different City brokers showed the strain they are under today, prompting fresh talk of mergers within the Square Mile that could put hundreds of jobs at risk.
Numis, an upstart investment bank regarded as one of the City’s recent success stories, said investment banking revenues would be lower due to a lack of deals. It warned that there is unlikely to be “a meaningful change in market conditions in the short-term” and that flotations will remain scarce.
The City did well during Covid as clients sought advice and fund raising. Lately, they have been cautious, leading to a shortage of IPOs and stagnation in the London market.
Even the biggest players such as Goldman Sachs have warned that up to 5% of jobs must go and bonus pots will be cut by up to 40%, the worst outcome for bankers since the financial crash of 2008.
UK manufacturing returns to decline in March
09:39 , Daniel O'Boyle
UK manufacturing production declined in March, after recording its first growth in eight months in February.
According to the S&P Global / CIPS UK Manufacturing PMI, output fell because of “subdued market demand, declining new export orders and a preference among companies for reduced inventory holdings”.
However, business optimism rose to a 13-month high.
Lavazza profits down despite revenue rise as business absorbs cost increases
09:03 , Daniel O'Boyle
Italian coffee giant Lavazza’s revenue jumped 17% to €2.7 billion in 2022, but profit dipped after it said it chose to absorb cost increases rather than pass them on to customers.
Revenue rose in all regions, but profit was down by 9.5% to €95 million, which the business put down to inflation.
“The 2022 results represent another milestone for our group,” CEO Antonio Baravalle said. “Despite the particularly challenging scenario, we have been successful in sustaining turnover growth and keeping the margin in line with previous years.
“This was made possible by the huge commitment at all levels of the company to pursuing a strategy of international growth, combined with cost containment in an extremely complex situation.
“The group is now focused on the exceptional cost increases seen during the year, which will also have a significant impact on 2023.”
Oil giants rally as FTSE 100 adds 0.6%
08:29 , Graeme Evans
Shares in energy giants BP and Shell are up more than 4% after Brent Crude surged to $84 a barrel this morning on the back of the surprise Opec production cut.
BP rose 21.8p to 532.6p and Shell added 90p to 2398.5p, moves that helped the FTSE 100 index to improve by a bigger-than-expected 0.6% or 48 points to 7679.74.
HSBC also rallied 7.8p to 557.5p but British Airways owner IAG fell back 2% or 3.3p to 147.65p amid concern about higher jet fuel costs.
The FTSE 250 index gained 43.89 points to 18,972.19, led by Harbour Energy and Tullow Oil after their shares rose by more than 6%.
Creditors to seize bankrupt Cineworld
08:04 , Daniel O'Boyle
Bankrupt cinema chain Cineworld is to be taken over by its creditors, as part of a new deal to restructure its multi-billion-dollar debts.
The deal includes a $1.46 billion loan, plus a new share offering of $800 million, which will give creditors a 100% stake in the company.
The company - which filed for bankruptcy in September 2022 - said it was looking to sell itself at the start of this year.
However, having agreed a deal , it now says it will no longer consider a sale for its US, UK and Ireland businesses, though it will keep its options open for its operations elsewhere.
"This agreement with our lenders represents a 'vote-of-confidence' in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” CEO Mooky Greidinger said.
“With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the 'Best Place to Watch a Movie'."
FTSE 100 opens higher after turbulent Q1
07:48 , Graeme Evans
The FTSE 100 index is expected to open the first session of the new quarter 20 points higher at 7651, according to CMC Markets.
London’s top flight was the only major European index to finish last month lower, largely due to its heavier weighting of banks and energy companies. This meant the FTSE 100 closed the first quarter 2.4% higher, well short of the double-digit gains seen on the continent.
US markets also had a contrasting quarter, with the Dow Jones Industrial Average flat and the Nasdaq 100 up by over 20%.
CMC’s chief market analyst Michael Hewson said: “As we look ahead to a new month and a new quarter, the main question is whether we’ve left the trials and tribulations of March in the rear-view mirror or whether last week was the eye of the storm before the onset of further volatility.
“Concerns over a banking crisis may well have receded in the last few days, however, the cosy narrative that rising interest rates are a positive for the banking sector received a bit of a wake-up call in the last few weeks.”
Brent Crude surges on Opec output cut
07:30 , Graeme Evans
Brent Crude surged by as much as 7% to $85 a barrel today after members of OPEC+ last night announced an output cut of 1.1 million barrels a day from next month.
The surprise move drew a strong response from the White House amid concerns that higher fuel costs will mean inflation takes longer to fall back from recent highs.
Oil prices had been on a downward trend, falling every month this year during the worst first quarter performance since global shutdowns throttled demand at the start of 2020.
Deutsche Bank strategist Karthik Nagalingam said: “It will take some time to see exactly how much this impacts global prices as demand concerns linger, but this is another potential factor exerting upward pressure on inflation after largely being an ameliorating factor this year.”
Brent crude later settled at around $84, an increase of more than $4 a barrel.
WANdisco CEO and CFO quit as fraud investigation finds $115 million black hole in finances
07:19 , Simon Hunt
The bosses of beleaguered tech firm WANdisco are to step down immediately after an internal investigation into suspected fraud has found over $115 million in missing bookings.
The firm today said David Richards, Co-founder and Chief Executive Officer and Erik Miller, Chief Financial Officer, have decided to step down from the WANdisco Board and leadership team.
WANdisco said its investigation has confirmed that its published purchase orders and sales bookings for last year were false. Revenue for 2022 should have been $9.7 million rather than $24m, and bookings should have been $11.4m rather than $127m.
WANdisco said the departures were not connected to the investigation.
David Richards said: “I am sad to be leaving WANdisco after 18 extremely enjoyable years. I remain a passionate supporter and significant shareholder of the Company.”
The Sheffield-based business, which only weeks ago was eyeing a US listing for its shares, earlier this month asked for them to be suspended in London as it discovered a major fraud that could threaten it as a going concern.
Tesla deliveries hit new record as quarterly growth slows
07:08 , Simon Hunt
Deliveries of Tesla vehicles in the first three months of 2023 rose to a new high of 423,000, the electric carmaker announced overnight, a jump of 36% on a year ago.
That has led its billionaire boss Elon Musk to set a new production target for the company of two million deliveries this year, up 52% from 2022.
Quarter-on-quarter growth was more modest at 4%, however, indicating the firm is experiencing tougher competition in the market after it slashed prices of top models.
