- FTSE 100 index sheds 44 points
- John Lewis posts loss, Co-op sees profit jump
- Federal Reserve dovish overnight
9.50am: John Lewis scraps staff bonus as Co-op posts sales surge
FTSE 100 trimmed its losses in mid-morning, dropping 44 points to 6,034, while sterling dipped 0.1% to US$1.2952.
John Lewis Partnership said it will not give a bonus to staff for the first time since 1953 after posting a £55mln loss for the six months to July 25.
Sales rose 1% but higher costs related to COVID-19 hit profits.
The early weeks of the second half have been encouraging in both of its brands, John Lewis and Waitrose, although it was announced yesterday the supermarket would close four more stores.
Meanwhile, fellow grocer Co-op reported an increase of 7% to £5.8bn in revenue for the half year to July 24, though costs related to the pandemic will come in at £97mln for the full year.
Profit before tax jumped 35% to £27mln while the supermarket chain also paid out £13mln in thank-you bonuses to staff.
8.50am: Retreat for Footsie
The FTSE 100 index opened lower on Thursday as it looks increasingly likely the UK is headed towards some sort of limited lockdown to ward off a coronavirus second wave.
London's blue-chip benchmark opened 55 points lower at 6,023.99.
The prospect of further national restrictions came amid howls of protest from all sectors at the apparent failure of wholesale testing and sparked worries over the economic impact of moves to flatten the infection curve.
After hours Wednesday, the US Federal Reserve received what the Financial Times called mixed reviews for its vow to keep monetary policy loose while attempting to spell out what loose meant in reality.
“The move did reinforce the Feds dovishness,” said the FT. “But some economists and investors doubted whether the more specific guidance would be effective in achieving the central banks ambitious economic objectives, leaving it under pressure to deploy other more aggressive tools to help the recovery.”
Meanwhile, Bank of England governor Andrew Bailey and fellow members of the Monetary Policy Committee look set to stand pat on the UK base rate, which is sitting at a historic low of 0.1% following their latest meeting.
The powder is expected to remain dry on further stimulus efforts, which are expected to be deployed later this year when the Treasurys furlough scheme comes to an end.
Elsewhere, the partial climbdown from Boris Johnson on the controversial Internal Market Bill failed to calm nerves over Brexit.
However, Next (LON:NXT) led the blue-chip index with a 2.2% gain after the retailer proved resilient to the current carnage on the High Street.
“The pace of change enforced by the lockdown towards online sales was one which Next was ready to embrace,” said Richard Hunter, head of markets at Interactive Investor.
“Its online presence had long been a cornerstone of its success, and where customers continued to shop – inevitably on a lower scale – the business was quickly ramped up to meet demand. In addition, with much of its store portfolio based out of town, the more recent tentative return to physical shopping has also played into Nexts hands.”
The current market volatility appears to have been good news for the spread betting firm IG Group, which topped the FTSE 250 index with a 6.2% rise in the wake of first-quarter results.
Proactive news headlines:
Tiziana Life Sciences PLC (NASDAQ:TLSA) (LON:TILS) has signed an agreement to use its “potentially transformative” approach to modulating the immune system in a human clinical study of patients with coronavirus (COVID-19). Work will get underway in Brazil starting next month, with the company's drug, Foralumab, administered by nasal spray either on its own or in combination with an orally-taken anti-inflammatory called dexamethasone. Tiziana has moved straight into human trials because it had already secured safety data for the nasal application for the drug from a phase I clinical assessment carried out a year ago.
Eden Research PLC (LON:EDEN) has announced that its commercial collaborator, Eastman Chemical Company has received authorisation for the sale of its Cedroz product in France. The AIM-quoted company, which is focused on sustainable biopesticides and plastic-free formulation technology for use in the global crop protection, animal health and consumer products industries, said the French regulator has also approved Eden's biofungicide, Mevalone, for use in organic agriculture in France. Separately, the group added, it has been notified that Mevalone has received authorisation for use on table and wine grapes in Serbia via regional distributor K&N Efthymiadis (KNE).
OptiBiotix Health PLC (LON:OPTI) said its subsidiary ProBiotix Health has signed an exclusive distribution agreement for Brazil with local group Ayalla Marketing. The UK companys new partner will distribute the cholesterol-reducing probiotic, LPLDL, both as an ingredient and as four finished products – CholBiome, CholBiomeX3, CholBiomeBP and CholBiome. OptiBiotix said the deal offered an “agreed and expected” first order within 30 days from approval by the Brazilian authorities of its food technology.
FastForward Innovations Ltd, the AIM-quoted company focused on making investments in fast-growing and industry-leading businesses, has noted that its investee company Juvenescence Limited has signed a partnership deal with Evgen Pharma PLC.FastForward has around a 0.63% interest in the issued stock of Juvenescence. In a statement on Wednesday, Juvenescence – a life sciences company focused on modifying ageing and increasing human healthspan – said Evgen has licensed its sulforaphane stabilization technology for use in several non-pharmaceutical applications led by its JuvLife division.
Supermarket Income REIT PLC (LON:SUPR) has said it is to raise £150mln to take advantage of opportunities that have become available since the onset of coronavirus restrictions. The trust invests in sites occupied by the major supermarket chains such as Tesco, Sainsburys, Morrisons and Waitrose and has identified £400mln worth of omnichannel sites that meet its criteria of size and online fulfilment potential. Property funds having to meet redemptions are one source of sites, it said, and due diligence has already been carried out on three worth £135mln in total. The REIT also announced it was increasing its dividend target for 2021 to 5.86p after raising the dividend by 4% to 5.8p in the year to June just ended.
Keywords Studios PLC (LON:KWS), the ever acquisitive video games services firm, has confirmed a 13% increase in first-half revenue at €173.5mln, with organic revenues marking an 8% rise, as it also inked a new deal. The group's underlying earnings (adjusted EBITDA) jumped 19% to €30.8mln for the six months ended June 30, 2020, versus €25.8mln in the same period of 2019. Keywords highlighted strong demand for its services and a robust trading performance with its largest service line, game development, showing particularly strong growth. Keywords also announced its latest bolt-on through the US$13.3mln acquisition of LA-based Heavy Iron Studios Inc, a technical specialist that mainly works on top-tier game titles – most recently, for example, it has been contracted to Crystal Dynamics for its new Marvel Avengers title and has worked on Activisions Call of Duty franchise. A structured deal sees the company pay US$4mln of cash upfront, US$500,000 on the first anniversary of the deal, and up to US$8.8mln of contingent payments tied to performance targets across the first two years under the Keywords banner.
ADM Energy PLC (LON:ADM) told investors it has formally submitted a bid to the Nigerian Department of Petroleum Resources as part of the 2020 Marginal Field Bid Round. Nigerias licensing process has made up to 57 marginal field assets available for oil and gas companies to bid for. These span projects that are onshore, swamp and shallow offshore. ADM is participating in the process alongside partner OilBank International, with the partners previously pre-qualifying for the bid round.
[email protected] Capital PLC (LON:SYME) has distanced itself completely from what it says was a fake article that appeared on Wednesday that claimed to contain bullish recommendations from several high profile fund managers. In a statement, the AIM-listed online inventory platform said: “It is a totally erroneous article reviewing a series of fabricated SYME forecasts that was issued yesterday afternoon. This appeared on more than one 'fake news' website.“SYME wishes to make clear that the article was both inaccurate and misleading and that it totally dissociates itself with the content."
Mosman Oil and Gas Limited (LON:MSMN) the oil exploration, development, and production company, said it has received notification to exercise warrants over a total of 62,500,000 new ordinary shares in the company at a price of 0.15p per share. The group said the funds from the warrants exercise of around A$165,000 will be added to its existing cash reserves.
Integumen PLC (LON:SKIN) announced that it has received notification from multiple warrant holders to exercise warrants over 42,500 shares in the company at an exercise price of 20p each. The consideration for the exercise of the warrant shares amounts, in aggregate, to a cash value of £8,500.
Galileo Resources PLC (LON:GLR) confirmed that it has issued a total of 6,250,000 fully paid ordinary shares in the company at a price of 0.6p per share following the exercise of warrants under the terms of its placing agreement dated October 17, 2019.
6.50am: Weak start for Footsie
The FTSE 100 is set to start on the back foot on Thursday ahead of the latest Bank of England policy meeting, which comes after the US Federal Reserve issued its latest policy decision last night.
CFD and spreadbetting firm IG Markets sees the blue-chip benchmark falling by around 39 points, making the price 6,040 to 6,043 with just over an hour to go before the open.
“There has been a lot of chatter in recent months about the likelihood of whether the Bank of England would go down the negative rate route, to the extent that it has become rather tedious, and a little predictable,” said Michael Hewson, analyst at CMC Markets.
“While Bank of England officials have been careful not to rule out the possibility of such a move the reality is that any such move would be extremely damaging to the UK financial sector which makes up such an important part of the UK economy.
“At least the US Federal Reserve has implicitly ruled out the prospect of such a move, perhaps mindful of the damage it has done in Europe and Japan,” he added.
The Federal Reserve surprised nobody last night, as the US central bank made no changes to policy. It did, however, guide that it intends to keep interest rates low until 2023 – a clear signal that rates will remain supportive in the short and medium-term.
In New York, the Dow Jones Industrial Average finished Wednesday in positive territory adding 36 points or 0.13% at 28,032. But the S&P 500 index dropped 0.46% closing at 3,385 and the Nasdaq Composite sRead More – Source