Miners lift FTSE over 7,000 on recovery hopes
A worker attends to machinery at a smelter plant at Anglo American Platinum’s Unki mine in Shurugwi – Philimon Bulawayo /REUTERS
Speciality chemicals group Croda jumped to its highest price in almost two weeks, nearing the top of the benchmark’s leaderboard, after it announced a strategic review of two business units.
The assessment of its performance technologies and industrial chemicals businesses, which cater more to industrial customers, is to be completed by the end of the year.
Croda is considering whether it should spin off the businesses or sell them to another firm, amid a shift in focus for the group towards consumer-care and life-sciences sectors, which represent 80pc of its profits.
The firm added that demand is strong across all regions and sectors, and it expects trading to continue to improve as it has done so far this year. Shares added 214p to £68.68.
Miners, however, dominated the top ranks of London stocks yesterday, tracking stronger metal prices and helping markets to rebound from a torrid previous session. Copper prices hit a 10-year high earlier in the day.
The sector’s boost pushed the FTSE 100 to its best day in over two months. Supported by a rise in banking stocks, it firmly bounced back above the 7,000 level as investors focused on recovery optimism. It ended up 116.13 points at 7039.30, while the FTSE 250 rose 55.86 points to 22,385.90.
“Confidence in global economic growth is driving markets today,” said Neil Wilson, chief market analyst at Markets.com.
“The miners are going to be leading the way, whatever type of growth we get, products we produce and infrastructure spending, the miners are going to be the ones producing the industrial metals.”
Anglo American led the way as the best performing stock on the FTSE 100, gaining 193.5p to £32.70. It was helped also by Citigroup raising its price target. Following closely behind in the top 10 risers was BHP, which was up by 109.5p to £23.06, Rio Tinto, by 290p to £64.08, Glencore, by 13.7p to 309.9p and Evraz, which gained 25.2p to 665.6p.
Banking stocks also had a positive day, with the wider banking index gaining around 3pc. Barclays rose 5.9p to 176.8p, NatWest gained 6.4p to 199.3p and HSBC 13.2p to 454.4p.
The worst performing companies of the day were, again, some of the main beneficiaries of the lockdowns as investors cashed in on their gains. Among them, Ocado fell to the bottom of blue-chips, losing 42p to £19.62, while Just Eat Takeaway dropped 89p to £71.81.
Elsewhere in the FTSE 250, insurer Direct Line shed 0.9p to 286.1p after it reported a near-11pc drop in its motor business due to a fall in new car sales and a decrease in the number of new drivers.
Fellow insurer Hiscox, however, saw a 6.3pc rise in premiums in the year to the end of March, though shares fell 11.2p to 800p.
That is all from us today – here are some of our top stories:
Thanks for following along. Have a good evening and do join again in the morning!
G7 countries call on China to meet economic duties
G7 countries have called on China to fulfill its economic obligations and responsibilities, saying they would work together to improve their economic resilience to “arbitrary, coercive economic policies and practices”.
In an official announcement, G7 foreign ministers said: “As nations that support open societies and free and fair trade conducted within a system of transparent and predictable international rules and standards, we are united in our concern regarding practices that undermine such free and fair economic systems, including on trade, investment and development finance”.
“We will work collectively to foster global economic resilience in the face of arbitrary, coercive economic policies and practices. We urge China to assume and fulfill obligations and responsibilities commensurate with its global economic role.”
Jessica Alba’s brand jumps on Nasdaq debut
Jessica Alba’s personal-care products brand, Honest Company, has jumped as much as 36pc in its US listing debut.
Its shares opened at $ 21.22 on the Nasdaq, under the ticker HNST, valuing Honest at about $ 1.9bn according to Bloomberg.
The company said late on Tuesday that it sold 25.8m shares priced at $ 16 each, raising $ 412.8m just slightly above the midpoint of its indicated range. It was then valued at $ 1.44bn.
Founded in 2011, the Los Angeles-based firm generated revenues of around $ 301m last year, marking a 28pc jump when compared to 2019. It posted losses of $ 14.5m in 2020. It sells products including diapers, nursing pillows, vitamins and non-toxic household products sold online and through partnerships with stores like Costco and Target.
London clocks best day in over two months
After a pretty torrid session for global stocks yesterday, London’s FTSE 100 has bounced back and clocked its best day in over two months to finish safely above the 7,000 level. It was supported by mining and banking stocks as investors focus on recovery optimism.
Miners gave the benchmark the biggest boost. Anglo American led the way, gaining 6.3pc after Citigroup raised its price target. Also in the top ten risers are Rio Tinto, Glencore and Evraz.
The banking index gained around 3pc, with Barclays, NatWest and HSBC all near the top of the leaderboard.
Speciality chemicals group Croda jumped 3.2pc after it announced a strategic business review of two units that cater more to industrial customers, as it shifts focus to consumer-care and life-sciences sectors.
Passenger uptick for low cost airlines in April
Low cost airlines Ryanair and Wizz Air’s share prices rose modestly today after each reporting they flew far more passengers in April than the same period last year. Investors still bore in mind, however, that numbers are far below pre-pandemic levels as restrictions remain in place.
Ryanair – listed in Europe – added 0.5pc after saying it flew 1m passengers and operated over 8,000 flights in April. While this is far better than the 40,000 passengers it carried in April last year, it remains way below pre-pandemic figures and is 79pc lower on a rolling annual basis.
European rival Wizz Air – listed in London – gained 1.5pc after saying it carried 565,000 passengers last month, up from 78,382 a year ago. It is, however, operating at just 22pc of capacity.
Poundland owner valued up to £5bn in float
Pepco, the owner of Poundland, said it will be valued at up to £5bn in its stock market float in Poland. The discount retail group last week confirmed plans to list in the central European country as opposed to London and is due to start trading towards the end of this month.
The group, which also owns the Dealz chain, said its initial public offering on the Warsaw stock exchange will value it at between €4.8bn and €5.8bn (£4.1bn and £5bn), as it capitalises on increased demand for discounted goods amid the pandemic.
This would make it the sixth largest float ever in Warsaw.
South African retail owner Steinhoff first said in 2019 that it was considering a listing for the business following the fallout of its 2017 accounting scandal. Steinhoff is set to raise around £870m through the float, according to official filings.
General Motors beats forecast despite chip shortage
General Motors Chief Executive Officer Mary Barra – REBECCA COOK /REUTERS
General Motors beat forecasts with its first-quarter earnings, and predicted annual profits at the top end for forecasts despite the global semi-conductor shortage which is causing havoc in the automotive industry, reports my colleague Alan Tovey.
America’s largest car maker said it expects 2021 to come in at the top end of the $ 10bn to $ 11bn range, even though it has been hit by the chip shortage.
Mary Barra, chief executive, said in a letter to shareholders: “The speed and agility of our team are front and centre as we move from managing through a pandemic to managing the global semiconductor shortage”.
In the first three months, GM delivered 1.74m vehicles, an increase of almost a fifth compared to the same quarter in 2021.
However, revenue of $ 32.5bn was only fractionally lower than last time round, and net income of $ 3bn was 10 times the $ 300m posted in the first quarter of 2020.
Peloton shares drop amid safety concerns
Maggie Lu uses a Peloton Tread treadmill during CES 2018 at the Las Vegas Convention Center in 2018 – Ethan Miller /Getty Images North America
Peloton shares have tumbled 8.5pc to their lowest since September, after the company recalled its Tread and Tread+ products amid safety concerns.
The home gym company, which boomed during the pandemic, announced voluntary recalls of its treadmill products after one child death and 70 incidents.
Regulators warned people in April to stop using the Tread+ if they have children or pets. The company initially said the regulator’s concerns were “inaccurate and misleading”.
CEO John Foley apologized for that in a statement today:
I want to be clear, Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+
We should have engaged more productively with them from the outset. For that, I apologize.
Sanjeev Gupta’s finance chief quits
Sanjeev Gupta’s finance chief is to quit after only 18 months in the job as the troubled commodities tycoon appoints crisis experts to his board, reports my colleague Oliver Gill.
V Ashok, chief finance officer of GFG Alliance since October 2019, is to step down for personal reasons. He will be replaced by Dubai-based executive Deepak Sogani.
Mr Ashok’s surprise exit comes alongside the appointment of three new board directors to assist group company Liberty Steel navigate the collapse of lender Greensill Capital.
Turnaround executive Jeffrey S. Stein will be chief restructuring officer; Jeff Kabel, a former JP Morgan banker and chairman emeritus of the International Steel Trade Association, has been appointed chief transformation officer; and Iain Hunter, the former head of Mr Gupta’s bank Wyelands, will be chief governance officer.
Read the full story here.
Wall Street rises against backdrop of steady rise in jobs
Wall Street’s main indexes were up slightly on opening, following a survey showing a steady rise in private sector jobs in April.
The ADP National Employment Report showed U.S. private payrolls increased in April as companies rushed to boost production to meet a surge in demand sparked by government support and a successful vaccination roll out.
Payrolls increased by 742,000, under the 800,000 forecast by economists.
A more detailed reading of the data is expected on Friday, when the US Labor Department’s non-farm payrolls data is released.
Trump’s Facebook ban upheld by Oversight Board
Facebook’s independent oversight board has upheld the ban on Donald Trump’s social media accounts but said the platform was wrong to issue an “indefinite” suspension.
The board, which includes former Guardian editor-in-chief Alan Rusbridger, said Facebook needed clearer rules for how to deal with the accounts of heads of state or high government officials.
“Facebook cannot make up the rules as it goes,” it said.
The social network suspended the former President’s accounts the day after the January 6 riot in Washington DC. At the time, Facebook chief executive Mark Zuckerberg said: “We believe the risks of allowing the president to continue to use our service during this period are simply too great.”
Today, the Facebook oversight board said their decision should be reviewed within six months.
“Facebook must review this matter and decide a new penalty that reflects its rules, the severity of the violation, and prospect of future harm. Facebook can either impose a time-limited suspension or account deletion,” the board said on its Twitter account.
Ex-Greensill bankers go it alone
Greensill collapsed under the weight of a giant debt pile earlier this year – Anthony Devlin /Bloomberg
Remember Greensill? It’s only the lender whose collapse sparked a national inquiry into lobbying over David Cameron’s ties to the company and created a legal minefield for backer Credit Suisse.
Now a clutch of former execs from the bank (who have not been accused of any wrongdoing) are setting out on their own. My colleague Lucy Burton has the details:
A group of executives who used to work at collapsed finance firm Greensill Capital have re-emerged with their own finance firm, the first business launch by ex-Greensill staff since the group’s high-profile crash in March.
Senior banker Sean Hanafin, a former Standard Chartered banker who joined Greensill as executive chair in 2019, has co-founded Silver Birch Finance alongside former Greensill colleagues John Goodridge, Tim Armstrong, Sally Singer and Chris Ruse, according to filings.
Insiders told Sky News, which first reported on the move, that asset management firm AgFe is a shareholder in the new business while its infrastructure is being funded via private equity firm TDR Capital, which recently drove the takeover of Asda. The new company is expected to target blue-chip corporate clients by allowing them to invest and reallocate capital sooner than they may have been able to otherwise, one person told Sky.
However, it is not expected to provide supply chain finance similar to the type offered by Greensill, nor will it work with government or public sector organisations.
The Greensill crisis has shone a spotlight on the lobbying activities of David Cameron, who advised Greensill, and questions are mounting over the former prime minister’s efforts to secure access for the business.
Aperol maker raises a glass to Brits
Aperol Spritz is a popular drink for Britons on holiday in Europe – ANDREAS SOLARO /AFP
It might be a summer favourite among holidaymakers visiting Europe, but Aperol maker Campari has said it is revellers in UK pubs and bars who have made it more confident about the spirit industry’s recovery.
Bloomberg has the details below:
Chief executive Bob Kunze-Concewitz is bullish about the Aperol maker’s rebound in the aftermath of the pandemic, saying scenes of revellers flocking to outdoor seating at reopened U.K. pubs and bars bode well for the spirits industry.
“You really have revenge conviviality,” the CEO said in an interview with Bloomberg Television on Wednesday. “Frustrated by a long period of lockdown, people have a strong, strong urge and need to meet their family and friends.”
That’s feeding into increased sales of spirits, he said. Investors are betting that consumers who set aside savings while stuck at home during months of Covid-19 curbs will splash out on everything from clothes, watches, drinks, restaurants, make-up, perfumes and travel as soon as they can.
Some have drawn comparisons to the years of partying that followed World War I. Kunze-Concewitz said he visited Britain for two weeks, just as venues were allowed to reopen, and he was unable to find a table either at a pub or a restaurant, as they had been booked out weeks in advance.
“The web page of the BBC had a picture of these four ladies having six Aperol spritzes in their hands and this was just the beginning of it,” he added. “It’s just the tip of the iceberg.”
Campari shares touched a record on Wednesday after the company’s first-quarter results wowed analysts, with RBC Europe Ltd. cheering a “very impressive” set of numbers.Shares rose close to 1.2pc in Milan.
Euro recovery hopes boost markets
Social distancing measures have hurt the hospitality sector in Europe, but there are signs of recovery – CHRISTOPHE ARCHAMBAULT /AFP
With three hours of trading to go, the FTSE 100 remains above 7,000 points as it looks set to hang onto the milestone marker.
The index stood 1.22pc up at 1.20pm at 7,007 points as it bounced back from yesterday’s “micro flash crash” experienced by European markets that left traders scratching their heads. That left Europe mired in red but today markets have recovered: aside from the FTSE, Germany’s Dax is almost 1.5pc higher and France’s Cac has jumped almost 1pc. The pan-European Euro Stoxx 600 is 1.45pc up for the day.
“European bourses are flying higher today, helped by strong earnings and accelerating business activity in the region,” said trading platform Oanda analyst Sophie Griffiths.
“Corporate earnings gave investors further reason to cheer with big names such as Deutsche Post and Hugo Boss posting impressive numbers.”
A key survey showing a surge in economic activity in the eurozone helped boost trader confidence that the bloc will soon exit a double-dip recession.
UK-New Zealand trade talks to intensify
Britain’s Secretary of State of International Trade and Minister for Women and Equalities Liz Truss – HENRY NICHOLLS /REUTERS
Trade talks between the UK and New Zealand are set to intensify, after the government said a “positive” call had taken place between trade secretary Liz Truss and her counterpart Damien O’Connor earlier today.
Chief negotiators are now scheduled to meet monthly, and the next formal rounds of talks will take place in early June and July.
The two discussed the negotiations around a comprehensive Free Trade Agreement which would focus on opportunities in industries of such as services, digital trade and the green economy.
According to the government, both sides agreed that good progress had been made during the fourth round of trade talks and committed to accelerating the process.
Elon Musk’s Starlink claims 500k waiting list for satellite broadband
A SpaceX rocket loaded with around 60 satellites for SpaceX’s Starlink broadband network lifts off from the Kennedy Space Center in Florida on Tuesday – John Raoux/AP
Satellite broadband provider Starlink has a waiting list of 500,000 customers ahead of the full launch of its service later this year, chief executive Elon Musk has said.
My colleague Matthew Field reports:
The venture, part of Mr Musk’s SpaceX rocket company, said half a million people had placed an order or put down a deposit for one of its satellite dishes, which can pick up broadband signals from a network of nearly 1,500 satellites.
The broadband costs £89 per month in the UK with its signal receiving dish costing £439.
So far, Starlink has gone directly to consumers with its broadband offering in a challenge to traditional telecoms providers. Its broadband signals, although expensive, can reach areas that are remote and too expensive for fibre installations.
Mr Musk said on Twitter the network could be limited in highly populated areas. “Only limitation is high density users in urban areas,” he said, “most likely, all of the initial 500,000 will receive service. More of a challenge when we get into the several million user range.”
FTSE up slightly while pound stays flat
It’s just past noon and the FTSE is still up by just over 1pc. Miners and housebuilders are leading the gains amid economic hopes.
The pound has edged slightly higher than the dollar this will have chipped at the FTSE’s gains but won’t have any significant effect.
Chip crisis to drag on for carmakers, warns Vauxhall owner
Recently assembled vehicles are stored in the distribution yard at the Vauxhall car factory in Ellesmere Port – Christopher Furlong /Getty Images Europe
The owner of Vauxhall and Peugeot has warned that the global shortage of computer chips will get worse before the supply crunch eases, reports by colleague Alan Tovey.
Stellantis said its output of cars will decline more in the second quarter than the first, when semiconductor shortages reduced production by 11pc.
Richard Palmer, the chief financial officer, issued the warning as the company reported first-quarter results.
“Visibility is still relatively limited. It would be imprudent to assume that the issue is just going to go away,” he said, adding that the issue could run into next year.
Almost a fifth of Stellantis’s 44 plants around the world had to halt work in the first three months of this year because they could not obtain enough chips.
Read the full report here.
Here are some of the day’s top stories from the Telegraph Money team:
Virgin Money shares drop in response to results
A man checks his phone as he walks past a branch of Virgin Money in Manchester, Britain – Phil Noble /REUTERS
Shares in Virgin Money have dropped this morning, in response to Britain’s sixth-largest bank reporting exceptional costs of £173m pounds.
In a note, Goodbody analyst John Cronin said: “In overall terms, we see the negatives outweigh the positives.”
The cost included a £59m hit from the payment protection insurance (PPI) scandal. But it’s also reported a £72 million pound profit before tax, compared to a £7 million pound loss the previous year.
David Duffy, CEO, said:
We are cautiously optimistic about the improving outlook as the impact of the vaccination programme in the UK delivers positive revisions to economic expectations.
We’re continuing to manage through what is still an uncertain economic backdrop, but the bank is well placed, with a strong balance sheet, and through ongoing strategic delivery we have a clear path to long-term, improved sustainable returns.
Maersk plans £3.6bn in buybacks amid surging demand
The MV Maersk Mc-Kinney Moller, the world’s biggest container ship, arrives at the harbour of Rotterdam in 2013 – MICHAEL KOOREN /Reuters
Shipping giant Maersk said it plans to buy back up to 31 billion kroner (£3.6bn) of its own shares to generate excess cash amid record-high freight rates
Bloomberg has more details:
The Copenhagen-based company will first accelerate an existing 10 billion-krone program, of which the remaining two- thirds will be bought by the end of September, it said on Wednesday. The new buyback program, which will run over two years, will start after that.
“We have plenty of capacity both to build out business and also to share with our shareholders,” Chief Executive Officer Soren Skou said in an interview with Bloomberg Television’s Anna Edwards and Mark Cudmore.
Shares in Maersk rose about 2.5pc when trading started in the Danish capital on Wednesday morning. The company’s market value has gained roughly 13pc this year.
Eurozone PMIs: Virus presents continued risk
Here’s more reaction to those PMI figures from Samuel Tombs at Pantheon Macroeconomics who warns the virus may put a dampener on economic reopening:
The services PMI now seems to be catching up with the rocketing manufacturing index, sooner than we expected. The risk is that this rebound in activity comes at the expense of controlling the virus. Cases are still rising at a high rate.
The good news is that vaccination has ramped up significantly, indicating that the major eurozone economies will reach herd immunity by July. This ought to allow reopening by the end of the second quarter, just about.
April new car sales rebound 3,000pc
Sales of new cars rebounded more than 3,000pc in April, as the industry returned to normal after the impact of the first lockdown last year, my colleague Alan Tovey reports.
Dealers sold 141,583 cars during the month – compared with just 4,321 in April last year – as showrooms were shuttered as coronavirus hit.
However, the latest figure is down on normal sales for the month, some 12.9pc below the 10-year average.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) which collates the data, cautioned against thinking the car industry has returned to normal.
He said: “A full recovery for the sector is still some way off, but with showrooms open and consumers able to test drive the latest, cleanest models, the industry can begin to rebuild.”
Eurozone private sector growth continues for second consecutive month
The eurozone private sector economy continued to expand during April, picking up pace and growing at a slightly faster speed than initially indicated.
It’s the second consecutive month of growth for the index which indicates business is picking up despite continued Covid-19 restrictions.
Germany lead the way, with the country’s growth underpinned by strong manufacturing performance.
Spain’s service providers experienced a bounce in activity, thanks to expectations that Covid-19 restrictions will be relaxed.
The final reading of the eurozone PMI was 53.8, higher than March’s 53.2. A reading above 50 indicates growth.
Chris Williamson, Chief Business Economist at IHS Markit said:
Barring any further wave of infections from new variants, Covid restrictions should ease further in the coming months, driving a strengthening of service sector business activity which should gain momentum as we go through the summer.
Although figures released last month showed the eurozone entered double dip recession, the latest PMI data suggest member states could collectively recover in the second quarter.
Boohoo’s revenues surge as shoppers stay online
Boohoo’s revenues soared by 41pc to £1.745bn as online sales boomed among lockdown Brits.
The fast-fashion company reported strong revenue growth across all geographies with the UK up 39pc and international up 44pc.
Boohoo completed over £250 million of acquisitions in the past quarter, including well known brands Oasis, Warehouse, Debenhams, Dorothy Perkins, Burton and Wallis.
However the company warned against future uncertainty:
We expect the benefits seen from reduced returns over the last twelve months to begin to unwind this year, whilst still experiencing significantly elevated levels of carriage and freight costs.
FTSE opens higher
As expected the FTSE has risen slightly at the open, at 0.6pc higher.
ITV reports bounce back in ad revenue
ITV’s revenues increased over the past quarter as it was boosted by strong growth in its ITV Studios production and distribution arm, it said this morning.
The broadcaster said it was “encouraged” by trading in recent months and was “cautiously optimistic” about the year ahead.
Total external revenues jumped by 2pc to £709m in the three months to March 31 despite pandemic restrictions throughout the period this year.
Carolyn McCall, chief executive of ITV, said: “We have made a good start to 2021 with total revenue and total viewing both up, despite the continuing impact of the pandemic.”
She added: “Our advertising revenues are rebounding from last year.” Read more here.
Good morning. The FTSE 100 is tipped to open higher as investors digest the latest optimistic signs of recovery in the economy.
David Duffy, boss of Virgin Money, said he was “cautiously optimistic about the improving outlook” as the vaccination programme in the UK “delivers positive revisions to economic expectations”. His comments came as the bank bounced back to profit in the six months to March 31.
Meanwhile Dame Carolyn McCall, ITV’s chief executive, echoed his comments and said: “Our advertising revenues are rebounding from last year.”
5 things to start your day
1) Wealthy set to escape tax raid as economy surges: Sunak said that he is “cautiously optimistic” about an upswing in economic growth as a string of data pointed to a sharp bounceback.
2) Advertising crash leaves black hole in TfL’s finances: Transport for London’s advertising income across its underground, rail and bus network fell 93pc to £3m between April and June last year.
3) Pub bosses poised to bring back drinking at the bar next month: JD Wetherspoon, Greene King, Slug & Lettuce owner Stonegate and Young’s are all plotting a return of bar service from June 21.
4) Sell it again: Ikea buys back old furniture: Under the Swedish firm’s ‘Buy Back’ scheme customers can earn up to £250 per returned item, returned as a voucher to spend in its stores.
5) Greg Abel, the man taking over from Warren Buffett: Meet Berkshire Hathaway’s vice-chairman Greg Abel who will someday take over as chief executive, as revealed by Warren Buffett.
What happened overnight
Major Asian stock markets advanced on Wednesday, while Chinese and Japanese markets were closed for holidays.
The Hang Seng in Hong Kong was little changed at 28,561.70 while the S&P-ASX 200 in Sydney added 0.4pc to 48,453.94.
New Zealand’s benchmark lost 1.1pc, Singapore was down 0.8pc and Bangkok fell 0.7pc.
Coming up today
Corporate: Boohoo (Full year); Virgin Money (Interim); ITV, Direct Line, Hiscox, OSB Group, Smith & Nephew (Trading update)
Economics: Services, composite PMI (Ger, EU, US), producer price index (EU)