- FTSE 100 jumps 86 points
- leads the charge as Ping An ups its stake
- Diageo cheers shareholders with upbeat trading update
Banking stocks are leading the market higher, with HSBC PLC () heading the charge.
The FTSE 100 was up 86 points (1.5%) at 5,928.
“HSBC shares have received a decent boost as one of its largest shareholders Ping An raised its stake from 7.95% to 8%, pulling the shares off their 11-year London trading lows, seen at the end of last week. This has helped the rest of the sector enjoy a decent rebound, with Standard Chartered also sharply higher,” said CMC Markets’ Michael Hewson.
Not just () – which is up 5.1% at 353.9p – but more UK-focused lenders such as Natwest Group PLC (LON:NWB) and PLC (); the former is up 4.4% at 103.95p and the latter is up 4.3% at 25.78p, despite neither of them attracting much interest from Chinese insurance giants so far as I know.
READ HSBC surges as largest shareholder ups stake
Investors are also raising a glass to () after the Guinness and alcoholic spirits maker issued a trading statement ahead of its annual general meeting today.
The shares rose 6.0% to 2,672.5p after it said it had made a good start to the current financial year. The US business is performing strongly and ahead of management’s expectations.
“Their H1 FY21 sales are still expected to decline year-on-year (against a COVID-free comparison) resulting in margin dilution but management now expect an improvement in sales and profits compared to H2 FY20; due to the continued robust demand off-trade sales and a gradual reopening of the on-trade in most markets,” said Chris Beckett, the head of equity research at Quilter Cheviot.
“Due to its exposure to the hospitality industry beverages have underperformed other consumer staples during the pandemic; however, overall investors are likely to react positively to this morning’s update. Diageo now trades on a 23x calendar 2021 expected earnings, which we believe is attractive for a quality company in an advantaged category,” Beckett said.
In the unlikely event that anyone needs further evidence of how hard the hospitality industry has been hit by the pandemic, the Office for National Statistics has just provided some.
During lockdown, young people were more likely to be furloughed than older workers.
The concentration of young workers in sectors such as hospitality that were hard hit by #COVID19 partly explains their high take-up of the Coronavirus Job Retention Scheme https://t.co/ZFdjWRK2YI pic.twitter.com/9xgZCiHHsk
— Office for National Statistics (ONS) (@ONS) September 28, 2020
8.40am: Strong start to the week
The FTSE 100 made a strong start to the trading week, taking its cue from Asia’s main markets.
China’s corporate profitability data released over the weekend got local markets motoring.
While the world’s second-largest economy appears to be shrugging off the ill effects of coronavirus, the West seems still in its grip.
In New York, daily infections are back above 1,000, while the UK may introduce a more draconian regime to counter the worst effects of a second wave.
On the market, () was the early riser with a 10% gain. The move was prompted by a filing by biggest shareholder Ping An, which showed the insurer had increased its stake.
The vote of confidence in the Asia-focused bank followed the drop in the stock to a 25-year low amid concerns HSBC may be caught in the crossfire between the US and China.
Up 5% was Smirnoff maker Diageo (), which said the outlook for the year had improved since its last update, particularly in the US.
A dollop of reality was factored into the share price of bookie William Hill (LONLWMH), which fell 12% early on after a more than 40% rise on Friday after two suitors emerged from the woodwork. Ladbrokes owner GVC () opened 3% lower.
Proactive news headlines
() said it has signed an exclusive distribution agreement with United Italian Trading Corporation (UITC) for its SlimBiome Medical weight management product in the Singaporean market.
() said it has won a £4.3mln contract to carry out a viral challenge study for a top-ten global vaccine company.
(LON:AGL, OTCQX:ANPCY) said it has submitted for regulatory approval in the US its Parsortix PC1 liquid biopsy for use in women with metastatic breast cancer (MBC).
() said its d2w biodegradable plastic technology has been incorporated into a new 100ml security bag that will be trialled at airports in Aberdeen, Glasgow and Southampton operated by AGS Airports Ltd.
() has appointed an exclusive distributor for North and South America while it also made its entry in the Australian market.
Fintech company [email protected] Capital PLC () said demand for its services has continued to grow since it last updated the market in July.
Incanthera PLC () has received positive data from a skin sensitisation study of its Sol skin cancer technology, which demonstrate it is “non-irritant”.
e-Therapeutics PLC () said it has expanded its scientific advisory board with the appointment of Bill Harte and John Mattick.
Scotgold Resources Ltd () continues to build the resource inventory at the Cononish gold and silver mine. The company has identified gold and silver anomalies to the north east of the mine that are consistent with the ‘Mother Vein’ structure.
()() has boosted production and processing rates at its Hellyer mine in Australia to 165 tonnes per hour. Plans are being finalised to increase production further to 180 tph, equivalent to about 1.5mln tonnes per year.
() told investors that the Stanley-4 well is flowing around 155 barrels of oil per day. Oil sales from the well are due to start this week, the company noted in a statement.
() has moved to put investors’ minds at rest over backing for the Ncondezi 300 megawatt power project in Tanzania. Lead investor CMEC has compiled a preferred list of partners who are familiar with the project and has indicated that sealing a deal with a new technology partner would take about a month to complete if required.
() has reported a strong rise in profits in the first half of its current year as the group highlighted the “resilience” of its business model during the coronavirus pandemic.
() again raised its dividend as cash reserves and its solvency position were largely unchanged in the half-year to end June.
() delivered revenue growth in the year to the end of June despite the coronavirus (COVID-19) pandemic delaying some sales. The fuel cell and electrochemical technology firm said the year saw a 21% increase in revenue and other operating income to £19.9mln from £16.4mln the year before.
() is looking forward to a “potentially company-making” next six months. The company is counting down to the high-impact Perseverance-1 well, in the Bahamas, while a work programme in Trinidad also promises to significantly boost production volumes.
() chief executive David Palumbo told investors that there’s growing awareness among potential customers of the company’s proposition. Palumbo said that 2021 is seen by EQTEC as “potentially exponential” in terms of deal closures and revenue growth.
() has reported strong growth in orders for its Rizikon Assurance supply chain risk management platform in the first half of its current year. In its results for the six months ended June 30, the AIM-listed firm reported that orders for Rizikon Assurance were up 41% year-on-year (YOY), while recurring revenue from the firm’s consulting services had doubled over the same period compared to 2019.
() () (OTCMKTS:WHELF) is set for a transformational year as it heads towards first sulphate of potash production from the Lake Way project in the first quarter of 2021.
() lost £305,000 in the year to March, up slightly from the £234,000 lost in the corresponding period a year earlier. The company ended the financial year with £95,000 in cash, although subsequent to the period end, in August, it raised £200,000 in a placing.
() turned in a loss of €220,000 for the six months to June 2020. The company closed out the period with €252,000 in cash. However, a further £600,000 was raised in August, covering expenses for the next 18 months.
() will issue £1mln of shares to BGF Investments LP after the private equity group exercised its right to convert part of its £2.5mln loan note. The molecular diagnostics company will allot 4,478,681 new ordinary shares and pay roughly £134,000 in cash to BGF, reflecting the accrued interest owed on this tranche of the loan.
()() has received gross proceeds of £62,000 after certain warrants were exercised. It will issue 200,000 new ordinary shares at a subscription price of 31p per share.
6.12 am: Market called higher
The FTSE 100 looks set to open firmly on the front foot, taking its cue from Asia’s main markets which kicked off the week strongly.
Leading the pack was China, where profits from the industrial sector grew for the fourth straight month, suggesting the world’s second-largest economy is starting to shrug off the effects of coronavirus.
The People’s Republic looks like the exception rather than the rule with a spike in cases in the West prompting a second round of shutdowns.
Here in the UK, the government is reportedly mulling tighter restrictions in London and the north in a bid to slow the infection rate as the nation heads into the potentially deadly winter period.
Looking ahead, it could be a make-or-break week for presidential hopeful Joe Biden who will be hoping to stretch his narrow poll lead in the wake of the first US presidential debate on Tuesday.
“President Trump, fresh from a New York Times report that he paid a grand total of $750 in federal income tax in 2016 and 2017, has set the tone for the debate, demanding via Twitter (of course), that Sleepy Joe Biden take a drugs test before, or after the debate,” said Jeffrey Halley, senior market analyst at OANDA.
“Cringe or clap, the first presidential debate is usually the most closely followed and will be critical for President Trump to erode Mr Biden’s lead in the polls.”
Elsewhere, negotiators from the EU and UK meet this week in Brussels in a last gasp bid to hammer out a trade deal.
The two sides are meeting as the clock ticks down on when an agreement can realistically be signed off with only around a month left before the talks are effectively timed out.
With reporting season almost at an end, the week’s scheduled updates come from second-liners such as fashion group Boohoo (), Daily Mirror owner Reach () and steak bake maker Greggs ().
Around the markets
- Pound worth US$1.2771 (up 0.2%)
- Bitcoin US$10,896.20 (up 1.20%)
- Gold US$1,865.90 (flat)
- Brent crude US$41.65 (down 0.41%)
6.45 am: Early Markets: Asia / Australia
Asia Pacific markets were mostly positive with Japan’s Nikkei 225 adding 0.64% and South Korea’s Kospi rising 1.48%
Mainland Chinese stocks lagged, with the Shanghai composite down 0.03% while Hong Kong’s Hang Seng index rose 0.98%.
Shares of China Evergrande Group (HKG:3333) in Hong Kong soared nearly 12% after the Chinese property developer said that its “operations remain stable and healthy while financial conditions remain sound.”
In Australia the S&P/ASX 200 remained flat as the number of new COVID-19 cases continued to decline, with just five new cases identified in Victoria and no new cases for the second day in NSW.
Proactive Australia news:
() () has soared to a new 13-year high after forging a binding agreement with () for the supply of spodumene concentrate from the company’s North Carolina deposit.
() has expanded a phase II double-blind, placebo-controlled clinical trial to evaluate the safety and efficacy of the natural anti-inflammatory formulation ArtemiC™ on patients diagnosed with COVID-19.
() (FRA:B4T) has appointed an experienced iron ore executive as projects director to help drive the company’s two new iron ore asset acquisitions into production.
() (OTCMKTS:AZZEF) has acquired an additional 22 new leases over 34,848 gross acres within the highly prospective Las Animas region in Colorado, USA.
() has received gold grades of up to 106.5 g/t and observed visible gold in rock chips at the newly defined Covidicus West prospect of the Bynoe Gold Project in the Northern Territory.
() has received positive feedback from a European Medicines Agency (EMA) scientific advice meeting which provides a clear path forward to registration for Zilosul® in Europe.
() has received further strong results for the remaining reverse circulation (RC) and diamond drill holes at the new Starlight and White Light gold discoveries at Break of Day, on the company’s flagship Cue Gold Project in Western Australia’s Murchison district.
Ciphepoint Ltd () has closed a strongly supported non-renounceable pro-rata rights issue offer which raised in excess of $1.458 million.
() (FRA:XL5) is making significant progress with ongoing exploration activities at gold and halloysite-kaolin projects in current Australian exploration hotspots.
() has received firm commitments for $2.1 million through a placement to fund ongoing exploration in the prolific Lachlan Fold Belt in central New South Wales.
