- FTSE 100 down 45 points at the close
- BAT falls as US FDA halts sales of some vapes
- St James's Place tumbles, reviewing fees
4.45pm: FTSE 100 closes lower on the day but up for the week
At the end of the week, London's blue-chip index close at a smidge below 7,600, down 0.59% on an up and down Friday, but ahead 1.4% over the past five days.
3:54pm: Next confirms FatFace deal
A late Friday deal to report. Next PLC has confirmed it has bought most of FatFace for £115.2 million from a consortium of financial institutions.
The Leicester-based retailer said the deal would be settled partly in cash and partly by the issue of new Next shares and management equity rolling over into the new structure.
It said the deal will not materially impact underlying profit before tax or EPS in the current year.
Upon completion, which is expected to take place within the next few weeks, Next will hold 97% of the equity and FatFace's management will hold 3% in the business.
Management will also participate in an additional performance related equity scheme.
FatFace will retain its management autonomy and creative independence and retain its own board of Directors.
It is expected that FatFace will migrate its online operations onto Next's Total Platform within the next twelve months.
It is anticipated that FatFace will continue to trade and develop its own retail store portfolio while Will Crumbie who became CEO in 2021, will continue to lead the business.
3:42pm: US consumer confidence falls
US consumer confidence has fallen this month as people grow more worried about rising inflation.
The University of Michigan’s monthly consumer morale survey has shown a drop in sentimenf this month.
The Index of Consumer Sentiment has dropped to 63.0, from 68.1 in September, with people gloomier about current economic conditions and economic expectations.
University of #Michigan #Sentiment declined -5.1 to 63 (67 est). Expectations (-5.3 to 60.7 vs 65.7 est) dropped more than current conditions (-4.7 to 66.7 vs 70.3 est). The consensus was for #inflation expectations to be unchanged vs prior month but were higher with 1yr up 0.6%… pic.twitter.com/dTtdNTvN4r
— Macro84 (@macro84) October 13, 2023
3:22pm: Novo Nordisk (NYSE:NVO) ups guidance
Some good news from Europe’s most valuable company, Novo Nordisk (NYSE:NVO), which upped annual guidance, predicting a boost from higher sales of its diabetes drug Ozempic in the US.
Nordisk said that for the third-quarter of 2023, its sales jumped 38% on-year at constant currency, while Ebit rose 47%.
Looking to the full-year, it now expects sales growth between 32% and 38% and an Ebit surge of 40% and 46%, above previous expectations of 27% and 33%, and 31% and 37%, respectively.
"The sales outlook for 2023 is updated, primarily reflecting higher full-year expectations for Ozempic volumes sold in the US and gross-to-net sales adjustments for Ozempic and Wegovy in the US," Nordisk said.
Shares are 3.7% in Copenhagen. The company recently dethroned LVMH as the most valuable European company.
3:00pm: Barclays climbs after strong US bank numbers
Barclays is one beneficiary from the strong US banking results with shares have up 1.4% to 154.20p.
Investors have taken heart from JPMorgan Chase’s investment-banking revenue for the third quarter topping expectations.
Barclays has the clearest read across among UK banks to the large US lenders given its bigger investment-banking division, as compared to the more retail-focused lenders like NatWest and Lloyds Banking Group.
Nonetheless, Lloyds has also come off its lows - uness that is the Nigel Farage effect of course.
2:43pm: FTSE rallies after strong banking results
The FTSE has rallied back to opening levels after some strong results over in the US which has given Wall Street a boost at the open.
Shortly after the opening bell, the Dow Jones Industrial Average was up 233.97 points, 0.7%, at 33,865.11, the S&P 500 was up 20.06 points, 0.5%, at 4,369.67 while the Nasdaq Composite was up marginally at 13,580.73.
JPMorgan Chase and Wells Fargo kicked off earnings for major financial firms with higher-than-expected profit and revenue numbers for the third quarter, while Citigroup also beat on revenue.
Shares in JPMorgan rose 4.4%, Wells Fargo rose 4.1% and Citigroup also jumped 3.3% and you can read the full details of the numbers here - JPMorgan, Wells Fargo and Citigroup.
But BlackRock slipped 1.7% after its revenue and assets under management came in below expectations.
The results gave equities a lift after being scarred by Thursday’s strong print which put a rate rise before the end of the year back on the table.
1:11pm: Market Movers
A roundup of some of London's biggest movers on Friday
Risers
Ondine Biomedical Inc's (AIM:OBI) share price rose by around 10% during trading after the company said it had deepened its roll-out of Steriwave antibacterial nasal sprays across hospitals in Canada.
TomCo Energy PLC (AIM:TOM) shares liftes 9% with the news that the company had raised £100,000 of gross proceeds via a share sale, with an existing shareholder subscribing for 125 million shares at a price of 0.08p each.
Fallers
Shares in St James's Place PLC (LSE:STJ) tumbled 17% after the UK's largest wealth manager came under scrutiny from the FCA because of its fee structure.
British American Tobacco PLC's (LSE:BATS) shares fell 4% after the US federal drug regulator told it to halt sales of its menthol-flavoured Vuse Alto vape, the most popular e-cigarette in the US, following a jump in popularity of the product among underage users.
1:02pm: Farage banks on Lloyds after NatWest row
Lloyds Banking Group PLC (LSE:LLOY) is the new home for some of the bank accounts of Nigel Farage, the former UKIP leader, Sky News reported.
Farage is to start banking with Britain's biggest high street lender, months after a row over the closure of his previous accounts resulted in the ousting of one of the industry's top executives - Alison Rose at NatWest.
Sky said Farage has opened a number of accounts at Lloyds Banking Group, which owns the Halifax and Lloyds networks as well as wealth management services.
Exclusive: Months after the debanking row which sparked a slew of inquiries and cost Dame Alison Rose her job as NatWest Group CEO, I can reveal that @Nigel_Farage has moved his personal bank accounts to Lloyds Britain’s biggest high street lender. https://t.co/wb6TqW70FP
— Mark Kleinman (@MarkKleinmanSky) October 13, 2023
Speaking to Sky News on Friday morning, Mr Farage confirmed the move, saying: "After being refused banking facilities by ten lenders, I am pleased to say that Lloyds has opened accounts for me.
"It is good to see that at least one high street bank is not politically prejudiced."
The decision is said to have been approved by Lloyds executives.
12:53pm: Ratcliffe in pole position for Manchester United - report
The long, OK, very long-running saga to buy Manchester United may have taken another turn with Jim Ratcliffe emerging as the frontrunner to buy into the Red Devils.
Bloomberg reported the update citing people with knowledge of the matter said, with the British billionaire’s recently revised offer giving him the edge over a rival proposal from Qatari investors.
The chairman of chemicals company Ineos is in talks with the club’s US owners, the Glazer family, and their advisers over the structure of a deal, according to the people.
Under terms being discussed, Ratcliffe could make an offer for some of the shares held by both the Glazers and minority investors in Manchester United, the people said.
Ratcliffe may end up with an initial stake of roughly 25% in Manchester United in a deal that could value the club at more than £5 billion.
12:39pm: Insolvencies jump as businesses face rising costs
Corporate insolvencies have jumped in England and Wales, as many businesses struggle with high borrowing costs.
Data published by the Insolvency Service showed that the number of registered company insolvencies reached 1,967 last month, up 17% higher than in the same month last year and up 30% up from September 2019, before the Covid-19 pandemic.
Business insolvencies rise 17% on last year - worst hit sectors construction, manufacturing and retail industries, reflecting impact of higher interest rates and a sharp drop in residential house building https://t.co/vpwGajdmZJ via @accountancylive
— Accountancy Daily (@accountancylive) October 13, 2023
Creditors’ voluntary liquidations were up 14% from September last year, while compulsory liquidation rose by 19%.
Companies are facing high borrowing costs following a string of interest rate increases by the Bank of England over the past two years, coupled with weak demand amid high inflation.
12:04pm: Further falls likely in the US, banks dominate
US stocks are expected to open lower following Thursday’s strong inflation print and as investors digest a batch of earnings from leading financial institutions.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.2% lower, while those for the S&P 500 fell 0.3%, and contracts for the Nasdaq 100 futures were down 0.5%.
Markets fell heavily on Thursday after strong inflation figures raised the chances of one more interest rate hike while rising energy prices have added further fuel to concerns that pricing pressures will remain hard to quell.
Mickey Levy at Berenberg said the data "reaffirms our view that the disinflationary process is likely to be bumpy and nonlinear."
However, despite the limited progress toward disinflation in September, he thinks the Fed is likely to focus on its preferred measure of inflation, the PCE price index, which is likely to come in somewhat softer than the CPI this month.
Nonetheless, he felt "the robust increases in supercore prices across August and September will likely reaffirm the prevailing view among Fed officials that inflation risks remain skewed to the upside and push Fed members to continue to assert that rates will need to remain higher for longer."
JPMorgan Chase, Wells Fargo, and Citigroup will report their latest quarterly earnings, with slow lending growth expected to cut into profits, while wealth management firm, BlackRock has also just released its numbers.
Elsewhere, the University of Michigan will release the preliminary reading of its consumer sentiment index for October, which economists expect to register a level of 67.4, slightly below September’s 68.1.
11:32am: Fidelity to vote against Finsbury Food takeover
One of the City's most influential investors is resisting a recommended takeover of Finsbury Food Group (AIM:FIF) PLC, according to Sky News.
Sky said that Fidelity International, which holds a 10% stake in the company, plans to vote against the 110 pence-a-share bid from DBAY Advisors recommended last month.
Revealed: Fidelity International, the fund management giant, is to vote against a 110p-a-share takeover of Finsbury Food Group (AIM:FIF), the London-listed company, after a recommendation from its board, amid growing criticism of the size of the bid premium. https://t.co/CDBcwCCu5R
— Mark Kleinman (@MarkKleinmanSky) October 12, 2023
Alex Wright, portfolio manager, Fidelity Special Situations Fund and Special Values PLC, told Sky: "DBAY Advisors' offer to buy Finsbury Food Group (AIM:FIF) at 110p per share undervalues the company, and Fidelity International will not be accepting the bid at this level."
"To put this offer in perspective, the bid values the company at a mere 11 times forward earnings, which is a very small premium to the 103p price the stock was trading at back in March this year."
"The company has been excellently managed by the current CEO and CFO through both Covid and recent commodity price rises."
Shares in Finsbury Food Group (AIM:FIF) are little changed at 109p today.
11:07am: Hunt warns of higher debt interest
UK chancellor Jeremy Hunt warned that next month’s autumn budget statement will include ‘difficult decisions’.
Speaking in Marrakesh, Hunt cited the uncertain global environment, and also flagged that higher interest rates and debt service costs have eaten into the UK’s financial position.
Hunt told Sky News that UK debt interest is likely to be £20 billion to £30 billion higher this year than predicted in the spring.
????NEW????
On the fringes of the IMF meetings in Marrakech, Chancellor @Jeremy_Hunt tells me govt is facing a £20-30bn increase in debt payments in next month's Autumn Statement.
Weaker growth. Higher gas prices.
"We need to prepare for the worst," he says.
More on @skynews soon.
— Ed Conway (@EdConwaySky) October 13, 2023
He added while the British economy has proved to be much more resilient than predicted there are short-term challenges.
“We have a challenge with inflation, which is still too high. And we have the challenge of the international environment where there is still a lot of shocks.”
10:50am: Brooks Macdonald gains on bid chat
UK wealth manager Brooks Macdonald Group plc (LSE:BRK) is working with investment bank Raymond James (NYSE:RJF) as a defence adviser amid takeover interest, Reuters reported on Friday.
Shares jumped 8.8% to 1,795p on the report.
Raymond James (NYSE:RJF) has a longer-term mandate to give financial advice to Brooks Macdonald, but this recently developed into defence strategy, the news agency said, citing "three people familiar with the matter".
It added that it is unclear whether any approaches have been made, and that both Brooks Macdonald and Raymond James (NYSE:RJF) declined to comment.
Raymond James (NYSE:RJF) is a St Petersburg, Florida based investment bank and wealth manager and in 2022, it bought London-based wealth manager Charles Stanley (LSE:CAY) for £278.9 million.
10:43am: Spirax-Sarco lower after Sartorius warning
Shares in Spirax-Sarco are down 3.3% at 8,598p after a warning by German lab equipment maker Sartorius after the European market close Thursday.
It's a negative read across for Spirax-Sarco given its exposure to the life sciences industry.
The Gottingen, Germany-based pharmaceutical and laboratory equipment supplier reported that its revenue in the first nine months of 2023 fell 18% to €2.55 billion, from €3.11 billion the year before.
It also said its preliminary underlying Ebitda margin was 29%, down from 34%.
The firm now expects revenue to fall 17% for the full-year.
Sartorius shares are down 10% in Frankfurt.
10:31am: BoE Governor says more to do to bring inflation down
The governor of the Bank of England said things in the UK look better than they did a year ago in a nod to the mini-budget chaos of last autumn.
Andrew Bailey also said he expects decisions on interest rates to continue being close calls.
Speaking at the International Monetary Fund's annual meeting in Marrakech, Morocco, Bailey said there are signs inflation is coming down but there is much left to do.
He said the bank's policy will continue to be "restrictive".
Unusual introduction for Andrew Bailey at the IMF - he is compared to George Bailey, the protagonist "banker" (incorrect) of 'It's a Wonderful Life' ????
— Andy Bruce (@BruceReuters) October 13, 2023
Bailey added: "We have made, I think, particularly in the last few months, solid progress in terms of showing signs that inflation is being tackled. But let's not get carried away because there's an awful lot still to do.
"I think many of us now see policy operating in a restrictive fashion and I'm obviously going to have to say that I think that's what it needs to do."
Bailey said this will have an impact on the UK's economy and is contributing to a "subdued outlook" for the country.
But without getting inflation back to target, that outlook would be even more subdued, he said.
10:14am: Could undervalued Loungers attract a bidder?
The City gave the thumbs up to Loungers PLC (AIM:LGRS)’s trading update which saw the shares rise 3.3% to 193.25p – with one analyst suggesting the share price could double while another felt it could attract bid interest.
The firm itself was extremely upbeat with Nick Collins, CEO saying: “I have never felt more optimistic about our prospects.”
The operator of all-day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands, said like-for-like sales grew 7.7% over the 24 weeks to October 1, an acceleration from the growth of 5.7% reported for the 12 weeks to July 9.
AJ Bell’s Russ Mould noted the “model of offering mid-market prices and opening up in different guises as cafés, restaurants and bars throughout the day is a successful one, with the company able to squeeze the most out of all of its sites.”
Liberum’s Anna Barnfather was impressed saying the firm “continues to outclass the competition and accelerate both like-for-like sales growth and expansion.”
Shore Capital’s Bradley Hughes also flagged the strong LFL sales growth which “is currently tracking ahead of our expectations for the full year.”
“We currently have 5% baked in for the full year and so current trading (7.7%) is supportive of upside risk,” he said.
He estimated that each 1 percentage point of LFL upside is equal to c.£1 million of Ebitda which he forecasts at £39.2 million for financial 2024.
Peel Hunt’s Douglas Jack was also upbeat.
“Not only are sales running ahead of our/consensus expectations, but inflationary pressures are diminishing,” he noted, which combined, “should lead to improving margins.”
He hasn’t factored this into forecasts, adding to the upside potential.
All analyst were agreed the shares are worth more.
ShoreCap’s Hughes said Loungers has made material progress since its IPO yet it’s share price remain broadly unchanged.
Indeed, the share price has fallen 5.3% in the last 12 months although it is up 6.8% in the year to date.
He suggested if the market does not respond, a bid could be on the cards.
“We sense other pools of capital will continue take advantage of record low valuations in the sector,” he said.
He sees fair value at 325p and has a buy rating on the stock.
Peel Hunt’s Jack has a 375p price target and believes the 5.9x EV/Ebitda and 14% equity free cash flow yield “represent extraordinary value.”
Liberum’s Barnfather was even more bullish with a 400p price target and a buy rating.
She pointed out the stock currently trades on 6.1x 2023 estimated EV/Ebitda (pre-leases) vs 8.6x implied by Apollo’s recent offer for Restaurant Group.
9:45am: Rising gas prices up fuel to inflation debate
Gas prices continue to rise adding to fears of rising inflation.
The UK contract has gained as much as 5.3% today to 141p per therm while European benchmarks have risen as much as 5.9% to €56 per megawatt hour.
Both prices have settled back a bit since now but are at levels not seen since last February.
AJ Bell investment director Russ Mould noted “With gas prices rising and oil starting to bubble higher again in the wake of the war in Gaza, there is the potential for further inflationary pressure to complicate the decision making of central banks yet again.”
Squeaky bum time at the Bank of England given havoc that gas prices did to inflation forecasts last year. Gas futures have gone vertical - a direct feed into the November CPI forecast. A week ago, gas looked like a ???? for 2024 CPI, offsetting oil ????. Not the case this morning ???? pic.twitter.com/hdtgKc1mKd
— Simon French (@shjfrench) October 13, 2023
In addition to the Israel and Baltic sea concerns, workers at two of Chevron’s liquefied natural gas plants in Australia are threatening strikes at facilities which account for roughly 7pc of global LNG supply.
9:21am: Analysts play down BAT vape ban hit
Analysts are playing down the impact of the US FDA ban on the sale of some of BAT’s vape products, although shares have slipped further, now down 2.5%.
Jefferies explained this was “largely expected” by the market given the FDA has already denied numerous menthol vape applications to date.
The broker pointed out menthol currently makes up around 75% of BAT's US vape sales which in financial 2023 totalled £1.1 billion.
Therefore, menthol is around 3% of expected financial 2023 overall group sales, and 25% of expected 2023 group reduced-risk product sales.
The broker also noted that a BAT said a menthol ban in California, say overall Alto volumes were little impacted, suggesting many users just switch to tobacco.
Jefferies also noted BAT has already said it will challenge this in the courts and is confident it will then be granted a stay.
The broker kept a buy rating and 4,000p price target.
Over at Citi, and analysts said the decision was “clearly an unhelpful development for the stock” but having spoken with the company, they are extremely confident in the evidence they have in order to challenge the FDA's process and overturn its decision in the Federal Court.
As a result, “we expect the shares to open lower in London but for downside to be limited by the group's confidence in its fundamental data and position.”
Both Jefferies and Barclays think the Vuse Alto tobacco pre-market tobacco application is crucial for BAT and is the key one to watch.
Barclays thinks the decision will be made in the next couple of months, before the year end.
Barclays reckons any impact from the vape ban will take some years to play out and “we do not see any impact on our FY23/24 estimates.”
It rates BAT ‘overweight.’
8:49am: Energy stocks keep FTSE in the green
The FTSE 100 remains in the green supported by gains in energy and mining stocks following renewed gains in oil and gas prices.
Endeavour Mining is top of the FTSE 100 risers, up 1.8% at 1,615p, as Barclays raised its price target to 2,600p from 2,400p and reiterated an overweight rating.
The rising oil price is supporting BP PLC (LSE:BP.), up 1.3%, and Shell PLC (LSE:SHEL, NYSE:SHEL), up 0.8% - Brent crude is up around 2% at $87.67/barrel.
“General supply concerns have pushed the price of a barrel of brent crude up 1.3% in the last week to around $87 a barrel, and that’s quickly becoming another headache for policymakers,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
She noted that OPEC “has said it expects global crude stockpiles to fall by 3 million barrels per day this quarter, barring further supply disruptions from the Israel-Hamas war.”
“Geopolitical situations such as these can change direction at short notice and have the ability to rattle markets and energy prices in a big way. Investors are wary of the unknown so this is keeping a lid on market performance until a clearer trajectory towards peace is found.”
The falls in St James’s Place have fed through to Hargreaves Lansdown, down 3.0%, while the vape ban in the US continues to weigh on BAT, down 2.1%.
Over in the FTSE 250, and the biggest faller is Ashmore, down 5.2%, after reporting assets under management fell.
8:15am: FTSE flat as interest rates seen higher, for longer
The FTSE 100 struggled for direction in early exchanges after strong US inflation figures raised the chances of a further interest rate increase across the pond.
At 8:15am, London’s lead index was up 7 points at 7,651.53 while the FTSE 250 was down 24.20 points, 0.1%, at 17,811.49.
Richard Hunter at interactive investor said the inflation figures “play into the “higher for longer” narrative which investors are begrudgingly beginning to accept.”
“The hiking cycle may have reached a peak, but the level of rates are likely to remain in force until such time as inflation is comfortably under control,” he said.
BAT fell 1.6% after the US FDA called on its US subsidiary RJ Reynolds to halt the sales of its menthol-flavoured Vuse Alto vape, the most popular e-cigarette in the US, following a jump in popularity of the product among underage users.
The Food & Drug Administration said that it had issued marketing denial orders for six vaping products sold by BAT-owned RJ Reynolds Vapor under its Vuse Alto brand. Three of the products were menthol-flavoured and three "mixed berry", the FDA added.
St James’s Place slumped 9.3% after it confirmed it was assessing its fee structure so that it complies with the new UK’s new consumer duty.
According to the Financial Times, early withdrawal charges for new customers could be removed by 2025, while charges for advisory and administrative services could be simplified.
Ashmore was another share in the red, down 1.3%, after it reported a drop in assets under management.
The specialist emerging markets asset manager said in the quarter ending September, assets under management decreased by $4.2 billion, comprising negative investment performance of $1.3 billion and net outflows of US$2.9 billion.
Loungers rose 3.7% after a strong trading update which showed sales growth accelerated.
Analysts at Liberum said the firm “continues to outclass the competition and accelerate both like-for-like sales growth and expansion.”
Deliveroo rose 1.1% to 126.80p as JPMorgan upgraded to neutral from underweight, and raised its price target to 142p from 113p.
7:56am: US FDA tells BAT to stop selling top vape brand
One stock to watch is BAT after the US federal drug regulator told its US subsidiary to halt sales of its menthol-flavoured Vuse Alto vape, the most popular e-cigarette in the US, following a jump in popularity of the product among underage users.
The Food & Drug Administration said that it had issued marketing denial orders for six vaping products sold by BAT-owned RJ Reynolds Vapor under its Vuse Alto brand. Three of the products were menthol-flavoured and three "mixed berry", the FDA added.
The company must not market or distribute these products in the US or they risk FDA enforcement action. However, the company may submit new applications for the products that are subject to these MDOs.
FDA Denies Marketing of Six Flavored Vuse Alto E-Cigarette Products Following Determination They Do Not Meet Public Health Standard https://t.co/e2LXmBsblF
— Media Affairs (@FDAMedia) October 12, 2023
The FDA said the company's premarket tobacco product applications lacked sufficient evidence to demonstrate that permitting marketing of the products would be appropriate for the protection of the public health, which is the standard legally required by the 2009 Family Smoking Prevention and Tobacco Control Act.
"Specifically, evidence submitted by the applicant did not demonstrate that the menthol and mixed berry-flavored products provided an added benefit for adults who smoke cigarettes - in terms of complete switching or significant smoking reduction," a statement from the FDA said.
The FDA said Vuse is the most commonly sold e-cigarette brand in the US, with Vuse Alto being its most popular sub-brand. Further, findings from the National Youth Tobacco Survey show that Vuse e-cigarettes, which are cartridge-based products, have been the second most commonly reported e-cigarette brand used by youth in the US since 2021, it said.
7:47am: St James's Place ponders change to fee structure
Staying in financial services and St James’s Place PLC has confirmed it is assessing its fee structure to comply with the new UK’s new consumer duty.
Responding to media speculation that this could entail an overhaul of how it charges customers, the FTSE 100-listed group said on Friday that work was ongoing.
“We continue to build on the work completed for consumer duty,” the group said in a statement.
“This programme includes an assessment of our fees and charging models to ensure we operate with a simple and scalable charging platform for the long term.”
According to the Financial Times, early withdrawal charges for new customers could be removed by 2025, while charges for advisory and administrative services could be simplified.
St James’s Place, which is the UK’s largest wealth manager, has faced regulatory scrutiny over whether its fee structure complies with the new consumer duty rules.
7:38am: Ashmore reports fall in assets under management
Ashmore Group (LSE:ASHM) PLC has reported a drop in assets under management reflecting net outflows and negative investment performance.
The specialist emerging markets asset manager said in the quarter ending September, assets under management decreased by $4.2 billion, comprising negative investment performance of $1.3 billion and net outflows of US$2.9 billion.
The firm said net outflows were at a similar level to the prior quarter, primarily reflecting continuing institutional risk aversion.
The outflows were mainly in the external debt and corporate debt themes, with smaller net outflows in blended debt and equities.
There were net inflows in the local currency and alternatives themes.
Ashmore noted trading took place against a backdrop of weaker China economic data and an expectation that global interest rates will remain high for longer pushing global capital markets lower.
Mark Coombs, chief executive officer, said: “Ashmore continues to deliver longer-term outperformance for clients across a broad range of strategies and is well-positioned to benefit from further recovery in Emerging Markets."
7:29am: Loungers sales growth accelerates
Loungers PLC (AIM:LGRS), the AIM-listed hospitality group, reported a pick up in sales growth as pricing pressures diminished.
Nick Collins, CEO said: “With a great pipeline of further openings in front of us I have never felt more optimistic about our prospects.”
The operator of all-day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands, said like-for-like sales grew 7.7% over the 24 weeks to October 1, an acceleration from the growth of 5.7% reported for the 12 weeks to July 9.
Compared to the same period in 2019, sales are up 25%.
Total revenue for the first half of the financial year rose 22.3% to £149.6 million from £122.3 million and Lounger said inflationary pressures continue to diminish in line with expectations.
The firm said its balance sheet remains strong with non-property net debt at October 1 of £14.3 million, up from £9.5 million last year, reflecting the timing of September month end working capital cash outflows.
Sixteen new sites were opened in the period, compared to 11 last year, taking the portfolio to 238 sites as at October 1. One Lounge site has been opened to date in the second half and, with a further 17 sites scheduled to open, the group expects to open a total of 34 new sites in the current financial year, a record number.
7:24am: UK gives green light to Microsoft bid for Actiivision Blizzard
Big news to start the day as Microsoft Corp's $69 billion acquisition of Activision Blizzard has finally been approved by the UK competition watchdog, removing the final major global regulatory hurdle that stood in the way of the biggest ever gaming deal completing.
The Competition and Markets Authority said that Microsoft’s restructured offer to sell some gaming rights to French publisher Ubisoft Entertainment satisfied any competition concerns it had.
We’ve cleared the new deal for Microsoft to buy Activision without cloud gaming rights.
In August, Microsoft made a concession that would see Ubisoft, instead of Microsoft, buy Activision’s cloud gaming rights.
Read more: https://t.co/Z4scLEJFy0
— Competition & Markets Authority (@CMAgovUK) October 13, 2023
The agency said it would preserve competitive prices and better services.
Sarah Cardell, chief executive of the CMA said: "The CMA is resolute in its determination to prevent mergers that harm competition and deliver bad outcomes for consumers and businesses."
"We take our decisions free from political influence and we won’t be swayed by corporate lobbying."
"We delivered a clear message to Microsoft that the deal would be blocked unless they comprehensively addressed our concerns and stuck to our guns on that."
Cardell wasn't impressed by Microsoft.
"But businesses and their advisors should be in no doubt that the tactics employed by Microsoft are no way to engage with the CMA," she said.
"Dragging out proceedings in this way only wastes time and money."
7:00am: FTSE seen lower after strong US inflation data
The FTSE 100 is expected to start on the back foot on Friday after strong US inflation figures put a US rate hike back on the table, and after weak trade data from China.
Spread betting companies are calling London’s lead index down by around 13 points after closing up 24.75 points at 7,644.78 on Thursday.
In the US on Thursday, the Dow Jones Industrial Average fell 0.5%, while the S&P 500 and the Nasdaq Composite both shed 0.6% after the US yearly inflation rate was unmoved at 3.7%.
Bank of America said the firmer than expected figures were "a reminder that the path to 2% inflation is unlikely to be smooth sailing and the Fed must continue to err on the side of doing too much rather than too little."
It retained its call for a 25 basis point rate hike in November. "The Fed is still data-dependent and today’s CPI release coupled with last week’s employment report very much support a hike in November, in our view. That said, recent commentary from Fed speakers has leaned in the direction of a pause."
In China, inflation was flat, while the producer price index fell 2.5%, according to official data released Friday.
Trade figures showed exports fell 6.2% annually in September, better than the 8.3% fall expected while imports declined 6.2% from the year before, slightly worse than estimates of 6.0%.
Back in London, and results from Ashmore will be the early focus while in the US results are due from banking giants, JPMorgan Chase, Wells Fargo and Citi.