Market report

BT bid talk drives market higher | Whitbread recovering


5pm: BT bid talk drives market higher


Britain’s blue chips closed higher, driven by bid talk surrounding telecoms giant BT.

Its shares surged by more than 5%, becoming the best performing stock in the FTSE 100 index. It is trading at 143p, which is slightly above this month’s low of 134p.

The speculation focuses on Patrick Drahi, the French billionaire, who has been buying into BT Group. He is now the biggest investor in the company with a stake worth about 12% and could launch a bid through his company Altice.

Another £1 billion was wiped off THG’s market value as investors dismissed the ecommerce company’s attempts to improve its governance and transparency and seized on signs of slowing growth and margin pressure.

Travel and service stocks also performed well, while Wall Street benefited from much-anticipated third quarter earnings from tech giants such as Alphabet and Twitter.

The FTSE 100 ended the session 54 points higher at 7,277. The more UK-focused FTSE 250 rose 0.96%.

9am: Market opens higher

London opened positively after a strong close on Wall Street, which saw the Dow Jones and S&P 500 hit record highs (see below).

Results from the household products company Reckitt Benckiser and Premier Inn owner Whitbread were well-received.

The FTSE 100 was trading 33.65 points higher at 7,256.47.

7.30am: Petrofac placing

Petrofac, the oil services company, intends to raise £200 million (gross) via a placing to help pay for its recent fine for bribery offences.

The issue price is 115p per share. This represents a discount of 27.2% to the closing share price of 158p on 25 October.

Full story here

7am: Whitbread on course for recovery

Premier Inn and Hub Inn Edinburgh

Premier Inn owner Whitbread said the recovery in sales is ahead of expectations, and while a number of uncertainties remain, UK like-for-like RevPAR run rate, the industry’s preferred measure, has the potential to reach full recovery at some point in 2022.

It said it is confident of a return to pre-pandemic UK profit margins.

“However we will have to wait to assess speed of recovery once we have greater visibility of longer-term inflation and supply chain pressures.”

H1 FY22 statutory revenues were 39% down compared to H1 FY20 as a result of the COVID-19 restrictions that were in place during the first half.

The adjusted loss before tax of £56.6m benefitted from £141.6m1 of COVID-19 related Government support schemes in the UK and Germany, and the statutory loss before tax of £19.3m also benefitted from £37.3m of adjusting items credits

In the current trading period, total UK sales were 1.3% ahead of the same period in FY20, with total accommodation sales 7.9% ahead and occupancy at 81.2%. Total UK accommodation sales were 14.1% ahead of the market.

Global markets

Markets were set to build on gains after US tech stocks surged yesterday, led by Tesla which became the first $1trillion carmaker after it signed its largest-ever order with rental car firm Hertz. 

The electric car group, headed by the world’s richest man Elon Musk, saw its share price climb 13% to an all-time high on Wall Street. 

The jump means Tesla’s market value hit $1.1trillion – joining an exclusive club of only a handful of companies including Apple, Amazon and Microsoft. 

Shares in Facebook rose more than 3% on Nasdaq in after-hours trading as the US social media giant reported a 35% rise in third quarter revenue to $29 billion. Profit rose 17% to $9.19bn (£6.68bn).

The figures, which just missed analysts’ forecasts, came amid controversies tied to privacy breaches and whistleblower allegations that the company puts profits ahead of people.

Full story here

London’s blue chip FTSE 100 index was predicted to open 10 points higher by spread-betters, a day after hitting a new 18-month high and closing just over 18 points or 0.25% higher at 7,222.82.

On Wall Street the tech-heavy Nasdaq rose 0.9% while the S&P 500 and Dow Jones added 0.5% and 0.2% respectively.

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