Market report

Blockbusters boost Cineworld | Cairn begins buyback


5pm: Weak metals hold back FTSE 100

Stocks in London ended higher on Monday despite weakness in basic resources on account of weaker metals prices, with Anglo American, Rio Tinto, Glencore and BHP all acting as a drag on the market.

Royal Dutch Shell ‘A’ and ‘B’ shares closed up 2.1% and 1.4% respectively after the oil major unveiled plans to simplify its share structure and change its name to Shell.

The FTSE 100 index closed up 3.95 points, or 0.1%, at 7,351.86. The FTSE 250 ended up 64.06 points, or 0.3%.

The London market was bolstered by the news Royal Dutch Shell is casting off its dual-share structure, but unlike BHP and Unilever is not threatening divorce and has instead committed itself to the UK and remaining in the FTSE 100 index, says AJ Bell investment director Russ Mould.

“The better comparison is with Unilever – which like Shell has Dutch and British roots. The consumer goods giant ended up being brought back from the brink of a move to the Netherlands in the face of angry protests from shareholders.

“It turns out Shell didn’t need to have its feet held to the fire, and it will remain a key constituent of the FTSE as it tidies up its complex A + B share structure.”

9.45am: Contractor collapses

Mechanical and electrical contracting specialist Weir & McQuiston (Scotland) has collapsed into administration with the loss of 93 jobs. 

Full story here

7am: Cineworld surge

Daniel Craig

Cinema operator Cineworld said a rush of blockbuster releases, such as Black Widow and No Time To Die has led to particularly strong growth in a number of the group’s markets in the four months to 31 October, in some cases even above the levels experienced in 2019.

As a result of this improvement in revenue and the cost measures implemented, the group generated positive cash flow in October, an important milestone in the company’s recovery, it said in a trading update.

Mooky Greidinger, CEO commented: “We are thrilled to see audiences returning in significant numbers. Our partnerships with the studios are as strong as ever and with the incredible movie slate to come, there are real grounds for optimism in our industry.”

7am: Shell restructure

Energy company Royal Dutch Shell is to end its dual share structure, move its headquarters and tax residence to London and simplify its name.

Full story here

7am: Cairn launches buyback programme

Cairn Energy will begin buying back an initial £20m of shares prior to the anticipated larger buyback programme that will follow receipt of the Indian tax refund.

The Edinburgh company said Morgan Stanley will handle the programme launching today and ending no later than 31 January.

Global markets

Crude oil prices fell earlier today amid increasing supplies, a lower demand forecast and higher energy costs.

Brent crude futures fell 45 cents, or 0.6%, to $81.72 a barrel. US West Texas Intermediate (WTI) crude lost 36 cents, or 0.5%, to $80.43 a barrel.

Oil markets have dropped for the last three weeks, hit by a strengthening dollar and speculation that President Joe Biden’s administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices.

Asia-Pacific shares were mostly higher on Monday as retail sales in China gained 4.9% year-on-year in October, higher than the 3.5% lift predicted in a Reuters poll.

The country’s industrial output for the month also rose 3.5% as compared with a year ago, above expectations for a 3% increase.

China’s Shanghai Composite slipped 0.18% despite the positive news while Hong Kong’s Hang Seng index rose 0.04%

In Japan, the Nikkei 225 gained 0.55% and South Korea’s Kospi surged 1.07%.

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