Wednesday Update

DB Live: Gilbert backs blockchain firm; British Land hit

4.45pm: London close

Investors continued to buy equities on the back of the return to work and hopes for economic recovery. The FTSE 100 closed 76.49 points (1.26%) higher at 6,144.25.

11.45am: Gilbert backs blockchain firm

Martin Gilbert

Martin Gilbert, pictured, along with his long-time deputy Andrew Laing at Aberdeen Asset Management have led an angel round in Edinburgh-based Blockchain Technology Partners.

The firm, founded in 2018, has been delivering the Tel Aviv Stock Exchange’s new securities lending platform.

Mr Gilbert, co-founder and former co-CEO at Standard Life Aberdeen, last year also took up the role of Chairman at banking fintech unicorn Revolut. Mr Laing, a long time senior leader at Aberdeen is now an active early-stage investor.

Paul Forrest, also an investor in BTP, has joined the firm as its inaugural non-executive chairman. He has more than 25 years experience as a strategy consultant advising governments and working with FTSE 100 and Global 500 businesses including Ford Motor Company, Wal-Mart, Virgin Galactic and AkzoNobel.

11.30am: Markets

City of London

Investors are regaining their appetite for stocks, says Russ Mould, investment director at AJ Bell.

“Last night the S&P 500 index in the US briefly flirted with the 3,000 mark for the first time since early March just before global markets collapsed.

“The world getting back on its feet has given a lot of encouragement to investors, also helped by hopes over various potential vaccines being developed in the fight against coronavirus.

“The only problem is that markets might be getting over-optimistic about the pace of corporate earnings recovery. If financial results don’t match expectations in the coming months then the stock market rally could come under threat.”

Investors are buying financial stocks with St James’s Place and M&G the top risers on the FTSE 100 index this morning. Housebuilders were out of fashion with Taylor Wimpey, Persimmon and Barratt Developments among the biggest fallers.

Among the mid-caps, travel operator TUI extended yesterday’s rally with another 25% gain. That means its share price has now risen by 90% since 22 May’s market close.

“Investors lucky enough to have bought low should be pleased at the gains but they might be even happier if they could actually go overseas for a fortnight by the sea,” said Mr Mould.

The FTSE 100 was trading at 6,154.82 +87.06 (1.43%).

10.45am: British Land update

“The largely unspoken fear in today’s results from property investor British Land is that the coronavirus impact on its retail assets could be mirrored in its office block holdings,” says Russ Mould of AJ Bell.

“Already corporate leaders, including the CEO of Barclays Jes Staley, are publicly noting they might not need the same level of office space in the future as they eye the savings that could be achieved by reducing their footprint. 

“It remains to be seen whether home working will pose the same existential threat to office real estate as online retail has to physical shops but it is a clear risk facing British Land, given offices account for substantially more than 50% of its holdings. 

“The search for a new CEO is reportedly on hold for now as current incumbent Chris Grigg tries to put out the fires sparked by the current crisis. His eventual successor faces the extremely tough job of revitalising the portfolio.” 

The property portfolio fell 10% in the last financial year pushing the real estate company to a £1.1bn annual net loss as the value of its retail sites plunged.

The FTSE 100 company said the value of its properties fell to £11.16bn from £12.32bn in the year to the end of March.

Its IFRS loss after tax widened to £1.11bn from £320m a year earlier. The value of British Land’s retail sites fell 26.1% to £3.87bn as Covid-19 factors added to existing pressures on the retail sector. The value of British Land’s offices rose 2.3% to £6.77bn.

8.50am: Hampden raises capital

Edinburgh private bank Hampden & Co has secured £7 million in funding from its four key investors. 

Full story here

8.15am: London opens higher

As predicted the FTSE 100 opened higher as traders were buoyed by the return to work plans. In the early minutes of the session the index was trading 52 points (0.86%) higher at 6,119.

7am: Britvic ‘resilient’

The soft drinks company chief executive Simon Litherland said that in these difficult times soft drinks have proven to be a resilient category.

The company said it has deferred its interim dividend as it weighed the impact of the coronavirus pandemic, which it said was hitting profits at around £12m – £18m a month.

The maker of Robinsons fruit juice said the largest impacts had been seen in Great Britain and Ireland due to government lockdowns, but added that stress testing of debt covenants did not indicate any potential breaches up to March next year.

Auto Trader Group 

The company announced fresh support for its customers following new guidance from the UK government around vehicle retail.

The FTSE 100 company noted that on Monday, the government confirmed that vehicle retailers in England would be permitted to reopen from 1 June. It said that for those retailers in England resuming trading, it would extend its recent discount scheme, providing a 25% discount for the month of June.

British Land

The property portfolio fell 10% in the last financial year pushing the real estate company to a £1.1bn annual net loss as the value of its retail sites plunged.

….more follows

Royal London sells Ascentric to M&G

Barry O'Dwyer

Mutual pensions group Royal London has announced the sale of its platform business, Ascentric, to M&G.

The sale follows the completion of Ascentric’s re-platforming in 2019 and the conclusion of a comprehensive strategic review led by Royal London Chief Executive, Barry O’Dwyer (pictured).

Full story here

6.45am: FTSE expected to rise

The FTSE 100 is expected to open higher as traders remain positive about a post-pandemic recovery.

Spread-better IG is looking at a 25 point uplift, building on Tuesday’s session which closed 74 points higher at 6,067.

Traders are encouraged by the lifting of Covid-19 lockdown restrictions in Europe and prospects of drugs to tackle the disease. Biotech firm Novavax has started human trials of its coronavirus vaccine candidate in Australia.

Wall Street was in upbeat mood with the Dow closing 2.17% higher, the S&P 500 up 1.23% to 2,991 and the Nasdaq 0.17%.

Asia was more of a mixed bag as tensions again flared on the streets of Hong Kong.

The Japanese Nikkei 225 was up 0.61% while Hong Kong’s Hang Seng fell 0.41%.

Today’s top Daily Business stories

Sunak to unveil changes to furlough scheme

Train and bus capacity slashed in return to work

Forbes demands answers on cancelled £60m fund

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