Wednesday Update

DB Live: Fortunes made as Hut soars; Fed holds rates ’till 2023′

9.30pm: Wall Street goes into reverse

Traders on Wall St (pic: NYSE)

The S&P 500 ended the session lower, reversing gains made after the Federal Reserve said it would keep interest rates near zero until 2023.

Losses in technology shares saw the S&P 500 fall 15.71 points, or 0.46%, and the Nasdaq Composite drop 139.86 points, or 1.25%, although the Dow Jones Industrial Average rose 36.78 points, or 0.13%.

Traders were enthused by White House chief of staff Mark Meadows stating that he was optimistic about a coronavirus stimulus deal, while President Trump said that he would support a bigger relief package.

6.30pm: Snoop to crowdfund

Financial management app Snoop, chaired by former Virgin Money boss Jayne-Anne Gadhia, is about to launch a £5m crowdfunding campaign on Seedrs this week, according to a trade source.

Full story here

4.45pm: Hut soars as London slips

Online shopping group Hut saw its shares soar 25% on the grey market. Its shares priced at 500p apiece on flotation shot up to 625p, adding more than £1 billion to its value, as its market capitalisation leapt from £5.4bn to £6.8bn.

It is the largest-ever ecommerce IPO in Europe and the largest tech IPO in London. But the company has been criticised for failing to comply with basic corporate governance rules which will deny it entry to the FTSE 100.

The initial public offering had already made a fortune for Hut’s backers.

Founder Matthew Moulding, 48, held on to his shares, but his 17% stake is now worth £1.2billion.

Former Tesco CEO Sir Terry Leahy, pictured, pocketed £17million from selling 3.4m shares at 500p. His remaining 13.6m shares are now worth £85m.

Oliver Cookson, the entrepreneur who founded nutrition brand Myprotein and sold it to The Hut in 2011, pocketed £283m during the float, on top of the £58million he made from selling his business nine years ago. He now has a stake worth £62.5m.

The FTSE 100 fell back but stayed above the 6,000 mark, shedding 0.4%, or 27 points, to 6,078.5 as the pound rose swiftly against a weaker dollar.

RSA Insurance and Hiscox added to Tuesday’s gains, advancing a further 1.2% and 5.0%, respectively, despite a court ruling in favour of the regulator’s test claim on paying out on business interruption.

9.30am: Economy contracts

lock on gates at bar

The Scottish economy shrank by 19.4% between April and June, but Chancellor Rishi Sunak does not support calls to extend the furlough scheme.

Full story here

8.30am: London opens lower

The fall in inflation and yesterday’s jobs data gave traders plenty to ponder along with Rishi Sunak’s hints on a new support scheme for virus-hit businesses. They were also looking ahead to the latest decision from the US Federal Reserve.

The FTSE 100 index slipped 0.4% just after the opening bell to 6,082 points.

Hut Group raced to 6.4% premium on its market debut after being valued pre-float at £5.4bn.

Aero engine maker Rolls-Royce was 3% lower, amid growing gloom over international travel. British Airways owner IAG was down 2.6%.

B&Q owner Kingfisher was among the early risers, up 3.2%.

7.30am: Inflation falls

Consumer price inflation fell back to 0.2% in August (the lowest level since January 2016) after rising to a four-month high of 1.0% in July, up from 0.6% in June and 0.5% in May, which had been the previous low.

7am: Clean energy North Sea jobs boom forecast

Innovation across the renewable and fossil fuel sectors could create more than 200,000 jobs and contribute more than £2.5 trillion to the nation’s economy by 2050, according to a report from the Oil & Gas Technology Centre.

Full story here

Galliford Try loss

Aberdeen bypass by-pass

The construction and civil engineering company Galliford Try reported an increased pre-exceptional pre-tax loss of £59.7m for the year to the end of June from £17.2m in the previous year.

The company has a current order book worth £3.2bn (2019: £2.9bn).  Of this, 68% is in the public sector (2019: 79%), 13% is in regulated industries (2019: 5%) and 19% is in the private sector (2019: 16%). 

The board is not proposing a final dividend but anticipates reinstating dividend payments following a return to profitability.

Bill Hocking, chief executive, said the company is well capitalised with a strong order book.  We are well positioned to make progress on our strategic priorities and margin improvement targets

Shop sales hit by Festival cancellation

Cancellation of this year’s Edinburgh Festival contributed to a 7.5% slide in sales on Scotland’s high streets, according to the latest data.

Figures released by the Scottish Retail Consortium (SRC) show that sales fell across the country for the sixth month in a row.

Food sales grew at a slower rate than earlier in the lockdown while wet weather boosted sales of autumn clothing ranges. This was in part counterbalanced by the lack of tourism – particularly for Edinburgh which did not enjoy its normal influx of visitors for the Festival.

David Lonsdale, Director  at the Scottish Retail Consortium, commented: “Six months on from the start of the pandemic and the revival of retail is proving painfully slow and protracted.”

Thomas Cook back in business

Thomas Cook is being resurrected as an online-only travel business, exactly a year after the 178-year-old company went bust.

Full story here

Today’s agenda

The Hut Group begins trading on the London Stock Exchange with a market capitalisation of £5.4 billion after raising £1.88bn.

Today’s top Daily Business stories

Labour joins call for airport testing to avoid jobs cull

Insurers facing payouts after ruling on interruption

BBC risks backlash over pay for top presenters

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