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Frasers sells French Connection stake; Boohoo Arcadia deal

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9.30pm: Wall St’s winning streak

Traders on Wall St (pic: NYSE)

The Dow Jones secured its longest daily winning streak since August as traders grew confident about Covid-19 stimulus.

The index closed 237.52 points higher (0.76%), while the S&P 500 was 0.74% firmer and the Nasdaq Composite saw out the session 0.95% stronger.

5.30pm: TV licence fee rises

The TV licence fee will rise from 1 April.

The fee is set by the Government, which announced in 2016 that it would rise in line with inflation for five years from April 2017.

Full story here

4.30pm: London lifted by US stimulus hopes

London closed higher on hopes of a substantial US financial aid package and rising oil prices. The FTSE 100 closed 34.20 points, or 0.5%, higher at 6,523.53. 

The rising oil price (see below) helped lift oil majors. BP ended up 3.9%, while shares in Royal Dutch Shell ‘A’ and ‘B’ closed up 1.5% and 2% respectively.

Commodity stocks were also sought by traders with Evraz closing up 4.1%, Anglo American 3.9%, Antofagasta 3.4%. Rio Tinto was 2.5% higher and BHP rose 2.4% on the day.

JD Sports Fashion was the session’s worst performer, down 2.9% amid speculation of a tax on the retail sector. 

Energy producer Drax gained 0.98% after saying it was buying Canadian firm Pinnacle Renewable Energy for CAD 11.30 a share, valuing it at £226m.

Rolls-Royce was 0.96% lower after saying t is temporarily closing its jet engine factories for two weeks this summer to save cash.

Omega Diagnostics

On Aim, the Scottish diagnostics company Omega rocketed 32.4% or 22.5p to close at 92p after confirming it is continuing to modify its Alva-based facility to upscale significantly its Covid test production test kit capacity.

The Clackmannanshire-based company was said to have been chosen to produce lateral flow devices for the Department of Health and Social Care.

Omega Diagnostics said in a statement to the London Stock Exchange: “The company can confirm that it is continuing to modify its Alva-based facility to upscale significantly its lateral flow test production capacity.

“When contracts or supply agreements are signed to utilise this capacity the company will announce this in line with AIM disclosure obligations.”

4.15pm: Bank selling retail assets

NatWest Group, formerly Royal Bank of Scotland, has appointed advisers at PwC to explore the sale of a £550m portfolio of loans secured against 25 assets – predominantly shopping centres.

Full story here

2pm: Diagnostics firm hiring 300 workers

Medical diagnostics firm LumiraDx, which produces tests for Covid-19 and other health conditions, is looking to take on 300 workers at two sites in Scotland.

The company is looking for manufacturing handlers, production technicians, as well as shift team leaders at plants in Glasgow and Alloa.

9am: Simpson & Marwick acquisition

Simpson & Marwick has added a Glasgow-based re-mortgaging and debt recovery company to its portfolio of brands.

Full story here

8.30am FTSE higher

The FTSE 100 was trading higher on vaccine and stimulus hopes. It was up 32 points at 6,521.55.

Shares in Omega, the medical diagnostics company, rocketed by 21% to 84p in early trade after it confirmed it is continuing to modify its Alva-based facility to upscale significantly its Covid test production capacity.

“When contracts or supply agreements are signed to utilise this capacity the company will announce this in line with AIM disclosure obligations,” it said in response to a media report.

7am: Frasers sells French Connection stake

French Connection

Frasers Group has sold its near-25% stake in French Connection, raising expectations of a deal with potential buyers.

Shares in French Connection rose 65% on Friday after it told investors that it had received two approaches from investment groups looking to complete a takeover.

This morning French Connection revealed that Frasers – which had been the second-largest shareholder in the business – has now sold its entire 24.93% stake, removing a huge potential obstacle to a deal.

Boohoo buys more retail assets

Burton

Boohoo, the online fashion retailer, has made a further swoop on the high street with a £25.2 million acquisition of the loss-making Burton, Dorothy Perkins and Wallis brands.

The assets are being acquired from the joint administrators of Sir Philip Green’s collapsed Arcadia Group, but will not include the 214 shops. Boohoo recently acquired Debenhams, also without its chain of stores.

The newly-acquired brands have more than two million active customers and the deal with strengthen boohoo’s menswear proposition.

The transaction will be financed through the Group’s existing cash resources,

In the most recent financial year to 29 August 2020, the brands generated unaudited revenues of approximately £427.8m across all channels and an unaudited EBITDA loss of £14.3m.

Thurso company to float

A Scottish battery cell maker working with car manufacturers such as Cosworth and Jaguar Land Rover is to float on the stock market.

AMTE Power was set up in 2013 by a group of former defence technologists at QinetiQ.

The company, which is based in Thurso, hopes to raise £7 million and expects admission to the Alternative Investment Market (Aim) next month.

Since being established it has raised £9.1m of equity finance, been directly awarded approximately £5.8m of public sector grants and has generated commercial income to date of about £2.5m.

Oil price at year high

Maersk oil field

Oil prices have risen to their highest for a year, with Brent futures edging over $60 a barrel fuelled by cuts in supply and US stimulus measures.

Full story here

Manufacturing output stabilises

Car-manufacturing-SMMT

SME manufacturing output stabilised in the three months to January, but the expectation is for a decline in the coming quarter for the first time since April 2020, according to the CBI’s quarterly SME Trends survey.  

The survey of 267 SME manufacturing firms from 16 December to 13 January spanned the conclusion of the Brexit negotiations and the return to lockdowns in England and Scotland. Consequently, SME manufacturers saw optimism deteriorate, with export sentiment also falling, although at a slower pace than in previous quarters. 

Meanwhile, the volume of total new orders fell, driven by a decline in domestic orders, while export orders grew at the fastest pace in two years. Average costs grew at the fastest pace since April 2019, with domestic prices also growing. The decline in employment continued to slow in the three months to January.  

Next quarter, output is set to fall alongside total new orders, with declines in both domestic and export orders. 

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Cost growth is set to accelerate further next quarter, leading to a pick-up in domestic price growth. Headcount is tipped to stabilise in the coming quarter. Meanwhile, the proportion of manufacturers citing materials or components as a factor likely to limit output over the next three months rose to the highest on record. 

Investment intentions for the year ahead remain weak, with SME manufacturers set to cut back capital expenditure on buildings and plant and machinery.  

The rate of decline of Scottish private sector economic output accelerated sharply in January, amid stricter lockdown measures, according to a Royal Bank of Scotland survey.

The purchasing managers’ index report also shows continued job-shedding.

The fall in employment in January was the least-steep monthly drop since the current run of decline began last February.



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