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Wetherspoon ‘mayhem’ blast; CMA lease order; Halfords deal

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4.30pm: London closes lower

The FTSE 100 closed at 6,708.71, down 70.97 (1.05%).

8am: FTSE 100 falls on bond rise

The FTSE 100 fell in early trade, hit by higher bond yields globally, while energy stocks dropped as fresh COVID-19 lockdowns across Europe dampened hopes of a swift recovery in demand. The blue chip index was trading 42.3 points lower at 6,737.40.

Oil heavyweights BP and Royal Dutch Shell fell 3.2% and 3.0%, respectively as miners dragged the index down.

Pub operator J D Wetherspoon fell 1.1%, on a half-yearly loss (see below) while NatWest (RBS) rose 0.4%, after agreeing to buy back shares for £1.1 billion.

Shares in Scottish Mortgage Investment Trust were down 3% at £11.14 in early trading after co-manager James Anderson announced his retirement.

7am: J D Wetherspoon – Martin blasts lockdown

JD Wetherspoon

Pubs chain Wetherspoon swung to a half-year loss before tax and exceptional items of £46.2m (2020: profit £57.9m) on a 53.8% fall in revenue to £431.1m (2020: £933.0m) for the 24 weeks to 24 January.

Tim Martin, chairman, said: “Wetherspoon and its employees, along with the hospitality industry, have worked very hard to comply with ever-changing government guidelines.

“It is disappointing that so many regulations, implemented at tremendous cost to the nation, appear to have had no real basis in common sense or science, for example, curfews, “substantial meals” with drinks and masks for bathroom visits.

“The future of the industry, and of the UK economy, depends on a consistent set of sensible policies, and the ending of lockdowns and tier systems, which have created economic and social mayhem and colossal debts, with no apparent health benefits.”

NatWest buyback

NatWest (RBS) Group has cut the state’s holding to 59.77% from 62% after the bank agreed with the Treasury to make a £1.125 billion off-market buyback of ordinary shares in the bank.

Full story here

Baillie Gifford

James Anderson, one of the UK’s longest-serving fund managers, is leaving Baillie Gifford and stepping down as joint manager of its Scottish Mortgage Investment Trust.

Full story here

Government borrowing

The UK government borrowed £19.1 billion last month, less than the £21bn forecast in a Reuters poll, taking borrowing in the first 11 months of the financial year to almost £279bn , official data showed on Friday.

CMA orders removal of lease terms

The Competition and Markets Authority is requiring Countryside and Taylor Wimpey to remove certain contract terms that mean leaseholders have to pay ground rents that double every 10 or 15 years.

In September 2020, the CMA launched enforcement action against four housing developers. These included Countryside Properties and Taylor Wimpey, for using possibly unfair contract terms, and Barratt Developments and Persimmon Homes over the possible mis-selling of leasehold homes.

The CMA has now written to Countryside and Taylor Wimpey outlining its specific concerns that their use of terms that double the ground rent every 10 or 15 years breaks consumer protection law.

It says that as this increase is built into contracts, it means people can struggle to sell or mortgage their homes, and so find themselves trapped. These terms can also affect their property rights.

Halfords deal

Bicycle and car products retailer Halfords is buying motoring services provider Universal Tyre and Autocentres for £15m. 

Universal operates from 20 sites and has 89 commercial vans. It specialises in tyre services as well as general car maintenance and repairs. 

Markets

London is expected to follow Wall Street’s retreat as nervousness over rising bond yields re-emerged and harsh opening exchanges between US and China over new trade talks.

US stocks were sold sharply – particularly after the European close – amidst the news that France would be going back into lockdown.

The S&P 500 tumbled 59 points as investors once again dumped technology stocks. The Dow Jones industrial average slid slightly.

Japan’s Nikkei 225 and Hong Kong’s Hang Seng were both weaker.



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