Daily Business Live
Kier placing; Brewin Dolphin; Rolls-Royce; Wood
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10pm: Wall Street rebounds
All three of the key US stock indexes were sharply higher, bouncing back from three days of steep falls. The S&P 500 enjoyed its biggest percentage gain in over a month.
The Dow Jones Industrial Average rose 433.79 points, or 1.29%, while the S&P 500 was 49.46 points, or 1.22%, higher and the Nasdaq Composite took on 93.31 points, or 0.72% despite tech stocks being most exposed to the slump.
Tesla continued to slip, falling 3.1% on the Nasdaq after boss Elon Musk’s sudden rejection of cryptocurrency bitcoin over environmental issues. Tesla’s shares sank 3.2% to $571.08, their lowest level in over two months.
5pm: London claws back losses
London shares staged a late relief after plunging in early trade.
Danni Hewson AJ Bell financial analyst, said: “What a difference a day makes. US markets have mostly brushed off yesterday’s losses and put the box marked “concerns on inflation” under the table for now.
“Even tech stocks are rising off the back of better than expected job figures and for much of the morning all 30 stocks on the Dow Jones were in the green.
“Wall Street’s rally was just the tonic London markets needed and even the FTSE 100 looked a completely different beast from this morning, by the end of the day it was only 41 points down at 6963 – such a turnaround from earlier you’d be forgiven for wondering if you’d dreamt it. But instability will be the watchword for a while.
“Investors are having trouble weighing the good economic news from the disconcerting. But despite the uncertainty, deals are being done, jobs are being created and restrictions relaxed even more. Pent up demand is a good thing, it’s just markets don’t want too much of a good thing.”
11.15am: ICL raising funds – possible IPO
ICL Therapeutics, a Glasgow-based drugs development company, is raising £3.5m ahead of a possible IPO next year.
10am: DataVita deal
DataVita, Scotland’s largest data centre and multi-cloud services provider, has acquired the Fortis data centre in Lanarkshire.
9.45am: Scottish Mortgage Trust – ‘strongest year’
Baillie Gifford’s Scottish Mortgage Trust, best known for retiring James Anderson’s spectacular gains on its early faith in Tesla, has posted its strongest ever year return.
9.30am: Menzies stake
Menzies Distribution has announced that food retailing veteran Charles Wilson has acquired a significant stake in the company and joined the board.
9am: Williams backs ski school
Skyscanner founder Gareth Williams has joined the latest investment round for ski-ing instructor marketplace, Maison Sport.
8.45am: FTSE plunges
London shares fell sharply as forecast in early trade following a weak session on Wall Street after an unexpected spike in US inflation (see below).
The FTSE 100 plunged 134 points (1.92%) to trade at 6,870.36.
BT said full-fibre broadband should be extended to 25 million premises over the next five years through its Openreach independent network arm.
But one analyst says the group is putting ‘signifiant strain’ on its resources.
7am: Kier raises funds
Construction group Kier is to raise £241 million via a placing and open offer to help underpin the balance sheet.
Andrew Davies, CEO, commented: “Today’s proposed capital raise represents the final milestone in the Group’s strategy to simplify the Group; to improve cash generation; and to strengthen our balance sheet.
“This capital raise will provide Kier with the financial and operational flexibility to continue to pursue our strategic objectives, within our chosen markets, and to facilitate investment in the business to help drive sustainable, profitable organic growth and the achievement of our medium-term financial targets.”
7am: Brewin Dolphin
Wealth manager Brewin Dolphin reported record total discretionary fund inflows in Q2 of £1bn and said total funds in the first half to 31 March increased by 10.5% to £52.6bn (FY 2020: £47.6bn).
Total income increased by 13.7% to £199.9m (H1 2020: £175.8m), driven by strong market performance and elevated levels of commissions.
Adjusted profit before tax came in 28.8% higher at £47m.
The board has declared an interim dividend of 4.6p per share payable on 11 June.
Robin Beer, chief executive, said: “In the first half of 2021 we delivered an excellent set of results driven by record fund inflows in Q2 and the outperformance of our clients’ investments during a strong market recovery.
“The consistency of our inflow performance throughout the pandemic demonstrates we have a resilient business model.
“Our strong financial momentum and the good progress made on our strategic priorities in the first half of the year gives me confidence for the remainder of the year.”
Aero engine maker Rolls-Royce said it expected to turn cash-flow positive in the second half as airline travel recovered from the Covid pandemic.
In a trading statement ahead of the AGM it said revenue was largely driven by demand for cargo flights and the maintenance of key routes with and “broadly unchanged from the run rate at the end of 2020 and consistent with our planning assumptions”.
Rolls said it expected to stop leaking cash outflows “at some point during the second half of 2021, as engine flying activity recovers and cost savings are delivered”.
7am: Wood Group
Energy services group Wood said the order book was up 9% in the first quarter.
Ahead of the AGM chief executive Robin Watson , pictured, said: “Our outlook for 2021 is unchanged.
“Increased consulting activity and strength in operations, supported by an improving order book, are expected to partly offset lower projects activity.
“The successful delivery of our Future Fit programme and an increased proportion of higher margin consulting revenues will deliver a full year margin improvement.”
Pipeline back in production
Fuel will start flowing through the Colonial Pipeline again, the company announced on Wednesday – six days after America’s largest pipeline closed down due to a ransomware attack.
Florida, North Carolina, Virginia and Georgia were among areas hit by fuel shortages as more than 10,000 gas stations ran dry.
Despite the resumption of supplies, Colonial warned that it would take time to get the 5,500-mile pipeline fully operational.
It said in a statement: ‘It will take several days for the product delivery supply chain to return to normal.
“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period.”
It is reported that the company has no plans to pay a rumoured $5 million-plus ransom to Russian hackers who have been blamed for the attack.
President Joe Biden has vowed to get the fuel crisis “under control”, with pressure mounting on his administration to do more.
Overnight markets – London expected to fall
Spread betters are expecting the FTSE 100 to reverse yesterday’s gains as inflation continues to worry traders.
It is forecast to fall by 60 points after regaining the 7,000 threshold.
Stocks dropped earlier this week ahead of a spike in the US consumer price index (CPI), which saw its biggest increase for nearly 15 years.
Wall Street’s Dow Jones Industrial Average fell 681 points or 1.99% whilst the S&P 500 dropped 2.14% and the Nasdaq was 2.67% lower as tech stocks suffer the brunt of the sell-off.
Japan’s Nikkei was 2.13% down, Hong Kong’s Hang Seng dropped 1.29% and the Shanghai Composite lost just over 1%.
James Athey, investment director at Aberdeen Standard Investments, said inflation was not the only cause of the slide.
“It seems likely that aside from the impact of cross market correlation, the main justification for recent weakness may be that investors are having to anticipate less supportive monetary policy in the near future as a result of the economic re-opening underway.
“Ultimately the reality is that equity markets everywhere have re-rated considerably over the last 12 months and in doing so are now pricing an incredible amount of good news with very little risk premium left on the table.
“This is in spite of the incredible macroeconomic uncertainty which persists.
“For this reason we should not be surprised to see future bouts of risk asset weakness as the inevitable result of near euphoric levels of investor confidence in stark contrast with the medium term outlook for economies and policy stances everywhere.”