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Entain mulls £16.4bn offer | Saga in profit | DeepMatter update


5pm: Markets rise ahead of Fed statement

Investors bought back into the market, seemingly feeling positive about the impact of statements from central bankers. The FTSE 100 surged back above 7,000 to close 102.39 points (1.47%) higher at 7,083.37.

Danni Hewson, AJ Bell financial analyst, said: “Central banks have the power to shake and stir markets, so it probably says something about exactly what investors are expecting to hear from both the Fed later today and the Bank of England tomorrow that both London and Wall Street seem positively upbeat. 

“Taper tantrums and rate rise ripples look to be on the back burner and fears of an imminent Evergrande collapse have also abated somewhat.  The FTSE 100 has sailed happily above the 7,000 mark thanks to a really positive showing from miners helped by healthier commodity prices.

“One price rise that’s not gone down well in the UK is that of gas and there are big concerns about what the energy sector will look at the end of the winter with two small companies already calling time. 

“Can those left standing pick up the slack or will additional customers make their sums untenable? Centrica’s shareholders seem to scent opportunity and its share price has risen by more than 5% since the weekend and though SSE has tumbled today it’s still up slightly compared to Friday’s close.  Competition is supposed to be better for the consumer but many of the new kids on the block simply can’t make the current numbers work.”

10.30am: Budget date

Finance Secretary Kate Forbes will deliver the 2022-23 Scottish Budget and the medium term financial strategy on Thursday 9 December.

Full story here

10am: Blow for output

Scotland’s GDP is estimated to have grown by 3.4% in the three months to July, compared to the previous quarter when it grew by 4.7%, according to statistics announced today by the Chief Statistician.

The largest contribution to the fall in GDP was the 9.9% drop in the electricity and gas supply sub sector, due to unusually low levels of wind and hydro-generated electricity during the summer.

Full story here

9am: Entain offer lifts gambling stocks

Stock prices in London opened higher with the UK gambling sector rising after Entain said it was considering a takeover offer from US fantasy sports firm DraftKings (see below).

The FTSE 100 index was up 75.69 points, or 1.1%, at 7,056.67. The mid-cap FTSE 250 index was up 113.53 points, 0.5%.

Midcap gambling firms Rank Group and 888 Holdings were up 7.7% and 3.8% respectively.

7am: Entain considers revised bid

The board of Ladbrokes owner Entain will consider a higher offer from US gaming company DraftKings at 2,800p per share, valuing the company at £16.4 billion.

The offer consists of 630p in cash with the balance payable in new DraftKings Class A common shares.

The new offer, following the rejection of a 2,500p bid, represents a premium of 46.2% to Entain’s closing share price on 20 September.

The board of Entain said it will carefully consider the proposal and a further announcement will be made as and when appropriate. Shareholders are urged to take no action at this time.

7am: DeepMatter seeing momentum

DeepMatter, the Glasgow-based digital chemistry data company, reported a widening first half loss of £1.4m (H1 2020: loss £1.2m). Revenue was £0.65m (H1 2020: £0.53m).

The company said it had enjoyed increasing commercial traction including a multi-year licensing deal with Merck’s life sciences business.

CEO Mark Warne said: “We have seen positive momentum in H1 and have enhanced our position in a growing market.  We continued to resource our sales and R&D capabilities to strengthen our offering.

“On the back of a strong renewals base and our new focus on growing revenues with those customers as well as growth in users and trials, we look forward with increasing confidence to delivering on our potential and the growth we envisage for 2021 and beyond.

7am: Saga gives no guidance

Over-50s holidays group Saga swung to a small pretax profit for the first half after booking lower costs, but said it would not give an earnings guidance for the year because of continued uncertainty around the pandemic.

For the six months ended 31 July, pretax profit was £700,000 compared with a pretax loss of £55.5 million for the first half last time.

Revenue fell to £156.4m from £192.4 million in the previous corresponding period.

Saga said that earnings from its insurance division made up for the shortfall in its cruise operations during the pandemic.

The company said bookings for its next fiscal year and the year after that were already ahead of pre-pandemic levels.

Global markets

Stock prices in London were seen opening higher ahead of the US Federal Reserve’s interest rate decision and likely indications of when the central bank will begin pulling back on its stimulus policies.

IG futures pointed to the FTSE 100 index opening about 27 points higher at 7,008.20. The index closed up 77.07 points, or 1.1%, at 6,980.98 Tuesday.

The Federal Open Market Committee will announce its decision at 1900 BST, followed by a press conference with chairman Jerome Powell.

Wall Street was mostly lower, with the Dow Jones Industrial Average down 0.2% and S&P 500 down 0.1%, while the Nasdaq Composite closed up 0.2%.

Meanwhile, embattled Chinese property firm Evergrande eased investors’ nerves by agreeing a deal with domestic bondholders that should allow it to avoid default on one of its interest payments.

Financial markets have plunged in recent sessions over fears that the Chinese group could collapse, with the potential to derail the world’s second-biggest economy.

The Japanese Nikkei 225 index was down 0.5%. In China, the Shanghai Composite was up 0.2%, reopening after being closed for the Mid-Autumn festival, while markets in Hong Kong were closed for a holiday. The S&P/ASX 200 in Sydney was up 0.7%.

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