Market report

HSBC profits surge | James Fisher seeks divestments


5pm: Oil prices lift market

Rising oil prices lifted London’s blue-chip FTSE 100 index which closed 18.27 points higher at 7,222.82. 

Brent crude rose to $86.57 a barrel from $84.77 on Friday. 

Shares in BP closed up 1.6% and Royal Dutch Shell ‘A’ and ‘B’ shares advanced 1.5% and 1.2% respectively. Mid-cap oil and gas company Harbour Energy rallied 5.2%, topping the FTSE 250 index.

Banking giant HSBC was also a gainer, with shares closing up 1.9% after it reported a sharp rise in profit in the third quarter.

9.30am: Market rises

The FTSE 100 started a new week in robust fashion despite a lukewarm reaction to better-than-expected results from index heavyweight HSBC, said AJ Bell investment director Russ Mould.

“The mining sector is doing the heavy lifting, as it did at the end of last week,” she said. “The coming days look busy as more of the UK’s big companies report on third quarter trading and Chancellor Rishi Sunak delivers his latest Budget.”

The FTSE 100 was up 37.43 points at 7,241.98.

6am: HSBC sees loan fears recede


HSBC announced a $2 billion share buyback after posting a 74% surge in third quarter profit.

The Asia-focused bank noted that the outlook for pandemic-related bad loans had receded.

However, it said its cost projections for 2022 had increased slightly to $32bn from $31bn, due to the pressures of inflation.

Chief executive Neil Quinn said: “We had a good third-quarter performance, with strong growth in profits supported by additional credit provision releases.

“Our strategy remains on track, with good delivery in all areas. This was reflected in more consistent top-line growth, robust lending pipelines across our businesses, and rising trade and mortgage balances.

“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us. This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2bn, which we expect to commence shortly.”

HSBC shares were up 0.1% in Hong Kong.

7am: James Fisher hit

Marine services company James Fisher said it has launched a detailed review of its cost base and balance sheet and is continuing to advance “at pace” the divestment of non-core businesses and assets aimed at generating significant proceeds over the next year, to reduce net debt and financial leverage as well as to simplify the business.

The company said it is no longer forecasting a resolution this year to negotiations over c.£2m due on a long-term project.

Customers of the group’s Marine Contracting, Decommissioning and Nuclear businesses have further delayed projects in recent weeks.

The projects were previously expected to commence, and in some cases finish, in 2021. The continuing challenges presented by the global pandemic, particularly in the safe mobilisation of teams to work sites, have influenced customer decision-making processes.

A recent deterioration in the condition of a financially distressed customer has increased bad debt risk by c.£2m.

Year to date revenue is 3.9% below prior year and the board now anticipates underlying operating profit for the full year, before separately disclosed items, to be in the range of £27m – £32m.

6am: Accountant raises funds

Private equity firm August Equity has invested in Scottish accountancy and business services group Anderson Anderson & Brown.

Full story here

Global markets

Facebook will deliver its earnings report tonight, while tech rivals Microsoft, Google owner Alphabet and Apple report later in the week.

Stocks in the Asia-Pacific region were mostly higher even as China’s latest COVID-19 outbreak seems increasingly likely to spread further.

China’s Shanghai Composite gained 0.29% and Hong Kong’s Hang Seng index rose 0.08%

In Japan, the Nikkei 225 fell 0.88% while South Korea’s Kospi lifted 0.26%.

Brent crude oil futures increased 71 cents, or 0.8%, to $86.24 a barrel, following on from last Friday’s 1.1% gain. The contract earlier hit its highest since October 2018 of $86.43.

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.