Market report

French Connection sold | Scotgold | Fanduel CEO | Petrofac fine


5pm: London falls at close

London’s FTSE 100 index were poised to close higher until falling back in late trade as weakness in financial and travel-linked stocks offset a bounce in energy.

The blue-chip FTSE 100 index ended 16.06 points of 0.23% lower at 7,011.01, extending losses for the third straight session.

Sainsbury’s rose 3.3% on hopes that SoftBank’s Fortress Investment could turn its attention to the company after losing the bidding war for Morrisons.

BP and Royal Dutch Shell were up 2.1% and 2.2% respectively, tracking a jump in crude prices. 

On AIM, the direct to consumer ready meal service Parsley Box edged up a few pence to close at 39p, but giving the company a market cap of just £22.25m following a wretched few days.

See Comment: Investors lose appetite for Parsley Box

4pm: Petrofac fined after admitting bribery


Petrofac has been ordered to pay £77 million after admitting it failed to prevent former executives from paying bribes to win contracts in the Middle East.

The Aberdeen-based energy services firm pleaded guilty on Friday to seven counts involving £32m in bribes between 2011 and 2017. 

The bribes helped Petrofac secure £2.7 billion of contracts in Iraq, Saudi Arabia and the United Arab Emirates.

The penalty followed an investigation by the Serious Fraud Office (SFO) and includes a £47m fine as well as a £22m confiscation order. The company has also been ordered to pay £7m in legal costs.

Judge Deborah Taylor, sitting at Southwark Crown Court, ssaid the corruption had been “systemic, serious and grave” but took into account Petrofac’s co-operation and its precarious financial situation having required state-backed support during the pandemic.

The penalty was significantly lower than had been feared and does not bar the company from bidding for public contracts.

Lisa Osofsky, director at the SFO, said: “By pleading guilty, Petrofac Limited has accepted that senior executives within the Petrofac Group acted deliberately and without conscience in the pursuit of greed.

“The company’s failure to prevent this conduct distorted competitive market conditions and tainted the oil and gas industry.

“Today’s result should serve as a warning; the SFO will use all the powers at its disposal to root out and prosecute companies and individuals, whose criminal activity detrimentally affects the reputation and integrity of the United Kingdom.

“The SFO welcomes Petrofac Limited taking responsibility for its conduct.”

2.15pm: New gas supplier

Ofgem has appointed E.ON Next to take on supplying ENSTROGA, Igloo Energy and Symbio Energy’s combined total of approximately 233,000 domestic customers. This follows a competitive process run by Ofgem to get the best deal possible for customers.

10am: London lacks direction

London stocks were looking for direction as markets awaited developments on the future of Chinese property company Evergrande whose shares were suspended pending an announcement on a “major transaction.

On a positive note, fully vaccinated residents and unvaccinated under 18s from more than 50 countries and territories can now enter the UK without needing to complete a pre-departure lateral flow test or self-isolate at home.

British Airways parent International Consolidated Airlines rose 2.1%, while jet engine maker Rolls-Royce rallied 1.7%.

Ryanair rose 2.4%, after revealing traffic more than doubled to 10.6 million in September from 5.2 million a year ago.

The FTSE 100 dipped at the open but edged into positive territory in mid-morning trade, up 6 points at 7,033.

9.45am: French Connection sold

Fashion chain French Connection has been sold to a consortium including its second-largest shareholder in a deal valuing it at £29m.

The company said it had accepted a 30p-per-share offer from UK-based apparel industry entrepreneurs Apinder Singh Ghura and Amarjit Singh Grewal, as well as holding company KJR Brothers.

The offer represented a 30% premium to the share price when news of the bid was first revealed last month.

French Connection said Stephen Marks, who founded the company 49 years ago and remains its top shareholder with a 41.5% stake, would retire from his role as chairman once the sale was completed.

7am: Scotgold – Cononish on course


Gold mining company Scotgold said it is on the “correct growth trajectory” after reporting a second consecutive month where production revenues exceeded operational costs.

It said there was a 24% increase in gold concentrate produced at the Cononish mine in the Trossachs over the previous month.

Phil Day, chief executive, said: “The operational turnaround at Cononish continues to gain pace and we are really encouraged by the performance of the mine and the overall improvement in our production profile. 

“Importantly, September marked our second month where production revenues exceeded operational costs and we are confident that we are now on the correct growth trajectory to realise the full potential of Cononish.”

7am: New Fanduel CEO

Gambling group Flutter has confirmed Amy Howe as CEO of FanDuel, the fantasy sports business that originated in Edinburgh.

Ms Howe joined FanDuel in February 2021 as president with responsibility for leading the company’s core commercial functions across its sportsbook, casino, racing, and daily fantasy businesses. She was appointed Interim CEO in July.

Prior to joining FanDuel, Ms Howe was global chief operating officer of Ticketmaster, the largest division of Live Nation Entertainment. During her tenure, she led the transformation and modernisation of the company’s ticketing platform, doubling its growth in gross ticketing value and growing its mobile app customer base by 400%.

Prior to Live Nation Entertainment, Amy was a Partner at McKinsey & Company.

7am: AMTE Australia JV

AMTE Power, the Thurso-based developer and manufacturer of lithium-ion and sodium-ion battery cells, has confirmed an earlier announced plan to build a 200,000 battery cell micro production line, a forerunner to a gigafactory, in Western Australia.

It has signed a joint venture agreement with InfraNomics Technologies to operate through Bardan Cells in Kwinana.

Kevin Brundish, chief executive of AMTE Power, said: “Bardan is attractive as a further test platform for our technologies and will be particularly useful additional experience and proof to investors and customers of our capabilities as we pursue the development of our UK based Gigafactory.”

Global markets – Evergrande woes mount

Blue chips were expected to dip below 7,000 as the markets prepare for a fall-out from the suspension of shares in Chinese property group Evergrande. This sent Hong Kong’s Hang Seng index 2% lower.

Jeffrey Halley, Asia-Pacific analyst at OANDA, explained: “Evergrande has a $260m offshore note maturing today, which only has a five-day grace period, and if no sign of payment occurs, the negative noise around the company and China’s property market will increase once again.

“There still remains very little visibility from the Chinese Government over Evergrande’s fate, although a slow and steady dismantling of the company appears to be the favoured course right now.”

Kazutaka Kubo, senior economist at Okasan Securities, said: “The biggest problem is not a default by Evergrande but the environment that has led to its downfall. Authorities are regulating housing loans and lending to property firms. Markets are looking for a next Evergrande already.

“There is rising risk Evergrande’s woes will spread to the entire Chinese property sector.”

Hong Kong led the decline with a 1.9% fall in the Hang Seng index. Japan’s Nikkei erased earlier gains and was 1.4% lower at one-month lows.

Elsewhere in Asia, share trading was limited because of public holidays in mainland China, Korea and parts of Australia.

Crude prices were largely unmoved ahead of a meeting today of oil producing nations in OPEC-plus on expectations they will raise supply in a steady manner.

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