Market update

Stagecoach and Nat Express talks extended | fall in jobless


5pm: Market lower ahead of inflation update

Danni Hewson, AJ Bell financial analyst, said today’s good jobs figures tend to restart the rate hike merry-go-round.

“It’s one of the reasons London markets have had a pretty gloomy day despite positive outlooks from a number of market movers including Vodafone, Land Securities and noodle specialist the Restaurant Group.

‘Their brand of optimism just couldn’t quite cut through and it seems the investment roller coaster isn’t over for Cineworld which found itself back at the bottom of FTSE 250 losers, the Bond effect clearly licensed for just a couple of days. 

“Is a rate rise a done deal for December? Not necessarily but an inflation update out tomorrow will lend more clarity, though it might seem prudent for the Bank of England to allow any Christmas effect to leach away before hitting the big red button.”

The FTSE 100 closed 24.89 points lower at 7,326.97.

7.15am: LV= rejects Royal London approach

LV= said it has seen the revised proposal from Royal London but will continue to recommend the takeover offer from Bain Capital.

The two offers were considered from 12 it received and the board concluded that Bain Capital offered the best outcome for LV= members.

In a statement responding to Royal London’s revised offer, the board said it “confirms that an e-mail was received from Royal London last week, being almost a full year after our transaction with Bain Capital was announced.

Full story here

7.10am: Jobless rate falls

The UK unemployment rate fell 0.5 percentage points to 4.3% between July and September and in Scotland to 4.1%.

The number of people in work rose to 75.4% driven by a record high net flow from unemployment to employment.

Scotland’s estimated employment rate rose over the quarter to 74.8%.

Total job-to-job moves also increased to a record high, largely driven by resignations rather than dismissals, during the July to September 2021 period.

The rise is also driven by an increase in part-time work and an increase in the number of people on zero-hour contracts, driven by young people

7am: Stagecoach-National Express talks


Stagecoach and National Express have been granted an extension until 14 December to thrash out a possible merger.

The two transport groups announced on 21 September that they were in talks about an all-share deal and on 18 October National Express was given a deadline of today to declare its intention to make an offer

In a statement, the companies said: “Reciprocal due diligence is now at an advanced stage and constructive discussions between Stagecoach and National Express are ongoing.

“The boards of Stagecoach and National Express continue to believe that the potential combination would be a strategically compelling proposition delivering strong value creation for both sets of shareholders.”

7am: Craneware update

Edinburgh-based software company Craneware said it is trading in line with management’s expectations and that its integration of Sentry Data Systems is progressing ahead of plan.

In an update ahead of its AGM it said sales activity is high, with initial cross-sale opportunities emerging, as anticipated, across the two customer sets alongside new customer opportunities.

The acquisition of Sentry has significantly increased Craneware’s scale and opportunity, expanding the Group’s pharmacy offerings, customer base and valuable data sets, as well as increasing total revenue visibility for the next three years to approximately half a billion dollars.

“With a strong balance sheet, high levels of visible revenue and strong customer retention rates, Craneware has a strong financial foundation from which to accelerate growth and to fulfil its potential, thereby increasing shareholder value. The Board is confident in the continued strong performance of the business.”

7am: Vodafone

Total revenue at telecoms firm Vodafone for the half year increased by 5% to €22.5 billion (FY21 H1: €21.4 billion), driven by service revenue growth in Europe and Africa and a recovery in handset sales following COVID-19 disruption in the prior year, as well as favourable foreign exchange movements.

Adjusted EBITDA increased by 6.5% to €7.6bn (FY21 H1: €7.0 billion) due to revenue growth and a legal settlement in Italy.

It declared an interim dividend per share of 4.5 eurocents.

Global markets

Asian shares were mostly higher as investors kept a close eye on a key meeting between US President Joe Biden and Chinese leader Xi Jinping.

President Biden also signed into law a $1 trillion infrastructure bill at a White House ceremony.

Markets in Asia also responded to China’s better than expected economic data, released Monday, and the situation in the mainland property market.

China’s Shanghai Composite fell 0.30% while Hong Kong’s Hang Seng index surged 1.20%

In Japan, the Nikkei 225 gained 0.11% but South Korea’s Kospi dipped 0.08%.

Wall Street closed little changed as rising Treasury yields dented appetite for technology stocks but boosted interest in financials.

European Central Bank President Christine Lagarde on Monday, pushed back on market bets for tighter monetary policy saying doing so now to rein in inflation could choke off the euro zone’s recovery.

This sent the euro lower to near a 16-month low at $1.354. The pound was $1.3359 near a year low.

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