Daily Business Live

Covid returns to haunt markets | Ted Baker update


5pm: London eyes Ukraine talks

Investors remained cautious as they awaited developments from the next round of peace talks between Russia and Ukraine, being held in Turkey.

The FTSE 100 ended the session down 10.21 points (0.14%) at 7,473.14, while the domestically-focused FTSE 250 managed a gain of 0.54%.

Footfall at UK shops rose 7.8% on the week last week, according to retail specialist Springboard, with high streets, retail parks and shopping centres all welcoming more custom,  principally because of the good weather.

Travel stocks were among the top gainers, with BA owner IAG up 1.89%, budget airline Wizz Air ahead 4.04%, and travel organiser TUI 4.46% higher.

NatWest reversed earlier gains to close 0.32% weaker, after announcing the buyback of a 4.01% stake from the UK government for £1.2bn, taking the British taxpayers’ holding to below 50% for the first time since the financial crash of 2008.

Ted Baker lost 2.22% after rejecting two unsolicited non-binding proposals from private equity firm Sycamore (see below).

11am: Covid re-enters market calculation

The FTSE 100 was trading 29.5 points higher at 7,512.85.

“It almost feels like we’ve stepped back in time two years as lockdowns in China once again rock the markets,” says AJ Bell investment director Russ Mould.

“The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure.

“It was no surprise to see Asian stocks slump on the move as the region’s dominant economy is once again threatened by the sceptre of Covid-19.

“The FTSE 100 is preferring to focus on renewed peace talks between Russia and Ukraine, amid hopes there can at least be a move towards an end in the fighting.

“Elsewhere, Natwest is finally free of state control after well over a decade as the UK Government reduced its stake below 50%, though any champagne might have to be put on ice given the challenges facing the bank from the cost-of-living crisis and the risks of mounting bad debts.

“At least the company is having a happier Monday than its rival Barclays. The £450 million hit it announced after issuing too many financial instruments makes this a very expensive mistake and one which will both hit the company’s credibility and frustrate shareholders looking forward to a now delayed share buyback.”

7am: Heineken leaves Russia

Brewer Heineken said it is leaving Russia following its invasion of Ukraine.

“We are shocked and deeply saddened to watch the war in Ukraine continue to unfold and intensify,” it said in a statement.

Full story here

7am: Taxpayers’ stake in NatWest (RBS) falls

The taxpayers’ stake in NatWest (RBS) has fallen below 50% following an off-market buyback of 549,851,147 ordinary shares from the Treasury.

The transaction of 4.,91% of the company’s share capital, at a price of 220.5 pence per share, raised £1.2 billion for the Treasury which now holds 48.06% of NatWest.

Full story here

7am: Ted Baker confirms two offers

The board of Ted Baker said it noted the recent press speculation and confirms that it has received two unsolicited non-binding proposals from Sycamore Partners Management in relation to a possible cash offer for the company.

The first was received on 18 March worth 130 pence followed on 22 March by a revised offer of 137.5 pence.

The board of Ted Baker and its advisers concluded the two offers significantly undervalued Ted Baker and failed to compensate shareholders for the significant upside that can be delivered by Ted Baker as a listed company.

It believes actions taken over the last two years have put the business on a firm footing and it is now well on the way to recovery following a turbulent period. The board is focused on delivering value for Ted Baker’s shareholders well in excess of the price offered by Sycamore.

Shareholders are urged to take no action at this time.

Global markets

Oil prices fell more than $3 on Monday as fears over weaker fuel demand in China grew after its Shanghai financial hub was forced into a two-stage lockdown to contain a surge in COVID-19 infections.

The health alert, on top of the ongoing war between Ukraine and Russia, added to uncertainty at the start of the trading week.

Brent crude futures slid as low as $116 a barrel and were trading down $3.09, or 2.6%, at $117.56 at 0340 GMT.

US West Texas Intermediate (WTI) crude futures hit a low of $109.30 a barrel, and were down $3.28, or 2.9%, at $110.62.

However, the oil market is expected to turn bullish when the Organisation of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, meet on Thursday, as the group was “less likely to raise oil output at a faster pace than in recent months”.

OPEC+ has so far resisted calls from major consuming nations to step up an output boost. The group has been raising output by 400,000 barrels per day (bpd) each month since August to unwind cuts made when the COVID-19 pandemic hit demand.

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