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Borrowing surges | Musk to step down | Bunzl | Ferrexpo


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3pm: Cineworld slumps

Cineworld Group saw its shares slump 8% after US cinema chain AMC Entertainment Holdings said it was no longer in talks to acquire some cinemas owned by the group.

AMC said it had held initial talks with lenders which were focused on the acquisition of certain assets of Cineworld in the US and Europe.

“A definitive agreement with the lenders has not been reached regarding the terms of any proposal to be presented to the debtors in the Cineworld cases, and at this time negotiations are not continuing,” AMC added in a regulatory filing.

US stocks opened in the green as earnings from Nike and FedEx were well-received by investors.

The Guardian said it has been hit by a serious IT incident, which is believed to be a ransomware attack.

The incident began late on Tuesday night and has affected parts of the company’s technology infrastructure, with staff told to work from home.

There has also been some disruption to behind-the-scenes services although online publishing is largely unaffected, with stories continuing to be written and published to the Guardian website and app.

The company said it was confident it could still produce Thursday’s print newspaper.

9.30am: London higher

JD Sports Fashion leapt to the top of the FTSE 100 on a positive read-across from Nike’s second-quarter numbers, which saw shares in the US sportswear firm surge in after-hours trading.

Metals producer Ferrexpo gained after saying it was now receiving sufficient levels of power to bring one iron ore pelletiser line in central Ukraine back into operation, allowing it to meet the requirements of existing customer contracts.

Packaging specialist Bunzl was weaker, despite saying that full-year revenues were set to jump on the back of high inflation and acquisitions (see below).

The FTSE 100 was trading 38 points higher at 7,408.41.

7am: Borrowing surges

Public sector borrowing rose sharply higher to £22 billion in November, up £13.9bn on the same month last year and marking the highest November figure since monthly records began in 1993. Economists were expecting a borrowing figure of £13bn.

Figures released by the Office for National Statistics showed that borrowing was fattened by the government’s energy and cost of living interventions, the decision to reverse April’s National Insurance hike, and high inflation.

The Energy Bills Support Scheme cost the government £1.9bn in November, while the Energy Price Guarantee was the main driver of a £4.7bn year-over-year rise in subsidies. In addition, social assistance payments were £3.3bn higher than a year ago, reflecting the payment of the second cost of living grants to working-age benefit recipients.

Chancellor Jeremy Hunt said: “Faced with the twin global emergencies of a pandemic and Putin’s war in Ukraine, we have taken significant action to support millions of businesses and families here in the UK.

“We have a clear plan to help halve inflation next year, but that requires some tough decisions to put our public finances back on a sustainable footing.”

7am: Bunzl

Fresh from announcing the sale of is healthcare division, packaging and materials specialist Bunzl  said its operating margins in 2022 will be slightly ahead of previous guidance and in line with 2021 while revenues are expected to rise by 17% at actual exchange rates.

In a trading statement it forecast revenue in 2023 would be slightly higher than in 2022, driven by both organic growth and acquisitions.

The company said it expects adjusted operating profit in 2023 to be resilient, with operating margin slightly higher than historical levels although adjusted EPS is expected to be moderately lower year-on-year due to higher interest rates and an increased effective tax rate.

Bunzl CEO Frank van Zanten, said: “We have committed more than £280m of spend to acquisitions over the year, with our pipeline remaining active and supported by our strong balance sheet.”

7am: Scotgold

Gold mining company Scotgold Resources is targeting significant expansion with plans to open further mines across Scotland. Full story here

7am: Ferrexpo

Ferrexpo said it was now receiving sufficient levels of power to bring one iron ore pelletiser line in central Ukraine back into operation, allowing it to meet the requirements of existing customer contracts.

Global markets – Musk to step down

Elon Musk has confirmed he will step down as chief executive of Twitter, as soon as he finds someone “foolish enough to take the job”.

More than 57% of users who voted in a Twitter poll Mr Musk posted on Sunday night said he should step down and Mr Musk said he would abide by the result.

He went on to question the result, but confirmed in a tweet early on Wednesday morning that he would relinquish his role as head of the social media platform once he finds a successor.

He wrote: “I will resign as CEO as soon as I find someone foolish enough to take the job!

Wall Street ended higher on Tuesday, with the Dow Jones Industrial Average up 0.3%, the S&P 500 up 0.1% and the Nasdaq Composite marginally higher.

In Japan, the Nikkei 225 index in Tokyo closed down 0.7%, extending Tuesday’s losses after the shock move from the Bank of Japan to widen the range for 10-year government bond yields.

In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney closed up 1.3%.

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