FTSE 100 flat; Scotland orders closures for pubs and restaurants

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  • FTSE 100 index flat
  • Scotland orders closures for pubs and restaurants
  • Roche supply issues hit UK COVID-19 testing

3.45pm: FTSE is flat

The Footsie took a rest from the yo-yoing and stayed flat at 5,949 before close.

Scotland has announced all pubs and restaurant located in the central belt will have to be closed from October 9 to 25.

Takeaways will be permitted while cafes not holding an alcohol licence will be able to stay open until 6pm.

There will not be a travel ban as previously rumoured.

Meanwhile, pub chain Greene King announced 800 job cuts and the permanent closure of a third of its venues following the new restrictions and the 10pm curfew rule.

“The continued tightening of the trading restrictions for pubs, which may last another six months, along with the changes to government support was always going to make it a challenge to reopen some of our pub,” the publican told the BBC.

Hospitality stocks were under pressure, with Wagamama owner Restaurant Group PLC (LON:RTN) down 3% to 55.3p and J D Wetherspoon plc (LON:JDW) trading 2% lower at 884.5p.

3.35pm: Proactive North America headlines:

Great Bear Resources Ltd (CVE:GBR) (OTCQX:GTBAF) adds more high-grade gold intercepts from LP Fault zone on flagship Dixie project

Heritage Cannabis Corp (CSE:CANN) (OTCQX:HERTF) says its products available for purchase on Patient Choice online platform

Phunware Inc (NASDAQ:PHUN) completes two contracts with Honeywell for developing a mobile integrated Smart Workplace solution

CleanSpark Inc (NASDAQ:CLSK) prices $40M public offering at $9 a share

Binovi Technologies Corp (CVE:VISN) (OTCMKTS:BVNIF) brings in C$1.7M as it closes private placing

Mawson Gold Ltd (TSE:MAW) (OTCPINK:MWSNF) hits good gold grades from surface with first hole at Sunday Creek in Victoria goldfields

Nabis Holdings Inc (CSE:NAB) (OTCMKTS:NABIF) (FRA:A2PL) announces management changes

Todos Medical Ltd (OTCQB:TOMDF) strikes COVID-19 testing supply deal with Integrated Health which operates MOTO+PARA’s Mobile Labs

Exro Technologies Inc (CVE:EXRO) (OTCQB:EXROF), says third-party testing proves its patented Coil Driver technology dramatically improves electric bike performance

Duos Technologies Group Inc (NASDAQ:DUOT) says operating subsidiary wins new inspection contract from existing customer CN

1.45pm: US stocks higher at open

US stocks surged at the open in New York for the mid-week session, with all three benchmarks gaining over 1%.

The Dow Jones Industrial Average surged over 333 to 28,106 having closed Tuesday over 375 points lower. The S&P 500 added 41 points at 3,401. The Nasdaq index advanced over 145 at 11,300 as US politics continues to take centre stage.

Yesterday, President Trump called for talks on a stimulus package to help the economy amid the coronavirus crisis to be halted until after the November 3 US election, sending stocks spiraling.

But hours later, he appeared to row back on the move as he called for aid to airlines and other fiscal measures. The President also later tweeted that he would be willing to pass several independent stimulus measures.

Also in investor sights today, European Central Bank President Christine Lagarde will make an early afternoon speech, while the US will get the minutes of the latest Federal Reserve meeting.

Connor Campbell, analyst at Spreadex said the Dow Jones was “looking to bounce back” this afternoon.

“That might be because, regardless of who wins the election, some form of stimulus should ostensibly be on its way in November,” he suggested.

1.50pm: UK COVID-19 testing system faces another struggle

FTSE 100 had a green stint in the early afternoon, adding 3 points to 5,953.

The COVID-19 testing system, which has already been under pressure amid a surge in cases and technical blunders, was hit by issues in Roche’s supply chain.

The Swiss pharma giant said the dispatch of new products was delayed due to problems at a warehouse, leading to “a very significant drop in our processing capacity” that could not be immediately resolved, Reuters reported.

In a letter to UK customers, Roche stressed the situation would improve over the next days.

However, the current shortage means the UK will be choked with tests to identify the rising number of infections.

12.30pm: Wall Street to rebound after stimulus stall

FTSE 100 was red again at lunchtime, dipping 6 points to 5,947.

US stocks are expected to rebound in early trade on Wednesday, as initial dismay at President Trump’s decision to cancel fiscal stimulus negotiations with US lawmakers was replaced by optimism about an aid package after the elections.

Futures for the Dow Jones Industrial Average were 150 points higher, while S&P 500 and Nasdaq 100 futures were up 0.4% each.

On Tuesday, the Dow tumbled 365 points, while the S&P 500 fell 1.4% and the Nasdaq Composite dropped 1.6% after Trump announced he would pause stimulus talks.

Trump broke off talks with Democrats in a tweet, saying that negotiations will stop until after the November 3 election, when he promised a major stimulus bill if he wins.

However, in a later tweet Trump said he would consider limited stimulus measures.

The President’s tweets came shortly after Federal Reserve chair Jerome Powell reiterated warnings about the economic recovery, saying that the US economy could slip into a downward spiral if the coronavirus is not controlled and growth sustained.

Minutes from the Fed’s September meeting will be published at 6pm London time on Wednesday.

“The reason for US stock futures trading higher is because investors know that whoever will win the US presidential election, another stimulus package is more likely to happen,” said Naeem Aslam, chief market analyst at AvaTrade.

A poll on Monday showed Democrat Joe Biden with his widest lead over incumbent Trump in a month, as a majority of Americans said Trump could have avoided the coronavirus infection which hospitalised him at the weekend.

11.45am: Frasers Group proposes cash, share reward for workers

FTSE 100 tentatively entered the green but sentiment remains weak after the halt to coronavirus relief package negotiations.

London’s leading index was up 2 points to 5,952 before lunch.

In the FTSE 250, Frasers Group PLC (LON:FRAS) unveiled a GBP100mln bonus scheme for its workers ahead of an annual meeting where boss Mike Ashley’s re-election has been opposed by a major shareholder advisory group.

Pirc, which advises institutional investors about governance matters, said shareholders should vote against Ashley and chair David Daly after workers at the group’s Sports Direct chain had been asked to work while furloughed during the coronavirus lockdown.

In a countering move, Frasers, which also runs House of Fraser and Flannels, has created a company bonus scheme that it said “could be worth in excess of GBP100mln”.

Independent retail analyst Nick Bubb said: “It is unclear why the hapless Frasers has not provided details of this scheme before or whether the result of the vote is in doubt, assuming most big shareholders will have already voted by proxy.”

Open to “the vast majority of workers”, the retailer’s bonus scheme is split into two sub-plans, where either cash bonuses or share awards can be received.

For the share award scheme, the Frasers share price will need to rise above GBP10 for 30 consecutive trading days during the next four years, though the shares closed overnight at 360.8p and have been below GBP4 for most of the past five years.

10.45am: Scotland to announce further restrictions

FTSE 100 was just below the flatline in late morning, down 3 points to 5,946.

“This continued stimulus standoff highlights the importance of seeing one party take both sides of congress, with Jerome Powell warning that the recovery could falter if another stimulus package is not passed. Nevertheless, stocks have managed to recover much of that initial decline,” said Joshua Mahony, analyst at IG.

“With Trump apparently showing few symptoms despite his coronavirus diagnosis, the sharp risk-off move seen at the end of last week appear to be behind us for now.”

Scotland’s first minister Nicola Sturgeon is due to announce further restrictions to curb the rising cases of coronavirus this afternoon.

Sturgeon previously insisted new rules would not mean another full lockdown as seen in March.

However, rumour has it there may be new travel restrictions and even temporary closures of two weeks of hospitality venues.

On Tuesday, the UK recorded 14,542 new cases, up by 2,000 from Monday’s numbers.

9.55am: Footsie turns red

FTSE 100 turned red in mid-morning, slipping 10 points to 5,939.

London’s leading index had a brief stint in the green earlier on Wednesday but succumbed to the general market malaise as Donald Trump delayed the stimulus until after the elections.

According to the latest reading, UK average house prices increased by 2.3% over the year to July 2020, down from 2.9% in June.

They increased 2.5% in England to GBP255,000, 3.6% in Wales to GBP170,000, 0.4% in Scotland to GBP155,000 and 3% in Northern Ireland to GBP141,000.

The Treasury made changes to the stap duty and other taxes in July so these figures don’t reflect the effect of the new measures, the Office for National Statistics noted.

The UK has seen a general house price growth slowdown in the past three years, however pent-up demand following lockdown helped lifting the trend.

8.50am: Small gain for Footsie

The FTSE 100 made a lacklustre start to proceedings on Wednesday though it managed to nudge into positive territory – quite a feat given the bloodletting after hours on Wall Street.

The UK blue-chip index was just 5 points higher at 5,955.43.

The Dow Jones Industrials Average shed 375 points on Tuesday after President Trump called time on cross-party negotiations over a US$2.2bn stimulus package, saying he would implement the bail-out after November’s election (provided he is returned to power).

After a 22% rise amid hopes Britain will soon bring in coronavirus testing at airports, jet engine maker Rolls Royce (LON:RR.) continued its ascent with an early 7% jump.

Also on the up was Tesco (LON:TSCO), rising 2% after its interims received the market’s seal of approval.

But not everyone was impressed. Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, the funds supermarket, said: ”Even though Tesco collected the clicks on a huge scale during the pandemic as it ramped up its delivery service, the six months to the end of August were far from a supermarket sweep for the grocer.”

“Covid costs have eaten into rising grocery sales and losses at Tesco bank have led to a 15.6% fall in core profit,” she added.

Proactive news headlines:

Gaming Realms PLC (LON:GMR) has inked a licensing agreement with NetEnt, a premium online gaming group, to gain access to new gaming IP. It sees the AIM-quoted group add the right to licence NetEnt’s acclaimed slot brand, Starburst, so that it can be combined with its Slingo genre of games. Slingo Starburst will be available worldwide and will be distributed to the online real money gaming (RMG) market in early 2021.

Polarean Imaging PLC (LON:POLX) said it has submitted a New Drug Application (NDA) and a priority review request to the US Food and Drug Administration (FDA) for hyperpolarised Xenon gas used to evaluate pulmonary function and to visualise the lung using magnetic resonance imaging (MRI). The medical imaging technology company said the submission of the NDA follows the successful completion of two Phase III clinical trials which demonstrated effective measurement of regional lung ventilation.

Belvoir Group PLC (LON:BLV), the UK’s largest property franchise, said it has successfully completed the 100th transaction under its Assisted Acquisitions programme, a core part of the group’s growth strategy. Since establishing the Assisted Acquisitions programme at the end of 2013, Belvoir noted that it has now supported 100 acquisitions by its franchisees, with a total deal value of GBP25mln, boosting franchisee network revenue by GBP24mln. The 100th transaction was undertaken by the new Northwood Wolverhampton franchisee, Mahomed Imtayas, who has acquired Millenium Properties (Letting Agents) Limited which had a portfolio of 250 managed properties. Mahomed joined the Northwood network in September having previously operated and sold a successful franchise business.

Vast Resources PLC (LON:VAST) has confirmed that production has recommenced at its Baita Plai polymetallic mine in Romania and that it is on track to meet it’s October production and sales targets. The AIM-listed mining company said that following the recommencement of mining, daily blasting has been implemented on the mineralised horizon of the Antonio skarn between 17 level and 18 level. It added that the blasted ore is stored underground in both the working place silos and the surface silos. Transport of the ore from the surface silos to the flotation plant silos has commenced in preparation for the hot commissioning of the flotation plant expected to follow shortly, the group said.

Caledonia Mining Corporation PLC (LON:CMCL) has said that, since raising the required funds to invest in the construction of a solar power plant to supply electricity to the Blanket Mine in Zimbabwe, it has now appointed Voltalia as the contractor for the project. Voltalia is an international renewable energy provider and is listed on the regulated market of Euronext Paris which has considerable experience in the delivery of renewable energy projects including the development, construction, operation and maintenance of solar power plants. It is already active notably in Burundi, Malawi and South Africa.

Shanta Gold Ltd (LON:SHG) said it has started construction of the Singida Gold Mining Project in central Tanzania with updated project economics. The reserve-based mine plan gives a post-tax net present value (NPV) at 8% of US$73mln, an increase of US$25mln since the previously published estimate of US$31mln in December 2018. The internal rate of return (IRR) will be 59% at US$1,900 per ounce at the approximate current gold spot price, the company said, for an average annual life of mine gold production of 32,000 ounces at an all-in sustaining cost (AISC) of US$869 per ounce. It will increase Shanta’s group production to 110,000 ounces in the first full year of operation and have average annual underlying earnings (EBITDA) of US$27mln.

Impax Asset Management Group PLC (LON:IPX) revealed it has enjoyed a strong finish to its financial year, with positive inflows lifting assets under management (AUM) to a record GBP20.2bn as at the end of September 2020. AUM for the sustainability-focused investment group was up 11.4% over the quarter since what was a strong third quarter and 34% on a year earlier, helped by GBP0.6bn of fund inflows.

Kromek Group PLC (LON:KMK) has said its business patterns are now returning to normal and detector shipments are being scheduled following the coronavirus (COVID-19) pandemic lockdown. Reporting full-year results, the supplier of detection technology for the medical, security screening and nuclear markets said two key customers whose material contracts were postponed from the previous year have now issued instructions to recommence. Kromek said there is increased visibility from customers as evidenced by its largest customer in the medical imaging segment providing the group with their plans for the full fiscal year, while demand for the D3S family of products continues to increase and there is renewed procurement activities in the US, Asia and Europe.

Argo Blockchain PLC (LON:ARB) said it has entered into a conditional Letter of Intent (LOI) with Canadian data centre provider GPU.one to potentially acquire two data centres in Quebec. The preliminary LOI sets out the material terms and conditions on which the company would make a strategic purchase of the centres, owned and operated by GPU.one which currently house Argo’s cryptocurrency mining equipment. The data centres have a combined total of 20MW of power capacity, and if completed, the acquisition would provide the tech firm with long term stability and direct control over the facilities in which its mining machines are housed.

4D pharma plc (LON:DDD) has reported positive top-line data from the phase II trial of its live biotherapeutic for irritable bowel syndrome (IBS). And it said the results provided a “strong foundation” for the continued development of the first drug with the potential to treat both major subtypes of the condition. Researchers investigated the effect of 4D’s Blautix on both bowel habit and pain in both groups to garner what is called a composite response endpoint. They also assessed the treatment across both IBS-C (constipation-predominant) and IBS-D (diarrhoea-predominant) forms of IBS.

Nuformix PLC (LON:NFX) said it is raising GBP650,000 as it looks to develop its assets to help fight coronavirus (COVID-19). The drug re-purposing specialist is placing 23.2mln shares at 2.8p each with existing and new investors. The cash injection will help strengthen data packages around drugs it has identified for treating the effects of coronavirus.

Oriole Resources PLC (LON:ORR) has conditionally raised GBP1.576mln through a placing and share subscription with the new funds earmarked for the support of ongoing exploration activities in Cameroon. Additionally, the company will seek to raise a further GBP293,000 via the NR Private Markets platform, which is operated by Minexia and is FCA regulated via authorised representative Ragnar Capital. The monies will fund a 3,000-metre maiden drill programme at the Bibemi project, for which the drill rig is presently being mobilised. Oriole noted that early-stage work at Bibemi shows potential for new discoveries in multiple zones. A total of 463.4mln new shares will be issued at a price of 0.34p each, a discount of around 15% from the closing market price on October 6, 2020.

Galileo Resources PLC (LON:GLR) has announced the appointment of Joel Silberstein, formerly with Xtract Resources PLC, as its finance director with immediate effect. The group noted that Silberstein joined AIM-traded Xtract in mid-2013 and was appointed its finance director in February 2014. He subsequently assisted in several corporate transactions, including those surrounding the Manica gold mining operations, and has experience of working in multiple jurisdictions around the world, it added.

Zephyr Energy PLC (LON:ZPHR), the Rocky Mountain oil and gas company focused on responsible resource development, has said a new presentation is available on its website https://www.zephyrplc.com/ via the following link: https://wp-zephyr-energy-2020.s3.eu-west-2.amazonaws.com/media/2020/10/06222926/ZEPHYR-16-2-overview-final.pdf. The presentation provides a technical overview of the dual-purpose well to be spudded in connection with the company’s Paradox project, details of which were announced on October 5, 2020.

INTOSOL Holdings PLC (LON:INTO) has said it will hold it’s Annual and Special Share Holders Meeting by Proxy vote due to coronavirus (COVID-19) pandemic restrictions. The Proxy voting will close on October 29, 2020, at 5.00 pm London UK time. Management will attend via conference call by way of a board meeting at 10.00am BST on October 30, 2020, to conduct the meeting and to receive the Scrutineers Report by CIC Veritas on the results of the shareholder proxy voting. The group said the meeting results will be published on October 30, 2020.

Westminster Group PLC (LON:WSG), a leading supplier of managed services and technology-based security solutions worldwide said it has been notified by holders of Convertible Loan Notes (CLNs) that they have elected to convert CLNs to the value of GBP18,750 into 187,500 ordinary shares. This latest conversion further reduces the outstanding CLN amount to GBP1,477,000 with a corresponding reduction in interest charges.

Supermarket Income REIT PLC (LON:SUPR) said it has successfully raised GBP200mln via an oversubscribed issue of 192,307,692 new ordinary shares at 104p each. After careful consideration of the strong level of support and quality of demand from investors in the initial issue alongside its confidence in executing on the pipeline and an increase in further appropriate investment opportunities since the marketing roadshow began, the board determined to increase the size of the Initial Issue from an initial GBP150mln figure, it noted. Notwithstanding the increased size of the initial issue, investor demand exceeded the gross proceeds raised and as such a scaling back exercise was undertaken, the group said.

Adamas Fin Asia Ltd (LON:ADAM) said that further to its announcement on October 1, 2020, the company has now raised a total of GBP1,991,916 (before expenses) via the open offer and placing following the issue of 8,356,663 new shares. It noted that due to internal compliance checks from the remitting bank of one placee, GBP1,142,794 of placement monies have been delayed in transmission to the company’s bank account. Adamas said it has been provided with confirmation of the funds transfer and remains confident of receiving the outstanding funds shortly. A further announcement will be made once the amount is received and a further 4,571,177 placing shares are issued, the group added.

6.50am: Lacklustre start predicted

The FTSE 100 index is expected to slip back in early trade on Wednesday, erasing Tuesday’s modest gains following mixed performances overnight on Wall Street and in Asia, with all eyes in London on half-year numbers from Tesco PLC (LON:TSCO).

Spread betting firm CMC Markets expects the blue-chip index to open around 12 points lower at 5,937, having added 7 points on Tuesday ending at 5,949.94.

Overnight in New York, the Dow Jones Industrials Average went into reverse again, dropping 375 points, or 1.3% to end at 27,772 after President Donald Trump, newly returned from hospital after a bout of the disease, ended negotiations with Congress over a large coronavirus support package bill. Meanwhile, the broader S&P 500 index shed 1.4%, and the tech-laden Nasdaq Composite fell 1.6%.

Asian markets were mixed on Wednesday, with Japan’s Nikkei 225 index down 0.2% but Hong Kong’s Hang Seng index up 0.5%. Investors in Asia seemed less rattled, holding a view that a US stimulus package would be delayed rather than derailed.

“There are a couple of ways we still get stimulus, but none of them occur before the election now,” said ING’s chief economist in Asia, Rob Carnell, since both US presidential election contenders are promising it.

“One way or another we’re going to get some stimulus, it’s just we’re not going to get it now – so we’ll tread water for a bit.”

US Federal Reserve Chair Jerome Powell warned of the risks if authorities did too little to support the economic rebound in a virtual speech on Tuesday.

“The risks of overdoing it seem, for now, to be smaller,” Powell said. “Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”

The main macro focus on Wednesday will be on minutes from the last Federal Reserve Open Market Committee meeting, due after London’s close.

On currency markets, sterling remained subdued with official UK house price data due for release today.

Tesco provides corporate focus

The UK corporate diary is fairly scant on Wednesday aside from the one huge set of results due from supermarket giant Tesco.

The FTSE 100-listed retail giant’s new chief executive Ken Murphy will oversee the half-year results just days after taking over at one of the most prominent names in the UK corporate world, although he at least has had a fairly steady tiller handed to him by his predecessor Dave Lewis.

The key focus for the market will be Tesco’s outlook statement and any hints of a strategic shift from Murphy, plus confirmation that the sales of its Asia businesses and a resulting GBP5bn special dividend for shareholders remain on track.

Guidance for the full year is likely to remain for flat UK retail profits, reflecting the uncertainty of coronavirus (COVID-19) effects, analysts at Berenberg said.

For the second quarter, analysts at UBS forecast 6.3% growth in UK retail like-for-like sales, excluding fuel and the Booker wholesale arm.

For the first half as a whole, UBS has pencilled in group revenue of GBP28.6bn and underlying profit (EBIT) of GBP898mln, held back by a GBP245mln loss from Tesco bank.

Around the Markets:

  • Sterling: US$1.2887, down 0.1%
  • Gold: US$1,879.70 an ounce, down 0.1%
  • Brent crude: US$41.02 a barrel, down 0.15%

6.45am: Early Markets – Asia / Australia

Asia-Pacific markets were mixed on Wednesday after US President Donald Trump called off stimulus negotiations until after the November election.

The S&P/ASX 200 in Australia led gains among the region’s major markets by rising 1.25% following the government’s budget announcement.

Hong Kong’s Hang Seng index recovered from an earlier drop by gaining 0.46% by afternoon.

South Korea’s Kospi also advanced 0.60% but Japan’s Nikkei 225 shed 0.26%.

Proactive Australia news:

Mako Gold Ltd (ASX:MKG) has completed the second tranche of an oversubscribed share placement with $10 million raised to support efforts to grow the company’s gold bounty in West Africa.

Creso Pharma Ltd (ASX:CPH) has secured firm commitments from institutional, professional and sophisticated investors to raise up to A$8.992 million in a strongly supported placement.

MGC Pharmaceuticals Ltd (ASX:MXC) (OTCMKTS:MGCLF) (FRA:H5O) has launched the CannEpil(R) App which gives medical professionals access to the International Library of Cannabinoids (ILC) as part of its collaboration with the Royal Melbourne Institute of Technology (RMIT).

Hexagon Energy Materials Ltd (ASX:HXG) has shifted focus away from rare earths and into new clean energy opportunities, including hydrogen, and existing exploration assets.

Northern Minerals Ltd (ASX:NTU) is set to reap the benefits of the escalating priority of securing a rare earths supply chain outside of China for both Australia and the United States.

Greenland Minerals Ltd (ASX:GGG) (OTCMKTS:GDLNF) continues to optimise the Kvanefjeld Rare Earth Project in Greenland with advanced flotation test-work delivering strong results and increasing overall rare earth recoveries.

Reward Minerals Ltd (ASX:RWD) is moving closer to production after the Australian Government’s Department of Agriculture, Water and the Environment granted environmental approval for its Lake Disappointment Potash Project in north-western Western Australia.

Tempus Resources Ltd (ASX:TMR) is mobilising drilling equipment to the Elizabeth sector of Blackdome-Elizabeth Gold Project in British Columbia, Canada, where around 6,000 metres of diamond drilling is planned before the end of 2020.

Hawkstone Mining Ltd (ASX:HWK) has entered into an agreement to acquire the Devil’s Canyon Gold Project in the highly prolific Carlin Trend in Nevada, USA, that has produced more than 195 million ounces of gold.

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