Bond market steadies, banks lift FTSE 100
The chancellor’s plans for an emergency fiscal statement later today appear to have calmed markets in the first session since the Bank of England ended its gilt-buying scheme.
The yield on 10-year government bonds had been above 4.3% on Friday but came back down towards 4.1% in early trading today.
Sterling was higher at just below $1.13, albeit in a weaker session generally for the US dollar.
The FTSE 100 index was 40.66 points stronger at 6899.45, with banks, housebuilders and utilities among stocks higher on the back of today’s developments.
The UK-focused FTSE 250 index rose 0.7% or 115.23 points to 17,148.05, led by a jump of 7% for ITV shares amid reports that the broadcaster is considering options for its production division.
Hoxton brand to open first hotel in Ireland
Trendy hotel chain The Hoxton is to make its debut in Ireland as part of a move to open seven new hotels across Europe by early 2024.
The Central Hotel in Dublin is being redeveloped as a 129-room Hoxton by owners Deutsche Finance International and BCP Capital. Ennismore, the owner of the Hoxton concept, has signed a long-term operating contract.
Further openings in the pipeline ahead of Dublin include Brussels, Edinburgh, Berlin and Vienna, plus a second property in Amsterdam and a fourth in London, in Shepherd’s Bush.
The first Hoxton, in Shoreditch, opened in 2006.
Hargreaves Lansdown CEO Chris Hill to leave the FTSE 100 fund manager
Hargreaves Lansdown’s chief executive, Chris Hill, is leaving the FTSE 100 fund manager after six years in charge.
The Bristol-based company, which annnounced Hill’s retirement this morning, does not have a replacement lined up and said he will remain in the role until a successor is appointed and to allow for a handover “up to November 2023”.
Hill said he set up a new strategy for the business, adding; “Having put in place strong foundations that are already delivering results, including an exceptional leadership team, it will be time after a thoughtful transition to hand over to my successor to take the company through the next phase of embedding this strategy.”
Hargreaves Lansdown is facing a multi-million pound lawsuit over the collapse of Neil Woodford’s equity income fund, which investors could access via its investment platform. Woodford’s fund, once worth around £10 billion, collapsed after a range of badly performing investments and amid criticism that it held too many assets that were difficult for it to sell when it needed to raise liquid capital.
In a separte trading update today, HL reported net new business of £0.7 billion for the first quarter of its financial year, ending on September 30. Net new client growth reached 17,000, taking its number of active clients to around 1.7 million.
Made moves forward with buyout bids
Embattled online furniture retailer Made has received a “number” of unnamed approaches to acquire the business that put itself for sale last month after running into liquidity problems.
Made said it had received a number of “non-binding indicative proposals” for the company and has now “invited a select number of parties” to progress towards firm offers by the end of October, following a due diligence process.
“The proposals provide a range of different transaction structures, including possible offers for the issued and to be issued share capital of the company,” said Made.
“Current discussions may be altered or terminated at any time and, accordingly, there can be no certainty that an offer will be made, nor as to what the terms of any offer may be,” the retailer added.
Nightmare for Eve Sleep as mattress firm enters administration
Beleaguered mattess company Eve Sleep has become one of the first victims of a looming recession as the firm said it was entering administration. It comes after sales at the company tanked 19% in the first half of the year.
Cheryl Calverley, CEO of Eve Sleep, said:”It is heartbreaking to have to acknowledge that the best way to preserve value for creditors, those partners and suppliers that have helped us on this journey, is to now terminate the formal sale process and appoint administrators.
“Having seen the year start so brightly, with the efforts of the team over the past three years in rebuilding eve into a business fit for profitable growth coming to fruition, the frustration at the unprecedented downturn in the market over February and March was felt all the more keenly.
“Despite monumental efforts to restructure the business and reshape the cost base, the scale of eve was simply insufficient to withstand the economic tsunami that has gathered momentum over the past six months, and allow it to continue as an independent business.”
Focus on Hunt statement, FTSE 100 steady
The 1p cut in the base rate of income tax is one of the mini-budget measures set to be ditched when Jeremy Hunt makes his statement to the Commons later.
A focus on fiscal discipline will be key to restoring confidence in markets, particularly after the gilts sell-off continued on Friday following Liz Truss’s press conference.
Susannah Streeter, senior markets analyst at Hargreaves Lansdown, said: “Trussenomics may have been ripped up and fed to the shredder but the author of the big gamble remains in power, and has the final say on the direction of travel.
“Investors are craving more stability but given the flip flopping we’ve had so far in her super-short tenure, economic policy uncertainty remains and that’s likely to be the key driver in the bond markets and on foreign exchange desks.”
As well as Hunt’s Commons statement, today’s session will be the first since the start of mini-budget volatility without the bond buying support of the Bank of England.
Other key events this week include the release of UK inflation figures, with Wednesday’s headline CPI reading forecast to return to 10%.
The US earnings season is also due to pick up speed this week, with highlights including the figures from Tesla and Netflix. Ahead of today’s opening, CMC Markets expects the FTSE 100 index to edge five points lower to 6853.
Frasers takes stake in MySale above 50%
Plans by Mike Ashley’s Frasers Group to take over e-commerce business MySale got a step closer today after the firm said its shareholding in the business had exceeded 50%.
In a statement the firm said: “Frasers will own or have received valid acceptances in respect of a total of 580,104,135 MySale Shares, representing approximately 55.78 percent of MySale’s issued share capital.
“Frasers intends to continue to purchase additional MySale Shares by means of market or other purchases.”