FTSE 100 Live 23 May: Nationwide profits lower, shares flat, National Grid £60bn investment plan
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LIVE – Updated at 08:20
FTSE 100 makes steady start as gains for financials help off set weakness for utilities
08:20 , Michael Hunter
London’s main stock market started the day in neutral gear, with investors working through a busy run of corporate news amid a wider sense of caution amid concern at fresh trade tensions between the US and China.
The FTSE 100 slipped 9 points to 8,361.70. Utility stocks stood out on the list of fallers. National Grid made the biggest single drop, down over 8%, or 91p, to 1037p after it announced a £60 billion investment programme to pay for decarbonising the UK’’s electricity distribution system.
Water utilities were also notable decliners, with Severn Trent down almost 4%, or 99p, to 2540p. United Utilities was down by the same margin, or 40p, to 1037p.
Financial stocks lent support to the index. Barclays was up 1%, or almost 2p, to 214p. Schroders gained 1.4%, or over 5p, to 388p.
National Grid shares plunge after fundraise for £60bn investment plan
08:17 , Daniel O'Boyle
Shares in National Grid have plunged as investors reacted to the cut-price fundraise announced today to fund its £60 billion investment plan.
Shares are down 8.4% to 1,033p, after the utility revealed it would raise £7 billion with a 645p-per-share rights issue.
The National Grid board said: “The board unanimously believes this comprehensive financing plan will allow the group to fund a significant increase in capital investment, maintain its strong investment grade credit rating, deliver for customers, and continue to achieve attractive shareholders returns.”
National Grid hails 'defining moment' as it announces £60 billion energy transition investment
07:56 , Daniel O'Boyle
National Grid plc will invest £60 billion over the next five years in a major green energy transition push in both the UK and US.
The plan will include £23 billion invested in energy transmission in the UK to support offshore wind, as well as £8 billion on “asset replacement, reinforcement and new connections”.
A further £28 billion will be spent in the US.
It has launched a rights issue to raise money for the investment, but this will be at a steep discount from its last closing share price. The rights issue is at 645p per share. National Grid closed at 1120p yesterday.
it comes as profits at the utility declined by 15% to £3.05 billion.
Chief executive John Pettigrew said: “Today is a defining moment for National Grid as we announce a significant increase in investment that cements our position as a leader in the energy transition on both sides of the Atlantic.
“This is an unprecedented time for our industry that is creating significant opportunities for National Grid today, over the next five years and for decades to come. Our new five-year investment plan will deliver long-term value and returns for our shareholders, support over 60,000 more jobs, and accelerate the decarbonisation of the energy system for the digital, electrified economies of the future.”
Rolls-Royce says engine flying time back at pre-pandemic levels in milestone moment for global travel industry
07:49 , Michael Hunter
Rolls-Royce, the world famous engine maker that powers many of the world’s planes, provided a landmark moment today for the move away from Covid.
The FTSE 100 giant said the amount of time its jets are in the air has returned to pre-pandemic levels.
Rolls is paid for the number hours flown by its Trent-branded jets, meaning the milestone also has important implications for its revenue. It was reached in the four months to the end of April.
It cited “the continued recovery of international traffic in Asia and our growing fleet”, and it said that for the full-year, it expected to pass 2019’s total for flying hours by about 10%.
GPE raises £350 million for investment in central London offices
07:42 , Jonathan Prynn
London property company Great Portland Estates is to raise £350 million through a rights issues of shares for investment in City and West End offices.
The company says the three for five issue will be priced at 230p. The company said the fund raiser will give it a war chest that “will allow GPE to take advantage of the attractive new acquisition and development opportunities emerging in central London commercial real estate and deliver attractive and accretive shareholder returns.”
It said the era of high interest rates has pushed values in central London to levels “approaching their trough” and not far from 2009 levels in real terms.
CEO Toby Courtauld, said: “The fully underwritten Rights Issue will allow GPE to seize the significant opportunity we see emerging in the central London commercial real estate space. We have seen a correction in asset values over the last 18 months with central London commercial real estate now trading in line with levels last seen in 2009 in real terms.
“We are currently tracking approximately £1.4 billion of acquisition opportunities which we believe are capable of being purchased at or below replacement cost, with GPE well placed to take advantage of these opportunities given our best in class offering, sustainability credentials and differentiated flex offering.
“Beyond this, there is a further £1.4 billion of opportunities on our watchlist. GPE have a strong track record and a disciplined approach to allocating capital, ensuring we operate in tune with London’s cyclical property markets with the objective of delivering attractive stakeholder returns.”
FTSE 100 set to tick higher in opening trade
07:34 , Michael Hunter
London’s main stock market index is expected to make modest opening gains today, with investors keeping watch on the state of global trade relations, but encouraged by strong earnings from US chip maker NVIDIA.
According to opening calls from spread betting companies, the FTSE 100 will add 5 points to 8375.30, as the mood for measured optimism holds.
Minutes from the latest rate-setting meeting of the Federal Reserve in the US sounded a hawkish tone on the timing of a cut in the cost of borrowing there, opening the way for modest closing losses on Wall Street.
But after NVIDA’s earnings followed the closing bell, the mood improved and stock market futures picked up.
Asian markets slipped after fresh tariffs from the US stoked concern about a potential trade war between the world’s two economic giants. Shanghai’s main stock index fell by over 1% and Taiwan’s was down 0.5%.
Nationwide profits slip
07:28 , Simon English
Nationwide profits slipped by £200m to £2bn for the year to April it said today, one day after Virgin Money shareholders backed the £2.9bn takeover by the society.
That controversial deal, an unusual takeover of a listed bank by a building society has earnt fierce resistance from some members who have not been given a vote on the deal.
To win them over, today the society launched a Member Exclusive Bond paying interest of 5.5% and other member benefits.
It extended it promise to keep branches open to 2028.
Chief executive Debbie Crosbie, formerly of Virgin Money, said: “I believe this deal offers an exciting opportunity to create a more diverse business that delivers even more value to our members and will strengthen Nationwide financially.”
Hargreaves Lansdown rejects bid
07:15 , Daniel O'Boyle
Hargreaves Lansdown has rejected a 985-p-per-share offer from a consortium led by private equity giant CVC.
The deal would have valued the funds giant at £4.7 billion.
The Hargreaves Lansdown board said: “The board confirms that it unanimously rejected the proposal on the basis it substantially undervalues Hargreaves Lansdown and its future prospects.”
Recap: Yesterday's top stories
Wednesday 22 May 2024 23:52 , Simon Hunt
Good morning from the Standard City desk.
The two sets of economic figures from the Office for National Statistics yesterday were both, in their different ways, pretty dire.
That slender miss on the 2.3% April inflation figure may not sound much, but it will have a huge knock-on effect for millions of homeowners and businesses. It seems almost inconceivable now that three MPC hawks can be converted into doves in time for the June 20 meeting of the Bank’s MPC.
It was 7-2 for a hold last time and that split may not change. Underneath the headline CPI figure all the data points most closely watched by the MPC are all running far too hot for comfort.
The figure for services CPI in particular must be a huge cause for concern after it only dipped from 6% to 5.9%.
Those big pay rises appear to be feeding through to prices, particularly in the hospitality sector. Stealth price rises such as the baked-in RPI-plus increases for the cost of mobile phone and broadband contracts that come into force in April also played their role.
A succession of interest rate cuts will always have been inked into Downing Street’s plan for a recovery in popularity in the run up to the election.
With that now effectively taken away, Rishi Sunak has concluded there is not much to be gained from waiting until the autumn before going to the country. Hold on to your hats for a July date with political destiny.
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Here’s a summary of out top stories from yesterday:
- Tax cut hopes fade as Govt borrows £20.5 billion in April, fourth highest ever for the month, driven by 10% rise in benefits in April
- Rejuvenated Marks & Spencer beats forecasts with £715 million profit
- Citibank fined £27.8 million after internal systems failed to block trader’s “fat finger” share sale of $444 billion, equivalent to entiure GDP of Denmark. He was supposed to be selling $58 million
- Rapsberry Pi to raise $40 millio in IPO
- Pubs giant M&B more than doubles half year profits to £108 million as sales grow 7% and energy costs stabilise...but Adnams struggles with losses widening to £4m