FTSE 100 Live: London shares climb higher, new Direct Line boss, mortgage approvals down

 (Evening Standard)
(Evening Standard)

The strong week for global shares is continuing as traders bet that US interest rates have peaked.

The latest rise for the FTSE 100 index is led by Prudential after new boss Anil Wadhwani laid out his strategy alongside results.

There’s also due to be a new boss at Direct Line Insurance after the Green Flag owner appointed Aviva’s Adam Winslow to the top job.

FTSE 100 Live Wednesday

  • Prudential lifted by China growth

  • Mortgage approvals show resilience

  • Direct Line appoints new CEO

Market snapshot

Wednesday 30 August 2023 16:10 , Daniel O'Boyle

Take a look at today’s market snapshot with the FTSE 100 set to finish higher today.

Shareholders revolt against Vistry boss’s new maximum pay

Wednesday 30 August 2023 16:07 , Daniel O'Boyle

Shareholders of housebuilder Vistry have made it clear they are unhappy with the company’s new pay policy for its top bosses as it passed with just a slim majority.

In a meeting on Wednesday, around 45% of votes were cast against both the new policy and amendments to the long-term incentives that can be paid to executives.

The new policy will increase chief executive Greg Fitzgerald’s pay to £800,000, more than double the annual bonus he can receive and add 50% to his potential long-term incentives.

It means that his maximum pay package will grow from £3.4 million to £5.6 million.

Read more here

Wilko redundancies could restart on Thursday, says union

Wednesday 30 August 2023 15:59 , Daniel O'Boyle

Potential job cuts at Wilko could be restarted on Thursday at Wilko if a suitor for the entire retail business fails to supply the necessary details, a union has said.

The GMB union has told members that a bidder for the entire business, which fell into administration earlier this month, has a deadline of 5pm to provide paperwork needed for the offer to be considered.

It said there are no other bids which would include saving Wilko’s warehouses and support centres.

It is understood that private equity firm M2 Capital has made a £90 million offer to buy the retailer and pledged to retain all jobs for two years.

Read more here

Aviation chiefs join forces to plead: ‘Don’t ever let this chaos happen again’

Wednesday 30 August 2023 15:57 , Daniel O'Boyle

The head of Gatwick airport on Wednesday joined a growing barrage of calls for an overhaul of Britain’s “international embarrassment” air traffic control system as thousands of passengers remained stranded overseas.

Stewart Wingate, Gatwick’s chief executive, said it was vital that there was no repeat of Monday’s meltdown and air traffic control chiefs needed to invest “so that events of this kind … do not happen at all”.

His comments came as bosses at Britain’s National Air Traffic Services (NATs) finalised an urgent report into what went so disastrously wrong that may prompt ministers to order a major overhaul of the whole system.

They follow strong criticism from other leading figures including Willie Walsh, the director general of the International Air Transport Association and former boss of British Airways, who described Monday’s meltdown as “a fiasco” and Ryanair boss Michael O’Leary who said the absence of back-up systems to stop flights being cancelled or delayed was “not acceptable”.

Read more here

Half of Gatwick Airport flights during second quarter of this year delayed

Wednesday 30 August 2023 14:55 , Daniel O'Boyle

Gatwick today said flight departure punctuality was badly hit in the second quarter of the year by a combination of air traffic restrictions, bad weather and the closure of Ukrainian airspace.

Only around half of flights from London’s second airport left on time, dragging the figure for the first half as a whole down to 62.3%, against 64.7% last year.

This was despite the Sussex airport only handling 86% of the pre-Covid level of flights over the six months as long-haul operators only slowly rebuilt their schedules after the pandemic.

Gatwick said it is “working with airlines and ground handlers to ensure aircraft are ready to go for the first wave of departures early in the morning and throughout the rest of the day. The airport also acted to prevent ground handling industrial action this summer, ensuring flights could continue as normal.”

Read more here

Future shares rise after reports of SmartBrief sale

Wednesday 30 August 2023 14:02 , Daniel O'Boyle

Shares in Country Life publisher Future are up by 4.6% today, having been up by as much as 7%, following a report that the business is looking to sell a number of its titles.

Business-to-busness assets including Smartbrief are up for sale, according to Sky News, in a move that is hoped to revive the fortunes of a business that has been struggling. future shares are down more than 40% this year.

Future appointed Jon Steinberg as its new CEO in April, replacing Zillah Byng-Thorne.

Interactive football games venue TOCA Social heading to former Debenhams space at Westfield London

Wednesday 30 August 2023 13:39 , Daniel O'Boyle

A chunk of the vacant Debenhams space at Westfield London has been signed for, and will become home to an interactive football games and entertainment venue.

TOCA Social- whose owner counts sports stars Harry Kane and Leah Williamson as backers- will start converting 35,000 square feet at Europe’s largest mall next year. It plans to welcome customers to 25 playing boxes and two bars also serving food, the Evening Standard can reveal.

A division of US company TOCA Footfall, this opening will mark the Social brand’s third UK site. It follows success at its Greenwich branch at The O2 where it has attracted over 300,000 visitors in the past year alone.

There was also a strong performance during the Women’s World Cup 2023.

Read more here

NS&I launches new issues of savings products with rates of more than 6%

Wednesday 30 August 2023 12:55 , Daniel O'Boyle

Savings giant NS&I has launched new issues of its one-year Guaranteed Growth Bonds and Guaranteed Income Bonds, paying the highest rates since they first went on sale in 2008.

Available from Wednesday, the new issues offer savers 6.20% AER (annual equivalent rate) for both one-year fixed-rate Guaranteed Growth Bonds and one-year Guaranteed Income Bonds.

Previously, one-year Guaranteed Growth Bonds paid 5.00% AER and one-year Guaranteed Income Bonds paid 5.12% AER.

NS&I is backed by the Treasury, so money held in it has 100% security.

Read more here

Record number of firms sign up to sustainably invest UK savers’ money

Wednesday 30 August 2023 12:20 , Daniel O'Boyle

A record number of companies have pledged to sustainably invest money on behalf of UK savers and pensioners.

The Financial Reporting Council (FRC) announced on Wednesday that more firms than ever before are signed up to its UK Stewardship Code 2020.

The code sets high standards for those investing money on behalf of UK savers and pensioners to create long-term value and lead to sustainable benefits for the economy, environment and society.

Read more here

Market snapshot as much of FTSE’s gains erased

Wednesday 30 August 2023 11:29 , Daniel O'Boyle

The FSTE 100 slipped back in the late morning, but is still up for the day so far.

Take a look at our latest market snapshot.

Lego earnings plunge 19% in tougher toy market

Wednesday 30 August 2023 11:15 , Daniel O'Boyle

Toy giant Lego has seen half-year earnings tumble by nearly a fifth as the boom in demand seen during the pandemic faded.

The Danish group reported a 19% fall in operating profits to 6.4 billion Danish krona (£738 million) in the six months to June 30.

Lego saw sales growth slow to 1%, with revenues of 27.4 billion Danish Krona (£3.2 billion) as it came up against “exceptional” trading a year earlier, with demand having soared during Covid-19 restrictions.

Revenues were flat with currency movements stripped out.

Read more here

Direct Line shares lifted by CEO hire, FTSE 100 steady

Wednesday 30 August 2023 10:21 , Graeme Evans

Churchill owner Direct Line Insurance got the City’s nod of approval today after it said it had hired a boss from rival Aviva to drive its turnaround.

Adam Winslow will step into the chief executive’s role vacated by Penny James, who left in January after a profit warning caused by a surge in motor insurance claims.

Direct Line shares are down by a quarter this year but rallied 3.45p to 164.2p on the appointment of Winslow to the £820,000-a-year role. He starts early next year.

Analysts at Jefferies noted that Aviva’s UK general insurance arm, which Winslow has run since May 2021, showed “remarkable resilience” in a challenging 2022 for the industry.

Direct Line, which also owns the Green Flag roadside recovery service, was among today’s best performing stocks in another robust session for the FTSE 250 index.

London’s mid-cap benchmark rose by 62 points to 18,530.59, while the FTSE 100 index built on yesterday’s 1.7% jump with a gain of 15.99 points to 7480.98 as traders bet that US interest rates are at their peak.

Persimmon and Taylor Wimpey shares spent another session on the risers board after yesterday’s loosening of EU pollution rules, but B&Q owner Kingfisher fell 3.2p to 233.4p as JPMorgan cut its price target to 220p.

City Comment

Wednesday 30 August 2023 10:00 , Simon English

This week Goldman Sachs retreated somewhat from its plan to sell financial products to the man in the street.

It is selling a personal financial management division in the US as CEO David Solomon seeks to unwind what the FT called a “a botched foray into consumer banking”.

This feels like one of the most predictable stories in finance, albeit one years in the making.

Goldman’s move to lure ordinary folk looked like a bank running out of ideas; one that had forgotten what it is good at.

What it is good at is very high-level trading and investment banking advice for gigantic corporations. Deal making and scheming at the very top of society.

Ordinary banking of the high street sort is about collecting pennies here and there and turning off the lights before you go home.

High charging investment banking is about charging tens of millions and working all night, about making things happen even when nothing much seem to be.

Moreover, you do business with Goldman Sachs partly out of snob appeal. It becoming available to almost anyone was always going to dent that brand value. (There are bound to be Coutts clients still upset to discover they shared a bank with Nigel Farage.)

Goldman says it is now focussed on “ultra-high net worth” wealth management – us rubes can forget it.

There’s something reassuring about that. Goldman on the high street, next to Greggs and WH Smith, never looked like a runner in the first place.

Solomon, the part-time DJ who is under some pressure from investors, is getting back to basics.

His 600,000 Spotify fans might have to wait for fresh material while Goldman goes back to being Goldman.

Mortgage approvals fall, but not dramatically

Wednesday 30 August 2023 09:41 , Daniel O'Boyle

Mortgage approvals fell in July, but are still far from falling off a cliff, with the Bank of England revealing that 49,500 loans were approved in July.

The number of approvals is down by 5,200 on June and below the average figures for most of the last decade, but is still up from the spring.

Meanwhile, the the actual interest paid on newly drawn mortgages saw ticked up to 4.66% in July, while the rate on the outstanding stock of mortgages rose from 2.92% to 2.97%. However, the increases are modest considering the rapid rise in the Bank rate in recent months.

Pru shares lift on Chinese hope

Wednesday 30 August 2023 09:12 , Simon English

New Prudential chief Anil Wadhani plans to double down on expansion in Asia and Africa while recognising a long list of risks from that plan.

Profits rose 3.6% to $1.46 billion in the last six months thanks to Chinese investors buying insurance deals in Hong Kong.

It warned investors today of a list of “risk factors” that include rising interest rates and the weakness of the Chinese economy. The shift to a low carbon future could also hit asset valuations.

That aside, Wadhani wants to boost dividends to investors by prioritising investment in Asia and Africa after more or less shedding the US and European arms.

The CEO, appointed in February, said it is “highly optimistic of the medium to long term growth potential” of China, despite recent concerns about its economic heatlh.

Pru shares in London rose 37p to 1021p, which leaves the business valued at £28 billion.

Superdry shares suspended after audit delays

Wednesday 30 August 2023 09:06 , Daniel O'Boyle

Shares in Superdry were suspended this morning, as the fashion brand failed to publish audited results in time.

The business was required to publish audited results by yesterday, but said that “normal procedures” in its audit were taking longer than expected.


It expects trading to resume before the end of the week.

Shares were trading at 56.1p, down almost 60% for the year, before the suspension.

Wednesday 30 August 2023 09:01 , Joanna Bourke

High street shoppers have helped offset declining online sales at The Works, the stationery and books retailer showed today as it recorded full-year revenue growth.

The chain said comparable sales in stores climbed 7.5% in the year to April 30. But the online figure dropped 15%.

Total like for like sales rose 4.2% and revenue increased 5.8% to £280.1 million.

Chief executive Gavin Peck said: “Although inflationary pressures increased business costs and dampened consumer confidence, we ended the year in line with our rebased expectations.”

Pre-tax profits tumbled to £5 million from £14.2 million, also impacted by the absence of Covid-related business rates support which it was helped by in the prior financial year.

Read more HERE

Prudential leads FTSE 100 index, Direct Line shares up 2%

Wednesday 30 August 2023 08:37 , Graeme Evans

Prudential shares have rallied 3% or 27.7p to 1012.5p after new chief executive Anil Wadhwani outlined his growth strategy alongside half-year results.

The reopening of the Hong Kong border meant new business profit jumped 39% to $1.5 billion (£1.2 billion) in the six months, with the Asia and Africa-based insurer focused on delivering 15-20% growth over the five years to 2027.

Pru shares led a strong FTSE 100 index, which rose 33.66 points to 7498.65. Other stocks doing well included Rio Tinto after a gain of 63.5p to 4887.5p and Lloyds Banking Group, which lifted 0.4p to 43.3p.

The FTSE 250 index improved 83.08 points to 18,551.67, with Direct Line Insurance up 2% or 3.45p to 164.2p after the company appointed Aviva UK general insurance boss Adam Winslow as new chief executive.

Supply of electric vehicles exceeds demand even as Ulez expands, dealership Vertu says

Wednesday 30 August 2023 08:31 , Daniel O'Boyle

Supply of electric vehicles is comfortably outstripping demand even as ULEZ expands, car dealership Vertu Motors said today.

The dealership chain, with 189 sales and aftersales outlets including a number in the London commuter belt, is set to meet profit targets even despite ending its 0% finance offers.

But when it came to electric vehicles, it said supply had ballooned in a way that did not match demand, causing many manufacturers to cut prices.

“Recent increased supply of new electric vehicles appears to be exceeding retail demand, creating an imbalance in pipeline inventory coming into the key plate change month of September,” it said.

Read more here

Market snapshot as FTSE 100 climbs higher

Wednesday 30 August 2023 08:24 , Daniel O'Boyle

The FTSE 100 has built on its gains yesterday, climbing back towards the 7500 mark.

Take a look at our key market data.

Southend Aiport in talks to bring airlines back after successful summer with easyJet

Wednesday 30 August 2023 08:17 , Simon Hunt

The owner of Southend today said it was in discussions to bring a number of airlines back to the airport after a successful summer with easyJet.

The partnership with easyJet has seen the schedule grow from 3 destinations to 7 with increasing frequency and strong load factors being experienced, Southend owner Esken said. This has encouraged easyJet to add additional routes with Alicante, Amsterdam, Geneva and Paris to operate through the winter this year.

A number of other operators including Ryanair had a base at Southend before abandoning the hub during the coronavirus pandemic.

(Alamy/PA) (PA Archive)
(Alamy/PA) (PA Archive)

Banks drive global dividends to record level

Wednesday 30 August 2023 07:59 , Graeme Evans

Banks contributed half the world’s dividend growth in the second quarter, according to figures on shareholder payouts by Janus Henderson.

Global dividends rose to a record $568.1 billion (£449.7 billion) in the three months to 30 June, up 4.9% on a headline basis as 88% of companies either increased payouts or held them steady. Excluding one-off special dividends, the underlying increase stood at 6.3%.

Dividends paid by banks rose 19.7% year-on-year to a record $85.3 billion (£67.5 billion), whereas mining payouts fell by a third. HSBC restored its quarterly dividend for the first time since the outset of the pandemic and at a higher level than many had expected.

The UK stock market’s heavy commodities weighting meant UK dividends fell by 12.1%, improving to an underlying rise of 2.9% without special dividends. Eight UK companies in every ten raised payouts or held them steady.

Ben Lofthouse, head of global equity income at Janus Henderson, expects the banking sector to continue supporting dividend growth.

He said: “A weaker economic environment is typically negative for banks, but the positive effect on bank margins from the end of years of ultra-low interest rates is very powerful and is driving dividend payouts.

“The big banks are very tightly regulated and so enter the downturn in a strong capital position.”

Direct Line appoints Aviva’s Adam Winslow as its new CEO

Wednesday 30 August 2023 07:40 , Michael Hunter

Direct Line appointed a new permanent CEO today, to replace Penny James, who left the FTSE 250 insurer in January after a profit warning led to it dropping its dividend payout and cancelling part of a share buyback.

Adam Winslow will take up the top job in the first quarter of next year, moving over from Aviva, where he runs the FTSE 100 company’s UK and Ireland general insurance business. He was previously CEO at Global Life at AIG Life and Retirement and is on the board of the Association of British Insurers.

Winslow said: “It’s a privilege to be invited to lead Direct Line Group into the future, particularly given its rich heritage and passion for serving its millions of customers.”

He will be paid an annual salary of £820,000 before bonuses and a 9% pension allowance.

Before Winslow takes up the new post, Jon Greenwood will remain as acting CEO, the Bromley-based company said.

Direct Line’s January profit warning came after a surge in the cost of motor insurance claims due to rising costs of second hand cars and longer repair times. The increased payouts lagged behind the rate at which it could put up premiums. There was also a spike in home insurance payouts after a cold snap in December.

Nvidia at record high as US shares rally, FTSE 100 seen higher

Wednesday 30 August 2023 07:18 , Graeme Evans

The FTSE 100 index is poised to build on yesterday’s rise of 1.7% after a strong session on Wall Street and further gains for Asia shares.

The appetite for risk follows a bigger-than-expected decline in the number of US job openings to the lowest level since March 2021, fuelling hopes that the US Federal Reserve will keep interest rates unchanged next month.

A sharp fall in bond yields meant the Nasdaq Composite rose 1.7%, with shares in semiconductor firm Nvidia up 4% at a record close of $487.8. The S&P 500 index rose 1.45% in its best session since early June and the Dow Jones Industrial Average by 0.85%.

The US performances helped boost sentiment in Asia, where the Hang Seng index has posted another session in positive territory amid speculation that China is preparing more initiatives to support the country’s property sector.

The FTSE 100 index, which yesterday rose 126 points as traders caught up with Monday’s strong gains in Europe, is forecast by CMC Markets to add another 28 points at 7493.

Recap: Yesterday’s top stories

Wednesday 30 August 2023 06:49 , Simon Hunt

Good morning. Here’s a summary of our top headlines from yesterday: