• FTSE 100 index drops 58 points
  • Spoons slides as it confirms 366 pubs will stay shut during new lockdown regulations
  • Capita edges higher as it confirms talks over sale of its education business

9.15am: Post-lockdown sell-down

London’s start has been a bit less run of the mill than had been expected, and not in a positive way.

The FTSE 100 was down 58 points (0.9%) at 6,305, leaving it out of step with most European markets.

“It appears that investors haven’t taken the latest covid-19 Tier designations well,” was the best guess of Spreadex‘s Connor Campbell for the reason for Footsie’s fall.

“The pound, meanwhile, edged 0.1% higher against the dollar but failed to move against the euro, as sterling continues to nervously wait for signs that the current Brexit talks are going to finally produce a deal before the end of the year. It’s not looking too promising: Michel Barnier tweeted that the ‘same significant divergences persist. This as the EU’s chief negotiator heads to London after his recent period of isolation,” Campbell added.

Drinks maker Diageo PLC (LON:DGE) defied the trend with a 0.4% rise to 2,940p after Morgan Stanley shifted to an ‘overweight’ stance – we’ll all be doing that this Christmass – from ‘equal weight’.

In other boozy news, pubs group JD Wetherspoon PLC (LON:JDW) said 366 of its pubs will remain closed following yesterday’s announcement of the new lockdown tiers in England.

Shares in ‘Spoons were off 2.0% at 1,112p.

Elsewhere in the mid-cap sector, outsourcing giant Capita PLC (LON:CPI) was wanted after it confirmed media speculation that it has entered into exclusive talks with the private equity firm Montagu over the possible sale of Capita’s Education Software Solutions business.

Capita’s shares were up 0.2% at 44.96p.

8.50am: Week could be a wash-out

The FTSE 100 opened firmly in the red on Friday as the economic and political ramifications of the tougher coronavirus (COVID-19) tiering system in the UK and continued restrictions across Europe weighed on sentiment.

The index of UK blue-chips opened 57 points lower at 6,305.56.

“[The index] is underperforming and could well finish the week lower, as it falls back for the third day in succession, and below last week’s lows,” said Michael Hewson of CMC Markets.

“This end of week caution appears to be predicated on concern over the short-term economic outlook, as the extension of tighter restrictions on economic activity in France, Germany and the UK creates further uncertainty over the potential for permanent economic scarring as we head into 2021.

“The vaccine story is undoubtedly good news, however, there is some concern as to what the economic landscape will look like when we come out of the other side of winter,” Hewson added.

On the market, there was an early Black Friday blow for Marks & Spencer (LON:MKS), which fell 1.7% after Goldman Sachs downgraded the retailer to ‘neutral’ from ‘buy’. Diageo (LON:DGE) was an early modest riser after Morgan Stanley moved its call on the international drinks giant to ‘overweight’.

Proactive news headlines:

Haydale Graphene Industries PLC (LON:HAYD) has announced that its partner IRPC has now completed the development project with Haydale and started production of its new washable functionalised graphene-enhanced fabric mask. IRPC has placed a follow-on order for 200 kilograms of Haydale’s bespoke ink, with further orders anticipated, the advanced materials group said. The face masks are currently being produced for use internally within the IRPC group, with a forecasted external order book for 2021.

DeepVerge plc (LON:DVRG) has hailed interim analysis from a University of Aberdeen research team that showed the company’s Labskin cloned human skin microbiome was able to host the SARS-CoV-2 coronavirus. This breakthrough means that real-world testing of anti-viral compounds can be carried out without human volunteers. Scientists at Aberdeen have been using the DeepVerge innovation to assess transmissibility from surfaces to airways via the body’s largest organ.

IXICO PLC (LON:IXI) said it has won a follow-on contract worth GBP1.9mln with an existing sponsor that will use the company’s AI and neuro-imaging technology in a phase Ib/II clinical trial of a drug for Huntington’s disease (HD). “The new award reflects and reinforces the confidence customers place in IXICO as the trusted and leading neuroimaging partner for Huntington’s disease clinical trials,” the company said. Practically and financially, it adds to IXICO’s strong and growing order book.

Falcon Oil & Gas Ltd (LON:FOG) has highlighted its debt-free status and a continued focus on cost management and the efficient operation of its portfolio in its interim financials as it narrowed its quarterly losses. In results for the three months to September 30, 2020, the company reported a loss of US$146,000 compared to a US$764,000 loss a year ago, while revenues were steady at US$1,000. The company also reported a cash balance at the end of the period of US$11.5mln, while net finance income swung to a US$279,000 gain from a US$360,000 loss a year ago.

Bahamas Petroleum Company PLC (LON:BPC) has updated on cost estimates and funding arrangements for its well operations in The Bahamas. The AIM-listed oil and gas firm said that to provide appropriate financial headroom, a previously announced conditional convertible note facility has been increased by GBP4.75mln to GBP15mln in total, with an initial subscription notice issued for GBP3mln and the balance of the facility to be provided in a timeframe consistent with the demands of operations.

Quadrise Fuels International PLC (LON:QFI) said it is continuing to build “positive momentum” and demonstrate significant progress in several key areas of its business as the company said it has been able to mitigate the impact of coronavirus (COVID-19) on its business. In an update to be delivered at its AGM later on Friday, the AIM-listed firm said while the timetable of some specific activities had been impacted by the pandemic, it has worked with clients to ensure that overall programmes remain on track.

Benchmark Holdings PLC (LON:BMK), the aquaculture biotechnology business, said it ended its financial year in a significantly stronger financial position after its programme of asset disposals. Liquidity at the end of September 2020 was GBP83.2mln, the company revealed in its fiscal fourth-quarter update, which was an improvement on the end-June figure of GBP67mln. Net debt at the end of September stood at GBP37.6mln, versus net debt three months earlier of GBP54.7mln. The group said its restructuring is now complete, with GBP44mln raised from five divestments in the three months to the end of September.

LoopUp Group PLC (LON:LOOP) said its core Professional Services (PS) Meetings and Events business has continued to trade robustly versus pre-pandemic levels. The audio meetings technology specialist said it has also continued to see strong momentum in its Cloud Telephony business, which was launched on its global cloud platform in July. Things are a bit tougher in the non-PS sectors, where the company said the churn rate – the frequency of customers defecting to rival services – is accelerating.

Mkango Resources Ltd (LON:MKA), the Malawi-focused rare earths project developer, posted a net loss of US$793,393 in the three months to the end of September, compared to a net loss of US$1.11mln in the same period of 2019. The pre-revenue company had cash of US$5.78mln at the end of September, compared to cash of US$6.44mln at the end of June.

Salt Lake Potash Limited LON:SO4) (ASX:SO4) advised that trading in the shares of the company have been halted on the Australian Securities Exchange (ASX) effective from Friday, November 27, 2020. The halt was requested by the company pending an update in relation to completion of the debt financing as announced on August 5, 2020, and a capital raising. The group said the trading halt will remain until the earlier of an announcement to the market regarding the above or the opening of trade on ASX on December 3, 2020. Trading in the company’s ordinary securities will continue on AIM during this period.

Eckoh PLC (LON:ECK), the global provider of secure payment products and customer contact solutions, said it has received notification of two share transactions by Nik Philpot, its chief executive officer. It noted that on November 25 and 26, 2020, Philpot purchased a total of 25,000 ordinary shares of 0.25p in the company at an average price of 63.7p each. The newly purchased shares will be held by Philpot’s Self Invested Personal Pension. Further, on 25 November 2020, Philpot transferred, through an on-market crossing, a further 25,000 ordinary shares from his personal account to his SIPP, at a price of 63p per ordinary share. Following the purchase of the 25,000 ordinary shares, the group said, Philpot is beneficially interested in 7,001,285 Eckoh ordinary shares, representing approximately 2.74% of the issued share capital.

Ncondezi Energy Limited (LON:NCCL) said it has been notified that on November 25, 2020, Scott Fletcher, a non-executive director of the company, purchased an aggregate of 933,690 Ncondezi ordinary shares of no par value. Following this transaction, it noted, Fletcher’s beneficial interest in the company increased to 61,661,887 ordinary shares, representing 17.63% of the issued share capital. For the avoidance of doubt, the group added, after this transaction and following the admission of the placing shares on December 8, 2020, Fletcher’s beneficial interest will be 63,439,687 Ncondezi ordinary shares, representing 17.32% of the then enlarged issued share capital.

Alien Metals Ltd (LON:UFO), a minerals exploration and development company, has said its chief executive officer and technical director, Bill Brodie Good, will be presenting at the ‘Turner Pope Investments / Vox Markets Resources Webinar Evening’ on Thursday 3 December 2020 at 5pm GMT. The group said he will provide an update on the company’s silver and iron ore projects in Mexico and Australia including the movements in the silver and iron ore market. Following its successful placing (announced November 23 2020), he will touch on the company’s plans to expand and accelerate its exploration programmes across its portfolio, as well as to continue to evaluate strategic opportunities. The company has a number of projects including the Los Campos and San Celso silver projects in Mexico, the Elizabeth Hill silver Project and Hamersley iron ore projects in Western Australia.

Zephyr Energy PLC (LON:ZPHR), an oil and gas company focused on responsible resource development in the Rocky Mountain region has said that Colin Harrington, the company’s chief executive officer, will be presenting at the Turner Pope Investments / Vox Markets resources webinar evening taking place on Thursday, December 3, 2020, commencing at 5pm.

6.50am: Not so much Black, as Grey Friday

With no lead from the US, where the markets were closed yesterday for Thanksgiving, London’s equities look set for a directionless start.

Spread betting quotes suggest the FTSE 100 will open around 10 points lower.

“The US stock market reopens today for a half-day but volatility is likely to be quiet across the board – it is typically the case following Thanksgiving,” observed CMC’s David Madden.

In Asia on Friday, Japan’s Nikkei 225 eked out a 74 point gain at 26,611 but in Hong Kong, the Hang Seng was essentially unchanged at 26,820.

“Stocks markets in the Far East haven’t moved move as it seems that traders in that part of the world are also content to sit on the fence. Industrial profits in China surged by 28.2% last month on a year on year basis. It was the sixth consecutive month of growth and it was a big improvement on the 10.1% rise posted in the previous report,” Madden reported.

As for UK corporate news, newspaper group Reach PLC (LON:RCH) looks the pick of the scheduled updates today in London.

Peel Hunt reckons the Daily Mirror and Daily Express publisher will really have to turn it on for there to be much positive share price reaction, given that the stock has already doubled in a month after the good momentum created by the positive interims in September.

Around the markets:

  • Sterling: US$1.3375, up 0.18 cents
  • 10-year gilt: 0.28%, down 3.83 basis points
  • Gold: US$1,807.10 an ounce, up US$1.60
  • Oil: US$47.69 a barrel, down 11 cents
  • Bitcoin: US$17,255, up US$133

6.45am: Early Markets – Asia/Australia

Stocks in Asia-Pacific traded mostly higher on Friday as China’s industrial profits surged 28.2% year-on-year in October, according to the country’s National Bureau of Statistics.

Chinese stocks were higher, with the Shanghai composite rising 0.32% and Hong Kong’s Hang Seng index gaining 0.14%.

In Japan, the Nikkei 225 rose 0.40% while South Korea’s Kospi gained 0.31%.

Shares in Australia skipped the trend with the S&P/ASX 200 falling 0.53%.


Proactive Australia news:

Andromeda Metals Ltd (ASX:ADN) is well-placed to transition from explorer to producer as the JV with Minotaur Exploration Ltd (ASX:MEP) is on a fast-track to start mining at the Great White Halloysite-Kaolin Project in South Australia, pending approvals.

Cirralto Ltd (ASX:CRO) has raised $2,806,200 via the issue of shares under a placement to sophisticated and professional investors at an issue price of 3 cents per share.

K2fly Ltd (ASX:K2F) chair Jenny Cutri told this week’s annual general meeting that FY20 had been an “extremely positive year for the company” despite the turbulent economic backdrop and impact of the COVID-19 pandemic.

Tempest Minerals Ltd (ASX:TEM) has completed tranche-1 of a $1.155 million placement to sophisticated and professional investors raising $744,787, which will support ongoing exploration at the company’s gold and base metal projects in Western Australia.

Technology Metals Australia Ltd (ASX:TMT) has launched a share purchase plan (SPP) which allows eligible shareholders to subscribe for up to $30,000 worth of fully paid ordinary shares without having to pay brokerage or other transaction costs.

Davenport Resources Ltd (ASX:DAV) (FRA:D86) has completed a transformational A$10 million placement, putting it in a strong financial position to advance its portfolio of four standalone projects in the South Harz region of Germany with a combined 5.3 billion tonnes of potash resource, the largest potash resource in western Europe.

Boadicea Resources Ltd (ASX:BOA) intends to expand its exploration efforts into the prolific Charters Towers gold region of north Queensland after applying for a new exploration licence for EMP27752.

eSense-Lab Ltd (ASX:ESE) is moving towards commercialising an alcohol-free sanitiser comprising two proprietary blend terpene profiles after receiving positive research results at the Central Virology Lab of the Israeli Ministry of Health.

Walkabout Resources Ltd (ASX:WKT) has executed a non-binding, conditional term sheet for a US25 million debt facility in favour of Lindi Jumbo Ltd from the African Export-Import Bank (Afreximbank).

Lotus Resources Limited (ASX:LOT) has received binding commitments to raise $5 million before costs to fund the restart study of its Kayelekera Uranium Project in Malawi and for near-mine exploration potentially increase the existing 37.5 million pounds uranium resource.

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