FTSE 100 up 7¬†points
Rory Stewart survives first-round cull in Tory leadership race
As expected, Boris Johnson tops the first ballot
1.15pm: Boris Johnson in the box-seat as Harper, McVey and Leadsom bow out of Tory leadership race
Mark Harper, Esther McVey and Andrea Leadsom have been eliminated from the Conservative Party leadership race, the first poll results revealed.
As expected, Boris Johnson ‚Äď who in 2007 demanded that Gordon Brown should immediately call a General Election upon becoming the leader of the Labour Party and therefore prime minister ‚Äď came top of the poll, with 114 votes.
Harper (10 votes), McVey (9 votes) and Leadsom (11 votes) each failed to poll the minimum 17 votes to stay in the leadership battle, which now goes to the second round of voting.
The FTSE 100 was little changed after the results of the ballot were announced, clinging on to a 7 point (0.1%) gain at 7,375.
12.45pm: Sterling’s pain is the Footsie’s gain
A dip in the value of sterling was helping London’s blue-chip index hold on to gains in the lunchtime session.
Sterling was down one-eighth of a cent against the US dollar, giving a small boost to the plethora of big dollar earners among the Footsie’s constituent list.
The FTSE 100 index was up 18 points (0.2%) at 7,385.
In contrast, the mid-cap FTSE 250 ‚Äď not so stuffed full of dollar earners ‚Äď was down 66 points (0.3%) at 19,183, despite a 13% increase to 56.9p by Just Group PLC (LON:JUST) after the retirement income specialist revealed in its annual general meeting statement that all of its directors have either recently bought shares or are about to.
Among the small caps, Agronomics Limited (LON:ANIC) was wanted after it revealed its recently announced share subscription was oversubscribed.
The shares rose 18% to 8.25p after the company said it had raised ¬£4.5mln through the issue of shares at 5p a pop; the subscription issue was 30% oversubscribed.
Delighted to welcome Vulpes to the shareholder register. https://t.co/9yWlHfuDau
‚ÄĒ SCANCELL (@scancellpharma) June 13, 2019
The shares rose 17% to 6.25p.
11.30am: Tanker fire in Sea of Oman has lifted oil prices
The Footsie took a close look at the 7,400 level this morning but declined to rise above it.
The index of leading shares was up 26 points at 7,393, with focus on events in the Middle East and, more parochially, the UK housing market, as traders await news on the votes for the Tory Party leadership.
‚ÄúNews this morning has been dominated by reports of damage to oil tankers in the Gulf of Oman,‚ÄĚ reported Chris Beauchamp at IG.
‚ÄúThe number of attacks in the region is on the rise, with today‚Äôs reports coming a day after explosions on board Iranian vessels. Geopolitical concerns are now front and centre, although the cause of today‚Äôs explosions is yet to be identified,‚ÄĚ he noted.
Oil prices have suffered heavily off the back of rising US crude stockpiles, Beauchamp observed, but the price Brent crude has perked up today and, in Beauchamp’s view, ‚Äúthe oil price looks primed for further upside in the short-term at least‚ÄĚ.
Followers of the housebuilding sector have not only had the latest RICS survey on UK house prices to mull over but also the mortgage trends update from UK Finance.
There were 27,370 new first-time buyer mortgages completed in April 2019, up 7.9% year-on-year, UK Finance reported.
Owner/occupier mortgages rose 6.4% from a year earlier to 25,450 while the number of buy-to-let mortgages completed was unchanged year-on-year at 5,100.
Help to Buy: Equity Loan scheme ‚Äď progress review – National Audit Office (NAO) Report: https://t.co/SJe3N2tG2l
‚ÄĒ Liz Douglas (@liddlelur) June 13, 2019
Meanwhile, the National Audit Office has reported that the majority of people who have taken advantage of the government‚Äôs controversial ‚Äúhelp to buy‚ÄĚ scheme ‚Äď dubbed ‚Äúhelp to sell‚ÄĚ by critics who see it as nothing more than a way of boosting the profits of house-builders ‚Äď could have bought their home without recourse to the scheme.
The National Audit Office said just 37% of buyers surveyed said they would not have been able to buy their home without the benefit of the ‚Äúhelp to buy‚ÄĚ subsidy.
According to the National Audit Office, that means that in the five years since the scheme was introduced, around 78,000 additional sales of new-build properties have happened that would not have occurred without the scheme being in place.
In May last year, the National Housing Federation said the country would need to build 340,000 homes per year until 2031 to clear the backlog of demand for housing and to account for the anticipated growth in demand. The government is targeting 300,000 new builds a year by the mid-2020s.
10.15am: The Footsie shakes off early morning lethargy¬†
The index of leading shares was up 23 points (0.3%) at 7,390, thanks in part to a 6.1% rise in the Ferguson share price to 5,642p after activist investor Nelson Peltz revealed his Trian hedge fund had built up a near 6% stake in the company formerly known as Wolsely.
Retail giants Tesco PLC (LON:TSCO) and Marks and Spencer Group PLC (LON:MKS) were in focus ‚Äď the former after a trading update and the latter after announcing the results of its recent rights issue.
Tesco was up 0.4% at 228.5p after it boasted of outperforming ta subdued supermarket sector.
Tesco PLC 1Q Trading Statement 19/20
Tesco CEO Dave Lewis: ‚ÄúOur customer offer is more competitive than ever, with a wider choice of our ‘Exclusively at Tesco‘ products now available in more stores, helping to drive more than 10% sales growth across the range.‚ÄĚ
‚ÄúThe first quarter trading update from the supermarket group reported like-for-like sales in its main UK market up by 0.4%, yet this falls short of analyst estimates,‚ÄĚ observed Graham Spooner, an investment research analyst at The Share Centre.
‚ÄúThe company remains cognisant of competition from the likes of Aldi and Lidl, who are continuing to win market share and are not making life any easier for Tesco who are desperately trying to win new customers. Add to that fierce price competition and promotions which are likely to remain a squeeze on margins.
‚ÄúThere is a defensive element to the shares, which in the current environment is a positive, but investors backing the management and their restructuring will have to be patient we would suggest a low to medium risk hold,‚ÄĚ Spooner said.
As for Marks & Sparks, its shares were off 1.6% at 215.6p after a tepid response to its rights issue. The company had offered one new share on the basis of every five currently held, at 185p a pop. Around 85% of the rights issue shares were taken up.
8.30am: Resource plays offset losses from ex-dividend stocks
London‚Äôs index of large-cap shares has made a mixed start with the strength of resource plays counterbalancing the impact of shares going ex-dividend.
The FTSE 100 was up 7 points (0.1%) at 7,375, bolstered by the likes of Rio Tinto PLC (LON:RIO) and BHP Billiton PLC (LON:BLT) from the mining sector and BP PLC (LON:BP. and Royal Dutch Shell (LON:RDSB) from the oil sector, which are sporting gains of between 0.6% and 0.9%.
The oil majors have been boosted by a surge in the oil price following reports that an oil tanker in the Sea of Oman is on fire; it‚Äôs an ill wind that blows nobody any good ‚Ä¶
Brent crude was trading US$1.60 (2.7%) at US$61.57 a barrel on the futures markets.
House-builder Persimmon PLC (LON:PSN), down 0.4%, was one of those stocks suffering from going ex-dividend, but its loss was on a par with that being suffered by sector peers Barratt Developments PLC (LON:BDEV) and Berkeley Group Holdings PLC (LON:BKG) after the release of the latest housing survey from the Royal Institute of Chartered Surveyors (RICS).
‚ÄúThe net balance of surveyors reporting that house prices have risen over the last three months increased to -10 in May, from -23 in April, above the consensus, -21,‚ÄĚ reported Samuel Tombs at Pantheon Macroeconomics.
Even the grumpiest, most morose of housing commentators are showing signs of market optimism it seems. The #RICS are reporting a more positive outlook – reversing previous negativity. Caution: Not many estate agents are RICS members anyway – tiny samplehttps://t.co/Gu4AcXsU39
‚ÄĒ Russell Quirk (@russellquirk) June 13, 2019
‚ÄúMay‚Äôs RICS survey shows that the extension of the Brexit deadline to October has given the housing market some breathing space. The new buyer enquiries balance recovered to -3‚ÄĒits highest level since July‚ÄĒfrom -26 in April,‚ÄĚ he added.
‚ÄúSupply-side indicators picked up too, but remained weaker than those for demand; the new sale instructions balance rose to -11, from -35, while the number of sale appraisals continued to fall in year-over-year terms. As a result, the slight imbalance between demand and supply points to modest upward pressure of house prices,‚ÄĚ Tombs said.
The only blue-chip in the housing sector to respond positively to this apparent encouraging trend (from the point of view of sellers) in the house price trend was Taylor Wimpey PLC (LON:TW.), which was up 0.7%.
Proactive news headlines:
Tekcapital PLC (LON:TEK) told investors that its portfolio company Salarius Ltd has completed a follow-on order for MicroSalt with an American snack food company. Salarius has developed MicroSalt which is a proprietary salt comprising micron-size salt particles that dissolve in the mouth significantly faster than regular salt. It creates a higher sensation of saltiness with much less salt. Big Pic in February.
Quadrise Fuels International PLC (LON:QFI) told investors it has inked a services agreement with Aleph Commodities Ltd which will provide services to the company in the use of the MSAR technology in the Kingdom of Saudi Arabia (KSA). Big Pic this week.
Sareum Holdings PLC (LON:SAR), the specialist small molecule drug development business, has hailed the recent progress of its clinical and pre-clinical programmes. Following last week‚Äôs announcement of preliminary efficacy data for SRA737, a cancer drug it helped to develop, the company provided the market with an update on other developments within its active pre-clinical portfolio. Big Pic in February.
Salt Lake Potash Ltd (LON:SO4) (ASX:SO4) has demonstrated the economic potential of its Lake Way Project through a scoping study for the commercial-scale development of its Western Australian sulphate of potash (SOP) project. The study was based on the mineral resource estimate for Lake Way reported in March, amounting to 8.2 million tonnes of SOP calculated using drainable porosity and 73 million tonnes using total porosity. Big Pic in February
Thor Mining PLC (LON:THR) (ASX:THR), in response to a price query from the Australian Securities Exchange, confirmed that it was not aware of any information which could explain the recent movement in the price of the company’s ordinary shares on ASX.
Seeing Machines Ltd‚Äôs (LON:SEE) has won four new commercial fleet contracts for its driver-monitoring technology via its New Zealand distributor in recent months. Big Pic in February.
accesso Technology Group PLC (LON:ACSO) has signed a three-year partnership with The New York Botanical Garden (NYBG) to supply its Passport, Siriusware and Ingresso products. Big Pic in March.
Taptica International Ltd (LON:TAP), the advertising technologies and performance-based mobile marketing group, has made rapid progress on its integration with recently acquired RhythmOne. Big Pic in April.
ValiRx Plc (LON:VAL) has raised ¬£300,000 through a share placing to address its immediate working capital needs and to develop key drugs. The group also expects to shortly receive ¬£150,000 in proceeds from the sale of an unlisted security along with a research and development tax credit of ¬£400,000 from the HMRC in July. Big Pic in May.
Mineral & Financial Investments Ltd (LON:MAFL) has announced it has taken an interest in Golden Sun Resources Limited, a group that‚Äôs advancing the Costa Rica based Bellavista mine into production later this year. It has purchased US$250,000 of Golden Sun‚Äôs ‚ÄėSeries B‚Äô convertible debt. Big Pic in March.
Benchmark Holdings PLC (LON:BMK) has confirmed that, further to its announcement of 3 June 2019, the company today successfully completed a new senior secured floating rate listed bond issue of Nkr850mln (US$95mln equivalent). The group said the bond issue, which will refinance Benchmark’s existing $90m credit facility, was significantly oversubscribed and marks the company’s entry into the Nordic region debt and securities market, which is globally recognised for its investment in aquaculture, providing it with access to a sector specialist investor base.
Pembridge Resources PLC (LON:PERE) revealed in a corporate update on Wednesday that it has received an additional ¬£450,000 in subscriptions at 16p per ordinary share within existing shareholder authorities, which concludes the company’s non-brokered private placement.
Cabot Energy PLC (LON:CAB) announced that SP Angel Corporate Finance is now the company’s sole broker with immediate effect and remains the company’s nominated adviser. Scott Aitken, Cabot‚Äôs chief executive officer, commented: “I would like to thank our previous joint broker GMP FirstEnergy for their services and the support they have provided to Cabot Energy over the years.”
Diversified Gas & Oil PLC (LON:DGOC) said it will pay a dividend in respect of the first quarter to 31 March 2019 of 3.42 US cents per share (Q1 2018: 1.725 US cents). The group said the dividend will be paid on 27 September 2019 to those shareholders on the register on 6 September 2019.
7.45am: London set for a slow start
The FTSE 100 looks set to start Thursday on the back foot as a familiar set of pressures push global equities lower.
Once again, traders are contemplating the impact of the ongoing trade dispute between Donald Trump‚Äôs ‚Äėtrade war‚Äô with China ‚Äď as their tariff tit-for-tat continues.
IG Markets sees the FTSE 100 down around 22 points, calling the London index at 7,342 to 7,345 with just over an hour to go until the open.
‚ÄúPresident Trump defended his use of tariffs against China as a tactic to try and rebalance the trading relationship, and Beijing dug their heels in too, as China made it clear they are happy to hold their equally stern stance,‚ÄĚ said David Madden, analyst at CMC Markets.
‚ÄúYesterday was a reminder that the two largest economies in the world are engaged in a trade spat, and some dealers reduced their positions in the equity markets.‚ÄĚ
He added: ‚ÄúAfter the European market close, President Trump reaffirmed his view that he will impose tariffs on $325 billion worth of Chinese imports if a deal isn‚Äôt reached.
‚ÄúMr Trump has made it clear that the trade war will ratchet up if Xi Jinping doesn‚Äôt show up at the G20 meeting later this month. Trade concerns are likely to persist in the near-term, but we might not see major moves in global stock markets until the G20 summit, when the two leaders are expected to meet.‚ÄĚ
Wall Street ended Wednesday‚Äôs session in the red. The Dow Jones closed 43 points or 0.17% lower at 26,004, while the S&P 500 finished down 0.20% at 2,879 and the Nasdaq lost 0.38% to end the session at 7,792.
In Asia, Japan‚Äôs Nikkei was down 162 points of 0.77% trading at 20,966, while Hong Kong‚Äôs Hang Seng was 227 points or 0.83% lower at 27,081 though the Shanghai Composite was trading slightly higher, rising 0.09% to 2,912.
Significant announcements expecetd on Thursday June 13:
Economic data: US weekly jobless claims
Around the markets:
- The pound: US$1.2691, up 0.02%
- Gold: US$1,336 per ounce, up 0.35%
- Brent crude: US$60.40 per barrel, down 3.129%
- Bitcoin: US$8,116, up 1.91%