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FTSE 100 defies early predictions to open in the green; Next’s resilient performance wins plaudits

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  • FTSE 100 index gains 28 points
  • Chancellor of the Exchequer announces new business support package
  • Businesses in the retail, hospitality and leisure sectors are to receive a one-off grant worth up to GBP9,000

9.55am: Sunak announces new GBP4.6bn package of business support grants


The Chancellor of the Exchequer, Rishi “Eat out to help out” Sunak, has announced a GBP4.6bn package of grants to help businesses survive the lastest lockdown.


Businesses in the retail, hospitality and leisure sectors are to receive a one-off grant worth up to GBP9,000, the Chancellor has announced.


A GBP594 million discretionary fund has also been made available to support other affected businesses.


The cash will be provided on a per-property basis to support businesses through the latest restrictions, and is expected to benefit moree than 600,000 business properties, a statement from Her Majesty’s Treasury said.


“The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further,” Sunak said.


“Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.


“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen,” he added.






The market barely reacted to the news, with the FTSE 100 up 28 points (0.4%) at 6,600.




9.30am: Oil giants drive the FTSE 100 higher


London is out of step with European indices, adding to yesterday’s gains, thanks largely to the oil majors.


The FTSE 100 was up 23 points (0.3%) at 6,595, helped by Royal Dutch Shell PLC (LON:RDSB) advancing 2.7% to 1,293p and BP PLC (LON:BP.) climbing 2.6% to 261.05p, as Brent Crude now trades above US$50 a barrel.


“Following a strong start to the new year for markets, pandemic woes dampened the mood overnight. UK PM Johnson announced a full lockdown in England last night, and more European countries are likely to extend their current restrictions or implement even stricter ones,” warned Milan Cutkovic at Axi.


“Investors will have to accept that Europe could find itself in lockdown until spring – with perhaps some temporary easing of restrictions in-between; however, it was clear from the beginning that the vaccination campaign will require time, and will not lead to an abrupt end of the pandemic,” he added.


Morrison (Wm) Supermarkets PLC (LON:MRW) was slightly in arrears after its trading update covering the Christmas and New Year period.


The shares were down 0.3% at 180.6p despite the company saying sales (excluding fuel) were up 8.1% on a like-for-like basis in the 22 weeks to January 3.


“Lockdowns have not guaranteed a home run for the supermarkets, especially in terms of additional operational costs,2said Richard Hunter, the head of markets at interactive investor.


“Morrisons is working hard to ramp up its online operations. While still in a relatively formative stage compared to its competitors, there have been some early wins and sales tripled in this period compared to the previous year. The tie-up with Amazon has both immediate and longer-term potential, while home delivery, click and collect and the Deliveroo relationship each have a part to play.


“Furthermore, despite the increase in net debt and the drain on working capital, much of the company’s store estate is freehold and there is a largely undrawn line of credit in the background which acts as a further buffer,2 he noted.


In other supermarket news, market research group Kantar revealed take-home grocery sales rose by 11.4% during the 12 weeks to December 27.


December was the busiest month ever for British supermarkets as shoppers spent GBP11.7 billion on take-home groceries over four weeks.


Tesco sales rose by 11.1% during while sales at Sainsbury’s increased by 10.7% year on year. Sales at Morrisons increased by 13.1% compared with the same time last year.


Tesco’s market share stands at 27.3%, down slightly from 27.4% a year earlier. Sainsbury’s has seen a similarly small shrinkage in its share, to 15.9% from 16.0%. Morrisons has been a slight beneficiary, with its share growing to 10.4% from 10.3%.


Privately-owned Asda has been feeling the squeeze; its market share dropped to 14.3% from 14.8% the year before. German hard discounter Aldi saw its share decline to 7.4% from 7.4% at the end of 2019.




8.30am: 2021 advance continues


The FTSE 100 made a slightly more subdued start to proceedings on Tuesday after a rollicking opening session of the new year that culminated in a triple-digit gain for London’s top stocks benchmark.


The UK blue-chip share index opened 27 points higher at 6,599.30.


Wall Street’s lacklustre performance after-hours may have acted as a moderate bromide. However, events closer to home gave cause for greater caution as Boris Johnson plunged the UK into a third national lockdown with coronavirus (COVID-19) cases threatening to swamp the NHS.


However, the Oxford/AstraZeneca vaccine which began rolling out on Monday helped offset the crushing economic blow mass confinement is likely to inflict.


On the market, Next (LON:NXT) topped the Footsie list of risers with a near 6% gain after a post-Christmas update to trading revealed the clothier’s performance to have been resilient (under the current circumstances).


“Next continues to wade through treacle, with further online growth being offset by another blow to its retail business,” said Richard Hunter, head of markets at Interactive Investor. “Even so, the group is continuing to navigate a difficult time with aplomb.”


On the debit side of the blue-chip index, lockdown-affected stocks figured.


British Airways owner IAG (LON:IAG) lost altitude with a 2.7% drop, while commercial landlords British Land (LON:BLND) and Land Securities (LON:LAND) were off 2.2% and 1.9% respectively, impacted by rating downgrades from Morgan Stanley.


Proactive news headlines:


Remote Monitored System PLC (LON:RMS) has issued an update on the status of a face mask manufacturing machine to be delivered to its subsidiary Pharm 2 Farm Limited (P2F). The AIM-listed firm said following an announcement on December 29. 2020, advising a likely shipping date, the manufacturing plant was loaded and dispatched from Spain on January 4, 2021. Remote Monitored noted that the plant is likely to arrive in Nottingham at the earliest on January 8, subject to any routine traffic or customs delays.


Westmount Energy Limited (LON:WTE) has highlighted the start of drilling operations at the Bulletwood-1 well, part of the Canje exploration project offshore Guyana. The group said it fires the starting pistol on an exciting and potentially game-changing period for the small-cap oil investor. Westmount indirectly holds an interest in ExxonMobil-operated Canje, via a 7.2% shareholding in JHI Associates Inc (which in turn has a 17.5% stake in the block). As a result of JHI’s farm-out deal with Total, struck in 2018, the minority partner is ‘carried’ for its share of costs in up to four wells including Bulletwood-1.


Destiny Pharma PLC (LON:DEST) has said its XF-73 Phase 2b clinical trial was fully recruited by the end of 2020, meeting the target timeline. The clinical-stage biotechnology company, focused on the development of novel medicines that can prevent life-threatening infections, said results of the trial are expected in the first quarter of this year. XF-73 is a first-in-class drug candidate from Destiny Pharma’s XF platform, initially being developed for the prevention of post-surgical staphylococcal infections, such as methicillin-resistant Staphylococcus aureus (MRSA), which cause significant complications and increased healthcare costs in the hospital setting.


SDX Energy PLC (LON:SDX) told investors it has tapped ‘first gas’ from the South Disouq SD-12X well in Egypt, six weeks ahead of schedule. The 100% owned well unearthed a commercial discovery in mid-2020 and subsequently came online on December 21, 2020, the company revealed in an update. It is anticipated that SD-12X is host to 24bn cubic feet of recoverable resources and can produce at 10 to 12mln cubic feet per day (presently the rate is reported as 5mln to 7mln). At the same time, SDX reported group production of 6,400 barrels of oil equivalent (boepd) for the twelve months ended December 31, 2020.


Impax Asset Management Group PLC (LON:IPX) has said its assets under management (AUM) surged to a new high in the final quarter of 2020. AUM rose by 24.8% during the final three months of 2020 to GBP25.2bn. “Despite these difficult times, I am pleased to report that Impax has again demonstrated its resilience and delivered another quarter of strong growth,” said Ian Simm, the chief executive of the AIM-listed specialist investor, which focuses on investments aimed at building a more sustainable economy, in a statement.


Custodian REIT PLC (LON:CREI) said it has purchased an office building one mile west of Oxford city centre for GBP7.86mln. The UK property investment company has acquired Willow Court, a 22,545 square feet office building on Minns Business Park, adjacent to the A34, which connects the M4 and M40. The property comprises four floors let to RBS, Dehns, Charles Stanley, Oxentia and the Smith Institute with a weighted average unexpired lease term to first break or expiry of four years and an aggregate rent of GBP537,496 per annum, reflecting a net initial yield of 6.41%.


Allergy Therapeutics PLC (LON:AGY) has initiated a peanut allergy biomarker study that will support the clinical programme for a phase I trial later this year of its potentially breakthrough short-course vaccine candidate. Researchers from Imperial College London have begun work on blood samples from peanut allergy patients to evaluate the group’s virus-like particle inoculation. Specifically, the scientists will seek to confirm its hypoallergic potential and its “potent immune response”.


Argo Blockchain PLC (LON:ARB) has reported higher revenues and margins from its cryptocurrency mining operations in December and offered a positive outlook for the year ahead. In an update on its operations, the firm reported revenues for the month of GBP1.63mln, up from GBP1.48mln in November, which was generated with an average monthly mining margin of around 60% compared to 57% in the prior month. The company also said it had mined 96 Bitcoin or Bitcoin equivalent (BTC) in the month compared to 115 BTC in November, taking the total amount mined in the year-to-date to 2,465 BTC.


United Oil & Gas PLC (LON:UOG) has announced the spudding of the ASH-3 development well at the Abu Sennan licence, in Egypt. The company owns a 22% interest in the Kuwait Energy operated well which will target Alam El Bueib reservoirs, at a depth of 3,600 to 3,950 metres, in a location up-dip of the ASH-2 production well. ASH-2 was brought online a year ago and has to date yielded over 1mln barrels, and is currently flowing around 4,500 barrels of oil per day.


Eden Research PLC (LON:EDEN), the sustainable biopesticides group, has received the London Stock Exchange’s Green Economy Mark, which recognises companies that derive over 50% of their total annual revenue from products and services that contribute to the global green economy. Adherence to good environmental, social and governance (ESG) principles has become a fundamental part of analysing businesses with institutions such as BlackRock, the world’s largest stock market investor, and Wall Street bank Goldman Sachs bringing the issue into the mainstream. In a statement, Eden Research chief executive Sean Smith said: “As the UK’s only listed AIM company focused on biopesticides for sustainable agriculture, being recognised with the Green Economy Mark clearly demonstrates our credentials to investors and other stakeholders, highlighting Eden’s efforts to support the transition to a sustainable world.


Shanta Gold Ltd (LON:SHG) said it has appointed Yuri Dobrotin as its group exploration manager. Dobrotin is a global expert in gold exploration with 35 years’ experience. He joins Shanta from Barrick Gold where he was a senior district geologist in Tanzania. He was previously the geology manager at Acacia Mining‘s Kenyan operations where he was directly involved in the discovery of the high-grade West Kenya Project, acquired by Shanta Gold in 2020.


NQ Minerals PLC (AQSE:NQMI) (OTCQB:NQMLF) has said that Colin Sutherland will cease to be a director of the company and also cease acting as its chief financial officer effective from close of business on January 8, 2021, to pursue other interests. The group said Sutherland will remain as a consultant to the company to assist with key initiatives currently underway concerning efforts to elevate NQ’s shares to trading on a recognised Tier-1 stock exchange.


Kodal Minerals PLC (LON:KOD), the mineral exploration and development company, announced on Monday that it has received conversion notices concerning its US$1.5mln unsecured convertible loan agreement with Riverfort Global Opportunities PCC Limited and YA II PN Ltd, details of which were announced on July 15, 2020. The investors have elected to convert a total amount of $300,242.88 (equivalent to GBP220,048.01), made up of a principal amount of $300,000.00 and accrued interest of $242.88, into 347,078,879 new ordinary shares of 0.03125p each in the company, at a price of 0.06340p per ordinary share. These conversions represent final repayment of the $750,000 first tranche of the loan agreement. The second drawdown of a further $750,000, as announced on October 27, 2020, remains outstanding.


EQTEC PLC (LON:EQT), a world-leading gasification technology solutions company for sustainable waste-to-energy projects, has announced the exercise of warrants over 12,000,000 new ordinary shares in the company at a price of 0.25p each and warrants over 30,773,543 new ordinary shares at a price of 0.33p each. The aggregate gross proceeds of these exercises receivable by the company amount to GBP131,553.


OptiBiotix Health PLC (LON:OPTI), a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skincare has announced that further to its announcement made on December 9, 2020, regarding the intention to appoint Christopher Brinsmead as a director of the company, the regulatory due diligence process required has been completed, and he joined the board as a non-executive director on January 1, 2021.


Tissue Regenix Group PLC (LON:TRX), the regenerative medical devices company, has announced that, following the Group’s announcement on December 4, 2020, Brian Phillips and Trevor Phillips have been appointed to its board as independent non-executive directors, Brian Phillips is now chair of the Audit Committee and Trevor Phillips is chair of the Remuneration Committee.


Block Energy PLC (LON:BLOE), the development and production company focused on Georgia, announces that, following the transition of the Mirabaud Securities corporate broking team to Tennyson Securities, Tennyson has been appointed as the sole broker to the company, effective immediately.


Silence Therapeutics PLC (LON:SLN) (NASDAQ:SLN), a leader in the discovery, development and delivery of novel short interfering ribonucleic acid (siRNA) therapeutics for the treatment of diseases with a significant unmet medical need, today announced that company management will participate in a fireside chat at two upcoming investor conferences. These are: The H.C. Wainwright BioConnect 2021 Conference on January 11, 2021, at 6.00am EST (1.00pm GMT); and the ICR Conference 2021 on Thursday, January 14, 2021, at 8,30am-9.10am EST (1.30pm-2.10pm GMT). Live webcasts of the presentations can be accessed via the Investors section of the company’s website at www.silence-therapeucs.com. An archived replay of the webcasts will be available for 60 days on the company’s website following the conference.


6.50am: New national lockdown a drag


The FTSE 100 was tipped to stumble on Tuesday after Downing Street imposed a new tougher national coronavirus (COVID-19) lockdown overnight.


London’s blue-chip share index was being called down 21 points by spread-betters in the City a day after making gains of just over 111 points or 1.7% to 6,571.88 on the first trading session of 2021.


On Monday evening, UK prime minister Boris Johnson said England will enter its third national lockdown until at least February 22, 2021, with households ordered to stay home for everything but daily exercise once a day and with all non-essential shops closed.


“The weeks ahead will be the hardest yet,” the prime minister said, as the moves were brought in to prevent the NHS from becoming overwhelmed amid rocketing numbers of Covid-19 cases in the country since last month.


With the pandemic resurgent in many other countries too, financial markets have been wobbly, with US share indices bathed in red overnight and Asian stocks mixed on Tuesday.


On Wall Street, the Dow Jones Industrials Average, S&P 500 index, ad Nasdaq Composite all retreated from their recent record highs, down 1.3%, 1.5% and 1.5% respectively ahead of an important pair of run-off Senate elections in the state of Georgia.


“With the world long to the eyeballs on the global recovery trade across multiple asset classes, uncertainty in the Georgia election today could create a fertile breeding ground for some emotional pullbacks,” said market analyst Jeffrey Halley at Oanda.


“I expect European equities to open lower with that in mind, with UK markets under greater than average pressure due to the imposition of a new national lockdown. With positioning so heavily weighted to the long side, equity markets could potentially correct much lower if the Georgia election results are delayed, inconclusive or if the Democrats sweep both seats.”


Around the markets:


  • Pound up 0.25 to US$1.3603
  • Gold down 0.1% to US$1,941.62
  • Oil down 0.5% to US$50.85

6.45am: Early Markets – Asia / Australia


Shares of Chinese telecommunications giants jumped on Tuesday after the New York Stock Exchange said it will no longer delist the firms.


Hong Kong-listed shares of China Mobile surged 5.47% while China Telecom’s stock jumped 5.74%.


Asian shares were mostly higher with the Shanghai composite rising 0.38% while South Korea’s Kospi gained 0.54%.


In Japan, the Nikkei 225 declined 0.35% and in Hong Kong, the Hang Seng index rose 0.13%.


Shares in Australia fell, with the S&P/ASX 200 down 0.03%.


READ OUR ASX REPORT HERE


Proactive Australia news:


Emyria Limited (ASX:EMD) will pursue the registration of its first cannabinoid-based medicine, EMD-003, to reduce symptoms of anxiety, depression and stress, with Australia’s Therapeutic Goods Administration (TGA) in 2021.


Infinity Lithium Corporation Ltd‘s (ASX:INF) (FRA:3PM) San Jose Project in Spain has been further strengthened by ongoing support from EIT InnoEnergy – an independent European Union (EU) body responsible for the industrial development program of the European Battery Alliance.


Archer Materials Ltd (ASX:AXE) (OTCMKTS:ARRXF) (FRA:38A) welcomes a recent report by Boston Consulting Group (BCG) ‘A Quantum Advantage in Fighting Climate Change’ which focuses on how quantum computing could provide economic solutions for companies and governments to fight climate change.


Kazia Therapeutics Ltd (ASX:KZA) (NASDAQ:KZIA) has laid a solid foundation for further development in 2021 of a pipeline that includes two clinical-stage drug development candidates.


Oklo Resources Ltd (ASX:OKU) (FRA:JYA) managing director and CEO Simon Taylor has shown confidence in the company’s gold strategy focused on West Africa with the purchase of 400,000 shares in the company in on-market transactions.


Bionomics Ltd (ASX:BNO) (OTCMKTS:BNOEF) has initiated a 7-day dosing pharmacokinetic (PK) study in healthy volunteers using the newly developed solid dose tablet formulation of its lead drug candidate, BNC210.


Maximus Resources Ltd’s (ASX:MXR) (FRA:M5F) directors have given the thumbs up to the company by participating in its recent strategic placement to raise up to $3.18 million to accelerate drilling at prospects around the historic high-grade Wattle Dam Gold Mine.


Peninsula Energy Ltd (ASX:PEN) received a speculative buy rating and a 15 cents per share risked price target from Canaccord Genuity in December.

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