- FTSE 100 index rises 51 points
- UK manufacturing PMI revised upwards
- ING predicts the latest lockdown will shave 6-7% from GDP in November
11.00am: Lockdown hit to UK GDP in November estimated at 6-7%
The UK lockdown will shave around 6-7% off the kingdom’s gross domestic product (GDP) in November, according to ING.
“Lockdown measures are set to return to England this week, and we think that will take roughly 6-7% off monthly GDP for November, following a forecasted 1% contraction in October. That figure could rise if some schools are closed, or if there is a knock-on effect on industries not officially required to close,” said James Knightley, who covers developed markets at ING.
“For the fourth quarter as a whole, that’s likely to mean a contraction of roughly 1.5% if most restrictions are lifted in December, or 2%+ if restrictions last longer,” he added.
On the plus side, the hit to the most heavily affected sectors – hospitality and retail – may not be as large as it was back in April, Knightley predicts.
The ING economist thinks the return to lockdowns will “inevitably add further political impetus” to getting a Brexit deal done.
“The UK government has slipped behind the opposition in some recent polls, while there is a sense that a no-deal scenario could further boost the campaign for Scottish Independence, something the government in London is keen to avoid. There’s also a fair chance the UK, and parts of Europe, could still be in some form of lockdown at New Year, and a ’no deal’ scenario could therefore be even messier than it might otherwise have been,” Knightley said.
The FTSE 100 was up 51 points (0.9%) at 5,628.
10.15am: UK October manufacturing PMI revised upwards
The UK Manufacturing Purchasing Managers’ Index (PMI) was revised up to 53.7 in October from the flash estimate of 53.3
September’s level was 54.1. A value above 50 indicates an expansion in activity.
“October saw the UK manufacturing recovery continue, albeit with the upturn losing momentum amid ongoing lockdown measures and signs that growth could weaken further in coming months after Brexit-related stockpiling,” said Rob Dobson, a director at IHS Markit, which conducts the survey.
“The main drag was a fall back into contraction for the consumer goods industry, blamed in part on lockdowns and falling demand as virus worries intensified among households.
“There was positive news on the export front, with new orders from overseas rising to the greatest extent in over two-and-a-half years; however, a significant contribution to the improvement in exports came from a temporary boost of Brexit stock building by EU clients, which was evident in one-in-four companies that reported higher exports.
“The outlook for the remainder of the year has therefore become increasingly uncertain, with risks tilted to the downside,” Dobson said.
Duncan Brock, the group director at the Chartered Institute of Procurement & Supply, which sponsors the survey, said that although the recovery lost a bit of steam in October, new orders still rose for the fourth month in a row.
“UK and European businesses were stocking up before the Brexit deadline, and as supply chains opened up further, more orders were received from countries like China; however pressures persisted for manufacturers with delivery times from suppliers lengthening to their greatest extent since June. Though capacity increased where staff returned to work, the rush to complete backlogs of covid-affected work resulted in difficulties in other tiers of the supply chain. Costs rose at the fastest rate since December 2018 as competition intensified for raw materials in short supply,” Brock said.
“The higher cost of doing business was not the only cause for alarm this month as the outlook for jobs remained painfully weak. More redundancies and restructures reduced headcounts for the ninth month in a row especially at consumer-facing businesses. As shoppers continue to press pause on spending, firms will be unable to conjure up the business they need to maintain operations leading to a fretful end to the year,” he added.
The FTSE 100 was up 46 points (0.8%) at 5,623.
9.45am: Sterling’s weakness a double-edged sword for FTSE 350 stocks
With sterling slithering through the gutters of the foreign exchange markets, the FTSE 100 has got off to a modestly firm start.
The same can’t be said of the mid-cap FTSE 250, whose constituents benefit less – if they benefit at all (increased raw material costs and all that) – from a weak exchange rate.
So, while the FTSE 100 is up 26 points (0.5%) at 5,603 as sterling falls by three-quarters of a cent to US$1.2877 following Saturday’s shambles of a lockdown announcement by the prime minister, Boris Johnson, the FTSE 25- is down 119 points (0.7%) at 17,094.
The usual suspects have been identified as beneficiaries of lockdown Britain – yes, even the south of England! – and as a result the top four risers on the Footsie are all food delivery rated: Ocado Group PLC (LON:OCDO), Just Eat Takeaway.com NV (LON:JET), J Sainsbury PLC (LON:SBRY) and Tesco PLC (LON:TSCO), which are up by betweem 2.7% at 6.6%.
Ocado was the best of the bunch, as it said it continues to see high demand as consumers migrate to online grocery in record numbers.
Primark-owner Associated British Foods PLC (LON:ABF) was down 2.7% at 1,652.5p after it said all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are temporarily closed, which represent 19% of its total retail selling space.
Its estimated loss of sales for these stores, including the stores in England, for the announced periods of closure, is £375mln.
How are we supposed to buy if you’re shut and have no online website to purchase? This is teasing! ????????????
— Elaine Barry (@LaineysMrsH) October 25, 2020
8.50am: Subdued start to big week
The FTSE 100 made an insipid start to the trading week with Saturday’s new UK coronavirus (COVID-19) lockdown announcement and the impending US election dampening the mood on Monday.
The former first: experts are now trying to assess the true cost of new coronavirus restrictions with one estimate putting the bill at £1.8bn a day.
“The health crisis is ratcheting up in terms of new COVID-19 cases (and hospitalisation rates) and there is a sense things are going to get worse before they get better,” said David Madden, an analyst at CMC Markets.
“Medical experts were claiming since the beginning of the health crisis that the virus is likely to resurface in winter, but, nonetheless, here we are, and dealers have been rattled by the situation.”
Those traders will also have one eye on America and the fall-out from Tuesday’s election with litigation being one possible outcome if the result is closer than is currently being predicted.
On the market, Ocado (LON:OCDO) led the risers with a 6.2% gain after the online grocer raised its earnings guidance.
Another potential lockdown winner, JustEat (LON:JET), was up 2.5% with the takeaway specialist expected to receive a significant boost between Thursday and the end of incarceration in early December.
Sainsbury (LON:SBRY) was ahead 2% early on following a Sunday Times report suggesting it is exploring moves to offload its banking arm.
The early casualties, meanwhile, were predictable. Airline giant IAG (LON:IAG) and Rolls Royce (LON:RR.) fell 6.3% and 4.5% respectively. Both will be and are currently being hit by the travel restrictions caused by the onset of the winter second wave.
On the FTSE 250, Serco (LON:SRP) was the big mover as it lost 11% after a consortium in which it holds a minority interest lost a management contract for the Atomic Weapons Establishment.
Proactive news headlines:
Arkle Resources PLC (LON:ARK) said it has identified new gold targets at its gold projects in Ireland, following soil sampling. A programme for trenching and drilling at the Inishowen gold project in County Donegal is planned to commence shortly. Meanwhile, trenching has commenced on the Mine River gold project located on the Wicklow- Wexford county border.
i3 Energy PLC (LON:i3E) has confirmed the closing of its transaction to acquire the Canadian assets of Toscana Energy Income Corporation, which further establishes the group’s production business in North America. Production from the Toscana assets along with assets acquired from Gain Energy, in September, averaged a combined 9,407 barrels oil equivalent per day for October. Additionally, the company noted that the Toscana assets come with C$128mln of accrued tax losses, which it said will support tax-efficient income for several years.
Sensyne Health PLC (LON:SENS) has said the University of Oxford is deploying the company’s app in a new coronavirus (COVID-19) clinical study. CVm-Health+ will be used in the FACTS evaluation of the feasibility and acceptability of new point-of-care tests for regular asymptomatic COVID-19 testing in the community. The Sensyne technology, which will be available to iPhone and Android users, will provide access to study information and links to training materials.
Seeing Machines Limited (LON:SEE) has reported higher revenues in its final results as well as “good momentum” in the first quarter of its current year following increased demand for its driver monitoring technology products. In its results for the year ended June 30, 2020, the AIM-listed firm reported that revenues were up 25% year-on-year at A$40mln, boosted by a 32% rise in revenues from original equipment manufacturers (OEM) due to a pre-production licence deal with a Tier 1 partner. The company also reported a 30% increase in aftermarket revenues despite a slowdown in installations of its Guardian monitoring systems due to the coronavirus pandemic.
Kromek Group PLC (LON:KMK) has entered into a development agreement, worth up to US$660,000, with a US-based, sector-leading industrial original equipment manufacturer (OEM). The majority of the development programme is scheduled to be delivered during the group’s current financial year and, following final completion, it is expected to make the transition to a multi-year supply contract. The AIM-listed supplier of detection technology focusing on the medical, security screening and nuclear markets, said the OEM will customise one of Kromek’s CZT detector platforms so it can be incorporated into its customer’s systems for identifying contaminations during production processes.
Zaim Credit Systems PLC (LON:ZAIM), said the coronavirus pandemic has accelerated the migration of its business model to online, resulting in a positive impact on margins. In an update on the online operations of its Zaim-Express subsidiary, the Russian fintech group said the online element now represents the largest portion of the group’s business. The shift to a more flexible and scalable online operation represents the successful delivery and execution of the revised strategy, resulting in significant growth from a low online base at the time of the group’s flotation last year.
CentralNic Group PLC (LON:CNIC) said it has completed its acquisition of Zeropark and Voluum, collectively known as Codewise, two companies that provide services to domain name owners so that they can generate recurring income from the monetisation of traffic to their websites. The internet domain name specialist said the total consideration for the purchase is US$36mln and is expected to be more than 20% earnings accretive for the company, adding that the acquisition will enhance its monetisation business and also has the potential to generate revenue synergies through cross-selling with its other businesses. In a separate announcement, the company said it will publish an interim report for its third quarter on November 30, as required under the terms of its senior secured bond listed on the Oslo Stock Exchange in Norway. The company confirmed that at this time it “continues to trade in line with market expectations” for the year ending December 31, 2020. In a third release, CentralNic added that it has issued additional consideration shares relating to the performance of KeyDrive SA, which it acquired in August 2018.
Eden Research PLC (LON:EDEN) is to partner with family-run farming business M H Poskitt to develop and trial a new bio-fungicide product designed to protect and improve the quality of vegetables. Poskitt’s farm in Yorkshire’s East Riding currently produces roughly 80,000 tonnes of crops per year serving UK retailers and a range of other customers. The AIM-listed biopesticides specialist said the partnership has been established to support a research & development project (R&D) that M H Poskitt has been engaged in, investigating the effect of mugwort plant extract on key plant diseases.
Silence Therapeutics PLC (LON:SLN) (NASDAQ:SLN) has announced that Marie Wikström Lindholm, previously VP Head of Technology Innovation, has been appointed senior vice president, Molecular Design and member of the Silence executive leadership team, with immediate effect. The company, 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, said Dr Lindholm will continue reporting to Silence’s Head of R&D and chief medical officer, Dr Giles Campion. It noted that Dr Lindholm joined Silence in December 2017 and has been responsible for building and leading a skilled team at Silence focusing on fine-tuning the design of Silence’s proprietary GalNAc-conjugated siRNA technology and exploring siRNA delivery outside the hepatocyte (liver cell).
ADES International Holding PLC (LON:ADES) told investors Monday that it has secured two contracts, one in the Kingdom of Saudi Arabia (KSA) and one in Egypt. In the KSA, the company has successfully extended a rig contract for three additional months to now run until the end of the first quarter of 2021. Earlier this year the same contract was extended by six months. In Egypt, it has a new two-year early production facility contract. It will establish an early production deck floor and topside facilities for the client, along with a jack-up barge charter.
Anglo Asian Mining PLC (LON:AAZ) has updated the mineral resources and reserves at the Gedabek open pit, Gadir underground mine and Ugur open pit mine in Western Azerbaijan. The group said Gedabek now contains resources of 735,000 ounces of gold and 69,100 tonnes of copper, including material in stockpiles, with a reserve of 284,000 ounces of gold and 26,000 tonnes of copper. Gadir now contains resources of 267,000 ounces of gold and 2,183 tonnes of copper, with a reserve of 49,000 ounces of gold and 191 tonnes of copper, it added,
San Leon Energy PLC (LON:SLE) said it has extended the deadline to complete its investment in the Oza oil field in Nigeria by three months. It comes as travel restrictions related to the coronavirus (COVID-19) pandemic have caused certain deal conditions to take longer than expected to finalise. A new deadline is now set as November 21, 2020. In early September the company unveiled its agreement to invest US$7.5mln investment into the Oza field via a loan agreement with Decklar, which is a subsidiary of Asian Mineral Resources (CVE:ASN).
Anglesey Mining PLC (LON:AYM) said it is “very encouraged” by continued strength in commodity prices over recent months and that it is now “actively reviewing” new exploration and development opportunities. In an update for the company’s general meeting on October 30, the company’s chairman John Kearney said the firm is taking “a very positive view on copper” and expects the current price to increase further in the medium term, which in turn should benefit the company as it considered deeper resources at its Parys mountain project in Wales, where copper trends tend to dominate over zinc.
Tiziana Life Sciences PLC (NASDAQ:TLSA, LON:TILS) has begun a clinical study of the nasally administered use of its monoclonal antibody, Foralumab, in the treatment of COVID-19 patients in Brazil. The trial will see the Tiziana drug administered either alone or in combination with dexamethasone, a corticosteroid medication. Clinical data are expected by the end of this year. The company said it is working closely with the collaboration partners, the Harvard Medical School and Santa Casa de Misericórdia de Santos Hospital in Santos, Brazil, to ensure the process is quickly “expedited”.
Trident Royalties PLC (LON:TRR)( FRA:5KV) said it received royalty payments amounting to just over US$480,000 in the third quarter of 2020. During the period the company announced three transactions over a total of six royalties. The royalty from Koolyanobbing amounted to A$652,073, taking the total received for 2020 to just over A$2mln. The total royalty revenue from Koolyanobbing over the first three quarters alone represents more than 30% of the royalty purchase price recovered. The company also received an inaugural payment from the Mimbula copper royalty.
Savannah Resources PLC (LON:SAV) said it has completed the sale of its stakes in the Block 4 and Block 5 copper projects in Oman to Force Commodities Ltd (ASX:4CE). Savannah will receive 50mln new fully paid ordinary shares issued by Force, giving Savannah a 4.9% stake in Force after four million shares are used to settle transaction costs. Savannah will receive preferential payment of A$3.5mln in cash from an existing loan out of cash flow generated from production on Block 5. And it will also get a 1% net smelter royalty on any future metal sales from Force’s portions of Block 4 and Block 5.
AEX Gold Inc. (LON:AEXG) (CVE:AEX), an independent gold company with a portfolio of gold licences in Greenland, has announced an operational update for the development of the Nalunaq property in South Greenland. The company said it continues to make good progress at the fully funded Nalunaq Project, with significant work having been completed on key work streams since the successful AIM Listing and fundraising in July 2020. The project remains on track, with workstreams progressing in line with management expectations, it added.
Stobart Group PLC (LON:STOB), the aviation and energy infrastructure group, has announced the appointment of David Blackwood as senior independent director (SID) with effect from November 1, 2020. Blackwood, who joined the Stobart board as a non-executive director on March 1, 2019, has extensive experience at senior levels of finance, audit and risk and has also acted as SID at Scapa Group and Dignity and is currently non-executive chairman of Connect Group. The Company announced on June 4, 2020, that it would resume the process to recruit two additional non-executive directors and address the appointment of SID. Further to that announcement, it said, Clive Condie was appointed with effect from July 1, 2020. However, as the coronavirus (COVID-19) pandemic has evolved in the last few months the board has decided to pause the recruitment of a second non-executive director. In a statement, David Shearer, Stobart Group’s non-executive chairman said: “I am delighted to announce the appointment of David Blackwood to the important role of Senior Independent Director. David has significant board-level experience and has made an invaluable contribution since his appointment.”
TomCo Energy PLC (LON:TOM), the US operating oil development group focused on using innovative technology to unlock unconventional hydrocarbon resources, has announced the appointment of Robert Kirchner and Richard Horsman as non-executive directors of the company with immediate effect. The group also announced that Stephen West, its non-executive chairman, and Alexander Benger, a non-executive director, have both expressed their desire to step down from their roles, given the increasing time commitment required as TomCo seeks to move to the next stage of its development, to focus on their other business commitments and have therefore left the board with immediate effect. Following the resignation of West, the company has appointed Malcolm Groat, previously a non-executive director of the company, as its new non-executive chairman.
Sensyne Health PLC (LON:SENS), the UK Clinical AI company, announced that at its virtual Annual General Meeting (AGM) held on Friday all resolutions were duly passed. Commenting at the event, Sir Bruce Keogh, non-executive chairman of Sensyne Health, said: “Sensyne is in a strong position to apply its technology and expertise to help the life sciences and healthcare industries manage the short term challenges associated with coronavirus. Our software suite is being used to conduct clinical trials, monitor personal symptoms and disease progression and deliver remote patient care. In the long term, we are building a business that contributes to and directly connects into, an increasingly digitised healthcare future. Most importantly we embody a better way to build technology companies – a way that recognises, respects and addresses the public, professional and institutional sensitivities related to ownership and privacy of highly personal healthcare data.” Full details of the votes received will be posted on the company’s website: www.sensynehealth.com
Alien Metals Limited (LON:UFO), a minerals exploration and development company, announced that, following the receipt of an exercise notice, it has issued 7,342,373 ordinary shares of no par value in the capital of the company at an issue price of 0.25p per share.
Synairgen PLC (LON:SNG), the respiratory drug discovery and development company, announced that it has conditionally raised total gross proceeds of approximately £7mln through the open offer to shareholders which was announced on October 15, 2020, representing the full amount proposed. Accordingly, the company has conditionally raised total gross proceeds of approximately £87mln (before expenses) in aggregate by way of the placing and the open offer.
Europa Metals PLC (LON:EUZ), the European focused lead-zinc and silver developer, has said it will hold its annual general meeting of shareholders at 10.00am UK time on Monday, November 30, 2020, by way of a virtual meeting facility.
Ferro-Alloy Resources Limited (LON:FAR), the vanadium mining and processing company with operations based in Southern Kazakhstan, has announced that at its annual general meeting held on October 30, 2020, all resolutions were duly passed.
ADM Energy PLC (LON:ADME) (FRA:P4JC), a natural resources investing company, has announced the launch of its new corporate website at: www.admenergyplc.com. The group said the website offers improved functionality and access to information on the company, including strategy, operations and all information required by AIM Rule 26.
Scirocco Energy PLC (LON:SCIR), the AIM investing company targeting attractive production and development opportunities within the European energy market, has announced the launch of its new website: www.SciroccoEnergy.com. The company also said it will be presenting a corporate presentation webinar and Q&A session at 11.00am GMT today which can be accessed via the following link: https://webcasting.buchanan.uk.com/broadcast/5f8eb6b0c4d0076f2b9424e6. The playback of the webcast will be made available on the website following the event.
Base Resources Limited (LON:BSE) (ASX:BSE) has said the latest company presentation, which was made available for the TZMI Virtual Congress 2020 that opened today, is available from the company’s website: www.baseresources.com.au.
6.50am: Footsie called lower
The FTSE 100 looks set to open in the red after the UK prime minister Boris Johnson on Saturday effectively placed the UK under house arrest with new restrictions aimed at halting the alarming rise in coronavirus (COVID-19) infections.
The measures, set be implemented on Thursday, are a little less draconian than those in place over the spring and early summer.
Even so, economists believe the financial toll will be high, with one expert stating £1.8bn will be lost every day the nation stays under lockdown.
Meanwhile, reports that chancellor of the exchequer Rishi Sunak was ready to announce his opposition to the new strictures by resigning have been firmly denied.
Saturday’s farcical announcement, which was put back several times, therefore interfering with peaktime TV, temporarily overshadowed the week’s other big news – Tuesday’s US election.
Globally, there have been a few nerves ahead of the vote. The opinion polls have Democrat Joe Biden well ahead, but then they were wrong in 2016 when Donald Trump was first elected.
The element of uncertainty is the reaction of the loser, particularly if Trump fails to secure a second Whitehouse term, and whether the process will be mired in litigation if, unexpectedly, it is a close race.
“I maintain that the Senate race is the crucial one and will have the most impact on markets,” said Jeffrey Halley, senior market analyst at OANDA.
“A Republican Senate will be an immediate negative, but probably the best outcome for equity markets longer-term. Massive fiscal stimulus and much higher taxes will be off the table in this scenario.”
Here at home, the business calendar remains busy with updates from blue-chips Sainsbury (LON:SBRY), AstraZeneca (LON:AZN) and Associated British Foods (LON:ABF) due later this week.
Around the markets:
- Pound worth US$1.2906 (-0.32%)
- Bitcoin $13,706.57 (-0.14%)
- Gold US$1,882.90 per ounce (+0.16%)
- Brent crude US$36.58 (-3.58%)
6.45am: Early Markets – Asia/Australia
Stocks in the Asia-Pacific region were mostly higher on Monday after a private survey showed that China’s manufacturing sector expanded for the sixth straight month in October.
China’s Shanghai Composite was up 0.08% while Hong Kong’s Hang Seng index edged higher by 1.13%.
Shares in Japan led gains with a 1.51% rise and South Korea’s Kospi followed closely with a 1.48% gain.
In Australia, the S&P/ASX 200 closed 0.40% higher after Aussie manufacturing activity expanded by the most in over two years in October.
Proactive Australia news:
Australian Vanadium Ltd (ASX:AVL) has produced high-purity vanadium pentoxide from representative leach liquor using hydrometallurgical methods, tested as part of a detailed flowsheet validation program for the Australian Vanadium Project.
Emyria Ltd (ASX:EMD) has strengthened its capital position after receiving a Research and Development (R&D) Tax Incentive refund of A$954,180 for the financial year 2019/2020.
Ironbark Zinc Limited (ASX:IBG) has executed a Letter of Interest (LOI) with the Export-Import Bank of the United States (EXIM), the official export credit agency of the United States’ Federal Government.
VIP Gloves Ltd (ASX:VIP) saw earnings before interest, tax, depreciation and amortisation (EBITDA) surge 340% in the September quarter, boosted by a sharp rise in average selling price and the addition of two production lines.
Pharmaxis Ltd (ASX:PXS) (OTCMKTS:PXSLY) (FRA:UUD) has reached the top biotech echelon with the US Food & Drug Administration (FDA) agency’s approval of its cystic fibrosis treatment Bronchitol® (mannitol) representing a transformational milestone.
Imugene Ltd (ASX:IMU) (OTCMKTS:IUGNF) has received US Food and Drug Administration (FDA) Investigational New Drug (IND) approval to initiate a phase-1 clinical trial of its checkpoint immunotherapy candidate, PD1-Vaxx in the USA.
Musgrave Minerals Ltd (ASX:MGV) has achieved gold recovery results described as exceptional in initial metallurgical test-work on Starlight gold lode at Break of Day deposit within the Cue Gold Project in the Murchison region of Western Australia.
Castillo Copper Ltd’s (ASX:CCZ) (LON:CCZ) (FRA:7OR) systematic infill soil sampling at the Mkushi Project in Zambia’s copper-belt have confirmed eight target areas with significant copper anomalism and extended strike lengths, which now range from 1.5 to 4.2 kilometres.
Nexus Minerals Ltd (ASX:NXM) RC drilling has confirmed high-grade mineralisation within the proposed open pit at Pinnacles JV Gold Project in the eastern Goldfields of Western Australia.
Great Boulder Resources (ASX:GBR) has received more encouraging assay results, which suggest that Mulga Bill at the Side Well Gold Project sits within a large mineralised system, with gold identified over more than 3 kilometres of strike and coincident with a deeper weathering profile and extensive shearing.