• FTSE 100 index closes up
  • US indices reach new highs
  • PM gets Brexit withdrawal bill through

5.10pm: FTSE closes higher

FTSE 100 index perked up a little late on Friday, the end of the final full trading week of 2019, but the recent share rally appeared to lose momentum.

It came as sterling gained and, as expected, UK Prime Minster Johnson got  his Brexit withdrawal bill, which contains no possibility of an extension to the transition period, through the Commons.

The UK’s premier index of leading shares closed up over eight points at 7,582.

The more UK company focused FTSE 250 also closed up around eight points to finish at 21,674.

“After 3% gains across the week and 4.5% gains across the past 10 days a little profit taking is hardly unexpected,” noted analyst Fiona Cincotta, at GAINCapital.com.

“The FTSE headed towards the close flat, paring earlier gains as the pound pushed higher and as MP’S clear Boris Johnson’s Brexit Withdrawal bill.”

Cincotta says the bill, as feared, put a no deal Brexit firmly back on the table.

“With the pound down over 2% across the week, today’s vote had been fully priced in, explaining why the reaction from sterling today was minimal. Instead sterling is riding higher following the better than forecast GDP release earlier in the session.”

Gross Domestic product (GDP) for the UK came in at 1.1% growth for the final revision of the third quarter, up from 1%, but was still a very uninspired performance, she noted.

The Wall Street story though was one of continued optimism as shares powered to new highs.

“With geopolitical risks abating and markets showing little interest in Trump’s impeachment, bulls are firmly onboard the Santa rally,” said Cincotta.

2.15pm: US markets to open higher

US markets are set to open higher, which would mean the two main benchmarks hitting new highs.

The Dow Jones industrial average is set to surge 77 points to 28,454 while the S&P 500 is tipped to open at around 3,214, up 9 points.

In the UK, the suspicion is that most traders have sloped off to start the weekend early as the FTSE 100 continues to languish just a few points above last night’s close.

1.30pm: FTSE 100 and FTSE 250 go their separate ways

It’s another one of those days when the FTSE 100 and FTSE 250 are out of sync with each other, although neither index is moving much.

The FTSE 100 is up 16 points (0.2%) at 7,590 while the FTSE 250 is off 37 points (0.2%) at 21,629.

Given the fact that sterling is making a decent fist of things on the foreign exchange markets, rising by almost a third of a cent to US$1.3041, the relative performance of the two indices is odder still, as a strong sterling is generally regarded as being good for blue-chips and a bit of a downer for the mid-caps that comprise the FTSE 250.

Among the mid-caps, Synthomer PLC (LON:SYNT) is defying the trend, rising 2.2% to 354.8p, after Deutsche Bank craked up its price target to 410p from 340p.

Outside of the FTSE 350, Triad Group PLC (LON:TRD) tumbled 8.7% to 37.44p after the digital technology consultant slipped into the red at the halfway point of the year.

12.15pm: Just Eat continues to reject the Prosus offer

Deck the halls with bunting … for a brief period the FTSE 100’s gain moved into double figures but it evidently took fright.

London’s index of leading shares retreated back towards last night’s close and is now up just 3 points (0.0%) at 7,577.

Bid stock Just Eat PLC (LON:JE.) ebbed 1.3% to 801.6p as it stuck by its preferred acquirer, Takeaway.com, rather than rival bidder Prosus.

“Just Eat’s rejection of Prosus’s revised offer isn’t new and they continue to signal their preference to merge with Takeaway.com. The logic is this is a merger of two companies doing the same thing for which there would be material synergies and strategic and market share gains to be had, whereas the Prosus offer is an investment vehicle for cash and not really bringing much to the table in terms of longer term benefits, except for the higher cash for shares offer. ” observed Helal Miah, an investment research analyst at The Share Centre.

“Just Eat should be commended for sticking to their guns and not selling out to the highest bidder and placing strategic interests first. The market has not reacted by much though given today’s news, the implication being that Prosus will have to up their price even higher in order to make it past the finish line in first place,” he added.

11.00am: Press reports of more off-balance-sheet shenanigans hit NMC Health

The NMC Health PLC (LON:NMC) continues to be just about the only show in town so far as London’s blue-chips are concerned.

While the FTSE 100’s modest 10 point (0.1%) rise to 7,591 correctly suggests that most traders are probably more concerned with some last minute Christmas shopping, there is one stock whose dial is moving: NMC, down 23% at 1,331.5p.

The Financial Times has reported that the Middle Eastern hospitals operator has been in discussions to raise off-balance-sheet debt of several hundred million dollars to fund new hospitals.

READ NMC Health shares tumble 23% after short-seller Muddy Waters takes aim

Muddy Waters, the hedge fund behind August’s short-selling of shares in litigation finance group Burford Capital, has had NMC in its sights this week and has been highly cricitcal of the healthcare operator’s finances, including its propensity for off-balance-sheet financing.

10.15am: Small upgrade to GDP

London’s leading equities remain becalmed, despite an upward revision of third-quarter gross in the gross domestic product (GDP) for the UK.

The estimate of quarter-on-quarter GDP growth in the third quarter was revised up to 0.4% from 0.3% previously; economists had expected there to be no change.

The year-on-year growth was revised up to 1.1%, from 1.0%.

“The upward revision to GDP growth in Q3 leaves the year-over-year growth rate only fractionally below the MPC’s estimate of its trend range of ‘a bit below 1.5%’, weakening the case for immediate rate cuts,” suggested Samuel Tombs, the chief UK economist at Pantheon Macroeconomics.

“The revision to quarter-on-quarter growth was driven by higher estimates for growth in private dwellings investment, 2.3%, and exports, 7.9%, up from 1.5% and 5.2%, respectively,” he added.

Meanwhile, it was confirmed that Andrew Bailey will be the next governor of the Bank of England, succeeding Mark Carney. Bailey is currently the head of the Financial Conduct Authority.

The FTSE 100 was up 8 points (0.1%) at 7,583.
 

9.30am: The Footsie struggles into positive territory

It has been an unexciting morning so far unless you are a shareholder – or short-seller – of NMC Health PLC (LON:NMC), which is under the cosh again.

The FTSE 100 has crawled 9 points higher (0.1%) to 7,583, no thanks to Middle East-focused hospitals operator NMC, which is down 7.3% at 1,425p.

Attempts by NMC’s management to rebuff the accusations made by hedge fund Muddy Waters don’t seem to have cut much ice with the City.

Also on the back foot is integrated oil giant Royal Dutch Shell (LON:RDSB), which revealed fourth-quarter profits would take a dent from an impairment charge. It also reduced its capital expenditure guidance to the lower end of its range of US$24bn to US$29bn.

“This shouldn’t have been too much of a surprise given the company’s warning in Q3 when the company recorded a 15% slump in profits from US$5.6bn in 2018 to US$4.8bn. At the time the company warned that it might miss its targets to reduce its debt levels, and increase its payouts to shareholders, which this morning’s announcement appears to bear out,” said CMC’s Michael Hewson.

“This reduction in guidance and impairment appears to show that management underestimated how much weaker oil prices would be in the latter part of this year, as well as underestimating future demand for oil, along with its by-products.

“At a time when renewables are starting to become more mainstream this warning does raise questions as to whether management are sufficiently attuned to the changing global environment around energy and climate change,” he added.

8.40am: Slow early progress

If you were betting on the FTSE 100, you wouldn’t be winning big today given the muted open.

The index of UK blue-chips lost 5 points at the open, falling to 7,568.89

Forgetting the impeachment farce being played out 200 miles away on Capitol Hill, Wall Street ended a busy session on a new high Thursday.

Yet this still wasn’t enough to tempt London’s buyers out in force.

It may be close to Christmas, but there is plenty going on with the Brexit bill expected to pass on the nod today after Boris Johnson secured a thumping majority in last week’s election.

The announcement of a new Bank of England governor is scheduled later Friday, with Financial Conduct Authority chief Andrew Bailey expected to get the nod.

Meanwhile, sentiment may be turned if the latest UK quarterly GDP figures throw up a surprise – though this looks a long shot.

On the market, Royal Dutch Shell (LON:RDSA), the Footsie’s largest constituent, fell around 1% in the wake of updated quarterly numbers.

Proactive news headlines:

Cadogan Petroleum Plc (LON:CAD) shares rose on Friday following news it has received final approval for a 20-year production licence for the Blazhiv field in Ukraine. The company has already paid the licence fees and has started production. Cadogan drilled a new well, Blazh-10, on the field earlier in the year that flowed at 185 barrels per day (bpd), lifting group production to 400 bpd.

Greencoat UK Wind PLC (LON:UKW) has agreed to acquire two Scottish wind farms on their completion for £104mln. Combined, Windy Rig and Twentyshilling, in Dumfries & Galloway, will produce 81 megawatts of power. The former is expected to come online in the second quarter of 2021 while the latter should be up and running by the third quarter of the same year

Live Company Group PLC (LON:LVCG) has signed an agreement with the Royal Burgers Zoo in the Netherlands for its BRICKLIVE Brickosaurs exhibition. The exhibition, the second at the zoo, will run from mid July 2021 to the end of August.

Immotion Group PLC (LON:IMMO) said it expects a “significant” boost in new installation activity in 2020 that is set to deliver monthly underlying earnings (EBITDA) at break-even in the first quarter. In a trading update, the firm said its full-year underlying EBITDA loss is estimated to be in line with expectations, with revenue to come in at between £3.6mln and £3.8mln.

VR Education Holdings PLC (LON:VRE) has extended a commercial agreement for its Apollo 11 virtual reality (VR) experience with the US Space and Rocket Center in Huntsville, Alabama. The tech firm said the agreement with the aerospace museum will now run for another 12 months, over which time the company will continue to take a cut of ticket sales for the experience.

Regency Mines PLC (LON:RGM) has reported a full-year loss of £2.7mln after its legacy interests in coal and electric car rentals were written-off in the period. Impairments of £1.5mln in the year to June largely comprised its investment in Mining Equity Trust (2018: £1.55mln loss).   

Benchmark Holdings PLC (LON:BMK), the aquaculture solutions provider, said it saw an improvement in adjusted underlying earnings from continuing operations during the final quarter of its fiscal year. In a fourth-quarter results statement that reiterated most of the financial information in its trading update of three weeks ago, the company said adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations in the three months to the end of September rose to £7.5mln from £7.0mln the year before.

US Oil & Gas PLC has raised US$61,111 through the placing of 152,842 new shares with private investors. The oiler placed the shares at a price of 32p each, the proceeds of which will be used for working capital to fund its drilling operations.

Iofina PLC (LON:IOF), the iodine producer, said construction of its latest production plant, IO#8, remains on track. Work on the Oklahoma plant began in late September of this year and continues to make progress as expected within Iofina Resources’ timeline and budget.

Shanta Gold Limited (LON:SHG), the East Africa-focused gold producer, developer and explorer, announced that its New Luika Gold Mine (NLGM) in South West Tanzania has successfully connected to the state power grid supplied by TANESCO. In a statement, the group said the initial connection represents approximately 10% of NLGM’s power needs and this is anticipated to increase over the next 12-24 months.

Ncondezi Energy Ltd (LON:NCCL) has said “several areas” have been identified to potentially speed up the development of a proposed 300-megawatt mine Mozambique power station. In a statement, the company said this was one of the major positives to emerge from the inter-ministerial committee for China and Mozambique.

Horizonte Minerals PLC (LON:HZM) (TSX:HZM) has announced an update on its Corporate Social Responsibility (CSR) program in the communities surrounding its Araguaia Nickel Project, south of the Carajás Mining District in the Pará State, north-east Brazil. The nickel development company focused in Brazil, which has supported local communities since its initial discovery of the project, said it is running several new social impact projects, tackling issues specific to the region, in partnership with local community organisations.

Hurricane Energy PLC (LON:HURR) has announced the appointment of Beverley Smith as a non-executive director of the company with immediate effect. The group noted that Smith is a chartered geologist and during a successful international career with BG Group, she delivered a portfolio of strategic, commercial, project and people leadership achievements, most recently as Vice President Exploration & Growth for Europe. It added that, following her appointment, half of Hurricane’s board of directors (excluding the chairman) are independent non-executive directors, in compliance with the Financial Reporting Council’s UK Corporate Governance Code 2018.

Europa Metals Ltd. (LON:EUZ), the European lead-zinc and silver developer, announced that Turner Pope Investments (TPI) Limited is its sole broker, with immediate effect.

6.45am: Quiet open predicted 

It’s beginning to look a lot like Christmas, in as much as the Footsie looks about ready to start taking days off.

Spread betting quotes suggest that the FTSE 100 will open little changed after the index rose 33 points yesterday to close at 7,574.

US markets reached new highs again yesterday, with the Dow Jones advancing 138 points to 28,377 and the S&P hardening 14 points to 3,205.

Asian markets have been mixed this morning. In Tokyo, the Nikkei was off 7 points at 23,857 while in Hong Kong the Hang Seng index was up 78 points at 27,879.

Corporate news is starting to tail off ahead of the Christmas break but the macroeconomic data keeps rolling along on schedule.

At 9.30am, the UK gross domestic product (GDP) reading for the third quarter will be released. Economists are predicting a 0.3% quarter-on-quarter increase and a 1% year-on-year rise.

Across the pond, the US is also releasing GDP data; the consensus forecast is that the second estimate of third-quarter growth will be the same as the first one, namely 2.1%.

On the personal income and spending front, Pantheon Macroeconomics thinks incomes “probably rose 0.4%”.

“The retail sales data point to a 0.4% increase in nominal spending, which should translate into a 0.2% real increase, given our 0.2% headline PCE deflator estimate. We look for a 0.1% rise in the core deflator,” it revealed.

Meanwhile, the final reading of the University of Michigan consumer sentiment index is expected to come in unchanged at 99.2.

Significant announcements expected:

Macroeconomic: UK GDP; US GDP; US Personal Income and Spending; University of Michigan Consumer Sentiment; German GfK consumer sentiment

Around the markets

  • Sterling: US$1.3015, up 0.05 cents
  • 10-year gilt: yielding 0.802%, up 2.5 basis points
  • Gold: US$1,483.30 an ounce, down US$1.10
  • Brent crude: US$66.68 a barrel, up 14 cents
  • Bitcoin: US$7,100, down US$69

City headlines:

  • Financial Times

  • Andrew Bailey, head of the Financial Conduct Authority, has been tapped up to become the new governor of the Bank of England.
  • Naspers and Takeaway.com both put new orders in for Just Eat on Thursday.
  • The World Bank has flagged a “towering” US$55 trillion of debt piled up by developing countries in 2018
  • The Daily Telegraph

  • Fallen stock picker Neil Woodford is seeking a comeback in China after the spectacular collapse of his investment empire.
  • Hospital operator NMC Health has hit back at claims of financial mismanagement made by hedge fund Muddy Waters as “false and misleading”.
  • The Times

  • The closely-watched GfK confidence index rose by three points to -11 this month, indicating the UK households grew more confident about their personal finances in the run-up to the general election.
  • Business groups have welcomed the greater emphasis on enterprise in the Queen’s Speech but warned that more clarity on the proposals was needed to deliver critical reforms.
  • Retail sales are suffering their worst run for more than 20 years after falling 0.6% in November, according to the Office for National Statistics.
  • Nike, the sportswear company, has reported a 10% rise in second-quarter revenue to $10.3 billion while profit was up 32% at $1.1 billion.
  • An activist shareholder, Western Gate Private Investments, has turned up the pressure for a shake-up at Stock Spirits Group, in a bid to force the Polish vodka maker’s board to pay a special dividend.
  • Investors have rebuked Playtech over a bonus scheme that could hand the boss of the gambling software supplier shares worth more than £30 million.
  • Pay for FTSE 100 chief executives has declined 12% to under £3.5 million on average after pressure from shareholders and regulators.
  • The accountancy watchdog has widened its investigation into the Thomas Cook audit to include the collapsed travel group’s 2017 financial statements.
  • Royal Bank of Scotland’s new chief executive has removed the management of its loss-making investment bank, raising expectations of deep cuts to the division.
  • Daily Mail

  • Breeze Energy, which has just under 18,000 domestic customers, has become the latest in a string of energy suppliers to go bust.
  • The Guardian

  • The UK’s financial watchdog has launched an investigation into a security breach at the Bank of England that allowed hedge funds early access to an audio feed of Mark Carney’s market-moving press conferences.
  • Goldman Sachs is close to reaching a settlement of nearly $2 billion with the US Department of Justice over the 1MDB corruption scandal, according to a report.