- FTSE 100 up 35 points to 8,113
- Anglo American snubs BHP bid
- Darktrace to be bought by Thoma Bravo
10.32am: Copper prices soar breach US$10,000
Anglo American’s rejection of a proposed takeover by BHP has come just after copper prices soared to two-year highs.
The price of the metal lifted above US$10,000 for the first time in around 24 months, having risen by 1.4% on the London Metal Exchange since April 2022.
It means copper prices now sit 17% higher than at the start of 2024, with the commodity a vital metal used in the production of EVs and renewable tech.
Anglo American rejected BHP’s ‘opportunistic’ £31 billion all-stock bid on Friday morning, saying it significantly undervalues its business, condemning the transaction as ‘complex’ and ‘uncertain’.
10.10am: CVC sees strong debut in Amsterdam float
Meanwhile, in Europe, newly debuted private equity firm CVC Capital Partnership has debuted on the Amsterdam stock exchange to an extremely positive reception.
Shares in the company surged 25% to €17.55 on its first day of trading, well above its IPO of €14 per share.
It leaves the company with a market capitalisation of around €14 billion (£12 billion).
Some €250 million in fresh capital has been raised from the sale of shares, while the rest of the proceeds have gone to existing stakeholders.
Co-founder Donald Mackenzie is selling up to 10 million shares, which is worth around €140 million based on the offering price.
9.48am: Darktrace takes swing at LSE
Darktrace has taken a hit at the London Stock Exchange following its plans to be taken private, adding more pressure regarding the exodus currently occurring in the market.
In a statement, the cybersecurity firm said: “The Board believes that Darktrace’s operating and financial achievements have not been reflected commensurately in its valuation with shares trading at a significant discount to its global peer group.”
Neil Wilson at Markets.com added: “Something has come loose in the UK market, like a hose pipe that was blocked up suddenly gushing forth.
He added that City stock picker Nick Train had claimed a “transformative deal could unleash pent-up demand for UK stocks” and hoped that BHP’s move on Anglo America could be such a deal.
9.27am: London Underground suffers last-minute strikes
Londoners have been caught out by a last-minute set of underground tube strikes set to take place today and tomorrow.
Earlier this week, the TSSA rail union said its members who work as customer service managers would be walking out today.
TfL predicted the strikes could lead to some stations having “to close at short notice” and could cause disruption on Saturday morning also.
TSSA members are planning to avoid working any shift which starts of Friday between 12.01am and 11.59pm, meaning staff will not attend any overnight shifts.
9.09am: Darktrace rallies on takeover by Thoma Bravo
Darktrace, the FTSE 250 cybersecurity firm, saw its shares jump close to 20% after it was revealed it had approved a purchase offer from private equity firm Thoma Bravo.
Shares at the company are now hovering around 617p, with Thoma Bravo having offered to buy the company for 620p per share, or £4.25 billion.
This represents around a 44% premium to the group’s share price average over the last three months.
Another one gone…
*THOMA BRAVO AGREES TO BUY DARKTRACE FOR $7.75/SHARE IN CASH
— Baron Investments (@baroninvestment) April 26, 2024
Thoma Bravo walked away from takeover discussions with Darktrace back in September 2022, but continued to pursue Darktrace as a means to ” increase its exposure to the large and growing cybersecurity market.”
8.51am:The morning so far
The FTSE 100 smashed yet another all-time high this morning, setting the stage for the fourth closing record if the gains can be sustained throughout the day.
Stocks have been lifted by a string of outstanding big-cap financial results throughout the week, both in the UK and across the pond.
Overnight, Microsoft beat earnings and revenue expectations, sending shares higher in post-market trades.
NatWest led today’s domestic results cycle. The group saw a 47% year-on-year decline in mortgage lending in the first quarter of 2024, with total lending down from £9.9 billion to £5.2 billion.
But with forecasts maintained, shareholders rallied around the bank, sending the stock 3.3% higher in the opening hour, making NatWest the top mover of the morning.
Asset managers Pershing Square and St James’s Place were also among the top risers, as were Ashtead, Persimmon (following yesterday’s buoyant results) and Centrica.
Pearson was one of the biggest fallers among the FTSE 100 set, with shares dipping 1.5%.
Regardless, the online learning and exams group said it’s on track to hit forecasts this year with momentum expected to be stronger in the second half.
But the biggest piece of company news was surely, London-listed miner Anglo American rejecting the shock takeover bid from Australian mining megacap BHP.
In a statement, Anglo’s board said the proposal “significantly undervalues Anglo American and its future prospects”. Anglo’s shares dipped 0.3%.
On the macro calendar, the GfK Consumer Confidence indicator rose to -19 in April 2024 from -21 in March, improving for the first time in three months and coming in above the -20 forecast.
The blue-chip index was 45 points higher at 8,124 at last count.
8.30am: Pearson sent lower following results
Pearson was one of the biggest fallers among the FTSE 100 set this morning, with shares dipping 1.5%.
Regardless, the online learning and exams group said it’s on track to hit forecasts this year with momentum expected to be stronger in the second half.
Revenues edged up 2% in the three months to end March 2024, with English learning (+22%) and workforce skills (+9%) the standouts.
Assessment and qualifications rose by 2% while virtual learning and workforce skills each dropped 4%.
Pearson added it was continuing to integrate AI features into its products with more than 40 Higher Education titles using AI for the Autumn term.
Shares were swapping for 976.2p as of 8.30am.
8.26am: Blue chips hit a new high
The FTSE 100 soared more than 50 points in the opening 30 minutes on Friday trades, bringing the index up to another record high of 8,129.
NatWest, Pershing Square, Scottish Mortgage and Fresnillio were at the top of the risers list, while Barclays, Pearson and Anglo American led the fallers (the latter due to rejecting BHP’s takeover bid).
8.07am: Microsoft hits it out of the ballpark
Microsoft Corp (NASDAQ:MSFT) is tipped to rally when US markets open later today.
The Redmont tech titan surpassed expectations on both the earnings per share (EPS) and revenue fronts in the first quarter.
It announced an EPS of $2.94, outpacing analysts’ expectations of $2.84 and revenue of $61.9 billion, exceeding the anticipated $60.9 billion.
Quarterly profit for Microsoft surged by 20%, propelled by robust demand for its AI products.
The stock added 4.3% in the post market, meaning its valuation should reclaim $3 trillion this Friday.
8.00am: GfK consumer confidence improves
The UK GfK Consumer Confidence indicator rose to -19 in April 2024 from -21 in March, improving for the first time in three months and coming in above the -20 forecast.
It marks a vast improvement compared to last year when the overall index score stood at -30.
Joe Staton, client strategy director at GfK, said: “Consumer confidence can be a very slow-moving creature and the past six months underline that.
At least there’s an air of forgiveness with consumers delivering softer verdicts on how they look back at the past year regarding their personal finances and the wider economy.”
The recovery in consumer confidence has stalled this year as markets delay Bank of England rate cuts.
But Rob Wood, chief UK economist at Pantheon Macro, took “encouragement from the GfK despite little change in the headline reading this year”.
“If real income growth continues, which we expect, consumers’ confidence in their personal finances and their spending will keep trending up,” he said.
“But consumers remain reluctant to splash out on a major purchase until the Bank of England starts cutting interest rates. We still expect the MPC’s first cut in June, with two more following this year in September and December.
7.44am: NatWest mortgage lending nearly halves in first quarter
NatWest Group PLC (LSE:NWG) saw a 47% year-on-year decline in mortgage lending in the first quarter of 2024, with total lending down from £9.9 billion to £5.2 billion.
Net interest margins fell from 2.25% in the same period last year to 2.05%, while lower deposit balances additionally caused a fall in net interest income from £2.9 billion to £2.65 billion.
Profit attributable to shareholders fell 28% to £918 million and return on tangible equity (RoTE) dipped 560 basis points to 14.2%.
NatWest blamed “increased mortgage margin pressure” for the 10% year-on-year fall in total income.
The CET1 capital ratio matched expectations 13.5%.
Retail Banking saw a 7.1% reduction in headcount, contributing to lower operating expenses in some areas despite overall increases in expenses due to severance costs and the Bank of England Levy.
As part of an ongoing share buyback programme, NatWest repurchased and cancelled £42.4 million of shares on 31 March.
NatWest maintained its full-year outlook except for group operating costs, which are expected to be £100 million higher than in 2023 due to an increase in bank levies.
7.17am: Anglo American rejects BHP bid
London-listed miner Anglo American has rejected a surprise advance from Australian mining megacap BHP.
In a statement, Anglo’s board said the proposal “significantly undervalues Anglo American and its future prospects”.
Anglo said the structure of the deal “is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent in the Proposal, and significant execution risks”.
Stuart Chambers, chairman of Anglo American, called the offer “opportunistic” and advised shareholders to take no action in relation to the proposal
7.10am: Stocks to hit another record
FTSE 100 futures contracts have the index swimming to another record high this Friday in what has been a resoundingly strong week for equity and company earnings.
The index closed at the third record peak for the week of 8,079 yesterday, and it is tipped to open another 71 points higher to 8,150 today.
A string of stellar big-cap financial results from the likes of Barclays, AstraZeneca, Unilever and London Stock Exchange Group support the index on Thursday; today, NatWest Group could continue the trends with its trading update.
It has also emerged that Anglo American has rejected the bombshell takeover bid from Aussie megacap BHP as it “significantly undervalues Anglo American and its future prospects”.
A profit beat from Microsoft in the US will surely support domestic equities even further.
On today’s macroeconomic calendar, The GfK Consumer Confidence indicator rose to -19 in April 2024 from -21 in March, improving for the first time in three months and beating market expectations of -20.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
