FTSE 100 Live Monday
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Vodafone revenues thanks to cloud lift
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CMC Markets announces job cuts
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Revolution Beauty in legal settlement
‘Dichotomy’ in the British labor market
08:06 , Daniel O’Boyle
Kathleen Brooks, research director at XTB, says the new Labor Force Survey says the latest Labor Force Survey data from the ONS shows a ‘dichotomy’ in the UK labor market.
“Although the unemployment rate was revised downwards, the economic inactivity rate was higher than previous estimates and the average number of hours worked was also revised downwards from 31.7 hours to 31.6 hours per week.
“This highlights the division in the post-pandemic labor market: fewer people are working, those who are working are working fewer hours, and yet there is a huge demand for labor. The revised survey suggests that wage pressures could remain high for some time, supporting the BOE’s caution in cutting rates and focusing instead on inflation risks.”
Naked Wines promotes British director Maza to CEO of the group
07:47 , Michael Hunter
Naked Wines has promoted the director of its UK operations to group CEO.
Rodrigo Maza, UK director since September, will take the top job. The company said today that he will “work side by side with Rowan Gormley,” Naked’s founder and executive chairman.
The troubled subscription drinks business warned in September that it could even go bankrupt as it made losses and posted a decline in sales. Peak sales during the Christmas period, announced in mid-January, also fell, but in line with forecasts.
After a transition period, Gormley will “resume his previous role as non-executive chairman,” the company said today.
Maza said: “I look forward to working with the team at Naked and ensuring this great company can realize its full potential.”
CMC is cutting 200 as fears of job losses increase
7:45 am , Simon English
Growing fears of massive job cuts in the city intensified today as spread betting firm CMC Markets said it would cut 200 jobs – 17% of its workforce. Replicated across the Square Mile, this would create tens of thousands of jobs.
A statement to the stock market today said:
“In the interim results announcement on November 16, 2023, CMC indicated that the company was reaching the top of its investment cycle and that a cost analysis was planned for the second half of the year, aimed at increasing efficiency through its global operations . The review has been successfully completed and as a result the Group will reduce its global workforce by approximately 200 positions, representing approximately 17% of the existing workforce.’
CMC, founded by Tory donor and Boris Johnson backer Sir Peter Cruddas, expects £21 million in savings from the cuts.
Larger banks, including Deutsche, have already announced similar cuts.
Banks and trading houses have been hit by a lack of deals and lower trading by investors.
CMC said: “Cost reductions have been achieved primarily by unifying support functions across multiple business lines, streamlining reporting lines and automating processes. The Group will continue to seek opportunities to increase efficiencies and control costs, while remaining committed to investing in growth opportunities and ensuring its technology remains market leading.”
Shares of city companies will be closely watched today.
07:42 , Daniel O’Boyle
The Hipgnosis Songs Fund (HSF) is seeking damages from founder Merck Mercuriadis, amid a lawsuit accusing him of stealing the idea for the music rights fund.
Mercuriadis is accused of “unlawfully diverting business opportunities” from a bankrupt company called Hipgnosis Music Limited (HML), resulting in the business being transferred to a separate company.
On Friday, Mercuriadis stepped down as chairman of Hipgnosis Songs Management (HSM), HSF’s investment advisor.
Now the fund says it has appointed its own lawyers to assess the claim, and is seeking damages “against any liability the company may incur as a result of the actions of Mr Mercuriadis or Hipgnosis Songs Management”.
Asian shares are recovering after an early slump, while growth in China’s services sector is slowing
07:41 , Graeme Evans
Volatility in Chinese stock markets continued today, with the Shanghai Composite falling 3.5% at one point before recovering to 1% lower.
Hong Kong’s Hang Seng index also rose after opening 1.5% lower.
Earlier, Chinese services activity emerged at a slightly slower pace in January, with a decline in new orders leaving the Caixin services PMI at 52.7, down from a five-month high of 52.9 in December.
Japan’s Nikkei 225 rose 0.5% after data showed an acceleration in the pace of business activity.
Vodafone is cheering the growth of cloud and IoT as revenues rise in the third quarter
07:36 , Michael Hunter
Connected devices in the Internet of Things helped Vodafone’s Cloud Services business increase revenue by a fifth in the third quarter.
It led to an overall increase in the Newbury-based multinational’s organic sales of almost 5%. Total sales fell by around 2% to €11.4 billion (£9.7 billion).
Margherita Della Valle, CEO of Vodafone, said:
“We maintained good services revenue growth in both Europe and Africa in the third quarter, supported by further acceleration of Vodafone Business, with our Cloud and Internet of Things services growing by more than 20%.”
The ONS research shows that the unemployment rate may be lower than thought
07:22 , Daniel O’Boyle
The ONS has recalled unemployment statistics from the Labor Force Survey, which suggest the unemployment rate could be significantly lower than previously thought, at just 3.9%.
However, the lower percentage is mainly due to higher economic inactivity rather than the fact that more people are working.
The figures for September to November show an unemployment rate of 3.9%, compared to the 4.2% figure published by the ONS based on PAYE data.
The ONS said: “The reweighted estimates suggest that while the employment rate has remained broadly flat, the unemployment rate may have fallen over the past five months, offset by a rise in economic inactivity; However, some uncertainty remains in these estimates.”
Revolution Beauty reaches a £3 million legal settlement with its founder
07:22 , Simon Hunt
Revolution Beauty has reached a £3 million legal settlement with founder Adam Minto following a long-running dispute over his management of the company.
Under the terms of the deal, Minto will pay just under £500,000 annually over the next six years, with interest of up to 8% on any late payments.
A letter of claim to Mr Minto stated: “The claim alleges that Mr Minto breached his fiduciary, legal, contractual and/or tortious duties to the Company.
“The company seeks to recover material amounts relating to the exceptional costs incurred by the company as a result of the alleged matters.” Minto left the company in 2022.
FTSE 100 is trading higher as US jobs cheer and Asian markets struggle
07:13 , Graeme Evans
European markets are expected to start the week on a steady note after strong jobs data helped Wall Street end Friday’s session sharply higher.
Nonfarm payrolls rose by 353,000 in January, compared to an upwardly revised 333,000 in December, further sign of resilience in the U.S. economy.
Although the data ended hopes for a March rate cut, the Nasdaq Composite ended the session 1.7% higher and the S&P 500 index rose 1.1%. Meta Platforms rose 20% after announcing its first-ever dividend.
Slower growth in China’s services sector after January’s PMI fell to 52.7 meant a mixed session for Asian markets this morning, with the Shanghai Composite down 1.1% and the Hang Seng index slightly lower.
The FTSE 100 index closed 6.6 points lower on Friday, but CMC Markets predicts it will open today’s session 11 points higher at 7626.
Summary: Friday’s top stories
06:36 , Simon Hunt
Good morning from the Standard City desk.
You’d be forgiven for thinking that London’s lackluster stock market activity is a sign that little new business is emerging to whet investors’ appetites.
The reality is anything but. A quick look at developments in the fintech industry shows that the capital is buzzing with innovation.
Talk to the founders of tech start-ups in London and they will tell you that there is plenty of funding for their ideas in the early stages. But getting the money to scale – the so-called series B and C rounds – is much harder in Britain, and then they pick up the phone to investors in the US – sometimes moving the company.
That’s the gap the public markets could and should fill — but none of these companies seem willing to float. As the boss of one of them tells me, they don’t want to take a big hit to their valuation that joining the LSE would entail. As retail investors continue to pull money out of UK shares at record speed, that attitude appears to be here to stay – and we’re all suffering for it.
Here’s a roundup of our other top stories from Friday:
And in City Spy…