The FTSE 100 slumped in early morning trade as a stronger pound weighed on the index, offsetting better than expected manufacturing data from China.

A number of major economies are reporting manufacturing PMIs today, with traders looking for any sign of improving sentiment, particularly in the UK where the sector has taken a hammering not only from lockdowns but also a major slump in the aviation industry, which could have a big knock-on impact on suppliers.

At 9.15am, the UK’s benchmark index fell 0.98% to 5,905.02.

SAGA SOARS ON FUNDING DEAL

In company news, over-50s insurance and travel services provider Saga (SAGA) soared 41% to 19.24p on announcing a £150 million equity raising, a large portion of which would include a strategic investment by former chief executive and owner Roger De Haan.

De Haan, who would become Saga’s chairman, was planning to invest up to £100 million in the raising, including £60.6 million at 27p per share, representing a 98% premium to the shares’ closing price on Friday

The rest of De Haan’s contribution would be on the same terms as other shareholders, for which the issue price would be a maximum of 15p per share.

Gene and cell therapy group Oxford Biomedica (OXB) gained 2.7% to 867p as it unveiled an 18-month supply agreement with AstraZeneca (AZN) for commercial-scale manufacture of a Covid-19 vaccine candidate.

AstraZeneca would pay Oxford Biomedica £15 million upfront as a capacity reservation fee. Oxford Biomedica said it expected to receive another £35 million in revenue plus certain materials costs until the end of 2021.

AstraZeneca, meanwhile, climbed 1.1% to £84.28, having reported positive clinical trial results for kidney disease treatment and European regulator approval for a lung cancer treatment.

DUNELM RALLIES ON PENT-UP DEMAND

Homewares retailer Dunelm (DNLM) rallied 6.8% to £15.26, having reported a rise in sales in July and August, owing to pent up demand following pandemic-led store closures.

Sales had been strong in the last two months, with total year over year sales growth up 59% in July, partly as a result of pent up demand following the store closure period and the timing of the company’s summer sale, and up 24% in August, the company said.

‘Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns,’ the company said.

OTHER COMPANY NEWS

Music rights investor Hipgnosis Songs Fund (SONG) firmed 0.8% to 121.5p after it acquired the music catalogue of musician and songwriter Nikki Sixx, best known as the founding member of Motley Crue, for an undisclosed sum.

Real estate portal OnTheMarket (OTMP:AIM) rose 1.1% to 90.95p on news that it had appointed Jason Tebb as its new chief executive, effective from 14 December.

Tebb was previously chief operating officer of property group Ulitmate Holdings and had also once launched estate and letting agency Ivy Gate.

Cake retailer Cake Box (CBOX:AIM) jumped 9.2% to 190p, having announced that it would pay a 3.2p per share special dividend in lieu of its withdrawn final dividend after sales recovered well as lockdowns eased.

Electronics components manufacturer TT Electronics (TTG) added 4.8% to 185.5p as it confirmed its involvement in the trial of a non-clinical Covid-19 screening device at Heathrow airport in London.

TT Electronics said it had been appointed as an exclusive manufacturing partner for the commercial launch of the device, called Virolens.

Musical equipment retailer Gear4music (G4M:AIM) rose 4.3% to 589p after it expressed confidence that its full-year results would 'at least in line' with its recently upgraded expectations.

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Issue Date: 01 Sep 2020