Stock market share price board
FTSE 100 and 250 both struggling at lunchtime / Image source: Adobe

Stocks in London were predominantly lower at midday on Monday, as investors remained cautious ahead of a busy week of monetary policy decisions and economic data.

The FTSE 100 index was down 33.74 points, 0.4%, at 7,648.76. The FTSE 250 was down 81.03 points, 0.4%, at 19,273.35, and the AIM All-Share was up 0.12 of a point at 741.43.

The Cboe UK 100 was down 0.5% at 766.27, the Cboe UK 250 was down 0.4% at 16,628.06, and the Cboe Small Companies was down 0.2% at 14,491.17.

In European equities on Monday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up marginally.

Monday’s economic calendar is quiet, but the week picks up pace with the UK’s budget announcement on Wednesday.

UK Prime Minister Rishi Sunak hinted at a cut to national insurance in next week’s spring budget as he spoke to journalists at the Scottish Tory conference.

The prime minister initially refused to be drawn on potential tax cuts to be announced by Chancellor Jeremy Hunt, but stressed his dislike for high national insurance.

On Thursday there will be the latest European Central Bank interest rate decision, whilst US jobs data on Friday will also help to shape the narrative for stocks.

The pound was quoted at $1.2676 at midday on Monday in London, higher compared to $1.2641 at the equities close on Friday. The euro stood at $1.0854, against $1.0827. Against the yen, the dollar was trading at JP¥150.42, higher compared to JP¥150.25.

In the FTSE 100, Fresnillo was the top performer of the morning, up 2.2%.

Morgan Stanley raised the miner’s broker rating to ’equal-weight’ from ’underweight.’

BT was up 1.8%, thanks to a broker upgrade, too. Berenberg upgraded its rating on the London-based telecommunications operator to ’buy’ from ’hold’.

Berenberg explained that by the end of 2024, BT must navigate a results presentation from its new chief executive CEO in May; a UK general election; and a pivot away from consumer prices index-linked retail pricing. Concerns relating to these events have contributed to the share price being the worst in the telecoms sector year-to-date, it pointed out.

However, Berenberg said it believes that all three risks are manageable.

In the FTSE 250, Hipgnosis was by far the worst performer, down 12%.

Hipgnosis said it will divert its free cashflow toward paying down debt and won’t resume paying dividends ‘for the foreseeable future’, as an independent study found a lower valuation for the company’s portfolio.

The dispute was sparked by an arrangement, later rejected by Hipgnosis Songs Fund shareholders, to sell part of the fund’s portfolio to a joint-venture between Hipgnosis Songs Management and private equity firm Blackstone Inc. Mercuriadis last month stepped down as chief executive of Hipgnosis Songs Management, and the board of Hipgnosis Songs Fund also changed. The two sides currently are squaring off in UK High Court.

Hipgnosis said an independent valuation of its portfolio of music royalty rights by Shot Tower Capital found that had a fair market value as of Friday last week of $1.80 billion and $2.06 billion, or $1.74 billion to $2.00 billion after deducting contingent catalogue bonuses of $59.9 million.

This is down from fair value as of September 30 last year of $2.62 billion, or $2.55 billion after deducting a catalogue bonus provision of $68.1 million.

Amongst London’s small-caps, PensionBee rose 6.6%.

The London-based online pension provider said it has entered into an exclusive, non-binding term sheet with a large, US-based global financial institution in order to expand into the US.

PensionBee explained that the US has the ‘world’s largest defined contribution pension market’, representing approximately 80% of the global total and $22.5 trillion in assets.

On London’s AIM, Rosslyn Data Technologies plummeted 28%, after providing an update on trading in its financial year ending April 30.

The data management and analytics service provider expects to report revenues for the year ending in the range of approximately £2.8 million and £3.0 million, with a corresponding adjusted loss before interest, tax, depreciation and amortisation of between approximately £2.6 million to £2.8 million. In financial 2023, Rosslyn reported revenue of £3.0 million, and an adjusted Ebitda loss of £2.0 million.

Budget airline Wizz Air lost 1.5%, whilst peer Ryanair rose 0.4%.

Wizz Air reported a load factor of 90.0% in February, down from 93.3% in February 2023. It blamed the need to reallocate flight capacity from routes to Israel due to its conflict with Hamas, amid more capacity flown overall than anticipated. It also cited some aircraft groundings for engine inspections.

Wizz said it carried 4.4 million passengers last month, up 16% from 3.8 million a year before. Capacity, however, increased by 20% to 4.9 million seats from 4.1 million.

Larger peer Ryanair said it carried 11.1 million passengers in February, up 4.7% from 10.6 million a year before, at an unchanged load factor of 92%.

Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index and the Nasdaq Composite were both called down 0.1%.

Brent oil was quoted at $83.37 a barrel at midday in London on Monday, lower from $84.08 late Friday. Gold was quoted at $2,083.66 an ounce, higher against $2,075.33.

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Issue Date: 04 Mar 2024