Banking group Royal Bank of Scotland (RBS) has agreed to pay a $4.9bn fine to resolve a US probe into its past sale of mortgage-backed securities. This is a far smaller penalty than many investors feared the bank would have to pay, with some estimates predicting up to $12bn in fines.

This sends shares in RBS jumping more than 5% to 290.6p in early trade on Thursday, one of the FTSE 100’s biggest risers.

Importantly for shareholders this settlement paves the way for a long-awaited return of cash to shareholders, including UK taxpayers who bankrolled its post-crisis survival. The UK government is widely thought likely to start the process of selling down its 71% stake in the bank.

Also, on the up is high street fashion chain Next (NXT), which tops the blue-chip leader board on Thursday. Its shares rally 6.5% to £55.86 after upgrading full year profit forecast guidance following an improvement in spring weather which boosted first quarter sales.

The news is well-timed, and Shares provides a deep analysis of the future prospects of the clothing business in this week’s on line magazine, which you can read here.

JOB CUTS AS BT STRUGGLES TO REVIVE GROWTH

British communications giant BT (BT.A) unveiled plans on Thursday to axe up to 13,000 managerial and back-office jobs in a bid to streamline the business and revive growth hopes.

The strategy update alongside full year results to 31 March showing another year of no overall growth although an improved profits performance.

But this latest attempt to rebuild after an accounting scandal and downturn in trading fails to convince investors despite the important dividend being held and an agreement with trustees over its pension scheme funding.

BT slumps nearly 9% to 217.2p early on Thursday, heading the list of the FTSE 100 biggest fallers.

Also down heavily on Thursday is outsourcing group Capita (CPI) as new shares from its discounted £701m rights issue flood the market today. Capita shares show a 35% slump on Thursday to 129.3p.

SHOP-TASTIC FIRST QUARTER

Supermarket chain Morrisons (MRW), Britain’s fourth biggest, beat forecasts for first quarter underlying sales growth sparking a 2.5% rally in its share price to 251.5p. That’s the highest the supermarket’s stock has been since August 2017, helped by growth in its wholesale business.

Slowing growth is troubling investors interested in package online holidays firm On The Beach (OTB) on Thursday. The share price slumps more than 10% to 583p as the company reports a 15% increase in adjusted pre-tax profit on a 19% rise in revenue.

However, this equates to a mere 7% rise in earnings per share despite talk of strong bookings and unique user stats. On The Beach is also losing its executive chairman Richard Segal.

Aero-engines manufacturer Rolls-Royce (RR.) has so far refused to confirm press reports that it is losing its Chief Operating Officer Simon Kirby in June, part of plans to streamline the operations.

Shares in the £15.3bn company remain largely flat at 831.6p on Thursday, but Shares gives its opinion on the stock in an analysis of future prospects in today’s digital magazine, which can be read here.

LET UP FOR HOUSEBUILDER GLOOM

Britain’s biggest housebuilder Barratt Developments (BDEV) reported strong trading in the first four months of the year on Thursday on ‘robust’ customer demand and said it expected full-year results in line with its expectations.

Shares in the housebuilder stay flat at 567p on Thursday, some way off 700p highs of October. Investors remain worried about slowing house price growth across the UK.

Soft drink bottler Coca-Cola HBC (CCH) reported better-than-expected quarterly sales growth on Thursday, helped by higher prices and strength in developing markets. That  sends the stock roughly 2% higher to $£25.13.

Britain’s biggest free-to-air commercial broadcaster ITV (ITV) says it has made a solid start to the year with net advertising revenue up 1% in the first quarter. The company points to its studios business performing well.

Shares in the company, which has recently been linked in various M&A rumours, rally 4% to 157.15p.

Gold prices steadied on Thursday as the dollar held firm near its 2018 peak on strong US bond yields, with investors also keeping an eye out for any further impact from President Donald Trump’s decision to pull out of a nuclear deal with Iran.

Oil prices clocked up more multi-year highs on Thursday as traders adjusted to the prospects of renewed US sanctions against major crude exporter Iran amid an already tightening market.

Several heavyweight stocks go ex-dividend on Thursday, acting as a counterweight to market positives from corporate announcements. Losing the right to the next payout affects insurer Admiral (ADM), oil giants BP (BP.) and Shell (RDSB), British Gas-owner Centrica (CNA) and pharma firm GlaxoSmithKline (GSK).

That trims 22.9 points off of the FTSE 100 index, according to calculations from Reuters, and caps the index’s early gains to 13 points at 7,675.75.

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Issue Date: 10 May 2018