Proactive Investors -
- FTSE 100 down 1 point at 7,493
- Oil prices jumps after attack on Israel
- Croda slumps on profit warning
BAE Systems rises, airlines rocked by events in Israel
The FTSE 100 has lost its early gains to trade little changed, down 1 point at 7,493.
Defence contractor BAE Systems (LON:BAES) is the top risers, up 4.5%, following the events in attacks in Israel on Saturday, while the rising oil price continue to support BP (LON:BP) and Shell (LON:RDSa).
But the oil price spike, and tensions in the Middle East, is not such good news for British Airways’ parent IAG (LON:ICAG), which is down 5.1%, on concerns of higher costs while a raft of flights have also been cancelled.
Easyjet (LON:EZJ) PLC fell 5.5% and Wizz Air Holdings PLC (AIM:LON:WIZZ) tumbled 7.0%.
The events in Israel also hit Energean which fell 10% - the firm’s flagship production & development assets are the multi-tcf Karish, Karish North and Tanin fields, offshore Israel.
GSK is up 0.8% after signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
Concerns that the warm weather in the UK will hit retailers sales has seen falls for Next , JD Sports Fashion, M&S and AB Foods (LON:ABF) – the owner of Primark.
Oil majors keep blue-chips in the green
The FTSE 100 opened higher as the ongoing tensions in the Middle East pushed oil prices higher, supporting shares in oil majors, BP and Shell.
At 8:15am, London’s blue-chip index was up 11.31 points, 0.2%, at 7,505.89 while the FTSE 250 fell 20.16 points, 0.1%, at 17,712.16.
Oil prices jumped following the attack by Hamas on Israel with Brent crude up 3.5% to $87.48/barrel.
Susannah Streeter head of money and markets, Hargreaves Lansdown (LON:HRGV) said: “'The shocking attacks in Israel have sent the price of oil soaring, as investors assess the potential for the conflict to disrupt supply in the Middle East, if other countries are drawn in.”
“With the Israeli government warning of a long and difficult war, there are concerns that deep and incessant retaliative strikes on Gaza could potentially bring Iran into the conflict and have an impact on the flow of energy in the region,” she added.
The spike in prices saw BP rise 2.5% and Shell jump 2.7% underpinning the FTSE.
But it was not such a bright start for shares in Croda which slumped 10% after it warned profits would be much lower than expected.
The speciality chemicals firm now expects full-year 2023 adjusted pre-tax profit between £300 million and £320 million, down from £370 million to £400 million.
In a statement, Croda said customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment.
Metro Bank Holdings PLC rallied 15% after it announced a financing deal to shore up its finances.
But Shore Capital’s Gary Greenwood said: “This is a very painful rescue for Metro Bank’s existing equity and debt holders and one which could not have been achieved without the support of its current largest shareholder, Spaldy.”
Volex fell 4.6% after warning it had been hit by a cyber attack.
The group said it would see a “material” hit to finances but nonetheless the news has left the market nervous.
Elsewhere, Next PLC (LON:NXT) was dwon 1.3% as JPMorgan (NYSE:JPM) placed the retailer on negative catalyst watch warning the warm weather in September and October may have hit sales.
GSK inks Chinese deal for shingles vaccine
GSK PLC (LON:GSK) has signed an exclusive deal with Chongqing Zhifei Biological Products Ltd to co-promote its shingles vaccine, Shingrix, in China for an initial three-year period.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period, the firm said in a statement.
There is also the potential to extend the partnership, should the companies agree.
Luke Miels, chief commercial officer, GSK, said the deal includes the option to extend the collaboration to include the RSV vaccine, Arexvy.
Zhifei will have exclusive rights to import and distribute Shingrix in China from January 1.
The pharmaceutical company described Zhifei as the largest vaccine company by revenue in China and said the partnership will significantly extend the availability of Shingrix.
Metro Bank strikes financing deal
A bit more on Metro Bank Holdings PLC (LON:MTRO) which has secured a financial package with investors following intense weekend negotiations, providing the UK-based challenger bank with much-needed capital and averting regulatory concerns.
Announced on Sunday, the deal comprises a £325 million capital raise, divided between £150 million in new equity from Metro's largest shareholders and £175 million in fresh debt from bondholders.
Colombian billionaire Jaime Gilinski Bacal, Metro's biggest shareholder, is slated to contribute £102 million to the new equity, positioning him to become the bank's majority shareholder.
Financing arrangement also includes £600 million in debt refinancing, requiring Metro's Tier 2 bondholders to accept a 40-45% haircut on their investments.