Proactive Investors -
- FTSE 100 slightly 100 lower, down 18 points
- 888 tumbles as CEO exits and some 'VIP' operations suspended
- L&G and Unilever (LON:ULVR) announce changes at the top
9.40am: JD Sports hit by cyber attack
JD Sports Fashion PLC has become the latest company to be targeted by cyber criminals following recent attacks on the Royal Mail and the Guardian amongst others.
The FTSE 100 listed retailer said the incident resulted in the unauthorised access to a system that contained customer data relating to "some online orders placed between November 2018 and October 2020."
The affected JD Sports group brands are JD, Size?, Millets, Blacks, Scotts and MilletSport, the company said in a statement.
The affected data is limited, JD added, noting it does not hold full payment card data and it has no reason to believe that account passwords were accessed.
The company said the information that may have been accessed consists of the name, billing address, delivery address, email address, phone number, order details and the final four digits of payment cards of around 10mln customers.
“We have taken the necessary immediate steps to investigate and respond to the incident, including working with leading cyber security experts” JD said.
“We are engaging with the relevant authorities, including the UK's Information Commissioner's Office (ICO), as necessary” it added.
Shares dipped 0.6% on the news.
9.28am: German GDP falls in Q4
Over in Europe now and news that the German economy contracted in quarter four by 0.2% which was worse than economists had expected.
Forecasts were that GDP would be flat but official numbers from statistics body Destatis showed growth declined in the October-December quarter.
Good Morning from #Germany where GDP contracted 0.2% in Q4 2022 QoQ, meaning Statistical Office has revised its estimate from stagnation to contraction in Q4, and that makes a #recession more likely. The consensus expects German GDP to contract by 0.5% in Q1 2023 QoQ. pic.twitter.com/0sqju6TeSb— Holger Zschaepitz (@Schuldensuehner) January 30, 2023
With current consensus forecasts predicting a 0.5% fall in GDP between January and March 2023 this leaves Germany on course to enter recession in the first quarter of 2023.
9.00am: FTSE lower, rate calls awaited
FTSE 100 remained lower but bounced off earlier worst levels as investors looked ahead to a key week of central bank announcements with the Federal Reserve, ECB and Bank of England all making their interest rate moves this week.
The lead index is now down 11 points.
Neil Wilson at Markets.com said “All eyes are on the Fed and what it says about the future path of monetary policy.”
“Two key things remain unknown – how high and for how long. I don’t think even the Fed knows the answers to these questions at the moment, but it will undoubtedly want to push back against the dovish read the markets have taken.“
Asian-focused stocks were a weak early feature following falls in the Hang Seng with Standard Chartered PLC and Prudential PLC near the top of the FTSE 100 fallers while J Sainsbury topped the rises on further refection of Friday’s stake purchase by Bestway Group.
Aside from the CEO changes at L&G and Unilever, another FTSE 100 company in the spotlight was oil major, Shell PLC, after it revealed it will combine its oil and gas production and liquified natural gas divisions as part of an overhaul by its new chief executive.
Wael Sawan, who took over at the start of this month, said the changes will take place from July.
Shell also confirmed its shake-up will reduce the size of its executive committee from nine to seven members in order to "simplify the organisation further and improve performance."
Sawan said: “I believe that fewer interfaces mean greater co-operation, discipline and speed, enabling us to focus on strengthening performance across the businesses and generating strong returns for our investors.”
But the news failed to inspire the share price, down 0.3%.
Frasers PLC fell 2% on reports the retailer is set to offer financial services which will allow its customers to buy goods on credit while building materials group, Marshalls PLC, dipped 2.6% as Deutsche Bank cut its 2023 and 2024 profit forecasts by 18% reflecting lower volumes
The bank also cut its price target to 479p from 629p.
8.17am: FTSE 100 lower and 888 tumbles
FTSE 100 opened lower ahead of a key week of central bank announcements and as investors digested changes at the top at two of the UK’s best known names.
At 8.15am London’s blue chip index was down 25 points, at 7,740, while the FTSE 250 was 91 points lower at 19,944.
Richard Hunter, head of markets at interactive investor, commented: “Markets tempered their strong opening to the year, as investors braced for a week brimming with important economic and corporate releases.”
888 Holdings PLC tumbled after the gambling company, which owns William Hill, suspended ‘VIP’ activities in the Middle East following an internal probe and said CEO, Itai Pazner, is leaving with immediate effect.
Broker Peel Hunt said “While these two pieces of news were announced separately, it seems reasonable to assume that the CEO departure is, at least partly, a consequence of the compliance failings.”
They also pointed out it follows the announcement earlier this month that the CFO would depart at the time of the final results.
“This news is clearly likely to have a negative impact on a share price already burdened with too much debt, and may have a knock-on impact on other other gambling companies, as shareholders reflect on the unpredictability of regulatory risks” the broker said.
Entain PLC and Flutter Entertainment PLC were also early fallers, down 1.2% and 1.1% respectively.
Legal & General PLC was another notable early faller, down 2.1%, after it announced that CEO, Sir Roger Wilson, was to step down after over a decade at the helm of the FTSE 100 listed insurer.
L&G said the process to name his successor would take around 12 months.
But news of a new boss at Unilever PLC was more warmly received which has announced the appointment of Hein Schumacher as its new chief executive officer.
He will replace Alan Jope, who announced in September 2022 his intention to retire.
Shares rose 0.8% against the weaker market trend.
7.56am: Unilever names new CEO
Another FSE 100 company changing management is Unilever PLC which has announced the appointment of Hein Schumacher as its new chief executive officer.
He will replace Alan Jope, who announced in September 2022 his intention to retire.
Hein is currently CEO of the global dairy and nutrition business Royal FrieslandCampina and became a non-executive director of Unilever in October last year.
He will start his role on 1 July 2023, after a one-month handover period.
Prior to joining Royal FrieslandCampina as CFO in 2014, Hein worked for HJ Heinz for over a decade across the US, Europe and Asia.
Unilever Chairman Nils Andersen said Hein was “a dynamic, values-driven business leader who has a diverse background of experiences and an excellent track record of delivery in the global consumer goods industry.”
7.43am: L&G's chief to step down
Legal & General Group PLC’s CEO, Sir Nigel Wilson, is to step down after over a decade at the helm.
Wilson joined joined Legal & General Group in 2009 as chief financial officer and was appointed chief executive in 2012.
He will remain as CEO until a successor has been found, a process which has now begun with L&G considering internal and external candidates.
The FTSE 100 listed insurer said the process will take around a year.
L&G’s Sir John Kingman said Wilson was a “world-class leader who has worked with great passion and energy.”
“Under his stewardship, the group has consistently delivered profitable, sustainable and inclusive growth. Nigel has been a tireless champion for investment-led growth and responsible investment.”
Sir Nigel Wilson said: “It has been an honour and privilege to serve as chief executive of Legal & General over the past decade.”
7.30am: 888 Holdings suspends 'VIP' operations in the Middle East, CEO exits
888 Holdings PLC has suspended VIP activities in some of its .com markets pending the outcome of an internal compliance investigation.
In a statement today, the betting company, said that following the review, it has come to light that certain best practices have not been followed in regard to Know Your Client and Anti-Money Laundering processes for 888 VIP customers in the Middle East region.
“While further internal investigations are underway, the board has taken the decision to suspend VIP customer accounts in the region, effective immediately” the company said.
The group, which is headquarted in Gibralter and owns and operates brands including 888casino, 888sport, 888poker, William Hill and Mr Green, estimated that the impact is less than 3% of group revenues, should the suspensions remain in place.
“Based on the board's current understanding, the process deficiencies identified are isolated to this region only”, 888 commented.
Lord Mendelsohn, chair, promised strong action in response: "The board and I take the group's compliance responsibilities incredibly seriously.”
“We will be uncompromising in our approach to compliance as we build a strong and sustainable business."
In a separate statement, 888 also announced that Pazner is immediately leaving office as CEO and as a director.
The company said Lord Mendelsohn, is assuming the position of executive chair on an interim basis while the board searches for a permanent CEO.
7.00: Weak start expected in London
FTSE 100 expected to start the week on the back foot as investors look ahead to interest rate calls in the US, UK and Europe later this week alongside a bumper batch of earnings updates.
Spread betting companies are calling the lead index down by around 40 points.
Michael Hewson chief market analyst at CMC Markets UK commented: “The strong start to 2023 appears to have given way to a little bit of caution for markets in Europe as we look to this week’s trifecta of central bank meetings, and what sort of outlook is painted by the Federal Reserve, ECB and Bank of England, and more importantly how many more rate hikes can we expect to see after next week.”
“This caution looks set to translate into a lower open for markets in Europe this morning ahead of Q4 German GDP numbers which are expected to show the economy in Germany ground to a halt.”
In the US on Friday the major US indexes all finished off a busy week of earnings in positive territory.
At the close, the Dow had gained 0.1% to close at 33,978, the S&P 500 increased 0.3% at 4,071 and the Nasdaq was up 1% on the day at 11,622 to cap off a great week for the tech-laden index.
Elsewhere, housebuilders will be in focus on reports the government is close to agreeing a multi-billion pound deal with the sector to help resolve the cladding crisis exposed by the 2017 Grenfell Tower disaster.
On the corporate front a trading update from Computacenter PLC is due.