Proactive Investors -
- FTSE 100 slips back, down 24 points
- AB Foods slips as cost pressures dent margins
- Whitbread rises on profit growth, £300mln buyback
11.06am: UBS (SIX:UBSG) attracted US$28bn during Credit Suisse (SIX:CSGN) crisis
A busy morning in Europe as well with markets also losing ground.
In Frankfurt, the Dax is 0.1% while in Paris the CAC 40 is underperforming its European peers down 0.7%. In London, the FTSE 100 is down 0.3%.
One of the more notable results came from Swiss bank, UBS, which said its wealth business attracted US$28bn of new money in the first quarter, benefiting from the deepening crisis at Credit Suisse that led to its takeover of the stricken rival.
The Zurich-based firm reported a drop in first quarter income in a period "characterized" by persistent concerns about interest rates and economic growth, "exacerbated" by questions about the stability of the global banking sector.
Net profit fell 47% to US$1.03bn in the quarter while revenue rose 9% to US$8.74bn.
The bank said it expected to complete the acquisition next month and would provide more details about the integration and its plans to wind down much of its rival’s investment bank over the rest of the year.
UBS chief executive Sergio Ermotti said: “With this transaction, we expect to reinforce our position as a leading and truly global wealth manager with strategic scale and complementary capabilities in the most attractive growth markets.”
Shares fell 1.5% to CHF17.92 each.
10.43 am: Central banks end daily dollar swaps
The world’s top central banks are ending the emergency action they took last month to keep dollars flowing through the global financial system.
The Bank of England, Bank of Japan, the European Central Bank, the Swiss National Bank have decided to end the daily dollar-swap lines they set up with the Federal Reserve to reassure markets after the collapse of Silicon Valley Bank.
Instead, the BoE will revert from daily operations to once per week.
However, in a statement, the BoE said it “continues to stand ready with other central banks to re-adjust the provision of US dollar liquidity as warranted by market conditions.”
The Bank of England said the decision was taken in view of the improvements in US dollar funding conditions and the low demand at recent US dollar liquidity-providing operations.
The swap operations were designed to help central banks around the world supply local banks with US dollars, an important safe haven asset, during times of market stress.
9.53 am: Vodafone 's top investor in talks over make-up of telco's Board
Shares in Vodafone Group PLC (LSE:LON:VOD) bucked the weaker market trend rising 2% after Bloomberg reported its biggest shareholder, Emirates Telecommunications Group Co., has opened talks with the British telecom group over the make-up of its board.
Bloomberg cited a regulatory filing from the firm on Monday in which the company, which is majority owned by the United Arab Emirates’ sovereign wealth fund, said it began discussions on April 12 about the board’s non-executive directors in order to engage on a variety of issues at Vodafone.
Also known as e&, the investor now owns 14.6% of Vodafone, up from 14%.
Vodafone’s shares have been steadily declining for years and the company has struggled to appease investors with attempts to streamline the business and sell assets.
The stock slid to two-decade lows after ousting previous Chief Executive Officer Nick Read in December, and the company has yet to name a new CEO.
9.38 am: Plenty to cheer in Whitbread results
Whitbread (LON:WTB) remained the top performer in the FTSE 100.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown said: "There’s plenty of cheer in Whitbread’s results today. "
He noted revenue growth of over 50% has seen Whitbread surpass pre-pandemic levels at both the top and bottom lines.
"Its strong brand in UK midscale hotels sees it consistently outperform the wider market and hoover up market share, while still maintaining price discipline," Nathan added.
He pointed out that despite inflationary pressures across the cost base and growth in the estate, margins in the UK hotels division were well ahead of last year and only slightly below those seen in 2020.
Despite the strong performance Nathan said: "There’s work to do on branding in Germany, but it's bedding down in the country and given the strong track record we wouldn’t bet against Whitbread making a success of its expansion."
While Whitbread remains in the green, the FTSE 100 is in the red, down 17 points, well off earlier lows.