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Stocks rally, BA owner gets double upgrade, Bellway hones in on Crest Nicholson

Published 10/07/2024, 13:22
© Reuters.  FTSE 100 Live: Stocks rally, BA owner gets double upgrade, Bellway hones in on Crest Nicholson

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  • FTSE 100 up 53 points to 8,193
  • Barratt Developments (LON:BDEV) underwhelms
  • Direct Line (LON:DLGD) looks beyond motor

Tesco to knock off early to cheer Three Lions (pending victory against the Netherlands)

Tesco Express (LON:TSCO) stores across England will shut shop early this Sunday to cheer on the Three Lions should they reach the Euro Cup final.

“We appreciate just how much this would mean to so many of our colleagues, and we want them to be able to celebrate with their family and friends,” said Tesco’s managing director Kevin Tindall.

To get there, England needs to beat The Netherlands in tonight’s semi-final before taking on Spain this Sunday. Should the Three Lions succeed against the Dutch, Express stores will shutter at 7.30pm before the 8pm kick off.

Spain clinched a spot in the final after beating France 2-1 on Tuesday.

Stores in Wales, Scotland and Northern Ireland will maintain their usual schedules, Tesco said.

Microsoft, Apple off OpenAI board

Both Apple Inc (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) have relinquished their non-voting positions on the board of ChatGPT developer OpenAI.

According to a Bloomberg report, Microsoft told OpenAI that it will withdraw from the board as ”we no longer believe our limited role as an observer is necessary”.

But it also comes at a time of heightened regulatory scrutiny in the European Union and US over the duo’s relationship.

Microsoft has $13 billion invested in OpenAI, leading to antitrust probes over the software giant’s dominant position in the burgeoning artificial intelligence sector.

OpenAI’s microchip supplier Nvidia (NASDAQ:NVDA) Corp is facing similar scrutiny,

Apple’s App Store head Phil Schiller was also given a spot on the OpenAI board, but according to an OpenAI statement, that appointment is no longer going ahead.

Schiller was set to join the OpenAI board as an observer following Apple’s announcement of ChatGPT integration into Apple devices.

British Airways owner wins double upgrade from Morgan Stanley

British Airways owner International Consolidated Airlines Group (LON:ICAG) has netted a double upgrade from Morgan Stanley (NYSE:MS), with the bank flipping its share price rating from underweight to overweight.

Morgan Stanley (NYSE:MS) analysts highlighted that IAG’s capacity growth “looks increasingly supportive” to pricing in the near and medium term.

While IAG’s attractive valuation is hardly the exception in the underbid airline sector, “the path to earnings upgrades looks clearest”, said the bank.

“Supportive fare data is showing up in advertised fares in North Atlantic, while

advertised data across the rest of the total network is also outperforming,” analysts added.

IAG was the best-performing stock among the FTSE 100 set on Wednesday morning, rallying 3.5% to 179p.

Alongside the double upgrade, IAG was supported by some optimistic spending data from TSB showing a 9.2% surge in airline and travel spending in the first half of 2024.

The rally adds to the bullishness of the wider blue-chip market. At the time of writing, the FTSE 100 was up 53 points to 8,193.

Brits face caffeine withdrawals as coffee futures spike

Coffee futures prices continue to surge past multi-year highs, sounding alarm bells for Britain’s caffeine lovers.

The Intercontinental Exchange’s Coffee C Futures contract is the benchmark for Arabica coffee, tracking the physical delivery prices of exchange-grade green beans.

It has soared 57% in the past 12 months, while Robusta futures have more than doubled.

Giuseppe Lavazza, chairman of the namesake Italian coffee company, yesterday warned that bean prices will remain “very high” through to the middle of next year.

“We have never seen such a spike in price as the trend right now,” Lavazza said in comments published in The Financial Times.

Vietnam, an important global coffee bean supplier, has been battling heatwaves that have hurt harvests, while Brazil and Colombia are battling their own adverse weather conditions.

Lavazza warned that UK consumers could see retail prices on a one kilogramme bag of beans soar up to 25% in the coming year.

“We have faced very, very strong headwinds. I don’t see any reason why coffee prices will go down,” he said.

“Climate change has affected the production in the most important robusta countries around the world, mainly Vietnam and Indonesia, reducing quite a lot the quantity available of these kinds of varieties.”

Bellway finally clinches Crest Nicholson takeover approval

Bellway PLC (LON:BWY) has won support from the Crest Nicholson (LON:CRST) board for an all-share offer of the mid-cap housebuilder at an implied valuation of 273p per share.

Crest Nicholson had previously rejected two takeover proposals forwarded by larger competitor Bellway, but a revised offer at a 28% premium appears to have sealed the deal.

Both companies “believe that there is compelling strategic and financial rationale” for the combination, Crest Nicholson said in recommending the offer to shareholders.

“The revised proposal would bring together the strength of each business with complementary brands to reinforce Bellway's position as a leading UK housebuilder, while enabling Crest Nicholson shareholders to benefit from the scale of the combined business.”

Under the offer, Crest Nicholson’s shareholders will retain 18% of the enlarged group.

Crest Nicholson shares shot up just 2.7% to 248p following the announcement, implying scepticism in the market that a concrete deal will be inked.

Travis Perkins jumps 5% amid leadership reshuffle

FTSE 250-listed builders’s merchant Travis Perkins (LON:TPK) was bid 5% higher this morning following the appointment of a new chief executive and chair.

Former Taylor Wimpey PLC (LON:TW) boss Pete Redfern will take over as chief executive from 16 September, replacing Nick Roberts, who has held the post for five years.

Meanwhile, Geoff Drabble is coming in as the new non-exec chair from 1 October. He is currently the chair of building materials distribution business Ferguson and packaging large-cap DS Smith.

The appointments form part of a comprehensive restructuring of the senior leadership team following Duncan Cooper taking over as chief financial officer in January.

Trading conditions have been tough for Travis Perkins (LSE:TPK), causing the group to cut its dividend in March.

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