23rd Oct 2020 11:21
(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Barclays said it delivered a "resilient" performance in the third quarter of 2020 with international income offsetting challenges in core UK and consumer divisions. The lender got the UK bank reporting season underway with higher third-quarter profit and reassurance that loan impairments are set to be lower in the second half of the year than the first and lower still in 2021, despite the ongoing Covid-19 pandemic. Barclays said pretax profit for the three months ended September came in at GBP1.15 billion, up sharply from GBP246 million a year earlier, bumping up its return on tangible equity to 5.1% from 2.4%. Third-quarter group income declined 6% to GBP5.20 billion from GBP5.54 billion, however. The company's core UK division saw a 16% year-on-year drop in quarterly income to GBP1.55 billion, while International income increased by 1% year-on-year to GBP3.78 billion.
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London Stock Exchange Group posted an improvement in earnings for the third quarter of 2020 as it noted "good progress" on the proposed acquisition of Refinitiv. For the three months ended September, revenue climbed 1% year-on-year to GBP524 million. Total income, including its CCP business, climbed 2% to GBP600 million. Gross profit was up 4% to GBP551 million. Information Services revenues were up 1% to GBP223, Post Trade Income was up 5% to GBP259 million and Capital Markets revenue were flat at GBP102 million. On a nine-month year-to-date basis, total income is up 6% year-on-year to GBP1.84 billion.
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InterContinental Hotels Group said it has seen a quarterly improvement in revenue per available room but noted this was still significantly lower than a year prior. For its third quarter ended September 30, the FTSE 100-listed hotel operator said its decline in RevPAR eased to 53% compared to 75% in the second quarter, leaving the year-to-date figure down 52%. Occupancy climbed to 44% from 25%. A total of 199 hotels, or 3% of the group's estate, remained closed as at September-end. "Trading improved in the third quarter, although progress continues to vary by region. Domestic mainstream travel remains the most resilient, and our industry-leading Holiday Inn brand family positions us well to meet that demand as it slowly returns," said Chief Executive Officer Keith Barr.
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Retirement homes developer McCarthy & Stone said it has agreed to a GBP630 million takeover from Mastiff Bidco, a subsidiary of Lone Star Real Estate Fund VI. The offer values McCarthy & Stone shares at 115 pence each, a 39% premium to its Thursday closing price. "The McCarthy & Stone directors, who have been so advised by Rothschild & Co and Deutsche Bank as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable," the company said. Lone Star Real Estate Fund VI, a part of US-based private equity firm Lone Star, has received irrevocable undertakings to vote in favour of the merger in respect of 17% of McCarthy & Stone's share capital.
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MARKETS
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"Better than expected results from Barclays triggered renewed interest in banking shares," said AJ Bell Investment Director Russ Mould. The mood in London also was boosted by news that US health regulators have approved Gilead Science's remdesivir to treat Covid-19 sufferers, a welcome development as the world waits for a vaccine for the contagion.
US futures are higher on Friday morning. The Dow Jones Industrial Average is called up 0.4%, the S&P 500 is called 0.3% higher and the tech-heavy Nasdaq Composite up 0.1%.
Barclays shares were up 7.2% in London, while Gilead were up 5.6% in the New York pre-market.
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FTSE 100: up 1.4% at 5,866.83
FTSE 250: up 1.0% at 18,076.25
AIM ALL-SHARE: up 0.5% at 974.17
GBP: down at USD1.3083 (USD1.3095)
EUR: up at USD1.1846 (USD1.1825)
Gold: up at USD1,909.65 per ounce (USD1,898.00)
Oil (Brent): down at USD42.60 a barrel (USD42.70)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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The UK's private sector suffered a "considerable" decline in growth in October, flash figures showed, with the hospitality sector particularly struggling due to local lockdowns. According to IHS Markit/CIPS survey data, the manufacturing sector also saw growth ease. The UK manufacturing output index slipped to 56.4 points, a four-month low, down from the final September figure of 59.0. The number remains above the 50.0 mark which separates growth from decline. The UK's manufacturing purchasing managers' index fell to 53.3 in October, according to flash figures, a three-month low and down from 54.1 in September. The services business activity index fell to 52.3 points according to October flash figures. This is a four-month low and a significant deterioration from 56.1, the final September figure.
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Business activity fell back into decline across the eurozone in October, data from IHS Markit showed, as accelerating growth of manufacturing output was overwhelmed by a steepening deterioration in the service sector amid rising Covid-19 worries. The flash reading eurozone manufacturing purchasing managers' index reading was a 26-month high of 54.4 in October, up from 53.7 in September. The flash eurozone manufacturing PMI output index rose to 57.8 from 57.1. However, the flash reading of the eurozone services PMI activity index was 46.2 in October compared to 48.0 in September. The services reading sunk the composite index to 49.4 versus 50.4 in September.
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US President Donald Trump and challenger Joe Biden traded accusations of graft and clashed on the Covid-19 pandemic Thursday but without landing a knockout blow 12 days before the election in a final debate that many saw as Trump's last big chance to change the narrative. Perhaps the most startling aspect of the debate in Nashville, Tennessee, turned out to be the relative civility compared to the disastrous first debate last month when Trump spent much of the time shouting frontrunner Biden down. This time, Trump called his Democratic opponent "Joe" and even lauded the moderator Kristen Welker of NBC News, who had a mute button to keep order, saying: "I respect very much the way you're handling this, so far." The most heated early exchanges were over mutual accusations of graft.
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