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Barclays stunned the City today by revealing boss Jes Staley has quit the banking giant in response to an investigation by UK regulators into his dealings with Jeffrey Epstein, the American financier and convicted sex offender.
Staley, who has run Barclays since December 2015, has stepped down in order to contest the findings of the two-year investigation by the Financial Conduct Authority. He will be replaced by C.S. Venkatakrishnan, who is current head of global markets.
Staley had business dealings with Epstein while at JP Morgan and Barclays said the investigation made “no findings that Staley saw, or was aware of, any of Epstein's alleged crimes”.
FTSE 100 Live Monday
BT leads FTSE 100 higher
Chinese PMIs disappoint
Nikkei 225 surges 2.5% after election
Rolls-Royce and Qatar confirm climate partnership
15:27 , Oscar Williams-Grut
Rolls-Royce has confirmed a new partnership with Qatar, which was tipped in the Sunday Times over the weekend.
The Qatar Foundation and Rolls-Royce have “entered into a long-term partnership to create a global centre for climate technology innovation”. The pair will invest in building two campuses in the UK that will “help entrepreneurs create and grow new climate technology businesses, aided by academic leadership, funds for R&D and early-stage venture capital investment.”
Warren East, Chief Executive, Rolls-Royce, said: “Rolls-Royce has pioneered power since its inception and we are already playing a key role in accelerating the energy transition in some of the hardest sectors to decarbonise. For us, the transition to net zero is both a societal imperative and an excellent commercial opportunity. This partnership with Qatar Foundation will enable us to accelerate progress in clean energy, including by allowing us to fully take advantage of nascent technologies that could have a significant impact on tackling climate change.”
Her Excellency Sheikha Hind bint Hamad Al Thani, Vice Chairperson and CEO of Qatar Foundation, said: “Today’s most pressing problems: climate change, soil restoration, water resources, animal welfare and human health are all inextricably linked. We stand ready to work together with our partners Rolls-Royce in developing innovative solutions and clean energy technologies. The expansion of Education City’s research ecosystem will inevitably further Qatar Foundation’s mission to pave the way to a better future.”
Boris Johnson said: “This partnership fuses the outstanding British engineering of Rolls-Royce with the vision of the Qatar Foundation, confirming the UK’s position as a science superpower and hub for investment. This will not only strengthen ties between our two countries but will help facilitate the climate-tech innovations we need to tackle climate change headfirst, delivering green jobs and green growth.”
Rolls-Royce shares are up 1.7p or 1.3% to 133.5p.
Darktrace continues to tumble
14:45 , Oscar Williams-Grut
Cyber security company Darktrace is having a rocky start to life on the FTSE 100. The business, which joined the FTSE 100 last week, is down 13% this afternoon, extending a slide that began last week. The company plummeted after Peel Hunt analysts downgraded the stock, saying the valuation was unmoored from reality and its technology did not meet the hype of its sales folk.
The stock has crashed 25% since Peel Hunt issued that note exactly a week ago. Darktrace is down 102p to 700p today.
Landsec to buy U+I
11:26 , Oscar Williams-Grut
Property giant Land Securities has swooped to buy regeneration specialist U+I, in a £190 million deal that will give it more major post-Covid building opportunities in London.
Thats marks a 73% premium to the latter’s closing price of 86p per share on Friday.
The tie-up would bring together developer and landlord Landsec, which has a £10.8 billion real estate portfolio, with a company known for working on large regeneration projects.
Schemes currently in U+I’s pipeline include the Morden Wharf site, Greenwich Peninsula , where there is scope for 1500 homes, warehouses and shops.
BT leads strong session for household names
10:47 , Graeme Evans
The blue-chip leaderboard reads more like a “who's who” of corporate Britain today as shares in BT Group, Rolls-Royce and Lloyds have surged to give retail investors much-needed cheer.
Other household names 1.5% or more higher included GlaxoSmithKline, Next, Royal Mail and Whitbread to help the FTSE 100 index climb by 43.24 points to 7280.81.
There was also a rally of 2% or 2.9p to 166.7p for International Airlines Group after its liquidity position was further boosted by its British Airways division securing a £1 billion UK Export Finance guaranteed five-year credit facility.
Today's upbeat results from Ryanair have added to the improving sentiment around the airline industry, with knock-on benefits for suppliers such as Rolls-Royce.
Shares rose 2.4p to 134.26p after it was also reported by the Sunday Times that Rolls is working with Qatar to launch a new fund that will funnel billions into UK green projects.
BT Group shares posted London's biggest gain, up 4% or 5.15p to 144.05p, ahead of this week's interim results and amid more speculation over whether 12% investor Patrick Drahi intends to build his stake.
Shares in another household name, AstraZeneca, rose 48p to 9142p after it secured $270 million (197.3 million) from transferring its global rights to certain treatments for chronic obstructive pulmonary disease to Covis Pharma.
On the fallers board, there was more volatility for FTSE 100 newcomer Darktrace as shares tumbled more than 12% or 99.5p to 703p. The cyber security firm listed at 250p in April and peaked at 985p in September, but has been shaken by broker caution since then.
The FTSE 250 index was 80.41 points higher at 23,187.02, with Auction Technology Group among the stocks doing well after a gain of 3%.
The conclusive result of Japan's lower house election meant shares in Baillie Gifford Japan Trust and JP Morgan Japanese Investment Trust were lifted 2% as the Nikkei 225 rallied 2.5% in Tokyo on hopes for faster fiscal stimulus.
Another strong period of trading by Howden Joinery helped its shares improve 6.4p to 926.2p as the kitchen supplier also forecast 2021 profits near the top end of City hopes.
Capital & Regional, the convenience and community focused shopping centre firm, rose 0.4p to 58.6p in the FTSE All-Share after reporting an improved operating performance.
Ryanair considers quitting London Stock Exchange
10:25 , Oscar Williams-Grut
Ryanair has revealed its board is considering delisting from the London Stock Exchange after seeing trading in its shares on the LSE hit post-Brexit.
Europe’s largest budget airline said trading on the LSE has “reduced materially” as a percentage of its overall shares activity during 2021. Bosses said this migration away from London “is consistent with a general trend for trading in shares of EU corporates post Brexit”.
The issue is also “potentially more acute” for Ryanair, the airline said, as European Union rules mandate that airlines are majority owned by EU nationals. Ryanair has a primary listing in Dublin, and has already made some UK investors sell shares this year to ensure it complies with the rules.
Manufacturing boosted slightly but still faces ‘severe’ headwinds
09:55 , Oscar Williams-Grut
Momentum in Britain’s manufacturing is improving slightly despite continued issues with supply chains and staff shortages.
IHS Markit said its regular survey of purchasing managers found the manufacturing sector reversed five months of declines in October. The index was boosted by new orders and a rise in employment. The PMI for October was 57.8 in October, up from 57.1 in September. Anything above 50 signals growth.
However, manufacturers are still struggling to source parts and people. Manufacturing production rose at the slowest pace for eight months.
Rob Dobson, Director at IHS Markit, said: “Strained global supply chains are disrupting production schedules, while staff shortages and declining intakes of new export work are also stymieing the upturn.”
IHS Markit said the sector was still facing “severe” headwinds.
Japan shares rally after election result
09:32 , Graeme Evans
The results of Japan's lower house election have given a significant boost to the Nikkei 225, which surged more than 2.5% in Tokyo this morning on hopes that Prime Minister Fumio Kishida’s ruling coalition will be able to accelerate fiscal stimulus.
His Liberal Democratic Party has secured enough seats to govern without its coalition partner. Kishida only took over as prime minister last month after Yoshihide Suga resigned.
The elimination of political uncertainty helped boost a number of Japan-focused investment trusts on the London market, with the Baillie Gifford Japan Trust and JP Morgan Japanese Investment Trust both more than 2% higher in the FTSE 250 index.
City Comment: Staley’s name is now forever linked to Jeffrey Epstein
08:58 , Simon English
What has the FCA got on Jes Staley in relation to Jeffrey Epstein?
Giving the appalling context – Epstein, Ghislain Maxwell, Prince Andrew and much else – the answer is probably “not much”.
The most likely conclusion to come from the watchdog’s impending report is that Staley mis-characterised his relationship with the financier and convicted sex offender.
That there was a meeting here or there that didn’t tell the board or the regulator about, perhaps because he forgot.
Among the many problems here is that this isn’t Staley’s first misstep. For a bank CEO he was awfully accident prone. He was pranked into a rather cringeworthy exchange with someone impersonating his chairman, John McFarlane.
More seriously he ordered an investigation into a whistle-blower who had sent letters to the board doubting the competence of Tim Main, a friend of his, for a top job in New York.
Staley was furious on his friend’s behalf and was later fined for his actions. He was lucky to keep his job then.
If you were being kind, you could say that what the Main and Epstein incidents have in common is loyalty.
Barclays shares fall 2%
08:41 , Graeme Evans
Barclays shares have fallen 2% in the wake of Jes Staley's departure and the appointment of global markets head CS Venkatakrishnan, known as Venkat, as his replacement.
The stock has almost doubled in value over the past year, with recent third quarter figures highlighting progress under Staley. However, Barclays said that succession planning had been underway for some time and that it had “long been confident” in Venkat's capabilities.
Today's statement said: “The board is confident that Barclays under his leadership will continue its strategic direction and improve performance in line with the progress of recent years.”
The FTSE 100 index stood 26.81 points higher at 7264.38, with BT Group shares the biggest riser amid ongoing speculation over the intentions of 12% shareholder Patrick Drahi. Shares in the telecoms giant, which reports its results later this week, lifted 3%.
The FTSE 250 index was 87.66 points higher at 23,194.27, with bingo operator Rank and cinemas business Cineworld among the stocks doing well following gains of 3%.
US demand boosts Pandora
08:24 , Graeme Evans
Pandora, the world's largest jewellery brand, today polished its 2021 forecasts on the back of stronger-than-expected demand from US shoppers.
The Copenhagen-based business now expects annual revenues growth of up to 20%, whereas it had previously forecast a range of between 16% and 18%.
This follows sales growth of 14% for the third quarter and 32% over the year to date, with the three-month figure also being 9% stronger than the same period of 2019.
The strong performance in the United States was accompanied by an improving picture in Europe as Covid-19 restrictions were eased.
However, Pandora warned: “Covid-19 and the unusually high level of US growth continue to create increased uncertainty around the guidance.”
O’Leary upbeat after Ryanair recovery
08:06 , Graeme Evans
Ryanair boss Michael O'Leary today said the budget airline had seen a “rapid recovery” in activity after a surge in bookings for the October half-term and Christmas breaks.
He expects this “peak buoyancy” to continue into Easter and next summer.
Announcing half-year results, Ryanair reduced its net loss from 411 million euros to 48 million euros (£40.5 million) after revenues increased 61% to 1.27 billion (£1.07 billion) as traffic jumped 128% to 39.1 million passengers.
However, uncertainty caused by the UK’s traffic light system and the close-in nature of bookings resulting in average fares being 30% lower at €33 (£27.80).
O'Leary also claimed that a planned new fleet of Boeing 737 “Gamechanger” aircraft would help reduce the environmental impact of flying.
He said: “Every passenger that switches to Ryanair from legacy airlines reduces their CO2 emissions by up to 50% per flight.”
Jes Staley out at Barclays as Jeffrey Epstein report looms
07:53 , Simon English
BARCLAYS chief executive Jes Staley shocked the City today by revealing he will quit following an investigation into the nature of his relationship with Jeffrey Epstein, the American financier and convicted sex offender.
The Financial Conduct Authority (FCA) has been investigating Staley over this matter for two years.
The bank and Staley were told on Friday evening about the preliminary findings – which he intends to challenge.
Staley had business dealings with Epstein while at JP Morgan in New York. Perhaps crucially, at least one meeting occurred after Epstein already had a conviction.
07:39 , Graeme Evans
Despite Apple and Apple missing expectations the previous evening, US markets set new record highs on Friday after their best monthly performance so far this year.
The FTSE 100 index has also been trading at a 20-month high, with London's top flight forecast by CMC Markets to open another 22 points higher at 7259 today.
This is despite concerns about the economy in China after the latest purchasing manager indices (PMIs) showed further weakness in October.
The PMI reading of 49.2 for manufacturing pointed to a contraction in activity while the 52.4 recorded for the services sector was also below forecast. However, there was some relief later when the privately complied Caixin PMI rose unexpectedly to 50.6.
Michael Hewson, chief markets analyst at CMC Markets, said: “The resilience in the markets is all the more surprising given the amount of gloomy headlines about rising inflationary pressures, the impact of supply chain disruptions, and their prospective impact on company profit margins and consumer disposable incomes.
“Under normal circumstances this would certainly be a problem at a time when central banks appear to be getting ready to scale back their large-scale stimulus in response to the recent sharp rise in inflation expectations, with all eyes on this week's US Federal Reserve and Bank of England rate meetings.”
Company results have been fairly positive so far as companies have been able to pass on price rises to consumers without any hint of demand destruction.
Hewson believes one reason for this consumer resilience is likely to have been that large government support measures have provided a decent buffer for consumer balance sheets as prices rise.
He added: “Whether that remains to be the case is open to question, however the fact that unemployment is almost back close to levels it was pre-pandemic is welcome news for governments who were concerned about the widespread damage the pandemic might have done to the jobs market.”