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Pound rallies as crunch Brexit talks loom

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03:41 PM

Wrap-up

Time for us to wrap up. Here are some of the day’s top stories:

Thanks for following along today – we’ll be back tomorrow morning!


03:38 PM

China’s top chipmaker falls as US launches sanctions

Trump -  SHAWN THEW/EPA-EFE/Shutterstock

Shares in China’s largest chipmaker dropped 7pc on Monday following reports that the company faces new sanctions introduced by the US government.

My colleague James Cook reports:

Shanghai-listed shares in Semiconductor Manufacturing International Corporation (SMIC), a key supplier of components for smartphones and other devices, dropped 7pc following reports of new sanctions against the company.

A letter from the US Department of Commerce sent to businesses on Friday claimed that exporting American technology to SMIC “may pose an unacceptable risk of diversion to a military end use in the People’s Republic of China”, the Wall Street Journal reported.

The exact nature of the trade sanctions against SMIC were unclear on Monday. The business has said it was “not aware of the notification" sent to American companies last week.

03:27 PM

Which Pizza Hut locations are closing?

For any stuffed-crust chilled by our 1:58pm post, here are the Pizza Hut locations set to close:


02:54 PM

Market moves

European markets are gaining momentum as we head toward the close, with Germany’s DAX leading the charge. 


02:32 PM

HSBC jumps on dividend hopes

HSBC shares are up 8pc this afternoon after its biggest shareholder bet on the bank restarting its dividend. My colleague Michael O'Dwyer has more details on the jump:

The stock had hit a 25-year low before Chinese insurer Ping An increased its stake from 7.95pc to 8pc last week. HSBC, which makes most of its profits in Hong Kong, has been caught in the crossfire of political tensions between China and the US. 

The bank could be included on Beijing’s list of "unreliable entities" that damage national security, Chinese state-run newspaper Global Times reported last week. Inclusion on the new list would hurt the bank’s business in the former colony as well as in mainland China. 

HSBC, which is working on contingency plans in case tensions between Washington and Beijing trigger new restrictions on banks serving Chinese companies and individuals, suffered a 65pc fall in pre-tax profits to $4.3bn (£3.3bn) in the first half of 2020.

02:11 PM

Siemens raises €16bn in energy float

Some action in Frankfurt today as Siemens spins off its energy unit and raises €16bn in one of the largest European floats this year.

Shares in Siemens Energy traded at €22 at the open before falling back under €20.

Siemens Energy, with its oil and gas, turbines, power transmission and related services businesses, joins the industrial giant's medical devices arm Healthineers and lightbulb unit Osram on the stock market.


02:05 PM

'Relief rally'

The surge on stock markets as we start the week is being called a “relief rally” by Jonathan Bell at Stanhope Capital:

Things got oversold perhaps a little bit in the short term. We saw quite a lot of exuberance in July and August, with prices particularly of tech stocks rising and that then has come off a little bit recently

As well as sterling's gains, the Australian and New Zealand dollars, and Swedish and Norwegian crowns were all higher against the US dollar, recouping some losses from last week.

Brent crude also made modest gains, up 0.7pc at $42.20.


01:39 PM

Wall Street opens higher

 As expected, US shares have opened solidly higher.

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01:21 PM

Full report: TDR preferred bidder for Asda buyout

My colleague Oliver Gill has a full report on goings-on at Asda. He writes:

Asda is set to be sold to a UK-based private equity firm after Walmart made TDR Capital the preferred bidder for a majority stake in the supermarket chain.

TDR Capital is bidding in conjunction with Mohsin and Zuber Issa, the low-profile billionaire owners of petrol forecourt operator EG Group.

It had been thought Apollo Global Management, a $400bn (£315bn) Wall Street private equity firm, would win the battle for control of the UK’s third-biggest supermarket after weeks of frenzied negotiations.

01:03 PM

Wall Street set to rise

After a surprisingly lively Monday morning, thing have gone slightly quiet out there. The next big event is likely to be the US open, with Wall Street set to rise solidly, in line with European stocks continued strong performance.


12:58 PM

Pizza Hut agrees closure plans

Pizza Hut’s creditors have agreed a deal that will see 29 of its 244 restaurants close, but protect the rest. 

My colleague Rachel Millard reports:

The chain is the latest to agree a company voluntary arrangement, a controversial form of insolvency, amid the damage to the hospitality sector caused by the coronavirus lockdown. 

The deal will protect about 5,000 jobs across the sites that will stay open, but puts 450 jobs at risk at the sites that are due to close. Pizza Hut was owned by the private equity group Rutland Partners until a management buy-out in 2018. 

A Pizza Hut Restaurants spokesman said: "We are delighted to have reached such a constructive position in partnership with our landlords and creditors."Our focus is now ‘business as usual’ supporting all of our team members and continuing to provide a Covid-safe restaurant experience for our guests.”

12:30 PM

Five years lost as pandemic hits youth jobs market

Unemployment surged among young workers over the summer even as schemes to preserve jobs succeeded in keeping older Britons employed.

My colleague Tim Wallace reports:

Joblessness among under-25s rose from 11.8pc in the three months to February to 13.4pc in July, according to the Office for National Statistics.

At the same time the share of young Britons in employment fell from 55.6pc to 52.9pc, wiping out half a decade of progress in bringing more 16 to 24-year-olds into work.By contrast the official unemployment rate for those aged between 25 and 49 barely budged, edging up from 2.8pc to 2.9pc.

The unemployment rate has fallen for those aged over 50.

11:58 AM

Pound extends gains

Sterling keeps rising, climbing as much as 1.4pc against the dollar. The British currency is outperforming major rivals amid a broad move against the dollar, with optmism about this week’s Brexit talks fueling buying.


11:35 AM

Radical plans could lead to Norwegian Air nationalisation

Norwegian  - REUTERS/Ints Kalnins/File Photo

Norwegian could be nationalised under radical plans being considered by government officials in Oslo.

My colleague Oliver Gill reports:

Political leaders in Norway’s ruling coalition have indicated that they favour bailing out the struggling budget carrier rather than the older flag carrier SAS.

Airline bosses have held talks with the government last week, local media reported.Jon Gunnes, transport policy spokesman for the Liberal Party, said supporting Norwegian was “very important”.Before the pandemic struck Norwegian was one of the biggest airlines operating from Gatwick airport behind easyJet and British Airways.

It had been offering cut-price flights to several cities in North America as well as more distant destinations including Rio and Buenos Aires.

11:19 AM

Great Portland Estates jumps after KKR buys stake

Shares in FTSE 250 property development group Great Portland Estates have popped higher today, after private equity group KKR took up a 5.53pc stake in business.

The purchase makes KKR the latest of a string of money managers to place bets against the demise of UK office spaces.

Great Portland’s shares are down about 28pc this year, against the backdrop of the pandemic.


10:54 AM

Walmart leaning towards British bidders for Asda – Sky

Sky News’ City editor Mark Kleinman tweets:


10:41 AM

Full report: reach shares soar as it prepares payout

My colleague Ben Woods has a full report on this morning’s update from newspaper publisher Reach. He writes:

Although dividends remain suspended, the publisher said it will issue investors with an award equal to an interim dividend of 2.63p.The stock jumped 12.6p to 77.1p but the company remains worth just under £240m. Shares were as high as 180p earlier this year.The share price rise came despite a slide in newspaper and advertising sales that sent Reach's pre-tax profits down 56pc to £25.2m for the 26 weeks to June. 

10:11 AM

Uber granted 18-month license

Transport for London has asked a judge for an 18-month operational license for Uber (see 10:31am update), which has been granted.


09:48 AM

Cripin Odey pleads not guilty to indecent assault

Crispin Odey -  REX

Hedge fund manager Crispin Odey has pleaded not guilty to a charge of indecent assault from 20 years ago.

Bloomberg reports:

The 61-year-old is charged with assaulting a woman in Chelsea in 1998 at his home address, according to a filing from Westminster Magistrates Court. Odey was charged with one count under the Sexual Offences Act.

09:31 AM

Full report: Uber wins appeal against London ban

My colleague Michael Cogley has a full report on today’s court decision. He writes:

The ride-hailing giant won its appeal against Transport for London (TfL) on Monday at the Westminster Magistrates court.In his ruling, Tan Ikram, deputy senior district judge at the Westminster Magistrates Court, said that “despite their historical failings” Uber was now “fit and proper” to hold an operator’s licence.TfL stripped Uber of its licence for a second time last year having first denied the US giant’s application to renew its license in 2017.

09:25 AM

Uber ‘fit and proper’ to hold London license

Ride-hailing app Uber is “fit and proper” to operate in London, a judge ruled this morning.

Deputy chief magistrate Tan Ikram said:

Despite their historical failings, I find them, now, to be a fit and proper person to hold a London PHV operator’s license

The duration of the permit granted to the group will be settled later today, after submissions by Uber and Transport for London.

TfL revoked Uber’s license last year over safety concerns, but its drivers have been allowed to continue amid a court review.


09:17 AM

Pound extends gains

The pound has extended its gains against the dollar, leaving it down about 4pc so far this month.

That puts it on track for the worst month since July last year, but it’s not far from a four-year record.


08:47 AM

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:


08:18 AM

Aldi pledges to create thousands of UK jobs

Aldi - REUTERS/Peter Summers/File Photo

Aldi has pledged to create thousands of jobs in the UK after its full-year profits surged.

My colleague Ben Gartside reports:

The company will make a £1.3bn investment across 100 new stores, creating 4,000 new jobs. The new stores will opened throughout 2020 and 2021, with further investment into expanded distribution centres and the creation of a click-and-collect service. Chief executive Giles Hurley said the company needed to evolve its business model to finally embrace internet shopping following the boom in online grocery during the pandemic. “Our business performance over the past six months has been very solid, we're growing according to data by about 10pc. What we also recognise is that consumer habits are changing and we need to evolve our business to meet those new demands and we're actively doing that,” he said.

08:05 AM

Reach profits knocked by advertising slump

Profit at Reach – publisher of titles including the Mirror and the Express – dropped by more than half during the first half of the year.

The small-cap group said it had seen a “strong recovery” in digital advertising and a rise in customer engagement across all its channels.

Revenues over the half year to the end of June dropped 17.5pc, from £352.6m to £290.8m, reflecting the sharp drop in advertising revenues prompted by the pandemic.

Reach struck a bullish tone, however, saying:

The group is currently performing materially ahead of market expectations for the full year though management remain fully aware that Covid-19 still represents a significant macro-economic challenge to the UK economy, with the potential for subsequent negative impacts on the business.

Chief executive Jim Mullen said circulation sales have stabilised and shown a “gradual recovery” over recent months.

The group noted its profits had also been “impacted by provisions for historical legal issues and historical contract issues”.

Nonetheless, its board is recommending an interim dividend, saying:

With the group currently performing materially ahead of market expectations for 2020, the board is recommending a proposed bonus issue to shareholders, in lieu of and with a value equivalent to, an interim dividend of 2.63p, subject to shareholder approval. The Board intends to resume cash dividends at an appropriate time, subject to market conditions.

Citi’s Natasha Brilliant said Reach’s results were “encouraging” despite the uncertain backdrop, noting that the group has also completed its cost saving programme.


07:35 AM

William Hill shares plunge after ‘disappointing’ offer

Bookie William Hill is leading fallers on the FTSE 250 currently, dropping as much as 14pc after analysts said investors would see Caesars Entertainment’s offer for the British group (see 7:46am update) as disappointing.

Although the 272p-per-share offer is at a 58pc premium to William Hill’s price the day before an initial offer was made, it is 13pc below their price at Friday’s close. 

One crucial card Caesars carries is the right to terminate its joint ventures with William Hill should rival suitor Apollo Global Management win out in a bidding war.

Goodbody analysts Gavin Kelleher said:

Given the move in William Hill’s share price on Friday, some people will see the 272p as a somewhat disappointing outcome. However, the statement in this morning’s release that Caesars has the right to terminate the William Hill US JV, means it is hard for Apollo or any other party to acquire William Hill and Caesars holds significant power in negotiations.

Stifel’s Bridie Barrett added that the Caesars’ offer carried a “sting in the tail”, saying:

While a termination of the relationship with William Hill under new ownership makes little business sense, it does add risk for a private equity acquisition. In light of this fact, a price at the upper end of our range is unlikely.

07:23 AM

Market moves

European shares have popped higher at the open amid widespread rises for banks. The jump, which is being led by Germany’s DAX, comes after the worst week since June for top stocks across the continent.

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07:15 AM

HSBC shares jump most since 2009 after Chinese investor ups stake

Shares in HSBC have popped as much as 12pc in their biggest intraday rise since 2009, after top shareholder Ping An Insurance Group boosted its stake in the embattled lender to 8pc.

Ping An said it was confident that HSBC– which last week saw its Hong Kong-listed shares hit a 25-year low – would soon return to paying dividends.

A spokesperson for the insurance group said:

Ping An believes HSBC’s suspension of dividend payments is a short-term issue and has been actively communicating with the lender about the possibility of restoring dividends in the future.

The cut to payouts, which was demanded by UK regulators in response to the onset of the pandemic, caused upset among HSBC’s base of Kong Kong retail investors. The bank has said it will review its payment plans once the pandemic’s impact becomes more clear.

HSBC’s shares are still down about 47pc this year.


07:09 AM

Diageo says outlook has improved

Diageo  - REUTERS/Shamil Zhumatov/File Photo

 Shares in drinks giant Diageo have popped higher at the open, after it reported “a good start” to its new fiscal year amid strong demand and easing restrictions.

In a statement ahead of its AGM today, chief executive Ivan Menezes said its US business was “performing strongly and ahead of our expectations”, while consumption of shop-bought alcohol in Europe remains “robust” – although “the risk of additional restrictions remains where infection rates are worsening”

He added:

Our outlook for the first half of fiscal 21 has improved since the year-end, reflecting the good start to the year, particularly for our US business. We continue to expect sequential improvement in organic net sales and operating profit compared to the second half of fiscal 20. Compared to the first half of fiscal 20, we still expect lower organic net sales and margin dilution. 

Mr Menezes said he was “pleased” with the company’s performance and was confident in Diageo’s long-term strength.

Jefferies’ Edward Mundy said investors would be cheered by the update, adding:

Although renewed government restrictions could slow the pace of recovery, we would expect shares to react favourably to the more upbeat trading statement given recent weakness.

07:03 AM

Pound edges higher

Sterling has climbed slightly against the dollar this morning, although the slightly uptick comes against a broader drop this month. Currently, it’s set to be the pound’s worst week against the US currency since 2016:


06:46 AM

William Hill takeover offer

Caesars Entertainment has tabled a £2.9bn takeover bid for high street stalwart William Hill.

The US giant has offered the bookmaker's shareholders 272p a share for the company, which it said was a 57.6pc premium to its closing price on Sept 1, the last day before Caesars’ first approach to William Hill.

Caesars said that William Hill's board was “minded to recommend” the offer to shareholders.


06:45 AM

FTSE to open higher

Good morning. The FTSE 100 is set for a bounce after positive industrial data out of China gave Asian markets a lift overnight. Caesars Entertainment has tabled a £2.9bn offer for William Hill and Aldi is pledging to create thousands of jobs in the UK next year after its profits surged.

5 things to start your day 

1) Regus owner locked in £800m battle with landlords: Shared offices provider IWG will threaten to put its Regus subsidiary into bankruptcy this week, thereby avoiding paying landlords £800m in rent guarantees. IWG said coronavirus has "severely affected" its finances, but landlords have reacted with fury at the move.

2) Bank of England official defends negative rates: Threadneedle Street's only woman rate-setter says evidence for taking rates below zero is "encouraging" from other countries, fuelling expectations the Bank could resort to the drastic measure in a bid to boost the economy.

3) BA backer Qatar Airways lands £1.5bn state bailout: The largest shareholder in British Airways owner IAG has won a bumper rescue package from Qatar to cover its Covid losses. The deal follows Qatar Airways' decision to up its stake in the British company by another £450m earlier this year.

4) Investors fear Wall Street chaos after US election: Traders are braced for long term stock market volatility after the November presidential election, if the outcome is disputed. A reliance on postal votes in the pandemic makes it unlikely a result can be announced on the night, and critics fear President Donald Trump could contest a Biden victory.

5) Exclusive: FoI laws give Upper Crust owner the edge in rail rent talks: Retail giant SSP has used freedom of information rules to effectively slash rents it owes train station operators, likely costing taxpayers millions.

What happened overnight 

Chinese stocks drove Asian markets higher on Monday, though sentiment was still cautious ahead of a US Presidential debate and as a spike in new coronavirus cases undermined global economic recovery hopes.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5pc to 550.47, but still within striking distance of a two-month low of 543.66 hit last week.

The index is set to end the month deep in the red after three straight monthly gains as the pandemic continues to wreak economic havoc around the world and raises investor anxiety about sky-high valuations.

Chinese shares opened higher and helped to underpin Asian markets after a tentative start, with the blue-chip CSI 300 index up 0.85pc. Shanghai's SSE climbed 0.5pc.

Encouragingly, data over the weekend showed profits at China's industrial firms grew for the fourth straight month in August buoyed in part by a rebound in commodities prices and equipment manufacturing.

Elsewhere, Japan's Nikkei was 0.75pc higher, partly on a lower yen, while South Korea's KOSPI index gained 1.1pc.

Coming up today

Interim results:

Reach

Economics:

UK-EU joint meeting on Brexit