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The FTSE 100 on Monday closed up 0.09% as U.K. Foreign Secretary Liz Truss won the race to lead the ruling Conservative Party and therefore become Boris Johnson’s successor as the country’s new prime minister. “Oil prices came to the rescue of the FTSE 100, with the U.K. index looking to end this relatively uneventful session flat on the day,” says Chris Beauchamp, chief market analyst at online trading platform IG.

 
Companies News: 

Ondo InsurTech Appoints Kevin Withington as CFO

Ondo InsurTech PLC said Monday that it has appointed Kevin Withington as chief financial officer.

Close Brothers’ Winterflood Business CEO to Retire, Successor Named

Close Brothers Group PLC said Monday that its Winterflood Securities business’s Chief Executive Officer Philip Yarrow will retire from the role on Sept. 20, and that it has named his replacement.

Carclo Shares Rise on Financing Agreement to Support Growth

Carclo PLC shares rose on Monday after the company said it has completed a funding agreement to support is growth strategy.

Clean Power Hydrogen Appoints James Hobson as Chief Financial Officer

Clean Power Hydrogen PLC said Monday that it has appointed James Hobson as chief financial officer and executive director, with his expected start date set for Dec. 5.

Journeo 1H Pretax Profit Flat on Higher Costs; Enters 2H in Strong Position

Journeo PLC said Monday that pretax profit was almost unchanged for the first half after it booked higher costs, and that it has entered the second half in a strong position.

Alpha FX 1H Pretax Profit Rose; Backs 2022 Views

Alpha FX Group PLC said Monday that pretax profit for the first half of 2022 rose, backed on a robust performance on its foreign exchange risk management division, and raised its dividend payout.

Prospex Energy Raises GBP500,000 via Loan Notes to Fund Selva Field in Italy

Prospex Energy PLC said Monday that it has raised 500,000 pounds ($575,600) via the issue of loan notes and will use the money toward its share of the development costs at the Selva gas discovery in Italy.

R&Q Insurance Holdings 1H Pretax Loss Widened; Backs FY 2024 Views

R&Q Insurance Holdings Ltd. said Monday that pretax loss for the first half of 2022 widened after the company booked higher costs, and cut its dividend payout.

Belvoir 1H Pretax Profit Slipped on Higher Costs; Revenue Rose

Belvoir Group PLC said Monday that its first-half pretax profit fell on increased administrative costs, though revenue rose.

Power Metal Resources Raises GBP800,000 to Fund Projects

Power Metal Resources PLC said Monday that it has raised 800,000 pounds ($920,960) via a share placing and will use the money toward a number of projects and for general working capital purposes.

Vistry Agrees to Merge With Countryside Partnerships in GBP1.25 Bln Takeover

Vistry Group PLC said Monday that it has agreed the terms of a merger with Countryside Partnerships PLC, buying the company in a cash and share deal that values Countryside at around 1.25 billion pounds ($1.44 billion).

 
Market Talk: 

Pound at Risk of Falling on Large, Poorly Targeted Fiscal Stimulus

1419 GMT – Liz Truss, elected as the ruling U.K. Conservative Party’s new leader on Monday, will need to deliver well-targeted fiscal stimulus to support the sterling, Deutsche Bank says. “The risk is that policy exacerbates the key vulnerability: the external imbalance,” Deutsche Bank forex strategist Shreyas Gopal says in a note. Expansive, poorly targeted fiscal policy would widen the budget and current-account deficits and raise inflation expectations, he says. Meanwhile, a potential review of the Bank of England’s mandate and reports that Truss could trigger Article 16 of the Brexit deal’s Northern Ireland protocol would add uncertainty for trade and monetary policy, he says. Deutsche Bank expects EUR/GBP to rise to 0.90 by year-end from 0.8628 currently. (renae.dyer@wsj.com)

Truss’s Spell as UK Prime Minister Might Be Brief

1311 GMT – New Conservative Party leader Liz Truss’s U.K. premiership could be the shortest of any Tory party prime minister in the last 50 years, a bookmaker says. Truss, who defeated rival Rishi Sunak in the party’s leadership contest Monday, is odds-on at 4/6 to spend a shorter time in office than Theresa May, who served as PM for just over three years, William Hill says. Truss takes charge amid economic uncertainty and odds show her being less likely to win an early general election than Labour leader Keir Starmer, Hill says. “We don’t expect Truss to last very long in office,” William Hill spokesman Tony Kenny writes, adding that the bookmaker isn’t ruling out her premiership being the shortest in U.K. history at 50/1. (philip.waller@wsj.com)

Truss’s Fiscal Plans Could Lift Gilt Yields, Implications For Pound More Nuanced

1233 GMT – Plans by new U.K. Conservative Party leader Liz Truss to increase fiscal stimulus could lift U.K. government bond yields, or gilt yields, while the implications for sterling are more nuanced, Newton Investment Management says. Truss plans to cut taxes and is mulling support measures to offset higher energy bills, which could add upward pressure on inflation and widen the budget deficit, Newton fixed income portfolio manager Howard Cunningham says in a note. That could translate into slightly higher gilt yields, he says. For sterling, looser fiscal policy might provide a short-term boost as it could lead to higher interest rates, he says. “However, the already stretched public finances would be more precarious, which might deter some potential buyers.”(renae.dyer@wsj.com)

Sterling Stays Higher After Truss Named New Conservative Party Leader

1202 GMT – Sterling stays higher on the day against the dollar and the euro, showing little reaction after Liz Truss was named the new leader of the ruling Conservative Party, as widely expected. Truss will travel to Balmoral Castle in Scotland on Tuesday to be appointed as prime minister by the Queen. She will replace Boris Johnson, who announced his resignation in July following a revolt within his party over a string of scandals under his leadership. There are hopes Truss will announce support measures to tackle the cost of living crisis and this is helping sterling on Monday, AvaTrade analyst Naeem Aslam writes. GBP/USD and EUR/GBP are both little changed after the announcement, at 1.1502 and 0.8623 respectively.(renae.dyer@wsj.com)

ASOS Possibly Briefing Analysts on Guidance Seen as Concerning; Shares Dip

1102 GMT – A report from the Sunday Times that ASOS briefed City analysts on its fiscal 2022 and 2023 guidance is concerning, Shore Capital says in a research note. The online fashion retailer said that it hasn’t shared non-public information with City analysts, but Shore says the potential of selective disclosure is worrying. “We would take a very dim view of the possibility, never mind the reality, of such behavior,” the U.K. brokerage says. Furthermore, one analyst anonymously expressed unease at how ASOS was managing expectations, which are now anticipated to be at the lower end of the range provided in June, Shore says, citing the Sunday Times’s report. Shore has a sell recommendation on the stock and a target price of 685 pence. Shares are down 6% at 644.00 pence. (sabela.ojea@wsj.com; @sabelaojeaguix)

Vistry’s Countryside Deal Should Boost Operating Profit

1040 GMT – Vistry’s agreed GBP1.25 billion takeover of Countryside Partnerships will potentially double its adjusted operating profit to exceed GBP800 million, Jefferies says. Furthermore, when factoring in synergies between the companies, earnings could treble, Jefferies analysts Glynis Johnson and Priyal Woolf say in a research note. This implies the group’s earnings will come half from Countryside, as its planned exit from the house building sector is no longer on the table, though most of this will come from the near-term buildout of sites, as planned, the U.S. bank says. Jefferies retains its buy rating and 1,209 pence price target on Vistry’s stock. (joseph.hoppe@wsj.com)

Vistry’s Takeover of Countryside Partnerships Should Be Welcomed

1039 GMT – Vistry’s GBP1.25 billion takeover of Countryside Partnerships should be welcomed by the former’s shareholders, Goodbody says. The addition of the Countryside Partnerships business increases the size and scale of the Vistry’s own Partnerships business, and management are talking about a GBP3 billion revenue opportunity over the medium-term, Goodbody analyst Dudley Shanley says in a research note. “Vistry Group management have highlighted at least GBP50 million of synergies from this deal, [and] given its track record of delivery over the last few years the market is likely to suspect that this number can be beaten,” the Irish brokerage says. Goodbody retains its buy recommendation on the stock. Shares are up 0.5% at 744.5 pence. (joseph.hoppe@wsj.com)

Energy-Intensive Crypto Investment Could Raise Odds of Climate Crisis

1036 GMT – Continued investment in more energy-intensive cryptocurrency is likely to increase the chance of a global climate crisis, a report from Imperial College Business School warns. The majority of cryptocurrencies are mined using the proof of work [POW] approach, which is an energy intensive process that makes cryptocurrency mining environmentally unsustainable, the report’s author Carmine Russo writes. The energy usage to mine the most popular POW cryptocurrencies–bitcoin and ethereum–was higher than the overall energy usage of the U.K. and Italy in 2020, he says. Russo recommends forcing cryptocurrency miners disclose the impact of their activities on the climate and advertising more environmentally-friendly practices. (renae.dyer@wsj.com)

Vistry’s Takeover of Countryside Partnerships Makes Strategic Sense

(MORE TO FOLLOW) Dow Jones Newswires

September 05, 2022 12:06 ET (16:06 GMT)

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