FTSE 100 starts on back foot; US consumer confidence data eyed

News

  • FTSE 100 down 32 points to 7,063


  • Carpetright shareholder buys debt pile


  • Sports Direct faces investor rebellion


  • Burford Capital fends off another short attack


9.45am: Bunzl hikes dividend


Bunzl PLC (LON:BNZL) could only deliver flat underlying earnings for the first half of the year, though the business supplies distribution giant received a sizeable benefit from the weak pound.


Having already revealed two months ago that underlying sales growth was slowing due to the softening global economy, the FTSE 100 group repeated its assurance that full-year results remained unchanged and upped the dividend another 2% to 15.5p.


Profit before tax of GBP200.5mln in the six months to 30 June was up 1.6% on the same period last year, although adjusted operating profits at constant currency rates were up only 0.3%.


“Against the background of slowing macroeconomic and market conditions across the countries and sectors in which we operate, Bunzl has produced a resilient operating performance,” said chief executive Frank van Zanten.


Shares are down 0.3% to 2,028p.


9.15am: Burford fends off another attack from short seller


Shares in Burford Capital Ltd (LON:BUR) have continued to recover on Tuesday as the litigation finance group fielded another attack from short-seller Muddy Waters.


Following up from the initial shots fired earlier in the month, where the San Fransisco-based hedge accused the AIM-listed company of “egregiously misrepresenting” returns, an update was issued on Tuesday relating to a $7.4mln investment in fledgling biotech Napo Pharmaceuticals.


Muddy Waters attests that Burford manipulated its return on invested capital (ROIC) and internal rate of return (IRR) on the investment by categorising Napo’s case against Salix Pharmaceuticals over its diarrhoea drug as a win with a significant return “when it should have been a loss”.


Burford, in its original response on 8 August, said it had structured its financing agreement with Napo so that any funds recovered could come from not just Napo’s dispute with Salix, but from other litigation, although it didn’t mention which.


Muddy Waters in its latest post on Tuesday said this was a “depraved” effort to “conceal adverse results”.


Burford shares are up 3.2% to 787p.


8.45am: Slow start to the week for FTSE 100


As expected, the FTSE 100 began the shortened trading week in the red, losing 24 points to 7,070.94.


The pre-occupation with a hard Brexit and continued concerns over recession overshadowed some seemingly backstage movements on Sino-American trade talks.


“Today investors will be looking towards consumer confidence data for signs as to whether the trade dispute is spilling over from the manufacturing sector into the consumer sector,” said Jasper Lawler of London Capital Group.


“So far consumer confidence has remained resilient, thanks to the solid labour market.”


On the market a late summer torpor appeared to settle over the major London trading desks with early volumes exceedingly low.


Against this backdrop, NMC Health (LON:NMC) continued its ascent after last week receiving competing bid approaches for a stake in the Gulf-focused private hospitals group.


Stepping down a division, biotechnology group PureTech Health (LON:PRTC) rose 7% as the market took comfort from the healthy cash position of it and its affiliates.


6.30am: FTSE 100 set to start week on back foot


Traders look set to ignore the pull of Wall Street and Asia with the FTSE 100 expected to open its weekly trading account in the red.


The world’s main markets were buoyed Monday by the prospect of America and China edging towards the trade negotiating table.


However, in London the fixation is likely to be with Germany’s uncertain economic prospects coupled with Boris Johnson’s apparent inability to move on Brexit negotiations at the G7 in Biarritz.


The gold price, a haven investment in times of volatility, posted a new six-and-a-half year high on Monday and wasn’t far off its latest peak overnight with an ounce of the yellow metal changing hands for US$1,538.30, up US$1.10.


Around the markets: Pound worth US$1.222; Brent crude US$58.94 a barrel, up 24 cents; Bitcoin US$10,194.34, down US$6.88


Tuesday’s Major Corporate News


Interims: PureTech PLC (LON:PRTC), Jadestone Energy PLC (LON:JSE), Bank of Cyprus Holdings PLC (LON:BOCH), Bunzl PLC (LON:BNZL)


Economic data: US house price index, US consumer confidence


Business Headlines


Financial Times


  • Trump prepared to meet Iran for new nuclear deal
  • World’s top wealth manager turns bearish on stocks – UBS recommends customers trim positions
  • Sports Direct board faces investor rebellion at AGM
  • Biotech companies issue first declaration on human gene editing
  • J&J ordered to pay US$572mln in opioid trial

Times


  • The chief executive of the empire behind the Daily Mail said there were no “sacred cows” as he announced a new disposal to boost its war chest before an anticipated economic downturn
  • CBI poll: vital services sector hit by Brexit uncertainty
  • Huge rewards lure shale US oil workers to the desert ‘war zone’
  • Ferdinand Piech, the man who turned around Volkswagen, dies

Daily Telegraph


  • British start-up beats world to Holy Grail of cheap energy storage for wind and solar
  • Small companies face spiralling business rates for keeping workers cool in the heatwave
  • Boss of Uber rival Kapten unfazed by threat of new car restrictions in London

Guardian


  • Greece to lift debt crisis-era restrictions on sending money abroad
  • Boris Johnson gives struggling high street fund pre-election boost

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