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FTSE 100 holds gains; Crypto storage firm granted insurance through Lloyd’s of London

Last updated: 10:30 28 Aug 2018 EDT, First published: 01:40 28 Aug 2018 EDT

cryptocurrency
  • FTSE 100 index up 54 points at 7,631

  • Crypto storage firm granted insurance by Lloyd's of London

  • US markets open at intraday highs, with Dow just 2% of all-time record

3.30pm: Cryptocurrency storage firm Kingdom Trust granted insurance through Lloyd’s of London

Kingdom Trust, a company that allows investors to store cryptocurrency has secured insurance coverage from Lloyd’s of London, the world’s largest insurance marketplace, to protect against theft or destruction of the stored assets.

The firm, which holds around US$12bn in assets, has been seeking insurance since its launch in 2010 in a move to bring institutional investors in the crypto and digital currency marketplace.

The coverage is also touted as helping bring digital currency businesses into the mainstream market, as insurance companies have reluctant to cover digital assets due to the relative lack of safeguards as well as a limited trove of data from the young industry.

One of the factors that may have helped Kingdom Trust is the offline storage of its assets, which makes them more secure, whereas most crypto insurers avoid coverage of assets stored online as they are more susceptible to tampering.

2.50pm: US markets open in record territory as optimism lingers

The Wall Street indexes opened with record numbers on Tuesday as positive sentiment from Monday’s rally and the US-Mexico trade agreement continued to bolster markets.

The Dow Jones Industrial Average was up 62 points at 26,111 shortly after the open, just 2% shy of January’s all-time high, while the S&P 500 and Nasdaq were trading at intraday highs, up 6.5 points at 2,903 and up 22 points at 8,036 respectively.

Meanwhile, the FTSE 100 had regained most of its progress from the morning and was up 44 points at 7,621. 

1.40pm: Wall Street poised to open near record highs as trade concerns ease

US markets are expected to open at near record highs on Tuesday Morning as Monday’s rally seems set to continue as trade worries receded.

The recent agreement over a NAFTA overhaul between the US and Mexico has helped remove one of the biggest weights on the market over the year, with any resolution of trade providing some extra clarity to the market’s outlook going forward.

While the market has reacted positively to the trade news, there is still wariness around the progress of negotiations between the US and a much larger trading partner, China, which have shown little movement over the past few months.

In London, the FTSE 100 was up 27 points 7,604.

1.00pm: Treasury denies it asked Carney to stay on longer at Bank of England

The UK Treasury has denied a report in the Evening Standard that it asked Bank of England (BoE) governor Mark Carney to stay on for another year beyond his scheduled departure in June of next year.

A diary item in the newspaper reported that the Treasury had “quietly approached” Carney about staying for an extra year as a measure to provide continuity after the UK left the European Union in March 2019.

However, the report was denied by a Treasury spokesperson, who said that the ministry didn’t recognise the reporting “at all”.

They added that the ministry was planning to “start recruitment soon, although the Standard has also said the government officials were struggling to find a candidate to replace him.

The FTSE 100 was up 23 points at 7,601.

11.50am: FTSE 100 closes morning in the green bolstered by US rally and trade news

The FTSE 100 started strong this morning and has maintained most its gains into lunchtime as markets in London picked up on a strong US rally on Monday that sent the S&P 500 and Nasdaq toward record highs.

There was also relief from news that the US and Mexico had agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), adding pressure on fellow member Canada to agree to new terms on auto trade and dispute settlement, potentially diffusing one section of the wider US trade spat with various countries.

Chris Beauchamp, chief market analyst at IG, commented that the progress in trade negotiations was “welcome for all concerned, since it shows that the Donald can be persuaded if the right approach is used”.

He added that other trade negotiators would be studying the US/Mexico talks for “tips on how to get on the president’s good side”.

It wasn’t all good news in London though, with the pound sliding nearly 0.2% to €1.10 against the euro after comments by UK prime minister Theresa May that no-deal Brexit “wouldn’t be the end of the world” and a statement that a hard Brexit was “not off the table” by German foreign minister Heiko Maas piled pressure on the currency.

Connor Campbell, financial analyst at Spreadex, said the comments by May had investors worried as “talk of Britain leaving the EU without an agreement has become louder and louder in the last couple of weeks, with the PM doing little to calm the market’s fears on this front”.

The FTSE 100 was up 26 points at 7,604.

11.10am: Oil price creeps up on worries of supply disruption

Brent crude prices edged up 0.7% to US$76.74 a barrel in late-morning trading as expectations of a tighter market were bolstered by risks of supply disruption from oil exporters such as Venezuela and Iran.

In the last two years, Venezuelan oil exports have halved to just 1mln barrels per day (bpd) according to trade flow data, while the US’s new sanctions on Iran coupled with the Islamic Republic’s internal woes has raised concern over its own exports.

The Organisation of the Petroleum Exporting Countries (OPEC) has kept supplies relatively tight recently as a result of the disruption as well as a high compliance rate on voluntary production cuts by its members, which stood at 120% in June.

The cartel has also seen issues from some of its key African members, Nigeria and Libya, due to continuing instability that could affect exports.

The FTSE 100 was up 30 points at 7,607.

10.20am: Equinor to decide on Dogger Bank wind project investment by May 2019

Norwegian energy group Equinor is to decide by May next year whether it wants to invest in the UK’s offshore wind project in the Dogger Bank area of the North Sea.

The company’s executive vice-president, Paal Eitrheim, said the company would be ready for the UK’s contract for difference auction next May, which meant that the firm would have made “the final investment decision by then”.

The company, formerly known as Statoil, is planning to develop a 3.6 megawatt offshore wind farm in partnership with FTSE 100 energy firm SSE plc (LON:SSE), who saw its shares lifted 1.2% to 1,266.5p in mid-morning deals.

In other Norway-related news, fellow blue-chip constituent Bunzl (LON:BNZL) shares were up 1.1% at 2,356p after it announced the acquisition Norwegian firm Enor AS and reported a 4% increase in pre-tax profit for the first half.

The distribution and services group has agreed to buy Enor, which supplies catering equipment to hotels, restaurants and hospitals, for an undisclosed sum.

Enor, Bunzl's first acquisition in Norway, generated revenue of NOK294mln (£27mln) last year.

Elsewhere in the FTSE 100, Lloyds Banking Group PLC (LON:LLOY) saw its shares inch up 0.3% to 61p after completing a  £1bn share buyback programme that it announced wirth its full-year results in February.

However, the FTSE 100 itself lost some early gains and was only up 22 points at 7,600.

9.30am: Sterling struggles as ‘no-deal’ Brexit worries compounded by May comments

The pound was weaker against the euro this morning as fears of a ‘no deal’ Brexit were compounded by comments from UK Prime Minister Theresa May that leaving the EU without a deal “wouldn’t be the end of the world”, according to a Sky News report.

The comment, made as the prime minister prepares for a trip to Africa, followed a statement from Chancellor Philip Hammond said a no-deal departure could damage public finances and require an extra £80bn in domestic borrowing.

In response to the Treasury, May said that the forecasts which formed Hammond’s comment were out of date and that “those figures were a work in progress at that particular time”.

In early morning trading, the pound was down 0.05% against the euro at €1.103, having slightly recovered from a 0.1% drop earlier in the day.

The FTSE 100 was up 50 points at 7,628.

8.45am: Trade relief boosts Footsie

The FTSE 100 index pushed higher in early trade on Tuesday, catching up with gains elsewhere after the UK bank holiday, helped by news of a trade deal between Mexico and the US.

Around 8.40am, the  UK blue-chip index to open around 50 points higher at 7,627, reflecting strength in US and Asian markets, having gained 14.27 points on Friday.

Investors were encouraged by news that the US and Mexico has reached a deal to overhaul the North America Free Trade Agreement (NAFTA).

Naeem Aslam, senior markets analyst at ThinkMarkets commented: “What the market participants are excited about is that the US and Mexico deal will bring Canada back on the table and a similar deal can be done with other country.

“On top of this, Trump could very well change his stance all together and may try to bend China's arm to adopt structural reforms.”

Miners were in the vanguard of the Footsie’s gains first thing, with Anglo American PLC (LON:AAL) up 2.5% at 1,614.60p, while Glencore PLC (LON:GLEN) and Fresnillo PLC (LON:FRES) both gained 2.0% at 327p and 965.80p respectively.

On the news front, NMC Health plc (LON:NMC) was also a blue-chip gainer, ahead 3% at 3,924p after the leading private healthcare operator in the Gulf States denied reports it is looking to acquire assets in India.

And broker comment had diverse impacts for two oil-related stocks, with Genel Energy PLC (LON:GENL) adding 3.6% at 259p after Canaccord Genuity upgraded its rating, while Petrofac PLC (LON:PFC) shed 0.4% at 655.6p after a Kepler Cheuvreux downgrade.

Proactive news headlines:

Europa Metals Limited (LON:EUZ) has mobilised a drilling rig at its Toral project in northern Spain as it prepares to begin a campaign to evaluate the potential extension of a mineral structure.

IronRidge Resources Ltd (LON:IRR) has hit high grade lithium in drilling at the Ewoyaa project in Ghana. Among the better intercepts were 128 metres grading 1.21% Li2O, 111 metres grading 1.35% Li2O, and 65 metres at 1.58% Li2O.

BATM Advanced Communications Limited (LON:BVC), a provider of real-time technology for networking and lab systems, entered the second half of the year with a strong order backlog.

Researchers have shown that ANGLE PLC’s (LON:AGL) Parsortix liquid biopsy system can be used to identify people with glioblastoma – an aggressive type of brain cancer.

Echo Energy Plc (LON:ECHO) has told investors that testing results from the CSo-2001(d) well, within the Fracción D asset onshore Argentina, indicate a significant pressure depletion across this western flank of the field.

SDX Energy Inc’s (LON:SDX, CVE:SDX) interim results reveal a 35% rise in net revenues and an 83% improvement in cash generation. The Egypt and Morocco focused oil and gas producer yielded some 3,234 barrels of oil equivalent output per day in the six months ended June 30, and, it continues to bring online successful wells drilled during 2018.

Thor Mining PLC (LON:THR) has successfully completed laboratory test work for the extraction of copper from several core samples from its Kapunda copper project in South Australia.

Mineral sands miner Base Resources Limited (LON:BSE) doubled profits in the year just ended as all three of its core metals saw higher prices. Production was steady at 91,672 tonnes of rutile, 464,988 tonnes of ilmenite and 37,157 tonnes of zircon; but prices of the metals rose by 17%, 28% and 46% respectively.

Chaarat Gold Holdings Ltd (LON:CGH) is raising up to US$100mln to help fund the acquisition of a producing and profitable polymetallic mine in the Russian Commonwealth. BP May but could do with an update for this fundraise and acquisition.

Galantas Gold Corp (LON:GAL) has restarted the production of concentrate from its Omagh gold mine in Ireland. Underground development continues. The company posted a net loss of C$1.2mln for the six months to June.

Bluebird Merchant Ventures (LON:BMV) has completed a A$250,000 placing into Southern Gold Ltd. The placing was part of the requirements for Bluebird to meet the formal joint venture agreement on the Kochang gold and silver mine in South Korea.

Grit Real Estate Inc. (LON:GR1T) announced that it has completed the acquisition of an effective interest of 80.1% in Cognis 1 Limitada, the sole owner of an 'A' grade corporate residential complex known as Acacia Estate, located in Zone 5 A/B, Area da Costa do Sol, Maputo in Rua do Rio Inhamiara Road, Mozambique. and the corresponding rental enterprise conducted on the property as a going concern.

AdEPT Telecom plc (LON:ADT) has announced the immediate appointment of Cantor Fitzgerald Europe as its nominated advisor and broker to the company.

Advanced Oncotherapy PLC (LON:AVO) announces that, further to its announcement of 2 July 2018, Peter Sjostrand, Gabriel Urwitz, Chunlin Han, RenHua Zhang and Yuelong Huang have been appointed as non-executive directors, with immediate effect.

Tlou Energy Limited (LON:TLOU) has released a presentation given today by the group’s general manager, Solomon Rowland, at the Africa Oil Gas & Energy Australia Conference being held in in Perth, Western Australia on the company's website.

6.40am: Strong start predicted

The FTSE 100 index is expected to start strongly on Tuesday, returning positively after the UK bank holiday following overnight jumps by US and Asian markets after President Trump made further moves to settle his trade wars.

Spread betting firm IG expects the UK blue-chip index to open around 43 points higher at 7,620 having gained 14.27 points on Friday.

Overnight on Wall Street, the Dow Jones leapt 259 points higher to close at 26,049, while the broader S&P 500 index and tech-laden Nasdaq Composite both rallied to record highs as investors were encouraged by news that the US and Mexico has reached a deal to overhaul the North America Free Trade Agreement (NAFTA).

The move will put pressure on Canada to strike a NAFTA deal and the upbeat trade outlook was also boosted as EU officials said Washington was pressuring Europe to speed up tariff talks.

Asian markets took heart from the signs of trade settlements progress on Tuesday, with Japan’s Nikkei 225 index ahead 0.7% and Hong Kong’s Hang Seng index up 0.6%, although other Chinese stock markets were more subdued with US tariffs still an issue for the country.

On currency markets, the pound slipped back overnight against both the US dollar and the euro amid Brexit uncertainties, with a CBI survey released overnight showing the mood of UK services firms at their lowest since November 2016 amid slowing sales and rising costs.

Acquisitions to boost Bunzl’s interims

On the corporate front, blue-chip distribution and outsourcing firm Bunzl PLC (LON:BNZL) is the only major firm due to report results on Tuesday.

Bunzl spent a record amount buying up businesses last year and the group has indicated that it would look at further acquisitions to expand the business.

In its last trading update, the company said that growth through acquisitions remains part of its strategy with a total committed spend so far this year of about £105mln

It also said it expects revenue in the first half to rise by 11% at constant exchange rates, boosted by its recent acquisitions and additional grocery distribution business won in North America.  Overall trading was in line with expectations, the firm added.

Analysts expect Bunzl’s first half earnings to rise by 7.3% to 59.1p per share and revenue to rise by 4.3% to £4.3bn on a reported basis.

Significant announcements due on Tuesday August 28:

Interims: Bunzl PLC (LON:BNZL), BATM Advanced Communications Ltd (LON:BVC), Jadestone Energy Inc (LON:JSE)

Finals: Sylvania Platinum Ltd (LON:SLP)

Economic data: CBI UK service sector survey; US import, export prices

Around the markets:

  • Sterling: US$1.2861, down 0.2%
  • Gold: US$1,209.90 an ounce, up 0.1%
  • Brent crude: US$68.85 a barrel, down 0.03%

City Headlines:

  • Melrose, which acquired engineering group GKN less than six months ago in a hostile takeover, is due to officially launch a £1.8bn sale of GKN’s powder metallurgy division – Sunday Telegraph
  • Melrose has shelved the US$800mln disposal of one of its American subsidiaries Ergotron, a maker of equipment for schools and hospitals – Monday’s The Times
  • Superdry is suing rival Jack Wills and a former employee over copying its design of a black padded coat in a winter range – Sunday Times
  • Lloyds might have no choice but to appoint Deloitte as its auditor because the other big four accountants have conflicts of interest - ramping up pressure on politicians and regulators to restructure the audit market – Sunday Times
  • Elon Musk took a U-turn and to abandoned his plan to take Tesla private saying current investors had insisted to keep the electric car company as a listed business – Sunday Times
  • The Russian oligarch Roman Abramovich is plotting a multi-billion-pound sale of Chelsea football club after turning down an approach from US private equity firm Silver Lake Partners – Sunday Times
  • Toyota is set to pump US$500mln into Uber, which values the car hailing app at more than US$70bn, to work together on developing autonomous vehicles – Daily Telegraph
  • Warren Buffett's Berkshire Hathaway plans to invest at least US$300mln in the parent company of India's largest mobile payments group Paytm – Financial Times
  • Germany’s top business leaders have warned of the dangers of a no-deal Brexit as many businesses in the country are still hoping the UK reverses its decision to leave the EU – The Guardian
  • Surging compensation demands for Wonga are pushing the payday lender close to collapsing into administration – Monday’s Daily Telegraph
  • Household products company Procter & Gamble has applied to trademark acronyms common in textspeak including “LOL” and “WTF” – The Observer

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