Thames Water collapse fears spread to rivals
Turmoil at Thames Water has triggered a wider sell-off in bonds across the utility industry as investors turn their attention to debt burdens at rivals.
The difference between yields on benchmark government bonds and those issued by Southern Water and Northumbrian Water have widened in recent weeks, reflecting growing nervousness about how risky the debt is.
The so-called “risk premium” on Southern Water Services bonds has widened by 13 basis points since March 19, while Northumbrian Water Finance’s bonds widened four basis points since March 22.
The moves means the companies are lagging behind investment-grade rivals and may signal concern among investors that Thames Water’s problems could spread across the industry.
Bryn Jones at Rathbones Group, told Bloomberg: “Not all UK water companies are set up like Thames but there’s a huge amount of read across.
“If the sector’s main player gets negatively impacted, then others and their spreads are going to get hit.”
A spokesman for Southern Water, which serves almost 5 million people across Kent, Sussex, Hampshire and the Isle of Wight, said: “With a supportive shareholder which has injected more than £1.5bn of fresh equity into the group since 2021, we have a resilient financial position. Our two bond issues in recent months have raised £1bn, and were both over-subscribed – indicating a high degree of confidence among our institutional investors.”
Northumbrian Water, which serves more than 2 million people in Northumberland, Tyne and Wear, Durham and parts of North Yorkshire, was also contacted for comment.
Thames Water is veering closer to potential nationalisation after parent company Kemble defaulted on a £400m loan last week.
The company is also due to repay £190m to its lenders by the end of this month, but it has warned this deadline will be missed after shareholders refused to pump in more money.
The crisis has fuelled fears that the struggling utility could collapse into administration. The Telegraph has revealed that bosses are exploring a radical break-up plan as they look to navigate the cash crunch.
The value of Kemble bonds has dropped sharply in recent weeks as ratings agencies Fitch and S&P cut the company’s debt further into junk territory.
Thames Water is struggling under the weight of an £18bn debt pile, much of which was racked up under its previous owners Macquarie Group.
In December, regulator Ofwat identified Thames Water as one of the UK’s most indebted water companies. Its gearing ratio, which measures debt as a proportion of a company’s regulatory capital value, stood at just under 78pc.
Five other water companies – Yorkshire, Affinity, Portsmouth, South East and SES – were singled out for having a gearing ratio of above 70pc. Ofwat’s recommended level is just 55pc.
Thames Water, which is being advised by turnaround specialists at Alvarez & Marsal, has asked lenders not to take creditor action as it tries to shore up its future.
Two Chinese banks – the Bank of China and the Industrial and Commercial Bank of China – are among a group of lenders that are likely to ultimately decide Thames Water’s fate.
Dutch bank ING and Allied Irish Bank are also part of the creditor group, alongside Macquarie.
The Australian investment giant, which has been criticised for building up Thames Water’s debt pile during its ownership, provided around £130m in loans to Kemble between 2018 and 2020, the Times reported.
Read the latest updates below.
06:21 PM BST
Signing off...
Thanks for joining us. We’ll be back in the morning to cover all the latest in the markets, but in the meantime I’ll leave you with some analysis from my economics colleague Eir Nolsøe: Why Mohammed bin Salman has been forced to rein in his dreams of a mirror city.
06:13 PM BST
Wildwood owner seeks to exit poorly performing restaurants
The restaurant firm behind the Wildwood chain is to close sites as part of a major restructuring.
Tasty, which also runs sites under Dim T brand, said it plans to end the leases of 20 loss-making restaurants after a “challenging” start to the year.
The proposals are to be circulated to Tasty’s creditors before a court hearing expected later this month.
Tasty has 43 Wildwood Italian restaurants in operation and six Dim-T Asian restaurants.
It said its performance “continues to be inhibited by a tail of underperforming sites, despite efforts at improving operational performance”.
Tasty added that it expects revenues of around £46.9m for 2023, up from £44m the year before. It said it expects its accounts to show an underlying loss of £0.9m, down from £2.7m.
05:51 PM BST
Newcastle refusing to supply Sports Direct over fans’ ‘strong dislike’ of Mike Ashley, lawyers claim
Newcastle United is refusing to supply Sports Direct with its football kit because of a “strong dislike” of club’s former owner Mike Ashley, the retailer’s lawyer has claimed. Adam Mawardi reports:
As part of a dispute between Newcastle and Sports Direct, court papers show that the club’s chief commercial officer claimed it would be “commercial suicide” to supply the retailer because of fan hostility towards Mr Ashley.
The UK’s largest sportswear retailer is suing Newcastle for allegedly breaching competition law by refusing to provide the company with the team’s kit for the 2024/25 season.
It comes amid a separate legal row between Mr Ashey and Newcastle co-owner Amanda Staveley, who owns a 10pc stake in the club alongside other investors, including Saudi Arabia’s Public Investment Fund (PIF).
05:24 PM BST
Better Capital seeks sale of double glazing giant
Jon Moulton’s private equity firm has hired advisers to pursue a sale of the double glazing giant it rescued during Covid, according to a Sky report.
Better Capital has reportedly signed up the consulting firm Alvarez & Marsal to work on an accelerated sale of Everest.
The company was rescued through a flat-pack administration in June 2020, backed by a £3.2m injection from Better. It had run into financial distress after the pandemic prevented its sales staff and self-employed fitters visiting customers in their homes, which came on top of years of losses.
In its most recent published accounts for the year to the end of May 2022, Everest posted a loss of £0.8m on a turnover of £51m.
Better Capital and Alvarez & Marsal were approached for comment.
04:54 PM BST
Footsie closes down
The FTSE 100 closed down 0.1pc today. The biggest riser was miner Fresnillo, up 6pc, followed by investment firm St James’s Place, up 3pc. BAE Systems was the biggest faller, going down 4.5pc, followed by Rolls-Royce, down 3.9pc.
Meanwhile, the FTSE 250 closed down 0.5pc. The biggest riser was WAG Payments, up 4pc, followed by Hipgnosis Songs Fund, up 3.4pc. The biggest faller was TBC Bank, down 5.2pc, followed by defence company Chemring, down 5pc.
04:42 PM BST
Investors look favourably on ProCook profits despite online sales dip
Shares in kitchenware retailer ProCook have jumped by 4.4pc today after the group told investors that profits would be higher than previously expected.
The group, which competes against John Lewis with pans and knives, said that sales for the year to March 31 were up just 0.4pc to £62.6m as the business pushed forward with new retail stores but saw declining online sales. The company expects profit before tax to end up between £500,000 and £1m.
Lee Tappenden, chief executive, said:
Despite the market remaining subdued, we are gaining share giving us confidence that our proposition continues to resonate with consumers. We look forward to delivering further strategic progress as we continue to build an even stronger customer-focused business which will allow us to accelerate profitable growth as trading conditions improve.
04:31 PM BST
Shell is ‘massively undervalued’ says ex-boss
One of the FTSE 100’s largest companies is “massively undervalued” according to its former boss.
Ben van Beurden, the Shell chief who led the oil company when it axed its listing in the Netherlands, has suggested it could benefit from switching to a US listing.
Ben van Beurden told the Financial Times that oil companies listed in America benefited from higher valuations and “more positive” attitudes from investors. He said:
All these factors conspire against the [companies] listed in Europe. And I think increasingly that will be a problem . . . Something will have to give. The company is massively undervalued . . . the share price today is at an all-time high, but it could be significantly higher from where it is today.
04:15 PM BST
EU opens China wind subsidy investigation
The European Commission has opened a new investigation into subsidies received by Chinese suppliers of turbines destined for wind parks in Europe, in its latest action against manufacturers of clean tech products in China.
Brussels will look into the conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria, European Union commissioner Margrethe Vestager said in a speech today at Princeton University.
A body representing Chinese business interests in Brussels expressed its “profound dissatisfaction” over what it called protectionism and a lack of transparency from the EU as it rolls out its new rules to counter state aid from foreign actors.
The China Chamber of Commerce said that the EU’s “continuous deployment of new tools against Chinese enterprises” represents “an act of economic coercion”.
“This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism,” it added.
Ms Vestager said the EU needed to adopt a more systematic approach, with case-by-case investigations meaning the bloc was “playing whack-a-mole”.
“And we need to do it before it is too late. We can’t afford to see what happened on solar panels happening again on electric vehicles, wind or essential chips,” she added.
04:02 PM BST
Tesla sales to dip 4.6pc, analyst suggests
Tesla sales could dip 4.6pc this quarter compared with a year ago, a US investment bank has claimed, estimating that it will deliver 444,510 vehicles.
Ben Kallo, an analyst at Robert W. Baird, wrote in a note seen by Bloomberg: “There is no denying that the demand environment has Deteriorated. Musk has been vocal on recent conference calls regarding the difficulty of increasing sales in the higher interest rate environment, and we expect this to remain a headwind” through at least the first half of the year.
The comments follow Wells Fargo analyst Colin Langan last month claiming the electric car maker was a “growth company with no growth”.
03:49 PM BST
UK investors opting for more global funds as confidence in S&P 500 dips
Clients of Hargreaves Lansdown became more confident about investing in the Asia Pacific, Europe and global emerging markets last month as some sought to diversify away from the US stock market. However, they became more wary of investing in the Japanese and UK stock market.
Emma Wall, the broker’s head of investment analysis and research, said:
Confidence dropped slightly in the US stock market in our investor confidence survey in March, however, it remains a region that our clients have strong conviction in – second only to global emerging markets. It is therefore no surprise to see, amongst the most popular funds in March, were those that track the S&P 500 – the main US market.
However, more global funds make up the top 10 than in recent months, as investors diversify away from the US and hedge their global bets on where will deliver the best returns in the future ...
The top 10 funds in March were growth-biased global funds, tech funds and global trackers, as well as India – a market that has outperformed peers significantly over the past 12 months.
This, however, is the only Asia or Emerging Markets fund that makes the top 10 buys, even though investor confidence in both Asia Pacific and global emerging markets has risen.
03:39 PM BST
Aviva completes takeover of AIG business
Aviva told investors today that it has completed the acquisition of AIG Life UK from AIG £453m, sealing the largest takeover under chief executive Amanda Blanc to date.
Ms Blanc said last month that Aviva would continue to look for “selective” acquisitions, after announcing a full-year profit that beat analyst forecasts.
Aviva in March agreed an acquisition to re-enter the Lloyd’s insurance market with a £242m deal to buy insurance platform Probitas.
03:32 PM BST
Flatulent cows targeted in M&S net zero push
Marks & Spencer is spending £1m to cut the harmful gases in its dairy cows’ belches and flatulence as part of a net zero push, writes Daniel Woolfson.
M&S said it would change what it feeds cows in its supply chain in an effort to cut around 11,000 tons of greenhouse gas emissions.
Changing the cows’ diets could reduce the carbon footprint of its fresh milk by 8.4pc, the retailer said.
M&S will work with the 40 dairy farmers in its “milk pool” to bring the scheme to fruition.
Methane is one of the most potent greenhouse gases and has been blamed for warming the planet.
03:14 PM BST
US stocks rise as bond yields ease
Wall Street has started the day broadly on the front foot thanks to easing Treasury yields and as investors look ahead to tomorrow’s inflation data.
All eyes will be on the March reading of the US consumer price index, which is expected to show a rise in headline inflation to 3.4pc year-on-year, from 3.2pc in February.
The core figure, which excludes volatile components such as food and energy, is expected to ease to 3.7pc year-on-year, from 3.8pc in February.
The benchmark S&P 500 edged marginally higher, while the tech-heavy Nasdaq was up 0.3pc. The Dow Jones slipped 0.1pc.
02:44 PM BST
Britain’s biggest pub company scrambles to plug £2bn black hole
The owner of Slug & Lettuce has raised concerns over its future as it races to refinance more than £2bn in debts.
Daniel Woolfson reports:
Stonegate, which is the UK’s biggest pub operator with more than 4,000 sites across the UK, warned in newly filed accounts that there was a “material uncertainty” around its ability to continue as a going concern.
This stems from challenges in being able to refinance £2.2bn of debts before 2025.
In its latest annual report, bosses said: “Whilst there is a plan in place for refinancing this debt, as at the date of signing the financial statements there is a risk that it exists over the completion of this exercise.”
If the company is unable to do this, it said it “may be unable to realise its assets and discharge its liabilities in the normal course of business”.
02:09 PM BST
AI tools no more intelligent than a cat, says Meta boss
Current artificial intelligence (AI) systems are no more intelligent than a cat or a four year old and fears they could destroy humanity are “bad science fiction”, Meta’s AI chief Yann LeCun has said.
My colleague Matt Field reports:
Speaking at an event hosted by the Facebook-parent company in London, Mr LeCun, considered one of the “godfathers” of modern AI, said worries machines could “kill us all” in “minutes” were misplaced.
In a talk, Mr LeCun said many AI chatbots, popularised by the launch of ChatGPT, “really suck” but humans are “easily fooled” into believing they are as smart as humans.
He said these chatbots are trained on language but not other parts of the real world, such as sight, or sound, and are incapable of planning or reasoning. He said: “AI assistants can pass the bar exam but can’t do what your cat can do.”
Last year, thousands of AI scientists and entrepreneurs called for a six-month moratorium on the development of the most powerful AI tools amid concerns they posed a potential existential threat to human life. Concerns over the intelligence and risks of current AI systems have provoked fierce debate among scientists.
Mr LeCun added that there was “no question” that machines would one day outsmart humans, but that was “certainly not next year”.
01:25 PM BST
Thames Water rivals hit by bond market jitters
Water companies across England are starting to feel the strain in bond markets as fears of a potential collapse of Thames Water turns attention to the industry’s debt burdens.
The risk premium on two recently-issued bonds from the sector has risen since they started trading.
Southern Water Services bonds have widened 13 basis points since March 19, while Northumbrian Water Finance’s notes widened four basis points since pricing on March 22.
The moves make the water companies underperformers among investment-grade peers and may signal concern among investors that Thames Water’s problems could spread across the industry.
01:08 PM BST
King Charles presented with first UK banknotes
King Charles III is presented with the first bank notes featuring his portrait by Bank of England Governor Andrew Bailey and Sarah John, the Bank of England’s Chief Cashier, at Buckingham Palace.
The portrait of the King will appear on all four existing banknotes – £5, £10, £20 and £50. The notes are due to go into circulation on June 5.
12:41 PM BST
US small business optimism falls to 11-year low
Optimism among small businesses in the US has plunged to its lowest in more than 11 years as sales expectations plunged and inflationary woes linger.
The index of sentiment fell 0.9 point to 88.5, the lowest level since the end of 2012, according to the National Federation of Independent Business. It marked the seventh decline in the last eight months.
Bill Dunkelberg, the group’s chief economist, said: “Owners continue to manage numerous economic headwinds. Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly.”
The net share of small firms expecting higher inflation-adjusted sales in the next six months slid eight percentage points to minus 18pc, the lowest since May.
Credit conditions also deteriorated, and smaller shares of firms said now was a good time to expand or make capital outlays.
12:31 PM BST
Mike Ashley’s and Next eye up deal for Ted Baker
Mike Ashley’s Frasers Group and Lord Wolfson’s Next are among the suitors circling collapsed fashion brand Ted Baker.
The high street giants have approached administrators at Teneo to explore a deal for all of parts of the group’s European retail arm.
No Ordinary Designer Label, which operates Ted Baker’s shops and websites in the UK and Europe, collapsed into administration last month.
Authentic Brands, which bought Ted Baker for £211m in 2022, said the “damage done” during a partnership with Dutch firm AARC was “too much to overcome”.
Ted Baker employed around 975 people and ran 46 shops in the UK and Europe when it fell into concessions. Administrators have confirmed that 15 UK stores will close and 245 jobs will be cut.
However, the Times reported that some shops could be saved under a deal with Next or Frasers Group. The parties reportedly have less than six weeks to submit a bid.
12:10 PM BST
Labour vows to fund NHS through ‘tax dodger’ crackdown
Labour has vowed to fund its NHS policies through a crackdown on tax dodgers.
Shadow Chancellor Rachel Reeves said the party could raise more than £5bn a year by stepping up the number of fraud investigations by HMRC.
Labour is looking to plug gaps in its spending commitments after the Government adopted its plan to scrap non-dom tax status.
Ms Reeves said the party would also raise £2.6bn by closing loopholes in the Tories’ plans, including scrapping a proposed 50pc discount on the tax non-doms would have to pay in the first year of the rules.
The Shadow Chancellor said told Radio 4’s Today programme that the measures will help Labour deliver promises of an extra 2m appointments on the NHS, 700,000 more emergency dental appointments and free breakfast clubs in all primary schools.
“That’s not small change,” she said. “That’s a massive difference.”
11:53 AM BST
TalkTV lost more than £90m before Rupert Murdoch shut down TV channel
Rupert Murdoch’s news channel TalkTV lost at least £90m before the media mogul pulled the struggling news channel off air.
Accounts filed for Mr Murdoch’s News UK empire show the fledgling station’s losses deepened to £54m in the year to July 2023. It takes total losses for the venture to £88m in just two years.
TalkTV launched in 2022 with the aim of replicating the success of opinionated US broadcasters such as Fox News.
But the channel was eclipsed by its upstart rival GB News, and has been plagued by lacklustre viewing figures, with many shows attracting audiences in the low thousands.
The hefty losses prompted News UK to shut down the terrestrial channel in March – weeks after Piers Morgan said he was ditching his nightly slot on the channel, which he branded a “straitjacket”, to pursue his show on YouTube.
TalkTV will move to a streaming-only model from the early summer.
11:29 AM BST
Pound nears two-year low against euro
The pound is close to a two-week low against the euro as investors await key economic data.
Sterling was up marginally against the euro at 85.76 pence after last week striking 85.87 pence per euro, its highest level since March 26. The pound rose 0.1pc to $1.2668 versus the dollar.
Markets are on hold ahead of UK GDP figures due on Friday after data from starting salaries for permanent staff added to signs of a slowdown in the job market and the British Retail Consortium said an early Easter boosted food spending in Britain last month.
Traders will also be looking to tomorrow’s US inflation figures and Thursday’s ECB policy meeting.
11:04 AM BST
Macquarie lent £130m to Thames Water
Australian investment bank Macquarie Group is a group of lenders to struggling utility Thames Water, it has emerged.
Macquarie, which a former shareholder in Thames Water, invested roughly £130m in debt held by parent company Kemble Water Finance in 2018 and 2020.
It means the Australian bank could play a critical role in deciding the water company’s fate after Kemble defaulted on £400m of its debt. Two Chinese banks are among creditors to the company, alongside Dutch bank ING and Allied Irish Bank.
Thames is meant to repay £190m to its lenders by the end of April, but its shareholders are refusing to hand over fresh funds and the deadline will be missed. It will then be up to the banks to either grant an extension or tip the company into administration.
The involvement of Macquarie, first reported by The Times, is likely to raise eyebrows. The Australian bank has been criticised for loading Thames Water with debt and paying out hefty dividends during its ownership of the utility.
It has defended its actions, saying it invested more than £11bn in Thames Water’s network during the period.
10:39 AM BST
Bank of England appoints EY as auditor
The Bank of England has appointed EY as its external auditor for the financial year ending February 2025.
It follows a competitive tender process that has seen KPMG, which has served as the central bank’s auditor since 2006, unseated.
The BoE said EY will work with KPMG to ensure a smooth transition.
10:27 AM BST
Gas prices near two-week high as ships diverted to Asia
European natural gas prices are close to their highest level in two weeks amid signs ships carrying the fuel are favouring other markets.
Benchmark prices fluctuated in morning trading at around €27.68, while the UK equivalent slipped 1.2pc.
Europe has record-high inventories as the weather starts to warm up, easing concerns about supplies in the coming months.
Still, the bloc is relying on shipments after the loss of most Russian pipeline gas, meaning it has to compete with Asia and other regions for liquefied natural gas.
10:03 AM BST
Tesla settles lawsuit over Apple engineer’s fatal Autopilot crash
Tesla has settled with the family of a driver killed while using its Autopilot technology, avoiding a public court hearing that would have raised questions over Elon Musk’s self-driving software.
James Titcomb has more:
The company is paying an undisclosed amount to the family of Walter Huang, a 38-year-old Apple employee who died while using Autopilot when his car smashed into a concrete barrier in California.
Mr Huang was using the driver assistance system, which is designed to keep cars in their lane and regulate their speed, when the car crashed into the divider in the middle of the freeway in Mountain View.
Tesla is facing lawsuits and US investigations over Autopilot and its more advanced “Full Self Driving” technology.
Mr Musk has increasingly focused on the development of the systems as competition eats away at its advantage in electric cars.
09:40 AM BST
Eurozone business loan demands falls ‘substantially’
Demand for corporate loans in the eurozone saw a “substantial decline” in the first quarter as the bloc continues to grapple with higher borrowing costs, the European Central Bank said.
The ECB’s quarterly Bank Lending Survey also shows that credit standards - banks’ internal guidelines or loan-approved criteria - were slightly tighter for firms across the bloc.
Demand for mortgages eased slightly for the first time since 2021.
The ECB said: “Higher interest rates, as well as lower fixed investment for firms and lower consumer confidence for households, exerted dampening pressure on loan demand.
“The substantial decline in loan demand from firms contrasted with bank’s prior expectations of a stabilisation.”
09:17 AM BST
UK pharma companies told to make fewer drugs in draft net zero guidelines
Pharmaceuticals companies were told to make fewer drugs for the sake of the environment, in new draft guidelines for businesses in the Government’s latest net zero drive.
Tim Wallace has the story:
The suggestion was among a vast array of proposals which Britain’s biggest businesses have been told to consider as they are ordered to publish lengthy reports every year to show how they plan to meet their net zero targets.
The Government said that it had removed this recommendation hours before the guidelines were published, following questions from The Telegraph.
The draft guidance said pharma companies should “reduce the overall quantity of products manufactured and purchased” as part of efforts to explore “sustainable alternatives” to drugs with high emissions.
Britain’s pharmaceutical industry employs 66,000 people, with a turnover of £40.8bn and exports of £26.1bn, according to the Association of the British Pharmaceutical Industry (ABPI).
Other recommendations in the Treasury report, which have not been redacted, include advice to clothing companies to reduce the amount of cotton used in t-shirts or replace traditional textiles with lab-grown fabrics.
08:38 AM BST
FTSE rises and fallers
UK stocks are down this morning as investors wait to crucial data that could give hints about the outlook for interest rate cuts.
The FTSE 100 was down as much as 0.2pc, while the domestically-focused FTSE 250 lost 0.3pc.
Miners are the best performers this morning as gold prices hover near record highs and industrial metals extended their gains.
BP rose 1.5pc after a positive first quarter trading update.
Investors will have a close eye on key economic events including US inflation figures, the European Central Bank’s policy meeting and Britain’s GDP numbers.
08:21 AM BST
Gauloises maker boosted by higher tobacco prices
The maker of Winston and Gauloises cigarettes is gearing up for a boost in profits in the first half of the year thanks to rising tobacco prices.
Imperial Brands reported a rise in tobacco revenues on a constant currency basis, as well as an improvement in its NGP (next generation products) business, which includes vapes and heated tobacco.
The London-listed company’s combustible tobacco business, which mainly covers cigarettes, reported declines in the UK and Germany.
However, bosses said this was offset by gains in the US, Spain and Australia. As a result, it is on track to hit half-year and full-year targets.
Imperial added: “At the same time, we have delivered strong pricing, more than offsetting wider industry volume pressures in certain markets.”
08:04 AM BST
FTSE 100 slips at the open
The FTSE 100 has started the day marginally on the back foot, despite positive data elsewhere in the economy.
The blue-chip index slipped 0.1pc to 7,932 points.
07:34 AM BST
BP pins hopes on trading boost
BP is expecting to report a strong performance from its trading business in the first quarter thanks to a market improvement from buying and selling oil.
In a trading update this morning, the energy giant also pointed to rising oil and gas production and improved margins in its refining business.
BP’s gas marketing and trading business kept up the good performance seen in the previous quarter, while oil improved after a weak fourth quarter.
The company expects its net debt to rise for the first quarter as it steps up working capital.
The oil giant enjoyed a strong end to the year, with shares jumping on better-than-expected profits and an accelerated share buyback.
It comes after the boss of rival Shell said the company was considering quitting London due to concerns its shares were undervalued.
07:25 AM BST
HSBC to book $1bn loss on sale of Argentinian business
HSBC will take a $1bn hit after inking a deal to sell its business in Argentina.
The banking giant has agreed to sell the division to Grupo Financiero Galicio, the country’s largest private financial group, for $550m.
The deal includes banking, asset management and insurance, as well as $100m of subordinated debt.
HSBC said the move will allow it to focus on higher-value opportunities. It will book the pre-tax loss in the first quarter of this year.
Noel Quinn, HSBC chief executive, said:
We are pleased to agree the sale of HSBC Argentina. This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network.
HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network.
Furthermore, given its size, it also generates substantial earnings volatility for the Group when its results are translated into US dollars. Galicia is better placed to invest in and grow the business.
07:15 AM BST
Retail sales: ‘Green shots of spring’
Karen Johnson, head of retail at Barclays, said:
Retailers were braced for a more subdued start to 2024, and recent figures are in line with expectations.
However, in spite of this initial lull, many retailers are confident that spending will rebound in the coming months, particularly in anticipation of better weather, the energy price cap drop, an uplift in the National Minimum Wage, and the buzz around major events such as Taylor Swift’s Eras Tour and the Paris 2024 Olympics.
Linda Ellett at KPMG, said:
An early Easter showed green shoots of spring for retailers in March, with sales growth up and above headline inflation for the first time in more than two years.
There were also some signs of improvement with more categories starting to see positive sales growth in March for the first time in months.
07:13 AM BST
Retail sales pick up thanks to early Easter boost
There’s more positive data out this morning. Szu Ping Chan has the details:
Retail sales improved in March as the early Easter saw households ramp up spending, according to figures published by the British Retail Consortium.
Total UK retail sales were up by 3.5pc compared with last March. This is above the three-month average of 2.1pc and the first time in more than two years that sales growth has outpaced inflation.
This means British households are no longer spending more to get less, according to the BRC-KPMG retail sales monitor.
The figures showed food sales rose 6.8pc year-on-year because of the early Easter and the subsequent uplift ahead of the long bank holiday weekend.
Elsewhere, wet weather dampened sales of garden furniture, barbecues, DIY products, and clothing and footwear.
07:08 AM BST
5 things to start your day
Good morning
Here are some of our top stories from yesterday to get you caught up:
1) Shell considers quitting London for New York | Oil and gas giant looks at ‘all options’ amid concerns it is under-appreciated by investors
2) ‘Shadow bank’ lending risks triggering new financial crisis, warns IMF | Caution comes after Bank of England launched review into risks posed by private equity
3) ‘Hallucinating’ AI could cause social order collapse, warns tech giant | Japan’s NTT calls for restrictions as chatbots ‘lie with confidence’
4) Mocking our company name is childish, says Abrdn exctve | Fund has been a victim of ‘corporate bullying’ since its rebrand, Peter Branner says
5) Matthew Lesh: Hands off our Isas – they are the savings incentive Britain needs | Criticism of the tax-free pots flies in the face of economic and investment principles
What happened overnight
On Wall Street, the Dow Jones Industrial Average fell 0.03pc, to 38,892.80, the S&P 500 lost 0.04pc, to 5,202.39 and the Nasdaq Composite gained 0.03pc.
US Treasury yields moved higher on Monday as fixed income investors lowered their expectations for how deeply the Fed will be able to cut interest rates this year after the jobs report.
The yield on benchmark 10-year US Treasury bonds rose to 4.424pc, from 4.378pc late on Friday.
