London’s FTSE 100 closed in the green on Monday, after UK Prime Minister Keir Starmer courted businesses to boost investment in the UK, declaring the nation open for business.
It was a glum day for gambling firms, however. Shares in bookmakers were well and truly bashed on UK tax raid fears, which Jefferies warned ‘would all but wipe out’ sector profit in the nation.
The FTSE 100 index closed up 39.01 points, or 0.5%, at 8,292.66. The FTSE 250 ended up 52.26 points, or 0.3%, at 20,817.19, while the AIM All-Share closed down 0.08 of a point at 733.77.
The Cboe UK 100 ended up 0.3% at 829.54, the Cboe UK 250 closed up 0.1% at 18,251.47, and the Cboe Small Companies slightly higher at 16,859.29.
In European equities on Monday, the CAC 40 in Paris ended up 0.3%, while the DAX 40 in Frankfurt rose 0.7%.
Opening an investment summit in London, Keir Starmer promised to get projects off the ground if they put funding into the UK.
He called on global investors to help get the economy moving through the ‘shock and awe of investment’, and vowed to ‘rip up’ Britain’s bureaucracy and tell regulators to prioritise growth.
He insisted the UK was open for business after the political ‘circus’ that followed Brexit and declared: ‘You have to grow your business, I have to grow my country.’
Deals worth tens of billions are expected to be confirmed at the summit, with the government even deploying the King to help encourage investment.
Speaking to Bloomberg TV, Starmer also played down speculation that the UK government was considering raising capital gains tax as high as 39%, calling it ‘wide of the mark.’
The pound was quoted at $1.3052 at the London equities close on Monday, down compared to $1.3074 at the close on Friday.
The euro stood at $1.0910 at the European equities close on Monday, against $1.0942 at the same time on Friday. Against the yen, the dollar was trading at JP¥149.83, up compared to JP¥149.13 late Friday.
Stocks in New York were higher at the London equities close, with the Dow Jones Industrial Average up 0.3%, and the S&P 500 and the Nasdaq Composite both up 0.6%.
In London, gambling stocks were under pressure after reports the government was considering a tax raid on the sector.
Late Friday, the Guardian suggested that the Treasury was considering proposals from two think-tanks which could raise as much as £3 billion.
Measures could be included in this month’s budget, the report said.
First, the Institute for Public Policy Research proposes to double taxes from 15% to 30% for the general betting duty levied on high-street bookmakers and to raise remote gaming duty for online operators from 21% to 50%.
Second, the Social Market Foundation proposes a doubling taxes on online gambling companies from 21% to 42% - online sports betting is currently taxed at 15% and online casino at 21%.
Shares in Entain, which owns bookmakers Ladbrokes and Coral, fell 7.7%. William Hill owner Evoke tumbled 13%. Flutter Entertainment, which owns Paddy Power and Betfair, fell 5.6%, while casino and bingo operator, Rank eased 3.2%.
Citi thinks increases in duties in-line with the report are ‘unlikely’ at this stage given the ‘material disruption this would cause to the UK bookmaker (and casino) industry, jobs and potentially increased black market activity.’
However, the broker does see ‘UK gambling tax creep as incrementally more likely’.
Jefferies said the proposals apparently being considered ‘would all but wipe out bookmaker profitability in the UK, per our estimates’.
In the FTSE 100, Bunzl rose 2.4% after JPMorgan upgraded the stock to ’overweight’ from ’neutral’ and increased its share price target to 3,980 pence from 3,660p.
Bunzl’s more attractive margin outlook, particularly in North America, should drive medium-term upside, according to analysts at the broker.
Handbag maker Mulberry climbed 12% after its largest shareholder refused to back an improved offer from Sports Direct owner Frasers.
On Friday after the London market close, Frasers revealed a revised bid of 150p per share, higher than the 130p offer made before.
But Challice decided against throwing its weight behind the Frasers offer.
Calling it an ‘inopportune’ time for Mulberry to be sold, Challice said it hopes hopes that ‘by making its position clear, Frasers will be encouraged to announce that it does not intend to make an offer for Mulberry.’
Frasers fell 1.4%.
Elsewhere, international recruitment firm PageGroup declined 0.8% after warning recruitment markets remain challenging given ongoing macro-economic uncertainty.
The firm, which owns the Page Personnel and Michael Page recruitment brands, said it continued to see ‘challenging market conditions’ throughout the third quarter with no improvement in September after the seasonally quieter summer months.
Gross profit fell 14% to £201.4 million in the three months to September from £242.2 million a year prior, including a 16% drop in September alone.
The firm said as clients’ recruitment budgets have ‘tightened they have become more risk averse,’ which has continued to slow the recruitment process, impacting time-to-hire.
Oxford BioDynamics plunged 54%. The firm launched a strategic review after warning it would need additional cash resources by early 2025.
The company, which specializes in the development of precision medicine tests for critical diseases, said the review would explore available funding options.
These would include a licensing or sale of company assets - such as the EpiSwitch NST and EpiSwitch SCB tests - and a possible hive-off of the US business into a separately funded entity.
Oxford BioDynamics said it has started a series of cost-saving actions that will materially reduce the business’s monthly cash cost base.
Brent oil was quoted at $77.19 a barrel at the London equities close on Monday, down from $78.67 late Friday.
Gold was quoted at $2,646.29 an ounce at the London equities close on Monday against $2,658.30 at the close on Friday.
Tuesday’s UK corporate calendar sees full-year results from housebuilder Bellway, plus trading statements from money transfer services provider Wise and Daily Mirror owner Reach.
The economic calendar has UK unemployment and average earnings figures at 0700 BST and a eurozone industrial production reading at 1000 BST.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
