Selling pressure on NatWest shares was holding back the FTSE 100 early Friday, but the London market otherwise was trading positively, amid another big day for company earnings.
Shares in City stockbroker Numis leapt by two thirds after it accepted a takeover offer from Deutsche Bank.
The FTSE 100 index opened down 6.16 points, or 0.1%, at 7,825.42. The FTSE 250 was up 54.48 points, or 0.3%, at 19,302.49. The AIM All-Share was up 3.53 points, or 0.4%, at 826.16.
The Cboe UK 100 was down 0.1% at 782.15, the Cboe UK 250 was up 0.2% at 16,916.24, and the Cboe Small Companies was down 0.1% at 13,675.56.
NatWest was the worst performer in the FTSE 100 in early morning trade, down 5.9%.
The bank said it delivered a strong performance in the first quarter of 2023 despite a period of significant macro disruption and uncertainty.
NatWest reported a profit before impairment losses or releases of £1.89 billion, up from £1.19 billion a year prior. Pretax operating profit totalled £1.82 billion, up from £1.22 billion. Total income climbed to £3.88 billion from £3.00 billion.
Its return on tangible equity was 19.8%, compared to 11.3% a year prior. CET1 ratio fell to 14.4% from 15.2%.
The bank kept its full-year outlook from the end of last year.
Gary Greenwood, analyst at Shore Capital, said: ‘Net interest income and margin was weaker than consensus expected, which may disappoint the market, especially given the consensus appeared to have got a little carried away in its optimism. There was also a modest deposit outflow (worse than expected) which management puts down to increases system liquidity and competition and the group now expects deposits to be modestly down for the year.’
Elsewhere in the FTSE 100, Pearson rose 2.9% after it revealed a strong start to 2023, with first-quarter results coming ahead of expectations.
The educational materials publisher reported total underlying sales growth of 2% in the first quarter of 2023. When excluding its OPM business, for which Pearson has entered into an agreement to sell, underlying growth was 6%.
In the FTSE 250, Hikma Pharmaceuticals climbed 3.5%. Hikma noted a stronger-than-expected start to 2023 in its Generics business and a continued good performance from its Injectables and Branded businesses.
Based on the expectation-beating performance from its Generic business in the year-to-date, Hikma updated its full-year guidance for the Generics business. It now expects revenue growth close to 20%, compared with its previous guidance of low double-digit growth.
Elsewhere in London, Kingspan rose 2.6% after it said it had a good first quarter, despite a challenging environment, and proposed a delisting from the London Stock Exchange.
In the quarter it said sales neared €2 billion, up 4% against the prior year but down 3% on an underlying basis. Looking forward, it added it expects to deliver a trading profit of just over €400 million for the first half of 2023.
The building materials company said that, following a review of its listing arrangements, it proposes to delist from London, subject to shareholder approval.
This is because its current share trading on the LSE is ‘negligible’ as a percentage of total trading, it said. Kingspan added it remains ‘committed’ to its primary listing on the main market of the Euronext Dublin, where the majority of its share trading takes place.
In other corporate news, Deutsche Bank reached an agreement with Numis Corp for a takeover offer of the London-based broker and investment bank.
Deutsche Bank will pay 350 pence per share, giving Numis a value of £410 million. The price represents a 72% premium to Numis’s closing price of 204p on Thursday.
The price comprises of 339p in cash, an interim dividend of 6p per share for the six months ended March 31, and an additional interim dividend of 5p per share which is conditional on the transaction becoming effective.
Numis directors intend unanimously recommend the takeover offer.
Shares in Numis surged 67% to 341.50p in London, while Deutsche Bank rose 1.1% in Frankfurt.
In European equities on Friday, the CAC 40 index in Paris was down 0.2%, while the DAX 40 in Frankfurt was up 0.3%.
In Tokyo, the Nikkei 225 index closed up 1.4%.
The Bank of Japan concluded its first meeting under new governor Kazuo Ueda, deciding to leave its ultra-easy monetary policy unchanged.
The central bank left its longstanding negative interest rate in place and made no further adjustments to the band in which rates for 10-year government bonds fluctuate.
Whilst it left rates unchanged, the BoJ said it would review them.
‘The bank has decided to conduct a broad-perspective review of monetary policy, with a planned time frame of around one to one and a half years,’ the BoJ said in a statement following a two-day meeting.
Against the yen, the dollar was trading at JP¥135.74 early Friday, sharply higher compared to JP¥133.95 late Thursday.
In China, the Shanghai Composite stock index closed up 1.1%, while the Hang Seng index in Hong Kong closed up 0.6%.
The S&P/ASX 200 in Sydney closed up 0.2%.
In the US on Thursday, Wall Street ended sharply higher, with the Dow Jones Industrial Average up 1.6%, the S&P 500 up 2.0%, and the Nasdaq Composite up 2.4%.
US stocks were lifted by strong tech earnings.
Meta Platforms was the star performer, surging 14% after first-quarter results beat expectations, boosted by a surprise increase in advertising revenue.
Earlier on Thursday, a report showed US economic growth slowed markedly and came in below market expectations in the first quarter, numbers from the Bureau of Economic Analysis showed.
US gross domestic product grew by 1.1% on an annualised basis in the first three months of 2023, compared to the last three months of 2022, slowing from a 2.6% rise on the same basis in the fourth quarter of 2022.
Economic growth fell short of FXStreet-cited consensus of a 1.9% annualised climb.
The dollar strengthened on Friday morning, despite the disappointing US economic growth. Sterling was quoted at $1.2481 at early on Friday in London, lower compared to $1.2492 at the close on Thursday. The euro stood at $1.1001, lower against $1.1024.
Brent oil was quoted at $78.58 a barrel at early in London on Friday, up from $78.08 late Thursday. Gold was quoted at $1,982.16 an ounce, higher against $1,984.30.
Still to come on Friday’s economic calendar, EU GDP data will be published at 1000 BST.
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