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Barclays AGM disrupted by climate protests; oil and gas prices slide – business live


Introduction: Regulator proposes sweeping changes to UK listing regime

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

New measures to encourage companies to float on the London stock exchange rather than abroad are being revealed today, but the changes would expose investors to more risk.

The UK’s financial watchdog plans to shake up the City’s listing rules, in the hope of halting the flow of companies to rival markets such as Wall Street.

The plans being detailed today by the Financial Conduct Authority (FCA) aim to make London a more attractive site to list, removing some of the eligibility requirements that can deter start-ups and newer companies.

The FCA is proposing several measures in a new consultation document, including:

  • simplifying the market, by merging London’s standard and premium markets into a single category for equity shares, scrapping the gold-standard “primary listing” category.

    This “single equity category” would include measures to tempt company founders to list in London, such as being more tolerant of dual class share structures with different voting powers, such as so-called ‘Golden Shares’

  • Ditching removing mandatory shareholder votes on transactions such as acquisitions, so companies can press on with deals and grow faster

  • removing a requirement for firms to have three years of audited financial accounts, which would make it easier for companies to join the market

The FCA says:

The proposed changes aim to provide a simpler and more accessible UK listing regime for companies, improving the attractiveness of listing in the UK and providing a wider range of investment opportunities for investors.

But…shifting to a listing regime based on disclosure and engagement, rather than regulatory rules, does bring more risk into the system.

So, the FCA says it wants an open discussion about the change to risk appetite that this would entail.

A recent review found that the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008, and that between 2015 and 2020, the UK accounted for only 5% of IPOs globally.

My colleague Jasper Jolly reports:

The Financial Conduct Authority (FCA) on Tuesday night said it plans to abolish the stricter “premium” class of London stock market listing, and make it easier for company founders to keep control of businesses using US-style “golden shares”, among a series of big changes to City regulations.

The changes are part of a push by the Conservative government to arrest the decline of the London stock market since the global financial crisis and lure new companies to list here. There were 2,101 companies listed on London’s main market in 2003, but that number has fallen to 1,097 today, according to London Stock Exchange data. The average number of companies floated has fallen from 177 a year before the financial crisis in 2008 to 66 a year in the period since then, according to the data company Dealogic.

Also coming up today

The US Federal Reserve is expected to raise US interest rates again tonight, as it tries to push inflation down to its 2% target.

The Fed’s FOMC committee is forecast to lift its benchmark policy rate by a quarter of one percent, to a new target range of 5-5.25 per cent, the highest level since mid-2007.

The Fed meeting is overshadowed by jitters over America’s regional banks. Shares in midsize lenders fell again yesterday, despite president Joe Biden insisting the banking system was ‘safe and sound’ following the collapse of First Republic.

JPMorgan’s takeover of troubled Californian lender First Republic’s deposits and most of its assets on Monday has not stemmed concerns over the health of the sector.

Trading in PacWest, the Los Angeles-based lender, was briefly halted for volatility yesterday and closed down almost 28%.

Western Alliance of Phoenix, Arizona, lost 15%.

US REGIONAL BANKS UNDER THE COSH yesterday – PacWest Bancorp -28%, Metropolitan Bank -20% and Western Alliance Bank -15%!

— David Buik (@truemagic68) May 3, 2023

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:

Banking relief after JP Morgan swallowed the First Republic Bank on Monday remained short-lived, as some regional bank stocks, like Valley National Bankcorp lost another 3%, Western Alliance Corporation another 15%, and PacWest Bancorp another 28%, even though it had said last week that the deposit outflows had slowed in March.

As such, SPDR’s US regional bank ETF was down by more than 6%.

It means that, no, the US regional banking crisis is hard to wane, high interest rates are truly being felt and the latter will likely have a sizeable impact on credit lending, hence on economic activity.

Today’s market

Sharp drops came from smaller- and mid-sized banks, which have been under heavy scrutiny as the banking system shows cracks under the weight of much higher interest rates. PacWest Bancorp dropped 27.8%, Western Alliance Bancorp fell 15.4% and Comerica sank 12.4%.

— PSC (@pscooput) May 3, 2023

The agenda

  • 9.30am BST: Office for National Statistics report: “How is the average price of items changing over time?”

  • Noon BST: US weekly mortgage applications data

  • 7pm BST: Federal Reserve interest rate decision

  • 7.30pm BST: Federal Reserve press conference

Key events

Kalyeena Makortoff

Kalyeena Makortoff

Another protestor stood up just minutes after the climate singers were ushered out of Barclays AGM, and is yelling:

“You are the worst fossil fuel funder in Europe in a climate crisis”

Barclays’s company secretary Hannah Ellwood has whispered to chairman Nigel Higgins to ask the protester to leave.

Others have taken over in a chorus, after that protester was ushered out, and Ellwood is trying to push through.

Higgins is trying to ask for calm, saying:

We are obviously very happy to hear opinions on what we do, but it may be helpful to wait until the Q&A and have a two-way discussion”

The climate protesters at Barclays’ AGM are being escorted out, after their Spice Girls rendition urging the bank to stop funding fossil fuel extraction….

Full marks to the sign language interpreter who has been signing every word of the climate protesters’ jingle at the start of the Barclays AGM this morning pic.twitter.com/ZOyrkve6X7

— Helen Cahill (@HelCahill) May 3, 2023

Climate protesters disrupt Barclays AGM

Kalyeena Makortoff

Kalyeena Makortoff

Climate protesters have disrupted chairman Nigel Higgins, less than 5 minutes into the Barclays annual general meeting today, with a rather catchy rendition of Spice Girls’ “Stop Right Now’.

The group have reworked the 90s classic’s lyrics, singing:

“Stop right now, no more oil and gas, stop burning fossil fuels and end this madness… hey you burning up the earth, gotta stop it now baby we have had enough…do do do do…you dirty, dirty bank”.

Higgins has suggested that security ask the protesters to leave. We don’t expect this will be the last disruption. Stay tuned.

Here’s a clip of the disruption:

UK gas prices have hit their lowest levels in months too.

The wholesale day-ahead UK gas price has dropped by 2.8% to 83.65p per therm, the lowest since last November.

Gas for delivery next month is down 1.3% at 84p per therm, the lowest since July 2021.

European wholesale gas prices hit 21-month low

The cost of wholesale gas in Europe has hit its lowest level since July 2021, which will hit Russia’s revenues to fund the Ukraine war.

The month-ahead cost of wholesale gas has fallen by 3.65% today to 36.95 euros per megawatt hour, tracking the fall in oil today.

Wholesale European gas price
The wholesale European gas price Photograph: Refinitiv

After the full-scale invasion of Ukraine in February 2022, the European wholesale gas price tripled to €215/megawatt hour.

It then surged over €300/megawatt hour last August, when European countries were scrambling to fill their gas tanks before last winter.

But now, with the weather turning a little warmer, demand for gas for heating and power generation has dropped.

Energi Danmark analysts said in a morning note.

“Supply is abundant, with storage sites across the continent now 60% full, with prospects of reaching 100% before the winter. We expect further losses in Wednesday’s trading.”

Oil slides as Fed rate hike nears

The oil price has fallen to its lowest level in over five weeks, as traders fear that higher interest rates will drive the US economy into recession.

Brent crude, the international benchmark, has fallen below $75 per barrel for the first time since 27 March.

It’s down 2% today at $73.86 per barrel, following a 5% tumble on Tuesday.

Oil weakened as investors anticipated the US Federal Reserve will raise interest rates by a quarter-point today, to a range of 5%-5.25%. That would be the highest level since 2007.

The turmoil in the US banking sector also hit oil, says Ole Hansen, head of commodity strategy at Saxo:

Risk sentiment in general was challenged by continued worries about the stability of the regional US banking system despite the bailout of First Republic by JP Morgan.

Despite current demand and growth concerns, the Fed is expected to hike once again later today, and it continues to weigh on the demand outlook even as supply side is looking stable for now.

How the average price of items is changing

Britain’s Office for National Statistics has launched a new Shopping Prices Comparison Tool, to let you track inflation in more detail.

The Tool tracks how the average prices of over 450 individual goods and services in the basket used to measure inflation have changed over the last year.

It covers food and drink, clothing and footwear, food and drink establishments, health, household items, recreation and culture, services and transport.

It’s online here, and here’s an embedded version to try:….

Allow content provided by a third party?

This article includes content hosted on ons.gov.uk. We ask for your permission before anything is loaded, as the provider may be using cookies and other technologies. To view this content, click ‘Allow and continue’.

The launch of this comparison tool follows complaints that the official inflation report wasn’t properly capturing the cost of living squeeze, particularly for poorer households.

The ONS today points out that some grocery items showed increases of over 40% in the year to March 2023, or around quadruple the headline rate of inflation.

For example, cheddar and other hard cheeses saw an average increase of over 40% in the 12 months in March 2023.

Oil and fats have also surged in price, partly due to the Ukraine war.

The ONS says:

All items in oils and fats have seen an increase in price but olive oil has increased the most, increasing by nearly 50% in the 12 months to March 2023.

Fast food and takeaway prices are up 13% over the last year, but fish and chips saw the largest increase, at 19%.

Cars of German manufacturer Porsche parked outside the stock exchange in Frankfurt, Germany
Photograph: Kai Pfaffenbach/Reuters

Porsche has posted a 25% surge in sales and operating profits in the first quarter of this year, as demand for luxury cars remained strong.

The German carmaker reported “record deliveries and unchanged strong demand” in the January-March quarter.

Porsche says it made a strong start to 2023 “despite difficult economic and geopolitical conditions”.

Revenues rose 25.5% to €10.1bn, with operating profit up 25.4% to €1.8bn, leaving its return on sales stable.

Rival luxury carmarker Aston Martin Lagonda, meanwhile, has cut its quarterly pretax loss. Aston is sticking with its forecast for 2023, as it sees strong sales of its sport utility vehicle DBX and higher selling prices.

Nicholas Holmes, head of Equity Capital Markets at law firm Ashurst, fears the FCA’s proposed stock market listing reforms won’t have too much impact, saying:

“The changes in themselves are welcome, although their impact is likely to be limited.

The challenges to London’s equity capital markets status run much deeper.”

In the travel sector, budget airline Ryanair has posted its third busiest month ever.

Ryanair flew 16 million passengers in April, up 13% year-on-year, it reported this morning. That’s despite 650 flights being cancelled due to French air traffic control strikes last month.

This is only the third time it’s flown at least 16m passengers in a month; last July and August it carried 16.8 million and 16.9 million passengers respectively.

#Ryanair passenger numbers for April rose to 16m
A record for April
Up 16pc on 2019
Up 13pc on 2022,
Load factor 94pc
89,650 flights operated,
650 flights cancelled due to French ATC strikes.
Rolling annual 170.3m
(v 110.2m for Lufthansa group,
second placed in Europe) pic.twitter.com/d4SUbN8Yjj

— Eoghan Corry (@eoghancorry) May 3, 2023

RS Group CFO quits after personal relationship with colleague

The finance chief of electronics products distributor RS Group has quit, revealing that he has had a personal relationship with a colleague.

David Egan resigned from his role as Chief Financial Officer (CFO) and as a director and will leave the business with immediate effect, RS Group told shareholders this morning.

Egan, who has also served as RS Group’s acting CEO twice, says his actions have “fallen short” of what is expected.

Egan explained:

“I have thoroughly enjoyed my seven years at RS and I am proud of what we have achieved. Very recently I notified the Board of a personal relationship with a colleague.

Following a detailed review by the Board, I recognise that there have been some shortcomings of judgment on my part and my actions have fallen short of the high standards expected of RS leadership. Therefore, it is right for me to step down from my role.

RS Group’s chair, Rona Fairhead (a former trade minister), says:

“Following a thorough review, the Board has accepted David’s resignation and in stepping down he recognises the importance of leaders setting and abiding by exemplary standards.

Egan will be replaced by RS Group’s VP Corporate Development, Jane Titchener.

The company says there are no changes to its profit expectations, but shares in RS Group are down 2.5% this morning, one of the biggest fallers on the FTSE 100 index of blue-chip shares.

RS Group, which distributes electrical and electronics components to manufacturers, has been hiy by a recent drop in sales in the US. Last month it predicted that operating profits for the last financial year would be slightly ahead of consensus expectations.

Haleon, the consumer health giant, has missed profit expectations despite hiking prices.

Haleon, which was spun out of GSK last summer, has reported earnings of 4.2p per share for the first quarter of the year, below forecasts of 5.24p per share.

That’s despite lifting its prices by 7.1%, which helped to grow revenues by 13.7%.

Haleon makes a range of oral health products, plus vitamins, minerals and supplements, respiratory pain relief and digestive health products.

Rising costs ate into Haleon’s profits, explains Victoria Scholar, head of investment at interactive investor:

Haleon confirmed it expects full-year organic revenue growth to come in at the upper end of its guidance range for 4-6%. First quarter adjusted earnings per share hit 4.2 pence, falling short of analysts’ expectations for 5.24 pence while revenue reached almost £3 billion, roughly in line with forecasts.

The consumer health spin-off from GSK has been dealing with squeezed profit margins which fell by 90bps on the back of cost inflation. It has been raising prices to offset the challenge of rising cost pressures with price increases rather than volumes mostly responsible for revenue growth in its biggest regions. However these price hikes have been insufficient to prevent a bottom line miss.

Nonetheless it reported strong sales growth across respiratory health, pain relief, oral health and digestive health thanks to demand for drugs during the cold and flu season. It has benefited from strength in China as Beijing unwound its strict anti-covid lockdown measures.

Since the spin-off last summer, shares got off to a difficult start, reaching a trough in September last year but the stock has been progressing nicely in recent months, rallying almost 30% over the past six months. But the disappointing earnings are weighing on shares today.”





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