- FTSE100 posts mild gains after flurry of results
- easyJet shares rise 3.1% on ICO near-miss
- CAB Payments investors raise regulatory concerns
- Shell chief backs changes to green investment
- Brent crude hovers around $86 as Russia and Saudi Arabia continue production cuts
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“The FSTE 100 has opened up to mild gains following the recent flurry of corporate results, as investors try to map the direction of travel from here. That’s being made a slightly more difficult task given further voices are adding to the narrative that recessionary pressure is coming down the pipes. While the UK’s economic plumbing might be in decent working order right now, this could change at short notice and is leading to a jumpier investor base.
easyJet shares have risen 3.1% on news the Information Commissioner’s Office has dropped an investigation into a hack which affected millions of customers. The sigh of relief from the investor base is palpable and means easyJet can put the issue to rest from an operation point of view. The incident does increase the risk of heightened scrutiny though – airlines hold vast swathes of private information and repeated hacks or breaches can affect demand. That’s something that will need to be monitored.
One headache the City doesn’t need is a regulatory investigation. Shareholders in CAB Payments are suggesting that the group’s pre-IPO prospectus was misleading. The recent profit warning, just four months after listing shares for the first time has contributed to a substantial downwards revision of the group’s market cap. At a time when London is fighting to be seen as a leading home for high-calibre IPOs, this is the type of headline it could do without. Whether or not the prospectus was infact a loose edition of the truth, this episode highlights the extra risks that can come with investing in newly listed companies. Of course, getting in early on a success story can boost returns massively, but the chances of a very bumpy ride are also much higher.
Shell chief Wael Sawan is making tracks to create a leaner company, and this includes being more discerning about how and where it invests in the energy transition. Alarms have been sounded by the departure of top executives in the group’s green divisions lately. While it’s true that traditional energy will continue to have a place in society for now, the switch to sustainable options is the way the herd is moving and those with more aggressive approaches to this are more future-proofed. The exact map of Shell’s green future is a difficult one to read, and that’s likely to result in pressure from various corners of the market.
Brent crude will now set you back a whisker under $86. Top producers Saudi Arabia and Russia have agreed to stick with extra voluntary production cuts until the end of the year. Turning the taps off has outweighed questions about demand following increased recession risk. Continued uncertainty in the Middle East is also inflating the price.”
