Bestway Group takes stake in Sainsbury's, Paragon Banking Group raises margin guidance
London open
The FTSE 100 was being called to start the session 13 points higher at 7,774.
In the press
One of the UK’s fintech darlings, Wise, could face a regulatory investigation after a rival startup accused the money transfer firm of stifling competition. London-headquartered Atlantic Money has written to the Competition and Markets Authority (CMA) to raise concerns over potential conflicts of interest and anti-competitive behaviour after Wise blocked the firm from a swathe of its own price comparison sites. – Guardian
Royal Mail has been accused of “letting people down” after delays delivering post meant millions missed doctors appointments and received important legal documents late. More than 30 million people were struck by delays to their letters this Christmas, according to research from Citizens Advice. Many people had to resort to pricier services such as Special Delivery to guarantee their post would arrive on time, the charity said. – Telegraph
Tens of billions of pounds in additional funding will be required to keep public services running this year because of a collapse in productivity that experts blamed on weak management and working from home. Public sector productivity fell 1.3pc in the three months to September compared with the previous quarter, according to the Office for National Statistics (ONS). This compares with a 0.1pc increase in output per hour across the economy over the same period. – Telegraph
Stocks to watch
UK convenience store retailer Bestway Group said it had purchased or agreed to buy a 3.45% stake in supermarket giant Sainsbury's but was not considering an offer for the chain. “Bestway Group intends to hold its shares in Sainsbury's for investment purposes and looks forward to supporting the executive management team. Bestway Group may look to make further market purchases of Sainsbury's shares from time to time, subject to availability and price,” the company said on Friday. In response, Sainsburys said it would “ engage with Bestway Group in line with our normal interactions with shareholders”.
Paragon Banking Group raised its guidance for net interest margins for the 2023 fiscal year, saying that it had begun "well" with loan book growth and net interest margins both running ahead of expectations. Nevertheless, its chief executive officer, Nigel Terrington, said that the economic backdrop remained "uncertain". In a trading update for the quarter ending on 31 December, the specialist finance provider reported that new lending jumped by 21.7% to £861.7m. Full-year guidance for new business flows, operating costs and RoTE were unchanged, and net interest margin growth guidance was increased by five basis points to 25bp.
US close
Wall Street's main market indices put in solid gains on Thursday following the release of a raft of data that many economists said kept the hopes of a soft landing alive.
"As momentum fades, we expect the U.S. to slip into a mild recession later this year, although risks are tilted toward a 'soft landing' given the resilience of the labor market," said Mickey Levy, economist at Berenberg Capital Markets.
Nevertheless, the details of the various economic reports arguably revealed slightly weaker than expected levels of activity, with the possible exception of the jobless claims figures.
Against that backdrop, the Dow Jones Industrials climbed 0.61% to 33,949.41, the S&P 500 was up by 1.10% to 4,060.43 and the Nasdaq Composite was ahead by 1.76% to 11,512.41.
Boosting the latter was an 11% pop in shares of electric vehicle maker Tesla.