Frasers Group pulls guidance amid new restrictions, NatWest buys £3bn Metro Bank mortgage portfolio

Stocks to watch

Mike Ashley’s Frasers Group said it was pulling full-year guidance after the UK government closed non-essential retail stores in response to a new variant of the coronavirus breaking out in London and the South East. The company, which includes the Sports Direct chain, had guided for a 20% - 30% improvement in underlying core earnings during full-year 2021.

NatWest has entered into an agreement with Metro Bank to acquire a £3bn portfolio of prime UK mortgages, it announced on Monday. The FTSE 100 bank said the portfolio consisted of owner-occupied residential mortgages, with a weighted average current loan-to-value of about 60%. It said the purchase price of £3.1bn represented a 2.7% premium on gross book value, with the impact of the transaction, based on NatWest's CET1 ratio on 30 September, equating to a reduction of around 15 basis points.

Newspaper round-up

The UK government’s partial public-sector pay freeze will hit workers who are already paid less than their counterparts in private companies, according to new research. A report by the Resolution Foundation suggests that the pay squeeze by the chancellor, Rishi Sunak, may not achieve his aim of narrowing the gap between government and private workers. - Guardian

Negotiators of a Brexit trade deal inched towards a compromise on fishing rights on Sunday but missed a major deadline, raising the prospect of weeks without arrangements from 1 January even in the event of agreement. The teams led by the chief UK negotiator, David Frost, and his EU counterpart, Michel Barnier, were expected to continue talks on Monday despite the European parliament’s notice that it would not vote on a deal if not secured by midnight on Sunday. - Guardian

Retail bosses are begging Rishi Sunak to extend a business rates holiday as fears grow that a new Covid crackdown could put thousands of jobs at risk. Industry chiefs called for aid from the Chancellor after non-essential retailers in London, the South East and the east of England were ordered to shut under new Tier 4 restrictions. - Telegraph

Deloitte unwittingly downloaded software linked to a massive hack which targeted dozens of US government departments, security experts have revealed. The consulting firm installed SolarWinds Orion products and has been forced to take steps to protect itself from any risks. Orion – used to monitor server activity – is believed to have been accessed by Russian hackers to break into US federal divisions. - Telegraph

The Financial Conduct Authority has fined only ten wrongdoers this year, its lowest scalp rating since its creation in 2013, and has meted out only £183.6 million in penalties, its third lowest total fines tally. The analysis of a key part of the enforcement process at the main City regulator comes after a week in which it was severely criticised in an independent report into its handling of London Capital & Finance, the minibonds business whose 11,000 investors lost £237 million. - The Times

US close

Stocks on Wall Street closed weaker on Friday, with the Dow Jones Industrial Average closing down 0.41% at 20,179.05.

The S&P 500 was 0.35% weaker at 3,709.41, and the Nasdaq Composite lost 0.07% to settle at 12,755.64.