Related Articles
- FTSE 100 drops 75 points
- Royal Mail bid clears security check
- Retail sales edge up in November
11.18am: Diageo ditching Diddy-linked drink brand? Good news, says Jefferies
Diageo PLC (LSE:DGE) is reportedly considering the sale of Ciroc Vodka, the drinks brand backed by disgraced music mogul Sean “Diddy” Combs.
According to sources cited by Bloomberg, FTSE 100-listed Diageo has contacted potential buyers, including beverage companies and private equity firms, to gauge interest in the brand.
Diddy, who is currently incarcerated on sexual abuse and trafficking crimes, entered into a partnership with Diageo in 2007 to help promote Ciroc in exchange for a 50% share of the profits.
In 2023, Diddy filed a racial discrimination lawsuit against Diageo, thus ending their partnership.
Ciroc sold 1.4 million cases and generated retail sales of $1.47 billion in 2023, but sales have plummeted in 2024.
In a research note, broker Jefferies estimated the sale could add more than 50 basis points to Diageo’s group growth while diluting earnings per share by less than 1%.
2024 has been tough for Diageo, with shares falling 11% year to date.
But Jefferies analysts cited optimism in the stock going forward.
They said: “Companies do not change overnight; however, we think that Diageo will start to look different as confidence in spirits growth increases and under a new, heavyweight CFO, where we expect to see a renewed focus on growth, profit and cash.”
11am: FTSE 100 crumbles
The FTSE 100 blue-chip index is now down 75 points on the day, making for nearly one percentage point of losses.
Water firms United Utilities Group PLC (LSE:UU.) and Severn Trent PLC (LSE:SVT) are the worst performance, shedding more than 2.5% each.
The footsie is now more than 275 points lower from the start of the week, marking one of the worst weeks for the index in months.
10.04am: No growth in fourth quarter, warns BoE
The Bank of England’s Monetary Policy Committee (MPC) has delivered an end-of-year economic projection of zero growth in the fourth quarter, marking a downgrade from the previous projection of 0.3%.
The MPC indicated the downgrade was in response to economic pressures following Labour chancellor Rachel Reeves’ inaugural Budget.
It said it was “considering the impact on growth and inflationary pressures from the measures announced in the Autumn Budget”.
Yesterday, the MPC voted to keep interest rates on hold at 4.75%, as was widely expected by the market.
Although it was expected, stocks tumbled following the announcement and have continued to fall today.
The FTSE 100 blue-chip index is currently down 43 points at 8,062.
9.51am: Water firms lose buoyancy
The UK’s largest market-traded water firms are down sharply today following yesterday’s seemingly positive (if not for customers but for earnings) final determination from regulator Ofwat.
Ofwat gave the green light for water providers to hike bills by 36% over the next five years; a better outcome (for earnings) than the previously expected 21% rise.
Shares in FTSE 100-listed Severn Trent PLC (LSE:SVT), which was granted the right to a 47% increase, fell more than 2.2% this morning.
Shares in United Utilities Group PLC (LSE:UU.), which was granted the right to a 35% increase, fell more than 2.5%.
Investors may have been spooked by the £18 million fine handed out to Thames Water for making unjustified dividend payments to shareholders.
9.29am: Government borrowing nothing short of early Xmas gift for Reeves
“As early Christmas gifts go, this one will be roundly welcomed by everyone at Number 11,” Danni Hewson, AJ Bell’s head of financial analysis, said of today’s government borrowing data.
According to ONS data, the rate of government borrowing dropped to its lowest level for November in three years.
The amount of cash coming in has increased substantially, even when you factor in the cut to National Insurance implemented by Rachel Reeves’ predecessor.
Tax receipts, meanwhile, climbed by £3.8 billion year on year to £61.8 billion year on year thanks to a higher income, corporation and VAT take.
The cost of servicing national debt is also down, although the “hard truth”, according to Hewson, “is the government is still spending substantially more than it’s got coming in and though borrowing to fund day-to-day spending was £3.5 billion less than the same time last year, it was still a hefty £6.8 billion”.
9.10am: Bitcoin slips below $100,000
Bitcoin (BTC)’s foray into the $100,000-plus zone came to a screeching halt yesterday evening when the world’s largest cryptocurrency fell nearly three percentage points against the US dollar.
It was the second day of sizable losses following a 5.6% dip on Wednesday.
At the time of writing, the BTC/USD pair was trading just below the $98,000 mark.
Bitcoin first rallied above $100,000 on 5 December before hitting numerous all-time highs thereafter, culminating in a record $108,353 earlier this week.
The coin’s historic achievement was first set in motion after the US elections in early November, when Donald Trump swept to victory over the Democrat Party on a comparatively pro-crypto platform.
8.48am: Car production down almost a third in ninth consecutive drop
The number of cars that rolled off production lines in November fell by almost a third for a ninth consecutive monthly decline, figures on Friday showed.
Some 64,216 cars were produced last month, down by 27,711, or 20.1%, against November 2023, the Society of Motor Manufacturers and Traders (SMMT) reported.
All major manufacturers faced declines as factories were refitted for electric vehicle production, SMMT said.
The drop meant monthly car production had hit its lowest level since 1980, with output over the year so far down 12.9% at 734,562 units.
Battery electrics and hybrids accounted for around a third of output, though volumes were down 45.5% year on year.
Production for domestic sales slumped by 56.7% in the meantime, as export volumes dropped by 21.3%.
“These figures offer little Christmas cheer for the sector,” SMMT chief executive Mike Hawes said.
“While a decline was to be expected given the extensive changes underway at many plants, manufacturing is under pressure at home and abroad.”
8.23am: Government borrowing hits lowest level for November since 2021
Government borrowing dropped to its lowest level for November in three years last month, according to the Office for National Statistics.
Borrowing totalled £11.2 billion in November, down £3.4 billion year on year and was the lowest level for the month since 2021.
“Central government tax receipts grew compared with last year, while increased spending on public services and on benefits were offset by lower debt interest payable,” ONS public sector finances deputy director Jessica Barnaby noted.
Tax receipts climbed by £3.8 billion to £61.8 billion year on year, as more was collected through income, corporation and value added tax.
Expenditure came to £0.2 billion less at £88.2 billion in the meantime, with interest payments on government debt dropping by £4.7 billion to £3.0 billion.
8.11am: FTSE 100 heads even lower
London’s blue chips extended a sharp decline for the week as trading got underway on Friday.
The FTSE 100 shed 33 points to sit at 8,071 following Friday’s open, following a 93-point drop on Thursday.
Barclays PLC (LSE:BARC) led the early fallers, having also dropped on Thursday, followed by the likes of Standard Chartered PLC (LSE:STAN) and United Utilities Group PLC (LSE:UU.).
8.06am: Tencent and Honor launch partnership for cloud and AI
Tencent Holdings (HKG:0700, OTC:TCEHY) Ltd and Honor Devices Co have unveiled a long-term partnership around cloud and artificial intelligence (AI) development.
Chinese smartphone maker Honor will adopt Tencent’s cloud infrastructure under the deal, including for the likes of analytics and search tools.
Tencent, China’s most valuable company, and Honor will also jointly develop a coding assistant to aid the latter’s software engineers.
Tencent shares had surged earlier this week on reports it was in discussions with Apple Inc (NASDAQ:AAPL, ETR:APC) to provide generative AI tools for iPhones.
Tencent shares climbed by 2.8% on Friday.
7.50am: Royal Mail takeover bid clears national security laws
Czech billionaire Daniel Kretinsky’s bid to buy Royal Mail’s has passed another major milestone towards completion with approval under national security laws.
Kretinsky’s EP Group noted on Friday that the Chancellor of the Duchy of Lancaster had conditionally approved its bid for Royal Mail owner International Distribution Services PLC (LSE:IDS) under the National Security and Investment Act.
“The order approves the acquisition, subject to the parties ensuring that Royal Mail remains able to and continues to provide services that are in support of UK national security,” it said.
EP had tabled the £3.6 billion bid in May, paving the way for Royal Mail to be taken into foreign ownership for the first time in its 500-year history.
However, national security concerns had been raised over the offer, threatening to slam the breaks on the takeover
IDS and EP were separately granted approval to move forward with the takeover from the government earlier this week, marking a key moment in Kretinsky’s bid to buy the postal service.
Approval under the act was separate to the government’s support, EP noted, with the deal expected the be completed in the first quarter of next year.
7.24am: Retail sales edge higher in November
Sales across Britain’s retail sector edged upwards in November as a drop at clothing stores was partly offset by growth at supermarkets.
Volumes increased by 0.2% month on month, following a 0.7% decline in October, according to an estimate by the Office for National Statistics.
Clothing and footwear sales dropped by 2.6%, while department store and automotive fuel sales were down by 0.7% and 0.9% respectively.
Sales at food stores increased by 0.5% in the meantime, as other non-food store volumes grew by 2.5% and household goods shops enjoyed a 1.1% increase.
“For the first time in three months there was a boost for food store sales, particularly supermarkets,” ONS statistician Hannah Finselbach commented.
“It was also a good month for household goods retailers, most notably furniture shops.
“Clothing store sales dipped sharply once again, as retailers reported tough trading conditions.”
7.11am: FTSE 100 set to drop further
London’s blue chips appeared on course for another drop ahead of trading on Friday, with futures showing the FTSE 100 down 30 points at 8,131.
The FTSE 100 had shed 93 points over the course of Thursday’s session, following a blow to Wall Street after the Fed signalled fewer rate cuts ahead earlier in the week.
The Bank of England’s rate call on Thursday, which saw interest held at 4.75%, did little to move the dial, after Monetary Policy Committee members voted six to three in favour of maintaining.
Overnight, Asian markets faced a largely negative showing, with South Korea’s Kospi down 1.3% and the biggest mover.
Back in London, attention on Friday was set to be on a key shareholder vote over Fraser’s spat with Boohoo, while Carnival was among those due to update.
5.00am: Friday’s schedule
Carnival will be among those to update on Friday, while Boohoo’s spat with Frasers over Mike Ashley’s bid to gain a seat on the formers board will reach a climax.
Carnival’s update should reflect plain sailing once again… Read more
Boohoo shareholders will decide whether Frasers boos Mike Ashley gets a seat on its board… Read more
Announcements due:
Trading update: Carnival Corporation & PLC
AGMs & EGMs: Boohoo Group PLC
Economic news: Retail Sales (UK), Consumer Confidence (EU), CBI Distributive Trades (UK), Core PCE Price Index (US)
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