JP Morgan Chase to launch digital bank to rival UK incumbents

Liam Roche
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JP Morgan Chase to launch digital bank to rival UK incumbents

JP Morgan Chase bank will expand into Europe and across the world if successful

JP Morgan Chase is set to launch a new digital bank as it seeks to become one of the largest lenders in the UK.

The ‘Chase’ bank will offer current accounts, in addition to savings, loans and other new products.

Sanoke Viswanathan, chief executive of the venture, said JP Morgan needs to have “millions of customers over time” to be viable.

JP Morgan is seeking to disrupt established institutions in its bid to be “in the top few” banks in the UK.

With a market cap of close to $500bn, JP Morgan is the biggest bank in America.

As of now, it employs just under 20,000 people in the UK, where its functions centre mainly around investment banking.

The bank has made a substantial but undisclosed investment in Chase UK, according to The Times.

Markets rebound from Evergrande sell-off

Liam Roche
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Markets rebound from Evergrande sell-off

The FTSE 100 staged a mini-resurgence on Tuesday morning, climbing by just over 1%, but not quite back above the 7,000 mark.

“Bargain hunters appeared to be out in force on Tuesday as the FTSE 100 bounced back from a torrid start to the week,” says AJ Bell investment director Russ Mould.

“The miners, scarred by heavy selling on Monday, eked out a recovery while British Airways owner International Consolidated Airlines continued the ascent which begin yesterday afternoon when the US lifted travel restrictions on fully vaccinated UK and EU visitors.”

A major factor in market volatility of late has been fears about the fall-out from a potential collapse of Chinese property developer Evergrande, and the concerns have not gone away.

“Evergrande is due to make a debt repayment on Thursday and this event could be the next major test of investors’ resolve.”

“The challenge for the markets is trying to guess how Beijing might react, particularly after its notably strident approach in recent months when it comes to the technology industry. Will it be similarly strict with the property sector?

Before Thursday there is also the latest US Federal Reserve meeting and the question of whether recent events will lead chair Jay Powell and his colleagues to rethink their plans for tapering financial stimulus.

FTSE 100 Top Risers

IAG (5.04%), Pershing Square Holdings (4.14%) and Shell (4.03%) are leading the way on Tuesday, each with sizeable gains.

At the other end, Kingfisher (-4.71%), Compass Group (-1.93%) and Polymetal International (-0.95%), were all in the red.

Kingfisher to raise dividend and buy back shares after profit jump

Liam Roche
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0
Kingfisher to raise dividend and buy back shares after profit jump

Kingfisher has been a winner from the coronavirus crisis

Kingfisher, the DIY chain, has raised its interim dividend by nearly 40% and is set to buy back £300m of its shares as its profits rose throughout the pandemic.

The British company has been successful on the back of the coronavirus crisis as the lockdowns, in addition to the move to people working from home, led to people spending more doing up their homes and gardens.

While this trend is expected to somewhat reverse as the economy reopens, Kingfisher is expecting its sales in H2 are expected to fall by less than initially expected.

The company is predicting its fall-year sales will fall by at most 7% compared to a previous forecast of between 5% and 15%.

Kingfisher added that adjusted pre-tax profit for the year would be between £910m and £950m, compared to analysts’ forecasts of around £912m.

Ross Hindle, retail sector Analyst at Third Bridge, commented on Kingfisher’s results:

“Kingfisher experienced strong sales growth yet again, with H2 LFL sales up 22.8% y/y driven by a strong demand for home improvement across both retail and trade channels. What is further-more impressive is that both transaction volume and average basket size is up on a 1-year and 2-year basis,” said Hindle.

“Before Covid-19 double-digit growth in the DIY space was something of an anomaly, however a few months on and growth remains stronger than ever.”

“Lockdowns were a boon for the group but with online sales still low it looks like more needs to be invested into digital and data,” Hindle added.

“A structural change towards working-from-home have made people look at their homes differently. Many families have spent months redirecting money into home improvements, especially home offices, outdoor spaces, and garden sheds.”

The Kingfisher share price is down by 4.75% on Tuesday morning.

Shell agrees to $9.5bn sale of Permian basin assets

Liam Roche
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0
Shell agrees to $9.5bn sale of Permian basin assets

Shell produces 175,000 bpd in the region

Shell has vowed to return over £5bn to its shareholders having sold out of one of the biggest oil fields in America.

The FTSE 100 oil giant agreed to offload its operations in the Permian Basin to ConocoPhillips for $9.5bn.

The move comes after Shell has deliberated over its strategy having mad promises to reduce its emissions on pressure from campaign groups.

The Permian basin produces in the region of 175,000 barrels per day, which means the decision represents a fork in the road for Shell.

The company confirmed it will use $7bn for “additional shareholder distributions”, while the rest will be used to prop up its balance sheet.

The deal remains subject to approval by regulators.

Shell remains one of the largest energy companies in the world and produced approximately 3.4m barrels of oil per day last year.

Wael Sawan, Shell’s upstream director, commented: “After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition.

“This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

The Shell share price is up by 3.65% during the morning session on Tuesday.

More to SourceBio International than Covid-19 testing

Andrew Hore
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More to SourceBio International than Covid-19 testing

SourceBio International (LON: SBI) has warned that it will be hit by the updated Covid-19-related travel requirements that mean that inbound fully vaccinated people will not need PCR tests on days two and eight. The effect on the diagnostics and storage company’s results is uncertain and the share price slumped 29.5p to 133p, but it is building up a cash pile and the operations are modestly rated.
Business will not disappear. Volumes had been growing and they will fall back. The average number of tests handled was 3,000 per day in the first half of 2021 and this rose to 7,000 per day in July a...

Director dealings: Eleco bosses buy after strategy update

Andrew Hore
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Director dealings: Eleco bosses buy after strategy update

Directors have been buying shares in building and architectural software provider Eleco (LON: ELCO) following its interims.
Chairman Serena Laing bought 39,363 shares at 127p each on the day after the results and 37,871 shares at 132p each the next day. These are the first shares she has bought, although she has been a director since December 2014.
Chief executive Jonathan Hunter acquired 11,847 shares at 126.5p each on 17 September. He owns 28,361 shares.
Business
Eleco supplies a range of architectural and construction project software in the UK and Europe. This covers visualisation, compute...

IAG share price jumps as US set to allow vaccinated passengers in from UK and EU

Liam Roche
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0
IAG share price jumps as US set to allow vaccinated passengers in from UK and EU

The announcement will bring 18 months of travel restrictions to an end

Passengers who have received the vaccine will be allowed to travel to America from the UK and the EU from November, Biden is set to confirm on Monday.

Travellers from foreign countries will need to prove they have been vaccinated before boarding, in addition to a negative test three days prior to flying, said a spokesperson from the White House.

The announcement will bring to an end 18 months of travel restrictions by Donald Trump, who was president at the beginning of the pandemic.

The airlines will also be required to collect contacting tracing information from international travellers.

In July, the UK waived quarantine requirements for fully-vaccinated arrivals from the USA.

Airline stocks are in play today amid rumours of the announcement.

IAG is up by 10.73% while EasyJet, which focuses more on Europe flights, is up by over 3%.

Royal Mail trials unique electric vehicles to deliver parcels

Liam Roche
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0
Royal Mail trials unique electric vehicles to deliver parcels

Royal Mail says EVs will be trialled in cities across the UK

Royal Mail has begun trials of its new micro electric vehicles as it steps up its efforts to reduce its emissions.

Two purpose-built vehicles will by trialled for the next six months delivering letters and small parcels in Crewe, Edinburgh Liverpool, London and Swindon.

The EVs have no tailpipe CO2e emissions and a range of between 70-90 miles in a single charge, which is through a standard three-pin plug.

Royal Mail has also used drones to deliver Covid testing kits and low-emmision tyres in an effort to be more environmentally friendly.

Simon Thompson, Royal Mail’s chief executive, said: “It’s really exciting to see these micro electric vehicles making their way into our daily deliveries.”

“We’re committed to keep on reducing our environmental impact and we intend to leave no stone unturned in trialling new technologies and new ways of delivering to help us do that.”

“As our fantastic posties make most deliveries on foot, this already means we have the lowest reported CO2e per parcel of major UK delivery companies.”

“From drones to electric vehicles, fuel-efficient tyres to bio-CNG trucks, we’ll keep on innovating to reduce our environmental impact even further.”

BP share price: CEO sets out strategy

Liam Roche
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0
BP share price: CEO sets out strategy

BP’s balancing act between moving away from the oil industry and securing its long-term future is an area UK Investor Magazine has covered for a long time. This has included analysing the various angles from which pressure is building on BP, from investors to regulators, to divest away from fossil fuels and into clean energy.

Since the company’s current CEO Barney Looney took office the BP share price is down by nearly 40%. It is the worst performing UK oil major in that period of time. However, what Looney has done, is to develop a coherent strategy for the future.

It seems the more that time passes, the more pressure is ramped up. The UN panel on climate change warned in a recent report that rising temperatures could begin to spiral out of control.

Barney Looney, is of the view that the FTSE 100 company is able to make the transition ahead of its rivals. So far, BP has announced that it will intentionally cut oil production, while it will continue to increase its capacity to generate electricity from renewable sources.

Looney intends to sell $25bn in fossil-fuel assets by 2025, having already sold legacy projects worth about $15bn.

However, Reuters reported that the oil giant is losing tens of millions of dollars from two of its key investments in renewable energy. BP’s UK-based EV charging company, bp pulse, lost a combined $30.8m between 2018 and 2019. While Lightsource, a solar energy company BP has a 50% stake in, lost a combined $81.8m over the same period.

BP does not anticipate these businesses will make a profit until at least 2025. And the losses will not deter Looney’s spending on renewable energy. The CEO’s goal is to increase yearly investment to $5bn by 2030, a substantial increase on current levels.

UK tech sector due for another record year of investment

Liam Roche
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0
UK tech sector due for another record year of investment

There are now over 105 unicorns in the UK

The UK tech sector is set for another year of record investment in 2021.

Following an influx of £13.5bn worth of venture capital during the first half of the year, the UK now has 105 ‘unicorns’, otherwise known as a business valued at over $1bn.

Out of the 105, 20 reaches unicorn status in the first half of 2021, including Tractable, Depop and Zego.

To highlight the rate of growth, between 1990 and 2014, 20 unicorns were created.

The £13.5bn investment record is thanks to a number of “mega fundraising rounds” by UK tech companies, including £578m raised by challenger bank Revolut, £289m by cyber security platform Snyk, and £1bn by car sales platform Cinch, among others.

Ion Fratiloiu, Head of Sales at Yobota, said: “These latest figures reflect the resilience of the UK’s tech industry, even in the face of huge uncertainty. It is promising, yet unsurprising, to see that fintechs make up 11 of the 20 businesses that reached unicorn status in the first six months of 2021. Indeed, the UK now finds itself at the cutting edge of fintech innovation, having gone from strength to strength in recent years.”

“The accelerated move to digital during the pandemic has naturally created new opportunities for investment and growth over the past 18 months. At the same time, customers’ changing habits have encouraged businesses to explore their capabilities and implement new features to adapt to growing trends – Monzo and Revolut’s recent move into the buy now, pay later (BNPL) space is just one prime example of this.”

“Ambitious tech businesses across the UK will certainly play an important role in helping to rebuild the economy, and we will no doubt continue to see these companies breaking many more funding records in the years to come.”

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