Shares in oil services provider Petrofac surged this morning even after the company was handed a $95m (£70m) fine for failing to prevent bribery in the Middle East.
The London-listed company had pleaded guilty to seven charges of bribery after it secured a plea deal with the Serious Fraud Office (SFO).
The penalty included a $64m fine and a $31m confiscation order, as well as £7m to cover the SFO’s legal costs. But it was well below the £154m fine the anti-fraud unit had been seeking.
Shares jumped as much as 17pc to their highest level since June 2020.
Petrofac chair Rene Medori said the sentencing “draws a line under a regrettable period of our history”.
10:40 AM
Square Mile faces Brexit brain drain, warns JP Morgan boss
London is losing top talent as financial markets begin to fragment after Brexit, according to a senior banker at JP Morgan.
Vis Raghavan, who leads the bank’s EMEA operations, told Bloomberg: “The talent pool in the city has started to dwindle as more professionals relocate to Europe and elsewhere.
“This fragmentation does not bode well, especially for the financial industry.”
City organisations have warned that Brexit was making it harder and more expensive to hire foreign staff. Meanwhile, some activity has shifted to adhere to new post-Brexit rules.
10:34 AM
Boris Johnson: All electricity must come from renewables by 2035
The UK is planning to eliminate the use of coal and gas for power generation by 2035, Boris Johnson has confirmed, as he further committed to renewable energy sources.
Asked by broadcasters at a Network Rail site in Manchester whether that was the case, the Prime Minister said: “Yes, it is.”
Mr Johnson added: “What I’m saying is we can do for our entire energy production by 2035 what we’re doing with internal combustion engines in vehicles by 2030.”
The Prime Minister added that the shift to renewable energy sources would help protect consumers from fluctuating import prices.
He said: “The advantage of that is that it will mean that, for the first time, the UK is not dependent on hydrocarbons coming from overseas with all the vagaries in hydrocarbon prices and the risk that poses for people’s pockets and for the consumer.
“We will be reliant on our own clean power generation which will help us also to keep costs down.”
10:25 AM
Petrofac fined $95m for bribery offences
London-listed Petrofac has been fined $95m for failing to prevent bribery in the Middle East over a six-year period.
The oil services provider pleaded guilty to seven bribery offences after securing a plea agreement with the Serious Fraud Office. The penalty includes a $64m fine and a $31m confiscation order.
The charges related to former employees paying bribes to agents to secure contracts in Iraq, Saudi Arabia and the UAE. The company admitted to paying $44m in bribes to secure $3.6bn of contracts.
Petrofac was also ordered to pay £7m to cover the SFO’s legal costs. David Lufkin, a former senior executive, was handed a two-year suspended sentence, meaning he will avoid jail time.
Shares in Petrofac jumped as much as 16pc following the sentencing.
10:17 AM
US futures fall
US futures are on the decline this morning as concerns about slowing growth and high inflation continue to rattle investors.
Futures tracking the benchmark S&P 500 fell 0.3pc after the index posted its biggest weekly loss since February. Nasdaq futures are down 0.4pc, while the Dow Jones has slipped 0.2pc.
Global markets have suffered as the post-pandemic recovery stalls on supply shortages of everything from semiconductors to coffee. A crunch in the energy sector has added to fears that inflation could last longer than expected.
Ipek Ozkardeskaya, a senior analyst at Swissquote, said: “The global chip and energy shortage is getting worse, the inflation is rising, the recovery may be slowing, and that puts central banks between a rock and a hard place
“The best they could do is to do nothing, or to tighten their monetary policy to avoid losing control on the economy.”
There was further trouble this morning as trading in shares of Chinese property giant Evergrande was suspended amid reports of a unit stake sale. Japanese and Hong Kong shares fell, while Chinese markets are closed until Thursday for a national holiday.
10:09 AM
EG Group acquires Cooplands bakery chain
EG Group has announced it’s bought bakery chain Cooplands as the Blackburn-based retailer continues its acquisition spree.
The company, which operates petrol stations and fast food outlets, said the deal will drive its expansion into new areas of food service.
Cooplands owns bakery assets including three bakeries distribute to about 180 stores and cafes, predominantly across the north-east and Yorkshire regions.
It employs more than 1,600 people and is the UK’s second largest bakery chain.
The acquisition follows EG Group’s takeover of fast food chain Leon in May this year. Last week it also bought 52 KFC Sites.
09:50 AM
FTSE rises 0.1pc
After a slow start to the week, the FTSE 100 is now looking a little brighter.
The blue-chip index is up 0.1pc at 7,036 points, reversing its losses at the open.
Gains for heavyweight oil stocks have helped drive the index higher as price target raises from Barclays push BP and Shell higher. AstraZeneca is also up more than 1pc after its breast cancer drug, Enhertu, received a breakthrough therapy designation.
BT is the biggest laggard, dropping more than 7pc after the Telegraph reported that Sky is closing in on a broadband investment deal with rival Virgin Media O2.
Morrisons is also down 3.8pc as investors were disappointed with US private equity firm Clayton, Dubilier & Rice’s successful £7bn takeover bid. However, rival Sainsbury’s has gained 5.7pc on hopes that Fortress Investment could turn its attention to the company after losing out the bidding war for Morrisons.
09:42 AM
In pictures: Army drafted in to tackle fuel crisis
The army has been drafted in this morning to help tackle a fuel crisis that has hit supplies at filling stations up and down the country.
Troops in military fatigues have been pictured at fuel terminals after being deployed to help plug the gap caused by driver shortages.
09:35 AM
Ovo Energy to table Bulb takeover offer
Ovo Energy will reportedly table a takeover offer for rival Bulb this week in a deal that would create the UK’s second largest supplier.
Ovo is putting together a bid with the backing of Mitsubishi, its biggest shareholder, Sky News reported.
It comes after the Telegraph this weekend reported that Ovo was circling Bulb as it eyes further deals less than two years after completing its takeover of rival SSE’s retail unit.
Bulb is said to have set a deadline of Wednesday for takeover offers as it looks to find new sources of funding.
A merger would add Bulb’s 1.7m customers to Ovo’s existing base of 4.5m householders, creating the number two player behind Centrica’s British Gas.
It comes as a crisis in the UK energy sector has sparked a string of supplier collapses in recent weeks.
09:28 AM
Money round-up
Time to check in on the Telegraph’s Money team. Here are some of their top stories this morning:
09:12 AM
Credit Suisse raided in Greensill probe
Police raided Credit Suisse’s Zurich offices last week and confiscated documents relating to Greensill Capital, complicating the bank’s efforts to move past a scandal that forced it to freeze $10bn in funds.
The raid follows a criminal complaint by Swiss authorities for violations of a federal law against unfair competition.
A spokesman for the public prosecutor in Zurich confirmed that proceedings had been opened against a representative of Greensill as well as unknown persons.
Investors in the funds, which Credit Suisse ran together with Greensill, are still waiting for over $3bn to be repaid, more than a year after the money pools were frozen.
Credit Suisse has shaken up its top management positions in an effort to move past the saga.
09:07 AM
Fuel crisis to last ‘at least another week’
There’s bad news for British motorists this morning amid warnings that the UK fuel crisis will run for at least another week.
Gordon Balmer, head of the Petrol Retailers Association, said it will take seven to 10 days for inventories to get back to normal levels.
He told Sky News that while there’s been an improvement across the country, London’s greater population density means it’s still a pinch point.
It comes as the army were deployed today to help deliver fuel to ease the crisis, which is now in its 12th day.
08:59 AM
Airbus boss sticks to A320 expansion plans
The aviation sector may be struggling with acute shortages of labour and materials, but it doesn’t seem to be have fazed the boss of Airbus.
Guillaume Faury has said he is confident Airbus’ suppliers can overcome the challenges and boost production of the A320 family of aircraft.
In an interview with Bloomberg, Faury reaffirmed the company’s plan to boost A320 output from 40 per month today to 64 a month in 2023, and said Airbus remains interested in potentially reaching 75 per month around mid-decade.
He said it was essential the planemaker’s vast supply chain have those ambitious, longer-term targets in mind as they manage through the current turmoil.
Faury added: “That anticipation is required for the supply chain to do the right things because we’re in an unprecedented situation in terms of tension in the supply chain. And we need to start the ramp-up.”
08:51 AM
Sunak: UK is committed to HS2
Rishi Sunak has insisted that the government is committed to the HS2 rail link amid concerns about the escalating cost of the project.
The chancellor told LBC: “The government is committed to HS2. We are as a government, of course we are.
“Some of these big projects at the time you do them, people will be skeptical, but over time, people will see that improving the connectivity amongst our cities will help us create job opportunities and that’s what it’s about.”
He added that the government was committed to HS2 because “infrastructure can transform people’s prospects”.
08:36 AM
British Airways owner IAG rises on fresh Gatwick plan
It may have been a sluggish start to the week for the FTSE 100, but British Airways owner IAG is among the stocks making gains.
The company is currently up 2.1pc – among the biggest gainers on the blue-chip index this morning.
It follows a report from my colleague Oliver Gill that British Airways is close to backtracking on its decision to scrap short-haul flights from Gatwick airport.
Bosses at trade union Balpa will take a new pay deal to pilots after re-opening talks last week in the hope that they will support sweeping changes at Britain’s second-busiest airport.
08:25 AM
Sterling rises to six-day highs
Sterling is hovering near its highest levels in almost a week this morning against both the dollar and the euro, continuing its recovery from last week.
Rising inflation expectations early last week hit bond yields, pushing the pound to its lowest levels since December 2020.
Sterling has since made a tentative recovery hitting $1.3576 early on Monday, its highest since Sept. 28. That still leaves the currency down 0.8pc on the year against the dollar. Against the euro, sterling was largely unchanged at 85.61p.
08:11 AM
Oil prices hold steady ahead of Opec meeting
Oil prices are holding their lofty highs this morning as all eyes turn to today’s meeting of Opec+ producers.
Crude oil is trading at just below $80 per barrel – its highest level in almost three years. The cartel’s production policy is expected to be the main factor influencing the market in the coming months.
Saudi Arabia has seen its output rise close to pre-pandemic levels and is enjoying its highest petrol revenues since 2018. Its fellow members are also united behind plans to restore their collective production to 400,000 barrels per month.
Amrita Sen of Energy Aspects said Opec+ was likely to stick to its plan at the meeting today. As long as prices are between $70 and $80 per barrel, he said, “the urgency to act beyond the current deal is limited”.
08:02 AM
Flutter appoints new FanDuel chief
Betting giant Flutter has tapped Amy Howe as head of FanDuel as it mulls a potential spin-off of its US business.
Ms Howe joined sportsbook and fantasy sport business FanDuel as president in February before becoming its interim chief executive in July.
Her appointment comes after previous boss Matt King announced his departure plans in May after four years of leadership.
Flutter, which owns Paddy Power, has been eyeing plans to float FanDuel, though it previously warned that Mr King’s departure could delay the process.
FanDuel, which Flutter acquired in 2018, has been growing rapidly as US states ease their betting regulations.
07:57 AM
Sunak: It’s my job to tell Boris Johnson not to overspend
More from Rishi Sunak now, who’s doing the media rounds ahead of his speech at the Conservative Party conference this morning.
The chancellor has said that part of his job is telling Boris Johnson not to overspend. It follows reports that Sunak told the Prime Minister he’d cut up his credit card.
He told the BBC: “I think that was an old thing, but I think that’s something that all chancellors say, that it’s part of our job,
“I’d like to think that we have been responsible with the public finances and that’s something that I take very seriously.”
07:52 AM
Magazine publisher Future slides despite upbeat trading
Publisher Future has fallen sharply this morning despite saying it expected full-year trading to be at the top end of previous forecasts.
The magazine group, which owns titles including FourFourTwo and GoCompare, said it was on track for another year of strong growth thanks to momentum in digital advertising.
It also said Rachel Addison will stand down from her position as chief financial officer at the end of the month. She will be replaced by Penny Ladkin-Brand, currently the company’s chief strategy officer.
Shares in Future were down as much as 4.3pc to their lowest level in seven weeks.
07:45 AM
BT slumps to six month-low
A bit more detail now on BT, which has slumped as much as 7.6pc to a six-month low.
It comes after my colleague Ben Woods reported that Sky is closing in on a broadband investment deal with Virgin Media O2.
The deal has raised concerns over competition in the broadband sector, with BT’s Openreach under threat. Jefferies analyst Jerry Dellis says the report gives “fresh impetus” to an existing BT overhang.
07:34 AM
FTSE risers and fallers
BT is the biggest drag on the FTSE 100 this morning, sliding 6.2pc in its largest drop in more than nine weeks.
There was also a significant fall for Morrisons, which was snapped up over the weekend by US private equity firm Clayton, Dubilier and Rice (CD&R), who sealed the deal at auction with a £7bn bid.
The supermarket chain was down 3.7pc to 285p – below CD&R’s successful 287p bid.
Providing some upward momentum was rival Sainsbury’s, which rose 1.9pc as the Morrisons deal sparked speculation of further deals in the grocery sector. JD Sports also gained 1.8pc.
On the FTSE 250, Plus500 was up 3.6pc after beating forecasts in its latest results. AO World also gained 3.3pc, clawing back some losses from last week after analysts at Jefferies branded its trading update “disappointing”.
It was less positive for Frasers Group, however, which plunged 9.5pc in its biggest fall for two months. Mike Ashley’s company has been under scrutiny for plans to hand its incoming boss a £100m bonus.
07:24 AM
French Connection accepts £29m takeover offer
French Connection is backing a £29m takeover approach made by a group of bidders including the company’s second largest shareholder.
The fashion chain unanimously recommended the 30p-per-share offer from a consortium that includes which includes Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers.
The struggling retailer kicked off a formal sales process in March and had announced the bid on Sept 23.
Singh Ghura, who has worked in the clothing industry for many years but also has investments in property and care homes, already owns just over 25pc of the company.
Chief executive Stephen Marks remains the chain’s largest shareholder and has given irrevocable approval for the takeover.
It comes after a challenging time for French Connection, which was founded in 1972. It’s been closing stores and in April said that revenue had slumped 40pc in the year to the end of January.
07:13 AM
German automotive confidence falls further
Confidence among German car makers is continuing to fall, with the latest figures showing that supply chain issues had made sentiment “much worse” in September.
A gauge produced by Ifo showed sentiment among German automotive manufacturers and their suppliers plummeted from 32.0 points to 13.2 points last month. In July, the figure had stood at 52.9 points.
Ifo’s Oliver Falck said: “The latest figures show that the automotive industry is the industry most seriously affected by supply bottlenecks for intermediate products.”
07:05 AM
FTSE 100 opens lower
The FTSE 100 has opened lower this morning, extending losses from the end of last week.
The blue-chip index was down 0.2pc at the opening bell at 7,013 points.
07:02 AM
Sunak: UK fuel supply issues are ‘getting better’
Rishi Sunak has said the UK’s fuel supply troubles are “getting better”, as he looked to calm concerns about panic buying.
The chancellor said there was enough petrol at refineries and terminals, adding that fuel deliveries had exceeded purchases since Tuesday.
But he warned it was hard to put a precise date on when the situation will return to normal.
It comes as the army is deployed today to help deliver fuel to filling stations up and down the country.
Almost 200 armed forces personnel, half of whom are drivers, will begin providing temporary assistance. Soldiers in fatigues have been seen arriving at a BP refinery this morning.
06:52 AM
Rishi Sunak to unveil £500m job support scheme
Rishi Sunak is poised to announce even more job support today in a speech at the Conservative Party conference.
The chancellor will pledge £500m to help get people back into work or retrain amid an ongoing labour shortage.
Much of the support package will be aged at people between 50 and 64 who are now out of work, softening the landing for millions of Britons after the furlough scheme came to an end last week.
Asked this morning about recent tax hikes to help fund health and social care, Sunak said he and Boris Johnson did not want further tax increases.
But he said he couldn’t guarantee that council tax won’t rise following comments by the Local Government Association that 9pc increases were possible.
06:34 AM
Evergrande shares halted
Good morning.
Shares in Evergrande have been suspended this morning as rumours swirl about a major rescue deal for the beleaguered property giant.
Trading was suspending pending the announcement of a “major transaction”, Evergrande said in a stock market filing. The company’s property management arm said it was halted before a possible offer for shares.
Local media reported that Hopson Development, whose shares were also suspended, plans to acquire 51pc of Evergrande Property Services.
Uncertainty over Evergrande’s debt load of more than $300bn has roiled global markets, stoking fears of a collapse that could spread throughout the wider economy.
5 things to start your day
1) Supermarket shortages are a good thing, says Tory MP – Row ignited with business at Tory conference as MP claims breakdown of supply chains is in the long-term interest of economy
2) Morrisons bidding war to spark flurry of City dealmaking – Sainsbury’s and M&S also in firing line as cheap pound encourages overseas investors to seek opportunities in UK
3) British Airways set to back-pedal on scrapping Gatwick flights – The airline is set to reverse a decision over short-haul flights from the London airport, the Telegraph can reveal
4) Britain’s inflation surge threatens to eclipse eurozone’s – Prices could spiral for longer than predicted, warns ex-IMF chief economist, amid squeeze on disposable incomes
5) Ovo circles rival Bulb amid energy price squeeze on suppliers – Firm seeks more deals amid energy crisis after buying SSE’s retail unit to become UK’s third largest household energy firm
What happened overnight
Asian markets were mixed on Monday, with Shanghai closed for the National Day holiday.
Hong Kong’s benchmark shed more than 2pc after troubled property developer China Evergrande’s shares were suspended from trading.
The company did not say why, but a Chinese financial news service, Cailian, said another major developer was planning to buy Evergrande’s property management unit.
Evergrande is struggling to make payments on tens of billions of dollars worth of debt as it endures a cash crunch brought on by a tightening of Chinese government restrictions on debt-leveraged financing.
The Hang Seng sank 2.3pc to 24,011.72 while Tokyo’s Nikkei 225 dropped 1.1pc to 28,457.15. Shares also fell in Taiwan. Australia’s S&P/ASX 200 climbed 0.8pc to 7,246.10.
Markets were closed for holidays in Shanghai and South Korea.
Coming up today
Corporate: Nothing major on agenda
Economics: Opec meeting, factory orders (US)
