BUSINESS LIVE: Petrofac mulls asset sale; Capita completes sell-off; Gold hits new highs on rate cut hopes

Head of Investments at Interactive Investor Victoria Scholar:

'After the FTSE 100 rose to a six-week high on Friday, the index is giving back some gains this morning, underperforming broader gains across Europe. London-listed miners are leading the losses, while Anglo American, Rio Tinto and Glencore are at the bottom of the British blue chip index.

'BP and Shell are also suffering from lower oil prices. Oil is under pressure for the third session in a row, with Brent crude and WTI each losing more than 1%, pressured by weak global demand and doubts about the extent to which OPEC+ plans to implement its supply cuts.

'Overnight the picture was mixed for indices in Asia, with China's CSI 300 hitting a near five-year low, while Australia's ASX bounced back from the negativity.

“It's a big week for US labor market data with the JOLTs numbers, the ADP employment data and Friday's all-important nonfarm payrolls report. The S&P 500 hit a new 2023 high on Friday, but US futures point to a softer open at lunch.”

Spotify has become the latest tech giant to announce major layoffs, with the streaming giant's CEO Daniel Elk announcing that around 1,500 employees are being laid off as growth slows 'dramatically'.

The Swedish company currently employs approximately 9,000 employees. Elk says cuts will “correct our costs,” while admitting it would be “incredibly painful for our team.”

Derren Nathan, head of market research at Hargreaves Lansdown:

'As we enter the final furlong before 2023, US markets are back to their highest levels in 12 months. But the optimism expressed by Federal Reserve Bank Chairman Jerome Powell on Friday that monetary policy is starting to achieve its goals did not spread to Asian markets in overnight trading.

'So it is still too early to say whether this was the starting signal for a Santa Rally. Despite stronger hopes that yields have peaked, a recent string of poor manufacturing indicators for China is weighing on the region.

'The Hang Seng has fallen more than 1% and the main Chinese and Japanese indices have also fallen. The FTSE 100 also started the week negatively.

“The perception that monetary policy's grip will not tighten has helped push bullion prices to record highs. An ounce of the shiny stuff will now run you almost $2,100, and speculation is mounting that more could follow.

'But there are also longer-term forces emerging that could allow other commodities to flourish. A Brussels-based campaign group Transport & Environment (T&E) reveals that European carmakers have secured only around 16% of transition metals (lithium, cobalt and nickel) to meet their commitments to sell electric vehicles by 2030, just five years before petrol cars are completely banned.

“Concerns about long-term demand are a constant in today's oil market, but for now supply is the driving force behind prices. Skepticism over OPEC+'s strict enforcement of the latest round of production cuts and concerns about demand from China are keeping prices in check. At just over $78, the value of a barrel of Brent Crude has fallen by almost 8% in just one week, including a drop of almost 1% today.”

The FTSE 100 is lower in early trading as heavyweight energy stocks find it easier to track falling crude prices and lower copper prices have dragged down mining stocks, while the focus slowly shifts to US jobs data.

The oil and gas sector fell 1.8 percent as crude oil prices fell under continued pressure from the OPEC+ decision and uncertainty over global fuel demand growth.

Industrial metal miners fell 2.1 percent as copper prices fall on a stronger dollar.

The market is awaiting US employment data this week, with an October JOLTS figure and the November ADP National Employment report expected in the week leading up to the broader November non-farm payrolls report on Friday.

Rolls-Royce rose 1.7 percent after JP Morgan upgraded the engineering company's shares from 'neutral' to 'overweight'.

An insurance company is swapping London for a £3.15 billion listing in New York.

Although Aspen is based in Bermuda, more than half of its 1,100 employees are based in the City of London.

It's no secret, especially to Jeremy Hunt, that we need companies to invest more in Britain.

Thoughts within the government were focused on this by some candid comments from Pascal Soriot, the boss of drugs giant AstraZeneca, about his decision to set up a new factory in Ireland rather than Britain.

Banks are facing losses of £6.6 billion after a major Selfridges shareholder collapsed.

Signa, co-owner of the Chrysler Building in New York and other department stores in Europe, has been hit by high interest rates and the costs of energy and construction.

According to JP Morgan estimates, the top two companies have borrowed millions from European banks.

Spotify will reduce its overall workforce by about 17 percent across the company, its boss told staff on Monday, after laying off 6 percent of its workforce in January due to higher costs.

In the latest third quarter, the company posted a profit, helped by price increases for its streaming services and subscriber growth across all regions, and forecast monthly listeners would reach 601 million in the holiday quarter.

Capita has completed a sell-off of non-core assets after agreeing to sell its 75 per cent stake in research group Fera Science for £32 million.

The sales to Bridgepoint Group value the joint venture with DEFRA at £80 million and represent a multiple of 10.8x on a standalone EBITDA of £7.4 million in 2022.

Jon Lewis, CEO of Capita, said: “Capita and Defra have worked together over the last eight years to grow and professionalise Fera, creating significant value for us and the taxpayer.

'Fera is now a vibrant and profitable commercial business, successfully serving private sector and government clients both in the UK and abroad.

“We had previously announced our intention to sell our stake in Fera, as part of our ongoing strategy to simplify and strengthen Capita. It was the right time to find a new partner who could build on the strong, successful foundations now in place at Fera and take the company to the next phase of its development.

'This is the latest excellent example of Capita's successful partnership with the UK government to commercialize government assets and transform them into valuable businesses, following previous successes such as Constructionline and AXELOS.

“I am extremely pleased that, subject to the successful completion of this transaction and our travel business, which closes on November 14, we will have completed our non-core divestment program. These divestitures have enabled us to significantly strengthen our balance sheet and substantially reduce our debt.”

William Hill owner 888 has rejected a takeover by a gambling software company this summer, it has been revealed.

The gambling giant received a £700 million written offer from Playtech in July.

But the offer – a price of 156 cents per share – was deemed too low for the company, according to The Sunday Times.

Petrofac is considering a sell-off of non-core assets after the oilfield services company warned it will no longer be able to meet its full-year expectations of “broadly neutral free cash flow” due to payment delays.

“While the group has made progress in reaching contractual settlements and reducing working capital, given the delays in obtaining advance payment guarantees, it no longer expects to receive these advances before the end of the year,” Petrofac said in a statement declaration.

The company added that it is exploring potential new financial options across all its capital classes and is actively engaged in discussions with investors to take a non-controlling position in certain other components of its business portfolio.

Last week, shares of London-listed Petrofac fell to a record low after analysts raised concerns about its balance sheet due to payment delays.