The Government’s NatWest stake is down to 11.4% after the lender spent £1 billion buying its shares from the Treasury.
The move cut the taxpayer stake by another three percentage points, having stood at 84% after the rescue of Royal Bank of Scotland during the financial crisis.
Elsewhere, the FTSE 100 index made a robust start to the week while the price of Bitcoin topped $81,000 for the first time.
FTSE 100 Live Monday
- NatWest £1bn buyback cuts Govt stake
- Insurer Direct Line set to cut jobs
- Fresh jobs warning over NI increase
Market update: Barclays and NatWest higher as FTSE 100 improves, Croda up 4%
10:17 , Graeme EvansAnother milestone for NatWest as it continues on the path to full privatisation today provided one of the highlights of an improved FTSE 100 index session.
The lender, whose shares are up by more than 70% this year, said it had spent £1 billion in a move that cut the Treasury’s shareholding from 14.2% to 11.4%.
It is the second time this year it has used a direct buy back of shares to unwind the Government’s interest, which originally stood at 84% after the rescue of Royal Bank of Scotland during the financial crisis.
NatWest shares today rose to 387.2p, up 6.4p from the buy back price of 380.8p as the banking sector enjoyed a strong session.
Barclays also added 4.7p to 256.2p as the lender continues to benefit from hopes its US operations will be boosted by deregulation and tax cutting under a Trump administration.
Lloyds Banking Group rose 0.8p to 53.9p and Standard Chartered by 15.6p to 939.6p while the FTSE 100 index rallied after Friday’s 0.8% reverse to stand 57.77 points higher at 8130.16.
The best performance came from specialty chemicals firm Croda International after it reiterated full-year profit guidance amid signs that conditions have stabilised in key markets and geographies.
Having fallen more than 25% this year, shares in the East Yorkshire-based firm rose 5% or 192p to 3796p in today’s session.
Croda was followed by Rolls-Royce, which lifted 14.6p to 567.8p, and by medical devices firm Smith & Nephew after a gain of 14.6p to 567.8p.
A shortened fallers board included the supermarkets Sainsbury’s and Tesco as last week’s post-Budget concerns over National Insurance headwinds continued. Their shares fell 2.4p and 1.6p to 246.8p and 343.6p respectively.
The FTSE 250 index rose 0.8% or 171.68 points to 20,689.60, with Burberry among the risers ahead of Thursday’s interim results.
The luxury goods group, which recently lost FTSE 100 status following a run of profit warnings, added 24.4p to 829.2p.
Other mid-cap stocks on the recovery trail included IT services group Kainos, up 20p to 815p after its plans for a £30 million shares buyback in today’s interim results lifted the mood following last month’s first ever profit warning.
The digital services arm of the Belfast-based company, whose shares are down 25% this year, has been hit by decision-making delays in the public sector.
Heathrow on track for record year
09:16 , Graeme EvansHeathrow has recorded its busiest ever October after figures today showed that more than 7.2 million passengers used the airport last month.
It is the sixth consecutive month of more than seven million passengers, with October’s figure up 3.7% on a year earlier.
EU traffic rose 8.5% to 2.5 million in the period.
The demand means Heathrow expects to close out 2024 having served 83.8 million passengers, an increase of 2.9 million on 2019's previous annual record of 80.9 million.
On Friday, British Airways owner IAG reported a third quarter operating profit well ahead of City hopes at two billion euros.
Croda shares up 4% in stronger FTSE 100, banking stocks rally
08:26 , Graeme EvansLondon shares have made a strong start to the week, with the FTSE 100 index up 56.54 points to 8128.93 and the FTSE 250 index 183.63 points higher at 20,701.55.
Strong performers include the speciality chemicals firm Croda International, which lifted 4% or 155p to 3759p after leaving full-year profit expectations unchanged in a third quarter update.
Chief executive Steve Foots said: “Whilst we are benefitting from more stable customer inventories and demand in key markets and geographies, the overall trading environment remains challenging.”
Direct Line Insurance shares rose 1.2p to 166.4p after its update, while NatWest added 4.1p to 384.9p following its £1 billion buyback of Government shares.
Other banking stocks also fared well as Lloyds Banking Group put on 0.7p to 53.7p and HSBC lifted 11.7p to 701.7p.
Direct Line set to cut jobs as part of £50m cost savings
08:10 , Graeme EvansDirect Line Insurance, whose brands include Churchill and Green Flag, is holding consultations over plans to reduce its headcount by 550 roles.
The company, which employs more than 9000 staff, is looking to achieve £50 million of cost savings in 2025 through procurement, technology rationalisation and simplification of its operations.
It said: “Our drive to create a leaner and more efficient operating model is advancing, with consultations currently taking place as part of a proposed reduction of around 550 roles.”
The company is in the early stages of a turnaround under new boss Adam Winslow.
He described trading conditions in motor insurance as competitive, alongside a higher level of injury claims in the third quarter.
The company, which grew its presence on price comparison websites during the period, lifted gross written premiums by 11.8% year-on-year.
Food chain flags “substantial” rise in cost of employing under 25s
07:46 , Graeme EvansVarious Eateries, which operates the brands Coppa Club and Noci, today warned that the Budget and changes to workers’ rights will “substantially” increase the costs and administrative burden of employing young people.
It highlighted the above-inflation increases to the minimum wage, substantial increase in National Insurance rates and lowering of the employer NI threshold.
The company said: “As a major employer of first-time workers, the hospitality industry will be particularly affected by these measures.”
It added: “Various Eateries is in a strong position to mitigate these effects, but this is still a further major blow to a struggling industry that employs more than three million people, mostly under 25.”
The comments came in a trading update for the year to 29 September, which showed revenues slightly ahead of current market expectations at £50.5 million.
This should generate adjusted earnings slightly ahead of forecasts due to efficiency improvements coupled with further softening of inflationary pressures.
Hong Kong stocks under pressure after inflation rate disappoints
07:27 , Graeme EvansAsia stock markets have started the week on the back foot after Friday’s stimulus measures aimed at addressing local government debt disappointed traders.
The weakest inflation reading since June also knocked confidence, with annual growth in the consumer prices index of 0.3% compared with the 0.4% forecast.
Hong Kong’s Hang Seng index fell by an initial 3% before a recovery to stand 1.8% lower, while an afternoon upturn helped Shanghai Composite to lift 0.5%.
NatWest £1bn buyback cuts Treasury stake
07:14 , Graeme EvansThe Treasury’s stake in NatWest has fallen from 14.2% to 11.4% after the lender spent £1 billion on a targeted buy back of its shares.
The dealings took place at 380.8p a share and follow a 70% rise for the company’s valuation so far this year.
It is the second buy back of Government shares of 2024, further reducing the 84% shareholding originally established during the financial crisis.
NatWest chief executive Paul Thwaite said: “This transaction represents another important milestone on the path to full privatisation.
“We believe it is a positive use of capital for the bank and for our shareholders and we are pleased with the sustained momentum in reducing HM Treasury's stake in NatWest Group throughout this year."
FTSE 100 seen higher, Bitcoin above $80,000
07:00 , Graeme EvansThe FTSE 100 index is set for an improved performance, with futures trading pointing to a rise of 24 points to 8096 after Friday’s 0.8% decline.
The poor showing was in contrast to the US, where the election and latest interest rate cut helped the Dow Jones Industrial Average and S&P 500 index put on 5% across the week.
Bitcoin also rose above $80,000 for the first time amid hopes that a Trump presidency will relax the regulatory environment.
The cryptocurrency stood at $80,985 this morning, while Brent Crude starts the week at $73.92 a barrel.
