Friday, January 11: London commenced the day in the green before fading into the red as day progressed, prompted by stronger sterling on account of reports that the departure from the EU will be delayed past the initial March 29 date according to cabinet ministers. The sentiment hit the exporter heavy FTSE 100 which closed -0.36%. Stock markets on the continent and the US were mixed as investors awaited further granularity on US-China trade talks, despite a sentiment boost after Federal Reserve Chair Jerome Powell yesterday predicted no recession in 2019 and a gradual approach to rising US interest rates.
Stobart(+7.43%) helped lift the FTSE 250 index after announcing the firm had invested as part of a consortium in distressed competitor Flybe which took a dive on the news(-77.10%) to 3.75p. The new joint venture was entered into between Stobart and Virgin Atlantic will be called Connect Airways Ltd., with DLP Holdings also taking part. The venture is structured such that Stobart and Virgin will both own 30% each and DLP will own 40% of the newly formed entity, and will pay 1 pence per share to Flybe shareholders, valuing the company at £2.2m. Flybe shares crashed 77.10%. Connect Airways said the offer came after careful due diligence, taking into account Flybe’s capital needs, its difficult trading environment and prevailing market conditions. As part of the deal, Connect will provide a £20m bridge loan for Flybe’s operational requirements. Once the acquisition is completed, the partners will provide up to £80m of further funding.
At the close European equities were mixed, with the FTSE 100 -0.36%, the CAC 40 -0.51% and the DAX 30 -0.31%.