Tuesday, October 8: The FTSE 100(-0.76) closed the day in the red as Hong Kong Stock Exchange abandoned its £32bn takeover for the London Stock Exchange(-4.78%) after being “unable to engage” with target management on the deal. The announcement came almost four weeks after the LSE rebuffed a cash and shares bid seeing “no merit” in further talks. Should the takeover have gone through it would have fundamentally changed the strategy of the LSE, which is currently engaged in a $27bn deal to buy financial data co. Refinitiv; positioning it against financial news & data giant Bloomberg.
Less than cordial interactions between No. 10 Downing Street and senior EU figures transpired into a blame game between the two parties, with both sides seemingly desperate to look to be the aggrieved party. The sticking point in negotiations continues to be the Northern Irish backstop and border controls, with many speculating a deal this month is now unlikely. Companies with significant UK revenues closed lower on the developments, leading to the FTSE 250 to finish the day at -1.13%. Further estimates from the Institute for Fiscal Studies illustrated than UK borrowing was likely to rise to £100bn, with total debt hitting 90% of national income in the advent of a “relatively benign” no-deal Brexit. The IFS is advocating for a tightening of the purse strings come Budget time in the face of heighted uncertainty and risks facing the economy and public finances.
Sirius Minerals CEO Chris Fraser declared the FCA should investigate websites ran by ADVFN PLC and London South East, which he claimed were to blame for a recent fall in the share price of the miner, as reported by the Times newspaper. Fraser believes a 10% fall in the Sirius share price the afternoon prior to its funding announcement may have been caused by a post on an online forum falsely claiming Sirius was about to announce an equity raise. Sirius was marginally higher at the close, but is 62% lower on a 30 day view following the shelving of its critical $500m loan note offer.
European equities were lower at the close, with the FTSE 100 -0.76%, the CAC 40 -1.18% and the DAX 30 -1.05%.